COUNCIL OF THE CITY OF PHILADELPHIA PUBLIC HEARING BEFORE THE COMMITTEE OF THE WHOLE - - - Room 696, City Hall Philadelphia, Pennsylvania Monday, April 7, 2003 10:45 a.m. - - - FY '04 OPERATING BUDGET TESTIMONY - - - Bill No. 030009 Bill No. 030012 Bill No. 030013 Resolution No. 030030 Bill No. 030004 Bill No. 030008 Bill No. 030010 Bill No. 030002 Bill No. 030003 Bill No. 030005 Bill No. 030006 - - - PRESENT: COUNCIL PRESIDENT ANNA C. VERNA, Chair COUNCILWOMAN JANNIE BLACKWELL, Vice Chair COUNCILMAN DARRELL L. CLARKE COUNCILMAN DAVID COHEN COUNCILMAN W. WILSON GOODE, JR. COUNCILMAN JAMES F. KENNEY COUNCILMAN MICHAEL A. NUTTER COUNCILMAN ANGEL L. ORTIZ COUNCILMAN FRANK RIZZO, JR. COUNCILWOMAN MARIAN B. TASCO - - - V A R A L L O Incorporated Litigation Support Services Eleven Penn Center 1835 Market Street, Suite 600 Philadelphia, PA 19103 (215) 561-2220 (215) 567-2670 2 4/7/03 - Committee of the Whole
Good morning, everyone. This is the continued public hearing of the Committee of the Whole regarding Bill Nos. 030009, 030012, 030013, Resolution No. 030030, Bill 6 Nos. 030004, 030008, 030010, also Bill Nos. 030002, 030003, 030005, and 030006. Mr. Dubow, would you please come to the table? Good morning.
Good morning. I have two things. One is testimony on the carry-forward on Bill No. 030002 and Bill No. 030003. Before I start, I wanted to say that PICA has asked that we redo.
I'm sorry. I didn't hear you. Would you move the microphone closer to you, please?
Yes. I have testimony on amendment to Bill 20 No. 030002 and Bill No. 030003. Before I give that testimony though, I wanted to let you know that PICA has asked that we redo the five-year plan to show the impact of the state budget.
Sorry. I can't hear a single word. 3 4/7/03 - Committee of the Whole
PICA has asked that we redo the five-year plan to show the impact of the state budget cuts and the impact of the fire arbitration award. We hope to have that process done by the end of next week. We are going through the numbers now to see how that would affect our budget and plan.
The fire award is approximately $43 million over the life of the plan. It looks like the state budget cuts are about a hundred million dollars a year. Now I would like to go into the testimony on the carry-forward.
I appear before you today to offer testimony on Bill Nos. 030002 and 030003, 4 4/7/03 - Committee of the Whole which propose to establish the City's FY 2004 capital budget and 2004-2009 capital programs. We are proposing modifications to add additional appropriations to carry forward all unobligated funding from prior years. In the proposed amendment all unobligated --
Mr. Dubow, do you have copies of the amendments, because we don't have them?
Yes. I'm told they were distributed to Council members this morning.
All right. It 5 4/7/03 - Committee of the Whole was just handed to me. Please proceed.
In the proposed amendment all unobligated, general obligation, PICA and revenue bond capital appropriations have been carried forward from prior years with few exceptions. These exceptions fall mainly into three categories, unspent appropriations for which projects have been completed underbudget, aviation projects that were either funded with other sources or not approved by the airlines, and water payroll costs, which do not carry forward. There are a large number of projects that have been included in the carry-forward budget at the direct request of City Council members. All the remaining funding for these projects has been included in the carry-forward amendment proposed today. These recommendations do not include the lapsing of any unencumbered funding for projects of this nature, whether or not those projects have been completed. Other than the addition of the carry-forward appropriations, there are two proposed modifications to Bill Nos. 030002 and 030003. The first includes a proposed appropriation of $687,000 6 4/7/03 - Committee of the Whole from prior year available balances for completed Council-designated projects. With the approval and authorization of the District Council Members, this funding can be used for other recreation projects within their district. The second request and modification is to delete the federal, state and other government off-budget funding amounts for transit projects erroneously included in Bill No. 030003. These projects are not technically funded with City appropriations, so they should not be included in the ordinance. I would be happy to answer any questions Council may have related to the recommended capital budget and program.
I'm sure Council members would like to review this for a moment. Are there any questions from members of the committee for Mr. Dubow? Councilwoman Tasco.
I'm just reading that. Would you explain to me what you are requesting again? 7 4/7/03 - Committee of the Whole
We are requesting to carry forward appropriations from earlier years so that money for projects that haven't been completed can be spent in '04.
So are any of the appropriations going from projects other than the ones they were appropriated for?
No, this is carrying them forward. The only changes, there is the 687,000 from earlier year projects in Council districts, but those changes are being done in consultation with the District Council Members so those changes won't happen without your approval.
Mr. Dubow, isn't this something that we do every year?
Thank you, Madam President. Mr. Dubow, during the capital budget I seem to recall raising the question regarding the Wynnefield Recreation Center and I believe the response at the time was that it would end up in the carry-forward budget which we have now received. So can you tell me where it is in the document we received, the page number?
Just one second. It's in the recreation department underlying 90F. It's part of the $270,000 shown there.
What page, Mr. Dubow? Are we in FY '04? Are we in the budget or the plan?
We have not figured out which book we are in yet. 9 4/7/03 - Committee of the Whole
In the budget. . It's in Line 86-K. It's part of the $270,000 and it is 70,000 of that 270.
You would not have. That's why -- you would know it when the book came out because it has a separate line in the glossy. You wouldn't know it from this without the explanation I just gave.
Okay. And how is it going to magically transfer into a line in the book?
The book will break out that 86-K and show the components of it into subprojects.
So what's the difference between, I guess, that and Line 86-I, which specifically gives a name to a new entity versus being a part of an innocuous line that no one can figure out what it was?
There is no magical reason. 10 4/7/03 - Committee of the Whole We could split that out.
Thank you. Did we have a problem before? It seems like it was so long ago. Lancaster Avenue, was that already listed separately in the green book as a project of its own? Isn't that also a carry-forward?
I'm Gary Jastrzab from the City Planning Commission. In the recommended there was a separate line item for -- a subproject for Lancaster Avenue and it is included in both the budget -- or in the program budgeted -- programmed for 2005.
In the document that you have before you it is part of project --
Okay. And it will stay that way in the final? 11 4/7/03 - Committee of the Whole
Thanks. I'm just trying to keep track. Thank you, Madam Chair.
You're welcome. Are there any other questions of Mr. Dubow? The Chair recognizes Councilman Cohen.
In what amendment is the carry-forward proposal you have spoken to us about covered? What amendment covers that?
It's the amendment that was handed out this morning. There was a packet handed out.
There are two amendments, one for the budget year and one for the whole program.
There are two, the proposed amendment to Bill No. 030003 I think is what the top 12 4/7/03 - Committee of the Whole of the packet shows, and there is another one that says "Proposed Amendment to 030002."
So there is no 5 reference made in the amendment to a carry-forward proposal; you merely incorporate the amendment by adding the dollar figure, changing the dollar figure.
So as in the previous question, one would not know that this amendment includes a carry-forward proposal.
You would know that it is amending the capital budget and see what the new numbers were.
Secondly, can you inform us generally of the role of the Planning Commission in developing the budget? I notice the gentleman coming from the Planning Commission, and my memory may be a built faulty, but that's kind of a new experience for me to have the budget director call on the Planning Commission. So would you tell us what is the role generally of the Planning Commission in formulating the budget?
By City charter the City 13 4/7/03 - Committee of the Whole Planning Commission is responsible for preparing a recommended capital budget and program each year that is submitted to the Mayor and then transferred to City Council for their approval. This process today moves forward all of the projects in fiscal '03 into the fiscal '04 recommended budget, so it's an omnibus. What you have before you today is essentially an omnibus piece of legislation that moves forward all of the unexpended funds in projects in previous years. So the Planning Commission's role is to prepare the recommended capital budget and program and to --
So if Council Members wish to impact on the capital program or the capital 14 4/7/03 - Committee of the Whole budget, it might be wise for us to be in communication with the Planning Commission as well as the budget director?
It is good to learn things even if it takes a long time to learn them. Thank you very much.
Thank you. Any other questions from members of the committee? Thank you, Mr. Dubow. I believe I saw Mr. Isdell here from the airport. I'm sure he has to get back to work. Would you please approach? Look at that snow. We want you out of here. Good morning.
I believe some of the Council members had asked that the airport be called back. Does anyone have any questions of Mr. Isdell? Councilman Cohen.
Thank you, Madam President. I read a couple of days ago in the 15 4/7/03 - Committee of the Whole Inquirer about the opening of the new international lanes of traffic.
I forget what you call them at the air terminals. There are a large number of them?
That project is part of a terminal expansion project that included two new terminals, one that we opened in 2001 and the one that is scheduled to open later this month. That was financed by a combination of passenger facility charges and airline rates and charges, about 75, 16 percent, in that order. 17
Yes, passenger facility 20 charges. That's the $4.50 surcharge that is added 21 to the ticket price. It's a user fee, if you will. 22
Was that a user fee 23 on all flights or just international flights? 24
It's a user fee on all 25 flights, all tickets, domestic and international. 16 4/7/03 - Committee of the Whole
The terminal that we are opening this month is an international terminal, that is correct. It can be used, if necessary, for domestic traffic, but it was designed and it will be used primarily for international flights.
Who makes the decisions to levy the additional charge, the $4.75 you are referring to?
The airport and the City do that and the Federal Government authorizes the ability -- the enabling legislation for airports to add that fee to ticket prices comes from Congress and then each individual airport has to go through an approval process, which we have done successfully for about the last 12 years I believe.
With respect to the payments, this is all financed by bonds?
Yes. We did a series of bonds through the Philadelphia Authority for Industrial Development. 17 4/7/03 - Committee of the Whole
The airlines support the bonds through the rates and charges and the airport supports the bonds through the passenger facility charges.
But who makes the payment? Who has the legal responsibility to pay the bonds when due?
I'm going to ask my deputy director for finance administration to help me out with that. I think it's a complicated answer. This is Ed Anastasi, deputy director for finance and administration. Can you answer that?
Yes, I can. The debt service on the bonds issued by the Philadelphia Authority for Industrial Development is paid for by the Philadelphia Authority for Industrial Development. At the time those bonds were issued, the City issued -- the City's airport issued general airport revenue bonds over the PAID so that the PAID bond debt service payments are really securitized by the debt service on the airport general revenue bonds and that the 18 4/7/03 - Committee of the Whole revenues that pay the debt service come from the landing fees that the airlines pay. It's incorporated in their landing fee rate. It comes also from terminal building rentals that the airlines pay. They pay a certain amount per square foot and that per square foot rental charge includes the debt service as well as the operating expenses associated with the new terminal.
How is the ability to make payments on those bonds impacted by the general decline in air traffic and, you know, caused possibly by the economic recession, possibly by the war, possibly by SARS? All of those items are mentioned in separate columns that very same day and caused me to be concerned. Also impacted by the bankruptcy of U.S. Airways, which is the main user of our airport. So it raised the question in my mind is there going to be any potential liability to the City of Philadelphia as a result of a possible problem with respect to meeting payments.
No. Clearly all of those factors had a negative impact on our revenues as they have on the general economy and particularly on the airline industry, but before we sold the bonds 19 4/7/03 - Committee of the Whole we had to do very detailed feasibility studies that looked at worst case scenarios including U.S. Airways bankruptcy or potential liquidation, and we would not have been able to do the financing without being able to demonstrate, primarily because of the strong origination market that we have here in the Philadelphia area, that our airport would be secure and that a certain minimum level of activity and revenue associated with that activity would be ensured into the future despite some of these other economic factors such as the SARS and the bankruptcy process which U.S. Airways has recently successfully emerged from. I didn't know if you wanted to add anything to that.
That's correct. And I think the one thing is that we have been pretty fortunate here in Philadelphia. When you compare our traffic results for, for instance, calendar 2002, we were up about one-tenth of one percent. Now, if you looked at the nationwide average in passengers for calendar 2002 the nation as a whole was down about 4.7 percent. So I think that bodes well for the way we have been able to recover from, 20 4/7/03 - Committee of the Whole for one thing, September 11 and the way U.S. Airways has been able to keep afloat during this process in which they have been doing everything that they could to emerge from bankruptcy by March 31, which they have been able to do.
We have done very well relative to the national average for airports and particularly relative to international passengers. We have continued to grow our international passenger base right through 2001, 2002. The numbers we just got indicate we set a new record for international passengers of 3.2 million. And that particular aspect of our passenger activity continues to grow even in the face of these negative economic indicators.
If it turned out that despite your careful analysis and preplanning, if it turned out that Philadelphia was impacted to the same extent as most of the rest of the nation and it was impossible to meet the payments, who would be the ultimate payer, PAID?
The ultimate payer of the bonds is paid, but the ultimate payer of the debt service are the airlines collectively that operate 21 4/7/03 - Committee of the Whole out of Philadelphia, not only U.S. Airways, but the other signatories to the airline use and lease agreement.
Can you tell me again the difference between the two ultimate kinds of payers? What's the difference between the ultimate payment on the bonds and the ultimate payment on the debt service?
The ultimate payment on the bonds is PAID, as we said, the Philadelphia Authority for Industrial Development, but PAID is really not responsible for raising the revenues to pay the debt service. That responsibility falls to the airport, and we have the -- and the airlines, since they have approved this international terminal project, are responsible for meeting those debt service payments through their rates and charges.
So on the debt service there would never be an ultimate responsibility by the City of Philadelphia?
That is correct because the City is not responsible for general airport revenue bonds like they are responsible for paying debt service on the general obligation bonds. 22 4/7/03 - Committee of the Whole
With respect to the bonds themselves where PAID has the basic responsibility, doesn't the City back up the PAID bonds?
Yes, they do. The City's airport/aviation fund backs up the City revenue bonds but not the City's general fund, and the way we are able to do that is because the aviation fund -- the contract between the airlines and the City for a use and lease of the airport provides for the airlines through their rates and charges to make whole the aviation fund and the aviation fund is the fund responsible and obligated to make the debt service payment.
If I might add, Councilman, if you have read in recent days the situation that the Pittsburgh airport is confronted with where U.S. Airways has indicated a significant reduction in their activity, they have it at least very similar to ours, which would require the airport to recapture the necessary revenue from the other airline tenants. That's the way the leases are written. It is a residual type of agreement which requires the airlines as a group to cover that debt 23 4/7/03 - Committee of the Whole service, and the only way you would have -- the worst worst case scenario would be if every airline in the United States went out of business, which I don't think is a reasonable prediction.
Not unless you pay full attention to the stories that the airlines are issuing. Don't they practically threaten that these days in their effort to get the amount of money they are seeking from Congress? Haven't they just gotten about $3 billion and isn't the President purportedly unhappy about the amount that the House and Senate are considering?
I think you are 100 percent correct on those statements, yes, sir.
Well, I don't want to take any more time than this, but you are saying it is very unlikely, or are you saying that under no 19 circumstances would the City of Philadelphia itself be responsible for payment of either debt service or the bonds?
Under no circumstances is the general fund responsible for making payment of any of the debt service on not only those bonds but for all other general airport revenue bonds that 24 4/7/03 - Committee of the Whole have been issued.
If I understand what you are saying, it's a reassuring thought. Thanks very much.
Thank you. Any other questions from members of the committee? The Chair recognizes Councilwoman Tasco.
Can you describe the contracting process that was used for the Sky Sites initiative? What was your minority participation and goals and were they achieved?
That's a contract that we have. It is a concession contract for the sale of advertising inside the terminal buildings. That was done through a request for proposals. I think that was initiated back in 1999. The award was made in the year 2000 to -- the company Sky Sites has now been acquired by a larger global company called J.C. Decaux -- I think it is D-E-C-A-U-X -- and that contract required certain percentages of 25 4/7/03 - Committee of the Whole participation. I believe that -- I don't have the detail in front of me. I know that I could get that for you very readily, but I believe that the initial DBE partner or one of the ones that was initially proposed was not able to reach a satisfactory agreement with the principal or the prime company and that a second company was substituted. That required approval by the Minority Business Enterprise Council, which they did achieve, and it is our understanding that they are meeting their commitments for the percentages of participation that were agreed to in that contract. That would be an easy thing for me to get up-to-the-minute details for you. I don't believe we have them with us today because we weren't prepared for that question.
What I would like to know is once these companies enter into a contract with minority companies, that the contract is satisfied rather than just have a paper participation. To what extent does the minority company participate in the contract? Do they actually get business? And so even though the first company may not have been successful in negotiating the contract with the major contractor, I would like 4/7/03 - Committee of the Whole to know who the second subcontractor was and did that contract the subcontractor got have full participation? Did they make any money, or is it just that they were on paper a participant but not necessarily fulfilled, granted any actual work, did any actual work, and how much was the contract, how much money did they actually make?
I can say that one of the subs under Sky Sites was Terry Crockett, an architect, local architect, and I can tell you that he has been working -- I was with him on Friday going through the new international terminal on the planning, design and installation of the advertising that will be placed in that building. So I know that he is one minority sub who has been utilized, but to give you specific numbers and percentages, I think we need to get back to you on that. I would like to add, if I may, just that as a general practice at the airport over the last two years we have scheduled -- we do monthly contract review meetings. We review all of our professional services contracts and we also look at our concession contracts such as the one you are asking about. When we find a prime contractor that 27 4/7/03 - Committee of the Whole is failing to live up to their commitments, we have a series of steps that we take. Initially we write a letter. If there is no remedial followup, we bring the principals of the company, of the prime, in for a personal meeting with myself. I sit in at those meetings. We remind them of their commitments. Many times there is enough time -- because we do this in a timely way, there is enough time for them to correct their deficiencies before the fiscal year is over. In the event they don't, we have the ability to terminate their contracts or, if it is a multiyear contract, to not renew, so we try to be aggressive. We work very closely with Mr. Roundtree and the Minority Business Enterprise Council and I think that there is always more work to be done in that area, but we would like to be a leader in the enforcement of the process, not just the initial commitment.
Thank you. And I would also like to know what happened to the first contract, subcontract, and why that didn't work out.
Okay. We would be happy to put that together. Should we send that to the 28 4/7/03 - Committee of the Whole President's office?
I forgot to mention too that we are also monitored in the concession program in particular. The FAA requires us to submit an annual report that updates them on our participation, achievements relative to our initial goals, and we have done quite well in that area.
Thank you very much and I appreciate your effort in trying to stay on top of it and monitor it because that is important because what feedback we get from some of the minority contractors is that they get these contracts and then they don't actually do any work. It's just, you know, the company says, "I fulfill my commitment," but in the end they do not engage the subcontractor on the project and therefore the contractor does not make any money and does not do any of the work, and so I think the monitoring is extremely important and I hope that you will stay on it and strongly, strongly enforce that.
As you know, the 29 4/7/03 - Committee of the Whole commitment of this Council is to make sure that things change. It is not business as usual.
Can you describe to me the post 9/11 hiring process for Civil Service employees at the airport? What were the difficulties that you have had and will any of these problems affect the new international terminal?
Yes. The biggest change is the requirement now for a ten-year criminal history records check for every employee. We had to do those checks on all 15,000 of the existing employees working at the airport. We have currently a staff of about 675 people that work for the City. They were all subjected to those background checks. The principal area right now relative to the new terminal where we have encountered problems is relative to our custodial staff. We currently have approximately 150 custodial vacancies. A large number of them, over a hundred, were budgeted and allocated specifically for the opening of the new building. We do have the largest inhouse custodial staff of any City agency and we felt that our 30 4/7/03 - Committee of the Whole objective was to continue to use the inhouse capability by hiring additional staff for the new building. Remember, this building is 800,000 square feet. If you took the entire airport right now and cut it in half, this one new terminal is bigger than half of those other six terminals. So there is a large amount of terrazzo that has to be cleaned, the floors, many new bathrooms, and an enormous amount of glass that has to be cleaned in the building, interior and exterior. So we have been working with the central personnel department since about a year ago to address the shortfall. We were already short by about 50 positions in our custodial unit for the existing six terminals. We were successful in having a new specification written for the Custodial Worker 1 class. A test was given last summer. We got a Civil Service list late last year. We have been aggressively interviewing from that list, but we are still carrying large numbers of vacancies, and one of the big factors, if you look at the last hundred people that we got from the Civil Service list, we were only able to hire about one-third of that number, say about 30 to 33 people. A large 31 4/7/03 - Committee of the Whole number of the candidates were eliminated by the criminal history records check. So that is not a good percentage obviously. We have currently scheduled very large certifications from the remaining people on the eligible list. Over the next several weeks we will be interviewing 100 people I think, two weeks from now, another 50 people a week after that and some large groups of candidates in May also. That will be after the terminal opens unfortunately. We are looking at the possibility, although we have not initiated any paperwork yet, of a temporary outsourcing for some custodial help and we have been working through the Mayor's Office of Labor Relations to ensure that we do that in a way that is in strict conformance with the contract and that hopefully, you know, we will be copasetic with District Council 33. I think the main concern is that that would simply be a temporary measure to get us through this period until we can fill all of our vacancies. So we are attacking the problem both from inhouse and outsourcing, and we have also been working closely with Mr. Dubow and the other City 32 4/7/03 - Committee of the Whole agencies that have custodial workers who might potentially be available through downsizing in the general fund departments. We are very anxious, if they become available, to get them down to the airport for interviews and, if possible, to hire them as well.
I know we discussed this with you prior to today and my concern is that you are looking basically -- if a company comes in and you outsource this service, would the employees have to be City residents?
So what is the guaranty that you get a different pool of people if you outsource?
I think whoever we would ask to bring in from the outside, to bring in candidates, would be confronted with a lot of the same problems that the Civil Service system has and it is true they would not be confronted with the residency requirement, which does not really sit well with me personally, but for a temporary situation it may be something that we have to 33 4/7/03 - Committee of the Whole consider.
So in the meantime you would still continue to search and test through the Civil Service process.
Absolutely. There are approximately 500 people on the current Civil Service list. We would like to get them in as quickly as possible for interviews and hopefully fill all of our vacancies and then we would avoid the outsourcing entirely.
What are some of the restrictions -- in the background check what is the criminal -- what criminal categories would prevent someone from being hired for the custodial position? Is it just any criminal, any arrests, or are there limitations, are there certain crimes, just what?
There is a list of disqualifying crimes that is published by the Transportation Security Administration, and they are essentially almost any felony disqualifies you and 34 4/7/03 - Committee of the Whole that's because the nature of the custodial worker's job, at least at our airport, requires them to have access to areas beyond the secure checkpoints. So they are required to have badges that open some of the security doors to get to and from work and, as a result, they are required to go through these background checks. And we can get you that list of disqualifying crimes. I can assure you that we have also worked very proactively with the City's Law Department to review the security requirements particularly relevant to these background checks to make sure that even though it is a federal mandate, we want to assure that we are respecting people's constitutional rights, and the City's attorneys have been helpful in advising us in the administration of this process.
So do you have a firm in mind that you would deal with in terms of outsourcing?
Our initial outreach was to -- we have a company on board at the airport right now that has responsibility for our facility maintenance that includes about 25 different forms 35 4/7/03 - Committee of the Whole of maintenance, everything from pigeon control to roofing to fence repair. One division of that joint venture is called Affiliated Building Services. They have actually done custodial services at some other airports in the United States including Chicago, so we have asked them for a cost quotation at this point, and we are evaluating whether it is really a cost-efficient way to go or not. We have not reached a final conclusion at this time.
I'm really concerned about the outsourcing in terms of what impact it has on Philadelphia. We have a high unemployment rate here and we want Philadelphians to work first and to begin outsourcing creates a problem and you make all the efforts to even try to get Philadelphians to the point of applying. I know that you don't personally engage in the recruitment, but do you know what recruitment efforts are made by the personnel department? Is it central personnel that does the recruitment?
Yes, and we met with them last April to discuss this need that we knew was coming. One of the things we felt was at the time that we had a high turnover rate in the custodial 36 4/7/03 - Committee of the Whole unit and we felt it was partly because the requirement, the original requirement for that position, was tenth grade education with no 5 experience. We requested that they insert some experience requirement for people that had done some actual cleaning or custodial work and I believe they added a six-month requirement. They changed the spec with the Civil Service Commission and the administrative board's approval last summer and they did an aggressive advertising and recruitment effort which resulted in -- they gave a test I believe in September and we have one of the largest eligible lists that they have ever had in the history of that test. There were over 600 people on the list. The real problem we have confronted is this issue of the background checks eliminating in some cases 50 percent of those candidates. The other reason -- we did not rush to fill the positions as we might have and I think there were two reasons for that. One was that the building did not open as originally scheduled so that gave us the opportunity to postpone some of the hiring and we also knew there was a possibility for some general fund downsizing in other City 37 4/7/03 - Committee of the Whole departments where they have custodial workers. That's been discussed all the way back I think for a year or so as well and our sense was we didn't want to fill these vacant positions with outside hires and not be able to accommodate people who have already worked for the City and might be in need of a transfer opportunity and we continue to look for some opportunities to bring those employees down to the airport. I don't think that will happen though until the new fiscal year. So we are really caught right now in this period where we are going to open the terminal May 1 and until July we probably don't have a realistic chance of filling a lot of those vacancies as we would like to, so that's why we thought a temporary solution might be helpful. We do want to retain a certain standard of cleanliness and it is difficult. The existing staff is overtaxed and particularly at the end of a snow season. They do a lot of the manual shoveling on the curbs. The custodial staff does all of that. They do get a lot of overtime, but even overtime becomes less of an incentive when you have had an awful lot of hours when you are stuck at the airport during the snow 38 4/7/03 - Committee of the Whole season. So overtime is not always the answer, and we do need to fill some of these positions as quickly as possible so we can keep the place clean.
The companies that you are talking about outsourcing with possibly, are they local companies?
The joint venture of PAS has a local component. I think it has -- two of the three joint venture partners are local and the third one I'm not -- I think that is a Texas-based company, but I'm not a hundred percent sure.
General Asphalt was one. There is a company called Affiliated Building Services, ABS, and U.S. Facilities is also a member of the joint venture.
Yes, they would hire locally for our needs and they have had the maintenance contract at the airport now for about a year and a half and on all the other systems they maintain, as I mentioned, from elevators, 39 4/7/03 - Committee of the Whole escalators, moving sidewalks, they have done a fine job, so that was our first resort because we already had them under contract. We would need to amend the contract to do this temporary custodial service. The other alternative would be to start from scratch with a bid through the Procurement Department, but that would take a significant amount of additional time.
Good morning. Mr. Isdell, let me go back to an issue that was raised by Councilman Cohen regarding the international terminal as well as the passenger facility charges. First, what was the total cost of the International Airport?
The new international terminal's total is approximately $550 million. 40 4/7/03 - Committee of the Whole
We broke ground in August of 1999 so it is about three and a half, three and three-quarters years to complete.
The original project which was approved by Council in 1998 had a projected completion date of January 1, 2002. We did -- you might recall we did additional financing in calendar year 2001 in the spring and summer. Council approved some additional financing at that time. The agreement --
The additional financing I believe was $187 million. At that time we also changed the projected completion date to July of 2002. The main reason that we have been unable to get the terminal open until this month has been the security requirements that were changed and imposed upon us following the 9/11 terrorist attacks under the Transportation Security Administration which was 41 4/7/03 - Committee of the Whole created in November of 2001. As far as --
Let's go back for a moment though. The original projected completion date was when?
January 1, 2002, was changed to July 1, 2002. And we're anticipating opening for full operations May 1 of this year.
Your original projected completion was January 1, 2002, right?
How close were you to meeting that deadline on September 10, 2001?
September 10 of 2001 we had already changed the date to July 1 of 2002 and our sense on September 10 of 2001 was that we would in fact be open on July 1 of 2002 and we felt that we were on schedule and on budget to do that.
Okay. So let's make sure the record is clear. You had already anticipated missing the original completion date of January 1, 2002 prior to the events of September 11, correct?
You had changed your 42 4/7/03 - Committee of the Whole date already from January 1, 2002 to July 1, 2002.
Then because of the events of September you were further impacted by 6 a whole host of requirements. And is that when you 7 moved the date back to May 1, 2003? 8
We moved the date back 9 several times primarily because we were unable to 10 get commitments from the TSA on the delivery of 11 security equipment required for the opening of the terminal. We were unable to get that commitment until December of last year when we finally received a letter that included a delivery schedule. We needed both the commitment for the equipment and a delivery schedule of when that equipment would actually be delivered. When we got that information in December, we were able then to come up with a concrete opening date and we have managed to live up to that.
And in terms of the budget, were you already over budget prior to the events of -- were you already over budget on September 10, 2001?