Trying to figure out how to do it. When you're dealing -- It's one thing to do it with one account. It's another when you're dealing with hundreds. It's a systematic problem to try and deal with it. We can think it through and see whether we could offer that, but I'm not sure if we can.
I certainly will look into it, but I'm not sure that would be possible.
All right. And the other issue is with respect to the deferral plan, which would be deferring the entire increase until March of the following year. The discount would apply to both the --
I have to say that we had not been considering the discount amount continuing on either plan. I will have to look at that, because the way -- That authorization comes to us from State Law, in terms of establishing a discount period, and that discount period is a fixed period 64 Bill No. 020808 of time. I'm not sure if we can extend that. I have to look at that.
And so I'll look at it for both programs. But I can't tell you right now that it will be possible, either from a legal perspective or from a systematic perspective, to be able to offer the one percent discount on the amounts that are paid.
In terms of the system, I mean, I don't see how that could be a problem --
We would have to do it at the back end once the payments were made, and then put a credit against the account.
I just have to see 65 Bill No. 020808 what it does. Our system issues are difficult to deal with right now, because we're in the process of converting to a new system. And it makes it extremely difficult for us to deal with the older system in doing some of these things.
But not on a deferral. I mean, you're talking months. 9
We're still figuring 10 out how we do it. We are committed to doing it. 11 We just don't yet know how we're doing it 12 systemically.
Okay. All right. I just need clarification on those two issues.
Commissioner, do you mind explaining again what happens to the 135,000 people who pay through a mortgage company?
Basically, they are going to be dealing with their mortgage companies, in terms of how the payments are made. If their mortgage company would 66 Bill No. 020808 agree to the deferral, we would accommodate them and implement that. But our relationship in those instances is with the mortgage company. We provide an amount to them that is their tax liability and we work with the mortgage company.
Let me ask a question, because I think this has been prolonged. Have you or anybody from the Administration spoken to any of the mortgage companies to explain what is being offered or what is being proposed?
We have communicated with them to let them know that there would be some issues out there and ask what their response would be. Basically, the response we got back -- And this was an informal communication back in September or October when we were first discussing all of the potential issues. They indicated that they would really not be changing their rules for Philadelphia. Most of them are large institutions that service multiple banks. And the ones who pay us and that we have the relationship with service 67 Bill No. 020808 sometimes hundreds of banks around the country. And they are not interested or willing to be flexible.
Thank you, Madam Chair. On that particular issue, so, Commissioner, what you're really saying is: We can offer a variety of different programs, and if the perspective is these are programs that are helpful to people, in terms of a deferral, we can offer those programs; but ultimately, the individual homeowner is not only going to have to deal with the City, but ultimately their bank will determine whether or not they can participate in the program at all. Isn't that correct?
If they have a mortgage and they escrow their real estate taxes as part of their mortgage, the mortgage company becomes a party to this whole solution, yes. 68 Bill No. 020808
So, what's the relief, then, for that person? There is none; isn't that correct?
Commissioner, I think you can do a little better than that. If the program is out there, if they are not eligible for senior citizen freeze, based on Pacenet or Pace, rather, guidelines --
They cannot take advantage of any other programs that we have, which are few, most of which are abatement programs based on improvements to your home. Just talking the average regular person, walking up and down the street. They have a job; they pay their mortgage; the mortgage company pays the taxes. They call up First Union Wacovia, Wells Fargo. These places are in Idaho, North Dakota, Delaware, wherever they're located, and 69 Bill No. 020808 say: I want to participate in the City's percent deferral program. And I'm only going to pay up to 15 percent of the increase, even though you know what the total amount is; and I'm going to defer the amount over 15 percent until next year. I assume they're going to say: Well, that's very interesting. And you can try to participate in the program all you want. Your escrow payment is going to be increased by the amount of the increase divided by 12, and you better pay that amount when your payment comes due or we're going to be chasing after you. Isn't that really the bottom line?
I can't say that it would happen in a hundred cases out of a hundred, but it is --
Because they basically say that they want to pay the full liability. 70 Bill No. 020808 They do not want to take a second position to the City.
Right. I mean, Wells Fargo Mortgage Company is not going to change their computer system to accommodate one program in the City of Philadelphia.
Thank you. The Chairs recognizes Councilman Kenney.
Thank you very much. Just one point of information on that same subject. I personally have had three mortgage companies in the last two, two-and-a-half years, want a mortgage that I have. They sell those mortgages like they sell, you know, underwear. And if you could possibly get a deal with one of these companies, 71 Bill No. 020808 and then six months later they sell your mortgage to another company, you have to go through the same process again. So, three mortgage companies in two-and-a-half years. I mean, it's difficult dealing with them as it is when you have questions. But to deal with this kind of program with three different companies in that period of time is just -- it's virtually a maze. So I mean, just to add on to what Councilman Nutter was saying, Councilman Di Cicco, and the Council President was saying, it really is going to be an ineffective program, because you're going to have to deal directly with these companies, and you don't know from month to month who you're dealing with. Thank you.
Thank you. The Chair recognizes Councilwoman Tasco.
I'd just like to ask a question. Do the individuals who pay their taxes in escrow with the mortgage companies, do they get the benefit of the discount? Do the mortgage companies pay -- since they're escrowing 72 Bill No. 020808 this money, can't they pay it in time for the homeowner to get a discount?
The vast majority of the mortgage companies that pay us pay by February 28th and take advantage of the discount. I can't tell you how they handle it with the individual taxpayer, but they should be giving each taxpayer the benefit of that, because that is the amount that they are paying. And that would have to be reviewed on a case by case basis with your own mortgage company if you're in that situation.
Are there any other questions from Members of the Committee? Do we have anyone else to testify on this bill? Saying none, this will conclude the Public Hearing. We will now go into our Public Meeting. 73 Bill No. 020808 I'm sorry, Councilman. Your light wasn't on. Councilman Di Cicco. COUNCILMAN Di CICCO: Madam President, is it appropriate at this time to ask to vote the Bill out of Committee?
We're going into the Public Meeting. COUNCILMAN Di CICCO: We're going into the Public Meeting. I apologize. I'm sorry.
We will now go into our Public Meeting. The Chair recognizes Councilman Di Cicco. COUNCILMAN Di CICCO: Thank you, Madam President. I move that Bill Number 020808 be reported out of this Committee with a favorable recommendation, and a further recommendation that the Rules of Council be suspended so as to permit first reading this day of Bill Number 020808.
The ayes have it. The motion carries. Bill Number 020808 will be reported out of Committee with a favorable recommendation; also recommendation that the rules of Council be suspended so as to permit first reading this day of that Bill. The record will also note that the Administration has requested that Resolution 12 Number 020764 be withdrawn. This concludes the Public Hearing and Public Meeting. I would ask all of my colleagues to please go into the anteroom so that we can start our caucus. (Public Hearing and Public Meeting concluded.) 75 Public Meeting CERTIFICATE I HEREBY CERTIFY that the proceedings, and evidence are contained fully and accurately in the stenographic notes taken by me upon the Public Hearing and Public Meeting of The Council of The Whole of The City Council of the City of Philadelphia, taken on December 16, 2002, and that this is a true and correct transcript of same. _____________________________ DAVID A. DEIK, RPR and Commissioner of Deeds (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.)