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Minutes

Committee Hearing, February 13, 2001

Philadelphia City Council Committee HearingsFeb 13, 2001

People mentioned

Names our system found in this transcript. Automatically extracted, so it can include anyone named in the record, not only officials or parties.

Organizations mentioned

Ms. Orfanelli

Specifically? I'd have to get a report for you.

Councilman Ortiz

The answer is no. 7

Ms. Orfanelli

No. 8

Councilman Ortiz

Do we know, in terms of the Water Department, in terms of the collection agency that has been hired, what has been the effectiveness and what has been the amount of money collected and what has been the amount of money paid?

Ms. Davis

Miss Garrett will handle that question. (Witness comes forward.)

Ms. Garrett

The collection agency programs that we have been administering have been very effective, and the contract fees range from 18 to 20 percent of the amount collected.

Councilman Ortiz

How much money has been collected?

Ms. Garrett

Since 1995, we've collected over $90 million.

Councilman Ortiz

How much money has 152 2/13/01 - FY '02 OPERATING BUDGET been collected in the last two years?

Ms. Garrett

In the last two years, we've collected close to 40 million.

Councilman Ortiz

And how much money -- that's percent of that has gone to the 7 collection agency? 8

Ms. Garrett

Yeah, between 18 and 20 9 percent, yes. 10

Councilman Ortiz

Thank you, Madam 11 Chair. 12

Councilwoman Blackwell

You're 13 welcome. 14 I think now unless there are other 15 questions that we are now ready for MBEC and 16 Mr. Roundtree. I suspect you both could use the 17 break. 18

Ms. Davis

Thank you.

Councilwoman Blackwell

The Minority Business Enterprise Council, we're ready for your testimony. (Witness comes forward.)

Councilwoman Blackwell

The President asked that we call on you next. I do not know why. Maybe someone requested it? I don't know. 153 2/13/01 - FY '02 OPERATING BUDGET COMMISSIONER APPLEBAUM: Good afternoon. I don't know whether you intentionally want to go off the schedule, but I believe, based on the schedule, the next department should be the Board of Pensions and Retirements, then Sinking Fund, City Treasurer, and then Procurement. And traditionally, the MBEC testifies at the same time that the Procurement Department testifies.

Councilwoman Blackwell

Well, the President asked that we call on MBEC next.

Mr. Roundtree

Okay. Good afternoon. I'm James Roundtree, the Director of the Minority Enterprise Council. Thank you for this opportunity to provide my testimony. I will not read my full testimony; I will just provide a brief synopsis of some things that we are involved with and then be prepared to answer questions. As stated earlier, we usually make our presentation with the Procurement Department, but --

Councilwoman Blackwell

I suspect that she will then want to go in order of the testimony, but she requested that we do you next.

Mr. Roundtree

Okay. The Minority 154 2/13/01 - FY '02 OPERATING BUDGET Business Enterprise Council's FY 2002 Operating Budget is $946,631, which is a decrease of $56,000 over FY 2001 estimated obligation of $1,002,632. The Minority Business Enterprise Council is the agency charged with administering the City of Philadelphia's anti-discrimination and affirmative action purchasing policies under Executive Order 193 and Chapter 17-500 of the Philadelphia Code. Executive Order was 193 established to provide equal access opportunities for all businesses in the City of Philadelphia contracting program. It ensures that City's funds are not used directly or indirectly to promote, reinforce, or perpetrate discriminatory contracting practices. The MBEC, we direct its efforts to provide more innovative services to minority, women, and disabled business communities. The MBEC has created a proactive environment where its role is not only to create opportunities for the minority business industry but also to educate decision-makers about the importance of programs that reflect inclusive diversity. To this day, we are increasing our monitoring effort to verify and document the actual dollars spent with certified 155 2/13/01 - FY '02 OPERATING BUDGET firms. , as prime contractors or prime consultants. We continue to work closely with City agencies and departments as well as quasi-City agencies and the private sector to promote the inclusion in all contracting activity. At this writing, the Minority Business Enterprise Council had planned to disseminate the executive summary of the business utilization study, the study that examines the contracting policies for the City and its quasi-agencies. The study analyzes the impact of the City procurement process on minority and disadvantaged business enterprises participation on contracting issues and opportunities for the MBE/WBE community through the year 2005, but based on the findings of the report, the process to enact new legislation governing the City's MBE program will begin. Unfortunately, due to a number of illnesses, we were unable to disseminate it prior 156 2/13/01 - FY '02 OPERATING BUDGET to submission of this testimony, but after our presentation at this hearing, we will be meeting with the Finance Director to come up with the dissemination mechanism for that. 8 percent. 9 percent. 1 million. 15 In my written testimony, we have some 16 graphs that will verify that information. 17 I'd like to talk a little bit about some operational initiatives that we undertook during the prior fiscal year. The MBEC was successful in conducting a number of workshops on how to do business with the City for new businesses for firms currently certified but that were unsure of the process. Over the last two workshops, we had project-specific activity, which drew over 80 responses. One of the workshops 157 2/13/01 - FY '02 OPERATING BUDGET included participation from the City's Division of Aviation. And we also cosponsored a seminar with Intech Construction Management firm, a seminar concerning the $150 million new postal facility that will be located near the airport. Businesses that participated in these workshops receive specific project information and met with many of the actual decision-makers. We continue our effort to link with the Procurement Department and the contract opportunity procurement (indiscernible), which is a special procurement evaluation enhancement database system. This will allow the MBEC to monitor all phases of the contract process for public works, service supply and equipment contracts through an automated database. We also are utilizing the ACIS, which is the Automatic Contract Information System that allows the MBEC the ability to monitor the department's professional service contract opportunity and to provide information to the minority and women business community.

Mr. Roundtree

The MBEC is working very closely with the General Building Contractors Association on a 158 2/13/01 - FY '02 OPERATING BUDGET mentor protege program created to advance minority and women business participation through joint efforts of the majority entrepreneurs from business development through special project capacity. MBEC utilizes a 17-computer work station which links to the City's mainframe. This allows MBEC specialists and coordinators the ability to reference contract information and access minority, women, and disabled business enterprises directory information, thereby creating a efficient system which provides resource material for departments and prime contractors. We are currently working on a number of projects for monitoring purposes, and those projects are: Penn's Landing, or the Simon DeBartolo Project; the Eagles stadium; the Phillies stadium; Independence Mall; the electronic voting machines; the RCN Cable franchise; the Neighborhood Transformation Initiative; the Comcast Cable franchise; and the Veterans Stadium food concessions. I'd like to take this opportunity to 159 2/13/01 - FY '02 OPERATING BUDGET thank you for allowing me to provide this brief overview of our testimony, and I'm available for any questions.

Councilwoman Blackwell

Thank you very much, Mr. Roundtree. When was the business utilization study completed?

Mr. Roundtree

It was accepted in, I believe, the fall of '99.

Councilwoman Blackwell

Why has it taken so long for dissemination?

Mr. Roundtree

Because we have had several problems with consultants. We just completed our payment process with them in the beginning of the year 2000. We had some difficulty identifying a economic development consultant to help us review some of the findings. But we are confident now that we have enough information to bring everything to closure and to beginning to disseminate it by May the 30th.

Councilwoman Blackwell

May 3rd dissemination date plan? 160 2/13/01 - FY '02 OPERATING BUDGET

Mr. Roundtree

Yes. I hope to have an executive summary to all of the program participants within eight days once I meet with the Finance Director.

Councilwoman Blackwell

Okay. 'Cause we have had many people requesting this, and we've been waiting for quite some time, obviously.

Mr. Roundtree

Yes, ma'am.

Councilwoman Blackwell

The original business utilization study covered the years 1985 through 1995. You state on that the study analyzes -- the study analysis goes through year 2005. Would you clarify that?

Mr. Roundtree

Well, what has to happen from that vantage point is, we need to set up a number of activities, and one is a legislative finding. After we prepare the legislative finding, you then have to develop something which is called "narrowly tailoring," and we believe that it will encompass at least a period of five years -- not less than five years but probably not more than ten.

Councilwoman Blackwell

Say that again. I couldn't hear the end, it was kind of 161 2/13/01 - FY '02 OPERATING BUDGET garbled.

Mr. Roundtree

We believe that we have to have a time period for the activity not to exceed ten years, but not less than five.

Councilwoman Blackwell

Okay. So in this study, you say you cover years 1985 through 1995. Then you make some forward-projections? Is that what you're saying?

Mr. Roundtree

Well, it's a little bit -- it should be a little bit later than that. It will probably -- yes, we made some forward- projections based on the information that we have at the time -- that we had at the time.

Councilwoman Blackwell

All right. The mentor protege program was created to advance minority and women businesses. How many minority and women businesses have advanced through this program?

Mr. Roundtree

It just started, and right now, there are approximately seven businesses that have assigned two mentors, and it's primarily through the construction industry.

Councilwoman Blackwell

All right. Can you let us know who they are? 162 2/13/01 - FY '02 OPERATING BUDGET

Mr. Roundtree

I can get that information for you.

Councilwoman Blackwell

Okay. What software does MBEC use to monitor employment activity on specific City contracts and how does this system work?

Mr. Roundtree

Okay, right now, we don't have a proprietary software. We have been using Access as the database, and the two projects that we were involved in actually monitoring employment was done manually. They were not done by software.

Councilwoman Blackwell

There's no 15 proprietary software and -- say that again, the rest of it.

Mr. Roundtree

The ones that -- the two projects that we were involved with through the Gateway project and another one that escapes me right now was done manually. I'm sorry, the Parkway project was done manually.

Councilwoman Blackwell

Do we have plans certainly to have it not done manually but to move forward?

Mr. Roundtree

Yes. And what we're 163 2/13/01 - FY '02 OPERATING BUDGET doing now is, we have met with a consultant to come up with some software, but we are looking for the finances to be able to purchase it.

Councilwoman Blackwell

All right. Would you get back to that in detail? Certainly, we would ask that -- I am sure that the Administration would expect that in this area, that we're still not doing these records manually. I'm sure that the Finance Director and that the Administration would support having this material.

Mr. Roundtree

They have pledged their support to do so. The difficulty has been that we have been very busy from one project to another. And right now, we have not had any true need to monitor the employment. We are the business aspect and the employment side comes -- the employment monitoring portion will come once Councilman Ortiz asks me this question about that legislation.

Councilwoman Blackwell

I mean, are you saying that it's so small, your records are so small, that there was no need to --

Mr. Roundtree

No. What I am saying 164 2/13/01 - FY '02 OPERATING BUDGET is that the MBEC's role is to monitor the business aspect. We began monitoring the employment as a pilot activity on one project specific, and that was the Parkway project, but we have not been involved in actually monitoring any employment other than that. We are a participant on one of the Administration's executive orders for labor, but our role for that is to identify the level of participation for the various trades. And under that program, we were not given the authority to monitor the employment. The information was provided to us by the project managers. And then what we were supposed to do was review it and provide the information to Council.

Councilwoman Blackwell

So every other aspect of MBEC's operation is handled properly as -- except for the employment, which you're working on. Is that what you're saying?

Mr. Roundtree

Well, I wouldn't categorize it as saying if it's properly or improperly. I would --

Councilwoman Blackwell

I mean, you do have a software program? 165 2/13/01 - FY '02 OPERATING BUDGET

Mr. Roundtree

Yes. Technology- appropriate. We use the existing database and softwares that exist from a shelf standpoint. For instance, we can use the Access program and we can use Excel and those things, but when it comes to being project-specific, you want software that's dedicated to providing that information.

Councilwoman Blackwell

Explain the airport concession program, where you state that 60 percent retail merchandising units are leased by MWBEs and 40 percent of the lease concession locations are by MWBEs and 45 percent of gross sales go to them similarly.

Mr. Roundtree

Under the airport DBE program, there was a number of goals that were established. The retail merchandising units are the carts that exist. And during the prior administration and the prior Council President's administration, they agreed that the number of retail merchandising units that were going to be established at the airport should have a specific range in it, and also that those units would also be utilized for incubation for individuals that were interested in going into the retail arena. 166 2/13/01 - FY '02 OPERATING BUDGET As a result, we've been able to utilize that to identify minority and women businesses that are interested in providing goods and services out at the airport for the consumers. The initial part of the program that calls for the 40 percent location and the 45 percent gross sales is based on the fixed term of the development lease. We had initial goals established for the interim, but now the overall goals are those -- 40 percent and 45 percent are now what we're trying to achieve.

Councilwoman Blackwell

Would you please supply the Chair and Councilmembers with the airport concession program's annual participation report for Fiscal Year 2000 and 2001?

Councilwoman Blackwell

Thank you. Would you also explain and submit the minority participation report on the new international terminal, which is estimated to cost $600 million?

Councilwoman Blackwell

And what is 167 2/13/01 - FY '02 OPERATING BUDGET the status of minority participating for the nine projects you mention on of your testimony?

Mr. Roundtree

They're in a very infancy stage of it, so we wouldn't time have any specific numbers for you on those, with the exception of the Comcast Cable franchise activity.

Councilwoman Blackwell

All right. Well, would you give us what you have, and then when you have the other information available, submit it to the Chair?

Councilwoman Blackwell

Who will submit it to the member of Council?

Mr. Roundtree

Yes. One of the ways we plan to address that, on your ordinance, I believe, 00088, it requires the MBEC to give the Administration and Council a six-month look at the prior procurement opportunity or activity, and we plan to include those projects within that reporting mechanism.

Councilwoman Blackwell

Okay. Given the increase in City procurement with regard to the airport, a decrease for NTI was listed for $56,000. What are the -- what aspects are that? 168 2/13/01 - FY '02 OPERATING BUDGET Will services be cut back? Why do we have a decrease of $56,000 listed?

Mr. Roundtree

We, just like every other department and finance, we were asked to look at ways that we can achieve what (indiscernible) level that the Finance Department had agreed to, and that represents that level. That represents whatever level the Finance Department agreed to by department.

Councilwoman Blackwell

Have you identified where the cuts will be?

Councilwoman Blackwell

Can you give us that information?

Mr. Roundtree

Yes. It's been one unfilled position and a number of reductions in other areas that we can provide for you.

Councilwoman Blackwell

One unfilled position for how much, and what reductions?

Mr. Roundtree

I can provide that information.

Councilwoman Blackwell

Thank you. What is your strategy to be included or have minority firms included in the new economy? 169 2/13/01 - FY '02 OPERATING BUDGET

Mr. Roundtree

It will be a two-pronged approach. From a business standpoint, it's to make sure that we get as much information about current bid activities as we can to the minority, women, and disabled business community. Increase our outreach to both the prime contractor market as well as the developer market. To identify areas where we can increase the number of minority and women and disabled businesses that can participate as primes. And that's from a business standpoint. From the personal and professional services contracts standpoint, it's to meet with more of the departments, directors, and commissioners, and identify opportunities where minority, women, and disabled businesses can be considered as prime vendors or prime consultants. We go through a process now, after the budget is approved, identifying areas that have been to be announced. I try to match those up with minority, women, and disabled businesses for prime and subcontract opportunities. And we will continue to do that.

Councilwoman Blackwell

Are you 170 2/13/01 - FY '02 OPERATING BUDGET involved in the Neighborhood Transformation Initiative in terms of awarding demolition contracts to minority contractors?

Mr. Roundtree

Again, it's -- it's a two-pronged answer. If it comes through the procurement process, we will be involved. I was glad to hear that Council would like for it to come through L&I versus the Redevelopment Authority, because we have more leverage or more participatory activity if it comes directed through a City department than if it does from the RDA. But to that extent, only if it comes through Procurement or directly to the Department will we have participation in it.

Councilwoman Blackwell

Finally -- and then I'll call on other members -- Councilman Ortiz will be next. My final question is, what is your involvement, MBEC's involvement with the hiring of minority construction crews for the airport expansion program? Are graduates of local training programs, like Top Win and Orleans Technical Institute, that train women and 171 2/13/01 - FY '02 OPERATING BUDGET minorities being approached or tapped for hiring?

Mr. Roundtree

Yes, they are. I am involved with the developers, with US Air, and with the prime contractors through Turner and Gilbane (ph.) as well as the airport. The US Air has hired the Greater Philadelphia Urban Affairs Coalition as their employment monitoring activity, and one of the things that takes place is that the Urban Coalition is supposed to provide an employment report, and we recommend levels of participation and the agencies that should be participating, and those are agencies that they reach out to.

Councilwoman Blackwell

Thank you, Mr. Roundtree. Councilman Ortiz?

Councilman Ortiz

Thank you, Madam Chair. Mr. Roundtree, do you have a list of projects that have been done, built in the City over the last ten years, last five years, where they have been facilitated through TIFs, HUD loans, OHCD loans, and so on down the line?

Mr. Roundtree

No, I do not. 172 2/13/01 - FY '02 OPERATING BUDGET

Councilman Ortiz

You don't have that?

Mr. Roundtree

No, I don't.

Councilman Ortiz

So you would not have a listing of how these projects have done in terms of their minority subcontracting done and so on?

Mr. Roundtree

Not the way you just phrased it. I have been -- I have participated on a number of TIF projects, but not the way you just phrased it. For instance, I was a Oversight Committee member on the Loews Hotel, so I know the level of participating that received.

Councilman Ortiz

Do that, do the Loews Hotel for me. What was the level of participation, actual participation of sub contracts on the Loews Hotel?

Mr. Roundtree

I can provide that information to you, but I can't give it to you off the top of my head.

Councilman Ortiz

And would you have information at the same time in terms of subcontracting on the Loews Hotel in terms of actual minority employment in the skilled trades? 173 2/13/01 - FY '02 OPERATING BUDGET

Councilman Ortiz

Do you have that available?

Mr. Roundtree

I can get you that information.

Councilman Ortiz

You can get that information?

Councilman Ortiz

Do you have available information in terms of other construction projects, such as the Ritz Carlton, for example?

Mr. Roundtree

No. I don't -- I wasn't a part of that one. I was -- I can get you information primarily on the ones that I was involved in. I can come up with a list on those projects.

Councilman Ortiz

So, in essence, in that part of investment that we have had in the City, where an extraordinary amount of taxpayers' related monies have been invested, MBEC really has very little power to get information as to minority participation either in jobs or contracting in those areas. 174 2/13/01 - FY '02 OPERATING BUDGET

Mr. Roundtree

Especially difficulty in jobs. Not as difficult in the business arena, but more specifically in jobs. The only way that the MBEC has been involved in a TIF program is when City Council has requested that we be involved.

Councilman Ortiz

Well, you know, we've been going through this, some of us, for a very long time in terms of seeing how we can leverage City monies to be able to increase, one, the participation and the creation of minority entrepreneurs in City and do we begin to try to retain most of the money, or at least a good part of that money, that is invested through taxpayers' funds to these private contractors that they stay in the City. And we really don't get, over the years, the information that we require. And right now, we have a whole series of things on the table. We have the stadium, we have the ancillary aspects that will be produced as a matter of fact that we're building the stadium. And supposedly in the contract, we have clauses that require a certain percentage of minority employment in the skilled trades and in 175 2/13/01 - FY '02 OPERATING BUDGET the actual subcontracting of businesses. We've had these before. And it seems like when we go back and we try to get the information that is -- for example, on the Convention Center and the Marriott and so on, that the testimony that is given here is one, and then the reality of it as it gets done has been another. And we have never achieved -- we have never been able to achieve the level of minority participation either in jobs or in contracts that testimony has been given that says that we were going to. Go ahead.

Mr. Roundtree

I'm kind of waiting for the question.

Councilman Ortiz

Well, I know that, but I'm just saying that we are here once again, and you seem not to have the answers of what has happened or the details. And we'd like to see what those details are. And, for example, in on one of the questions Councilwoman Blackwell asked you, you said you're trying to achieve in terms of the airport, trying to achieve. That means those 176 2/13/01 - FY '02 OPERATING BUDGET goals have not been achieved; is that correct?

Mr. Roundtree

And the process is not over.

Councilman Ortiz

What does it mean? What do we have? What is the reality of what we have? Don't tell me what we're trying to achieve; tell me what it is that we currently have.

Mr. Roundtree

I can do that.

Councilman Ortiz

Okay.

Mr. Roundtree

I can surely do that.

Councilman Ortiz

Okay, I'd like to see that in a report, I'd like to see that in black and white. These things -- because we're always trying to achieve. What I'd like to find out is where we're at and what we have achieved (indiscernible)..

Mr. Roundtree

Okay. And now, Councilman, based on that, you have to give me more than two days to get that information to you, thought. You've asked me to accumulate activities that I've been involved with, especially around TIFs. That's information that I would need more than two days for. And the Administration would 177 2/13/01 - FY '02 OPERATING BUDGET like to get you a speedy response. I know the position that the Administration will take, but I will need more than two days to respond to your inquiry.

Councilman Ortiz

But, you know, these are inquiries that we've been asking for over time, and it seems like we never get the answers. And then we have to wait for to you come back and then we ask them again.

Mr. Roundtree

Okay, but with all due respect, I've never been asked for -- you mentioned the Convention Center, you mentioned the Marriott Hotel. I've never been asked for those information, nor have I been placed in a position where I should be responsible for giving you the answers on those two project, especially when the bodies who are responsible, who were directly responsible to you, report to you also.

Councilman Ortiz

But I am asking for the answers to the question that Councilwoman Blackwell asked.

Mr. Roundtree

I will have those, I will have those.

Councilman Ortiz

Thank you, Madam 178 2/13/01 - FY '02 OPERATING BUDGET Chair.

Councilwoman Blackwell

Thank you. Might I also add, Mr. Roundtree, that I think you had to expect some of these questions. You knew you were coming to testify.

Mr. Roundtree

I wore a black suit so it would help with the bruises.

Councilwoman Blackwell

Good, good, okay. That sounds like a fair answer to me. Councilman Nutter?

Councilman Nutter

Thank you, Madam Chair.

Councilwoman Blackwell

You're welcome.

Councilman Nutter

I'd like to go back to an area where Councilwoman Blackwell was a little while ago, and I'm just reading the testimony on . Now, it says, "At this writing, the MBEC has disseminated the executive summary of 'a business utilization study.'"

Councilman Nutter

Can you tell me who the executive summary has been distributed to thus far. 179 2/13/01 - FY '02 OPERATING BUDGET

Mr. Roundtree

It has not been disseminated to anyone at this point. When we were preparing this, we have fully had intended for it to be submitted to the Finance Director and approved for dissemination. But unfortunately, the key person who was putting it together became ill and was unable to complete it. And thus, this testimony had been done, and I haven't had an opportunity to meet with the Financial Director, nor the other participants in the program to disseminate the information.

Councilman Nutter

Now, you said the person became ill and they couldn't complete what? What were they working on?

Mr. Roundtree

They were working on a summary, they were working on the executive summary.

Councilman Nutter

So your testimony now is actually the summary is not done?

Mr. Roundtree

No, the summary is complete. I have to meet with the Finance Director and the Administration to determine the level of dissemination. Or the methods of dissemination. 180 2/13/01 - FY '02 OPERATING BUDGET

Councilman Nutter

Okay. Now, do you anticipate that Council will be on the dissemination list?

Mr. Roundtree

Yes. I would not have put it in if I didn't think that was going to be appropriate.

Councilman Nutter

Well, I appreciate that Mr. Roundtree, but it has become apparent that I think some people don't necessarily believe that we actually read this testimony and then put things their testimony at which they are then seemingly stunned and surprised that someone would actually ask them a question about it. And so, you know, I don't know exactly what your policy is, but you know, I do actually read the testimony. And if it's in there, you know, I think that it's then open for full discussions. So -- but I appreciate that.

Mr. Roundtree

But for the record, Councilman, I understand that Council does read the testimony and takes the testimony to heart, and so I only put things in here that I'm pretty sure if not possible that I'm going to live up to. And I can only handle the things that I'm 181 2/13/01 - FY '02 OPERATING BUDGET responsible for.

Councilman Nutter

I understand.

Mr. Roundtree

So those are the only apologies I'll make.

Councilman Nutter

I understand. That's fair. On , can you -- I mean, it appears that the participation by disadvantaged firms, all contracts in that chart, in the Fiscal Year 2000 is actually less than it was in Fiscal Year '95 and -- so is that correct?

Councilman Nutter

Okay. And secondly, would you say that there is more work or more actively? Because I'd be interested in the dollar-levels, and I don't recall seeing that as a part of the chart work. So I'm intrigued as to what these percentages are relevant to -- 13.79 percent of what?

Mr. Roundtree

Okay.

Councilman Nutter

Or 16.32 percent of what? And but my general sense is -- let me get back to my question. There must have been more work and activity in FY 2000 than there was in 182 2/13/01 - FY '02 OPERATING BUDGET FY '95. Is that --

Mr. Roundtree

I would -- based on what you just --

Councilman Nutter

Is that a fair assumption?

Mr. Roundtree

I can't -- I can't even respond to that. I would have to go back and look at the actual information.

Councilman Nutter

Okay. Tell me what the contract spending numbers were in FY '95 total as compared to FY 2000.

Mr. Roundtree

Okay, I will get that information for you.

Councilman Nutter

Okay. Why are the numbers lower.

Mr. Roundtree

And I will have that explanation for you also because I don't want to speculate once I have that in front of me I will then issue the language that supports it.

Councilman Nutter

Okay. Why are the numbers what they are, and have they ever been higher in previous years?

Mr. Roundtree

They were higher, I believe, back in -- it has to be 1988 probably was 183 2/13/01 - FY '02 OPERATING BUDGET our best year.

Councilman Nutter

1988?

Mr. Roundtree

Yes, was our best year, and it was the best year for participation for women and minority businesses.

Councilman Nutter

What were the numbers then?

Mr. Roundtree

I will get that information for you. And the only reason why I know that is, that was prior to the Richmond versus (indiscernible) decision, and everything began to decline from 1989 through 1992 from stability.

Councilman Nutter

So absent the law in place, generally referred to as -- (Unintelligible, parties talking over each other.)

Councilman Nutter

Absent the law in place, then all of a sudden people couldn't -- they couldn't find people anymore, or they didn't feel compelled to do outreach or have people on the job and just said, Well, hey, life is good now, let me go back to doing what I was doing 184 2/13/01 - FY '02 OPERATING BUDGET before?

Mr. Roundtree

That's a kind of difficult question to respond to primarily because I don't know what was in most of the psyches. I can only tell you that the general attitude was just that, when people heard that the set-aside prohibition -- and that's it was affectionately called -- was deemed unconstitutional, they then began to think that they did not have to comply with any level of the City's program. Fortunately for us, the way the program was established, it was done on increments of the activity. For instance, the only thing that was struck down in 1989 or '90 was the public works provision. The personal and professional service contracts (indiscernible) services upon equipment still could have goals. But the atmosphere was different and the City faced a number of legal challenges. And that's the only thing I can attribute that to earlier.

Councilman Nutter

Well, subsequent to the legal decisions, I mean, how do you get compliance now? I mean, why does anybody comply?

Mr. Roundtree

Because as then, as it 185 2/13/01 - FY '02 OPERATING BUDGET is now, it's an element of the -- if it's a bid activity, it's a element of the contract. They have to show good faith, and we think we do an excellent job of outreach and assuring that firms -- the ranges that we set, there are firms out there that are ready, willing, and able to participate.

Councilman Nutter

I'll establish the premise that I believe that you are attempting to do your job to the best of your ability and with the resources that you have available to you. Having said that, what is your assessment of the FY 2000 number for all contractors as 13.79 percent? And for public works contracts, minority businesses was 10.97, female businesses was 5.13. I mean, one, are any of those numbers acceptable to you? And, secondly, do we have -- does the office have particular goals as to where you think we should be?

Mr. Roundtree

First question: No, the numbers are acceptable to me. However, given -- again, with this premise, given the climate that we live in, they are probably the absolute 186 2/13/01 - FY '02 OPERATING BUDGET best that we could do with what we have.

Councilman Nutter

What does that mean, and are you now telling me that in a more perfect world, the numbers couldn't be better?

Mr. Roundtree

In a more perfect world, it could be much better.

Councilman Nutter

Okay. (Unintelligible, parties talking over each other.)

Mr. Roundtree

If we had an affirmative action program versus a anti- discrimination program, the numbers should definitely be better. But under the anti- discrimination program, the only thing a bidder has to do is to tell us that reasonably they could not achieve those numbers from a litany of things. A, I do perform all of the work myself. B, I can demonstrate that the minority and women businesses were higher. And I mean I could go down the list with reasons why they can receive a contract and not obtain the goals from a nondiscriminatory manner. As long as they can prove that they did not discriminate in any manner in reaching whatever levels they did or not, then the only 187 2/13/01 - FY '02 OPERATING BUDGET obligation the City can have then is to award the contract. And that's under the anti- discrimination policy. Under the affirmative action order, they would have to demonstrate that they used some affirmative steps to achieve the goals. So to say that I'm doing all of the work with my own forces will would then not be acceptable. To say that, you know, that the only firms that we solicited, the minority or female firms that we solicited was too high, it would then be unacceptable. But those are the differences between the two programs.

Councilman Nutter

Let me ask this question. On some of the TIF projects, and even the recent stadium project, what were the -- I think there's a term of art used. Is it an economic opportunity plan that is developed in those projects?

Councilman Nutter

Now, those are recent projects. What were they?

Mr. Roundtree

They're an attempt to 188 2/13/01 - FY '02 OPERATING BUDGET structure diversity and inclusion and having -- and by the way, they are all voluntary. I mean, that the owner or the developer is suggesting to you that that --

Councilman Nutter

Well, if I've got almost a half a billion dollars, I might be willing to voluntarily do a lot of stuff, right?

Councilman Nutter

Oh, okay, all right. Go ahead, I interrupted you.

Mr. Roundtree

But that's the difference. I mean, you kind of answered your own question. If that's the kind of rewards you're going to get, there are some things that you are going to do. Now, on the other side of that, if you're not going to get any reward for doing this, why do it.

Councilman Nutter

Well, Mr. Roundtree, people who are doing work for the City are not doing it for free, right?

Mr. Roundtree

No. 24

Councilman Nutter

This is not like part of their pro bono side of their construction 189 2/13/01 - FY '02 OPERATING BUDGET business.

Mr. Roundtree

No. 4

Councilman Nutter

Where they just think out of the kindness of their heart, they should go build and renovate rec centers for us and libraries and dig up streets and all kinds of other stuff. I mean, we do pay these people, right? I mean, don't they get a check with Sade's name on it?

Mr. Roundtree

I think her testimony's coming up after mine.

Councilman Nutter

They get a check from the City, right?

Mr. Roundtree

Yes, they do.

Councilman Nutter

They are working for hard, cold U.S. cash.

Councilman Nutter

Okay. Isn't that a benefit? I mean, they price it in such a way so that they actually make money, right?

Councilman Nutter

They're not just trying to cover costs and, you know, life is good, and we're just going to break even and, like, have 190 2/13/01 - FY '02 OPERATING BUDGET this company, and we're just going to do what we do 'cause we think the City is a great place.

Mr. Roundtree

No, it's about business.

Councilman Nutter

Okay, they're making money.

Councilman Nutter

Okay. So why don't we have an economic opportunity plan with people who have contracts with us. Tell me the difference between that and all of these big facilities and big projects. The folks come in and they voluntarily agree to do these certain things because they are going to get Tax Increment Financing Districting and not pay certain taxes for years so they can build very large 18 buildings, at which most of us will never go t, 19 except for maybe ground-breaking and 20 ribbon-cutting, and they voluntarily agree to, some of them, some fairly high numbers. Isn't that correct?

Councilman Nutter

I mean, they're higher than -- 191 2/13/01 - FY '02 OPERATING BUDGET

Councilman Nutter

Do you know anybody that came through here in recent times and agreed to percent? Minority business? 6

Mr. Roundtree

No. 7

Councilman Nutter

Oh, they go a 8 little higher than that, right? 9

Mr. Roundtree

Always. 10

Councilman Nutter

Okay. What were the last couple?

Ms. Rafferty

I couldn't tell you.

Councilman Nutter

25, 30? 35, 40?

Mr. Roundtree

Oh, they're definitely in the percentile. They've consistently been 16 in the 20 percentile range. 17

Councilman Nutter

Okay, all right. 18 So could we have an economic opportunity plan 19 model for some of our contracts? 20