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Minutes

Committee Hearing, February 25, 2003

Philadelphia City Council Committee HearingsFeb 25, 2003

People mentioned

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Organizations mentioned

Mr. Gamble

You're welcome.

Councilwoman Brown

Thank you, Madam Chair.

Councilwoman Tasco

Thank you. The Chair recognizes Donna Reed Miller.

Councilwoman Miller

Thank you, Madam Chair. Good afternoon.

Mr. Gamble

Good afternoon.

Councilwoman Miller

I just have a quick question. But I do want to mention that I do support my colleagues quest to have a priority keeping in Philadelphians working, okay?

Councilwoman Miller

I want to talk about capital projects. When capital projects are 619 2/25/03 - FY '04 OPERATING BUDGET awarded, I guess really the question is what happens? Tell me the process. Once the bids are out there, we have the companies that bid on the job, and I believe MBEC sets minority participation goals.

The Witness

That's correct.

Councilwoman Miller

Tell me what happens after that.

Mr. Gamble

What happens is that the prime or those who are bidding the prime have to go out and solicit subcontractors for this particular bid. And then they will submit with their bid the prices of their subcontractors as well. And then an award is made based on the lowest prices meeting specification.

Councilwoman Miller

Who monitors the level of the MBEC percentages for minority participation?

Mr. Gamble

MBEC does.

Councilwoman Miller

So if the firm that won the bid now has pretty much, I guess, the contract, if they have not met the percentages requirement, what do you do?

Mr. Roundtree

I'm James Roundtree, I'm Director of the Minority Business Enterprise 620 2/25/03 - FY '04 OPERATING BUDGET Council. We contact both entities to find out why. And then based on the contract obligations, we determine what can be done next. Either recommend to the Procurement Commissioner that they be debarred if it was a blatant omission by the firm or come up with some financial incentives of how the minority or women businesses can be paid or participate in the contract.

Councilwoman Miller

But will you release the contract without the percentages?

Mr. Roundtree

Oh, no. That process is once the bids are turned into Procurement, the commitment form is sent to the MBEC. The MBEC reviews it, contacts the minority and women businesses that are listed on the solicitation commitment form to confirm that they are expected to be participating and what they're supposed to be doing. Then we write a recommendation to the Procurement Commissioner as to the acceptance or non-acceptance of that activity. If we approve it and then it's accepted, then it's sent on to the Law Department for conformance. And at that point, I think is where you're interested, what happens if the firm did not live up to its obligations. Generally, it's 621 2/25/03 - FY '04 OPERATING BUDGET at that point when we send out a letter asking firms if they have participated on the project for this dollar amount. Then we find out whether or not they have. Unless it's a capital project or a TIF project where we've had some responsibility for doing on-site monitoring, then we do a monitoring on a monthly basis and ensure that the firms are participating. But if not, we do it by sending out a letter asking for them to verify the contract level of participation that they had listed on the S&C form. Once that comes back, we put it in our report.

Councilwoman Miller

And if they're not on a capital project?

Mr. Roundtree

Most Public Works are capital projects, and it starts off in the professional service realm and then goes through Procurement for the actual building. So what happens in Capital Projects from a professional side winds up being a Procurement opportunity and the actual bid, bricks and mortar type of scenario.

Councilwoman Miller

So then no Public Works contract should be awarded or let go or given them the go-ahead to start the work without the 622 2/25/03 - FY '04 OPERATING BUDGET percentages being met?

Mr. Roundtree

Part of the evaluation, remember this is the 193 is the anti-discrimination policy --

Councilwoman Miller

It's a good faith effort.

Mr. Roundtree

And it's not an affirmative action. So what we have to determine whether or not the firm discriminated in this marketing or contract effort. If we deemed that the firm did not discriminate and they have not met the percentages but they did not discrimination for other reasons other than discrimination, then we have to award the contract to the lowest responsive responsible bidder. And that's where the kind of difficulty or sensitivity comes in when we set a range and a firm did meet it by saying, "We're going to perform the work with our forces." If they can demonstrate that they are going to do 98 percent of the work with their own forces, then we cannot deny them a contract.

Councilwoman Miller

But if they're going to go out and get subcontracts?

Mr. Roundtree

Then we have to make sure, as 623 2/25/03 - FY '04 OPERATING BUDGET you said earlier, that they perform a good faith effort in including minority and women and disabled businesses.

Councilwoman Miller

And I notice everybody has their own interpretation of what "good faith" means. And I think that's where we run into these problems, around good faith.

Mr. Roundtree

There are a list of about -- it used to be 10, but it's about 8 different items that they have done to assure good faith. One of the things that we are proposing in the new executive order is to give the good faith area a weighted point percentage. And say that in order to be deemed good faith you have to hit somewhere in between a 70 and the Commissioner and I are working out the levels between a 70 and 85 percentile just to be deemed a good faith effort, a responsive and a good faith effort. Right now we don't have a weighted system. If they indicate that they did solicit a firm, the did solicit minority or women firms and that they were not satisfied with the results, be it the price is too high, the capacity was limited or there was not a discriminatory practice, then we would still have to award the 624 2/25/03 - FY '04 OPERATING BUDGET contract to them -- I'm sorry. We don't award. We'd have to recommend to the Procurement Commissioner that the contract be awarded.

Councilwoman Miller

And suppose you recommend to the Procurement Commission that the contract not be awarded, then what happens?

Mr. Gamble

Then it would not be awarded.

Councilwoman Miller

So with the new definition or the new 10 points or the 8 points, whatever you said, the good faith criteria, hopefully, your goal in doing that is to maybe enhance the level of minority participation on City contracts?

Mr. Roundtree

Yes, indeed.

Councilwoman Miller

I'd be interested in seeing the results. How soon do you think this draft is going to be ready? I know you're meeting with Janice and everybody, so when do we think this new executive order will be ready for implementation?

Ms. Davis

Janice Davis, Director of Finance. As soon as we can schedule a meeting with the Mayor to go over what's contained in that executive order and then address any issues that 625 2/25/03 - FY '04 OPERATING BUDGET anyone else may have in the executive order. We will be rolling it out. I've shared a copy of it with John Macklin to get his perspective on any items that he might see missing in it. So we're ready now to go to the Mayor with it.

Councilwoman Miller

Thank you. Thank you, Madam President.

Council President Verna

Are there any other questions of the witnesses? The Chair recognizes Councilman Mariano.

Councilman Mariano

I just want to say for the record Councilman Nutter asked all the questions that I was going to ask.

Council President Verna

Councilman Ortiz.

Councilman Ortiz

The thing through this discussion at this hearing, the thing that really bothered me about the latest testimony, it expresses sort of an informality about the bidding process in the Procurement Department. That is bothersome and questionable. I would like for you to give us in writing in detail what is the process from A to Z that you go through to give somebody a contract and decide upon that company or that individual? I also am adding to Councilman Nutter's request, because he 626 2/25/03 - FY '04 OPERATING BUDGET asked you about Philadelphia firms, I'd like to find out as much as I can about the background of the individuals, whether they're African American, Latino companies and so on down the line. And if you have a prime with subcontractors, I would like to find out who those subcontractors are, and the ethnicity or African or Latino women background of them. And I know that you're coming up and saying you don't have a system that does that.

Ms. Deyoung

Our system currently tracks minority or women or disable, not by ethnicity, though. Strictly minority purposes only.

Councilman Ortiz

Well, minority, you're black, Latino, or you're Asian, Native American or female. But in your shop that go through the Procurement Department, we have asked this about the contracts from Ms. Davis, that together with the process that you have in your shop in terms of determining --

Ms. Davis

The listing contracts that we have was sort of all inclusive. So I'll be looking to this young man, to the professional services group and we'll pull it from multiple --

Councilman Ortiz

We'll be looking to him 627 2/25/03 - FY '04 OPERATING BUDGET also.

Ms. Davis

We'll pull it from multiple directions, but we should be able to get you what you're looking for.

Councilman Ortiz

What I would like in writing is the process from A to Z.

Mr. Gamble

Yes, Councilman, you'll get that.

Councilman Ortiz

Thank you.

Council President Verna

The Chair recognizes Councilman Nutter.

Councilman Nutter

One quick question. Commissioner, can you tell us -- I've heard different things about it. I don't completely understand it. But there's supposed to be a group now reviewing every contract that comes through the City, some Contract Review Committee or team. Do you know anything about that?

Mr. Gamble

Yes, I do, Councilman.

Councilman Nutter

What is that about?

Mr. Gamble

It's the Contract Review Committee. The various individuals from City government, Procurement, Finance, MBEC, Budget, who actually looks at every contract that comes through 628 2/25/03 - FY '04 OPERATING BUDGET the City. Every bidding opportunity before the department can submit a request to procurement or go out and solicit an RFP, it must come through this committee.

Councilman Nutter

When did that start?

Mr. Gamble

It started May of last year.

Councilman Nutter

And what was the impetus for doing this?

Mr. Gamble

The impetus for doing it was that the Mayor wanted to know who was responsible for actually approving or obligating the City for contracts. And so at that time --

Councilman Nutter

Was there some problem or something?

Mr. Gamble

He wanted to know who was responsible because at that time departments would go out and buy without proper authorization. Also, he was concerned about making sure that there were opportunities for companies within a city so that we would not do business as usual. If a company or if a department has been comfortable with a company for the past 10 years or so, then normally what happens in professional services arena they will just continue to renew it. So it was the intent to try 629 2/25/03 - FY '04 OPERATING BUDGET to stop this type of action from taking place.

Councilman Nutter

Stop what type of action?

Mr. Gamble

Where companies were -- where vendors were given contracts on a professional basis without some type of procurement opportunities or without sending out some type of competition.

Councilman Nutter

So what's been the result so far? Have more Philadelphia companies had opportunities.

Mr. Gamble

There are some. I don't know the number, Councilman. We will get that information to you that does talk about the opportunities for Philadelphia, especially in the professional services area.

Councilman Nutter

Now, I have to assume, you'll correct me if I'm wrong, that many of the contracts that you're reviewing are not professional services.

Mr. Gamble

The ones that procurement deals with are non-professional, but the CRC, the Contract Review Committee, we look at all contracts, professional services as well as Procurement.

Councilman Nutter

I was intrigued by your comment, and I'm pleased to hear that that was of 630 2/25/03 - FY '04 OPERATING BUDGET concern to the Mayor. But I remember in our earlier discussion, you seemed to indicate that given any kind of preference to Philadelphia firms wasn't possible and you cited the City Charter as an obstacle. So which is it?

Mr. Gamble

Well, when I was speaking of the City Charter, I'm referring to procurement opportunities where we have to bid them. In the RFP you have more latitude where you can determine award based on different values or different criterions. In Procurement, I really don't have that leeway or that luxury because it says if a company resides in Timbuktu that they can bid on the project. So in the professional services area, we do have opportunity to do that where that can be done.

Ms. Davis

If I might add, one of the reasons why we also looked at bid contracts was sometimes projects can be put together in a way that makes it almost impossible to have inclusiveness or to have opportunities for smaller companies or companies located even in Philadelphia. So we've been looking at the opportunities to see if there aren't ways that we can restructure the way a bid goes out, whether it is a gigantic bid or a bid that 631 2/25/03 - FY '04 OPERATING BUDGET goes out in smaller packages to see if there is not a way to get participation both from a diversity standpoint and from a local preference standpoint without violating the Charter.

Councilman Nutter

I understand. So Commissioner, you said that you'll be able to get us a report from the start of the Contract Review Committee which would lay out where new opportunities have been provided or where Philadelphia-based businesses have been able to more fully participate in these contracting opportunities; is that what you said earlier?

Mr. Gamble

No. What I was saying to you earlier is that we will provide to you -- the contracts you had asked for as far as companies living in Philadelphia versus non-Philadelphians. And I said that I'll provide that to you.

Councilman Nutter

That was in the earlier discussion. I'm saying in this discussion I thought I heard you say that you could -- because this discussion has only been about the Contract Review Committee and its work. And I thought I heard you say earlier in this discussion that you could get me a report showing where new opportunities have been 632 2/25/03 - FY '04 OPERATING BUDGET created as a result of the existence of the Contract Review Committee. Now, did I mishear you?

Mr. Gamble

I didn't -- I don't know if that's available. The only we do actually is look at -- we approve the expenditure before it takes place. We don't, at that level, look at determining whether or not it's a Philadelphia-based company or not.

Councilman Nutter

Well then, let's go back to the beginning. What does the Contract Review Committee do?

Mr. Gamble

One of the things it does is that it makes sure that, one, that a company or that a department does not go out and spend money without the proper authorization.

Councilman Nutter

Well, let's say we never had a Contract Review Committee. What governs whether -- I mean, who tells L&I whether they can go buy X or Streets can go Y or Recreation can go buy Z? I mean, isn't that more a function of what dollars they have in the appropriate budget category and based on whether they need it or not? I mean, were people buying too many pencils?

Mr. Gamble

No. Prior to CRC that is what 633 2/25/03 - FY '04 OPERATING BUDGET was taking place was that a department felt that it could go out and buy whatever they wanted because they had the money in their budget without any rhyme or reasoning for it.

Councilman Nutter

Give me an example of a department that bought something that they should not have bought.

Mr. Gamble

Let's say that a department decides that they want to use a consultant to build a bridge. Normally what has happened is that the department usual will work with companies that they know, that they have worked with in the past and they feel comfortable with. They don't give other companies the opportunity to bid on the project. So they would go out and they would solicit those individuals that they're familiar with and there's possibility that they would do this year after year after year because they're comfortable and because that's the way they've always done it. So the CRS process --

Councilman Nutter

Or because they knew that that firm had favorable status with the Administration or they're 's known to the government or whatever. 634 2/25/03 - FY '04 OPERATING BUDGET

Mr. Gamble

Whatever. So they would go out and they would do it. What the CRC does is that when those type of things come up, then we make sure that there are opportunities, that MBEC is made aware of those opportunities that's there so that they have minority participation in those.

Councilman Nutter

So tell me about some of the contracts where that has happened.

Ms. Davis

We're not tracking specifically which ones we've changed the participation on. What has happened, and Mr. Roundtree can attest to it, is we've gotten MBEC involved earlier in the process now. Before people would do RFPs and not let MBEC know that there was an RFP coming. We're setting ranges earlier in the process. Not so much with the bid stuff because the bid is what the bid is unless we can restructure it. But on those professional services contracts, we have on a number of occasion when we've gotten the answer that we're going used this firm because we've always used them, we force them to go back out and issue an RFP. We looked at training that was going to be provided by MOIS and forced that contract back out 635 2/25/03 - FY '04 OPERATING BUDGET for review because we were doing training at multiple different levels. The same training was costing multiple different prices to the departments depending on who was doing it. We sent that out for a new RFP to give more people opportunities to bid on it. We're also doing that were the desk top support. That went back as a result of it coming to CRC and CRC not being satisfied with participation and the composition of the providers. So there have been a number of instances where we have, in fact, held up the award of contract, and usually those are professional services in order to have it either go out for new RFPs or allow additional time for more responders.

Councilman Nutter

And this has been going on since May?

Councilman Nutter

But did I understand you to say that you're not keeping track of it or --

Ms. Davis

At this point we've not tracked our success in changing the dynamic. We know anecdotally because of the way MBEC is being involved and the fact they are getting inquiries 636 2/25/03 - FY '04 OPERATING BUDGET from departments. In the past, departments would not go to MBEC to get their ranges. So we have involvement now.

Councilman Nutter

But Secretary Davis, if you're going to go through all of this time and effort, and my sense is all of you are pretty busy, if you're going to sit and review contracts -- and I don't know how long a CRC meeting lasts or how involved it is or how much you have to read. It's beyond me to imagine if you're going to spend that amount of time and effort trying to do the right thing that someone wouldn't be keeping track of it. Otherwise, I mean, other than the good feeling you might get int he meeting, what's the point?

Ms. Davis

We know that we have additional participation, but we have not measured from the change prior to May. It's something, you're right, we should be tracking. And my crew just got something else that we have to do now.

Mr. Roundtree

It will appear in our next annual report because we will be able to chart and compare what we did this year versus what we're doing in the next fiscal year.

Councilman Nutter

But you wouldn't be able 637 2/25/03 - FY '04 OPERATING BUDGET to give us a preliminary report from May '02 up through, say, January of the number and type and the actual contracts to show where a change was made or who else had the additional participation opportunity?

Mr. Roundtree

Yes, we will do that.

Councilman Nutter

Can we have that type of report?

Councilman Nutter

What, if any, has been the impact on the ability to keep the process moving as smoothly as possible if every contract is going through CRC? Has there been some time lag?

Mr. Gamble

What we do is that we meet on a monthly basis and we have all departments to submit all of their expenditures that they anticipate for the month to receive by the 15th of the month. And then all of those expenditures and all of those contracts are reviewed and discussed in a monthly meeting at the end of the month and a decision is made at that time.

Ms. Davis

Unless there is a problem. Only in those cases when there is a problem where we take exception to what has been done, there is usually no 638 2/25/03 - FY '04 OPERATING BUDGET great delay in getting back. We notify everyone usually within a day or two of the decision of the CRC on the individual items. If there is a need for them to provide additional information or if we're saying, "No, we're not approving this at all, this needs to go back out," then there will be a delay. But for the most part, they know what the outcome is within two days. So we've not held up the process at all.

Councilman Nutter

Okay. But you're going to get us a report of all the contracts that have gone through this process where there has been a change made or greater bidding opportunities that have either enhanced the diversity of the team working on the contract or given some opportunity to a Philadelphia-based business?

Ms. Davis

We'll get you whatever information we have available. We'll do our best.

Councilman Nutter

Thank you very much. Can I have a sense of a time line on that?

Mr. Roundtree

We will have it back to you in a week. One business week.

Councilman Nutter

One business week. He's further defining his terms. I assume that's still 639 2/25/03 - FY '04 OPERATING BUDGET seven days.

Mr. Roundtree

Yes, a calendar week, seven days, yes.

Councilman Nutter

I'm just checking. I want to make sure I'm getting what I'm supposed to get.

Mr. Roundtree

Councilman Nutter, we need until next Friday. Give us until next Friday.

Councilman Nutter

First it's a week, now we're trying to get nine days.

Mr. Roundtree

You asked me to be specific. And since I was trying to be specific, I am now asking for your indulgence to give us until Friday of next week.

Councilman Nutter

All right, fine. Take next Friday. Friday is a good day to get a report to me. Don't send it over after 3, though. (Laughter.)

Councilman Nutter

Thank you very much. Thank you, Madam Chair.

Council President Verna

You're welcome. The Chair recognizes Councilman Goode.

Councilman Goode

Thank you, Madam President. 640 2/25/03 - FY '04 OPERATING BUDGET Now that we've set the timeline, let's deal with a clarification in terms of what the total portfolio of contracts is. What is the totality of contracts? Are we talking about contracts that are just funded through general Operating Budget and Capital, or are we also talking about contracts that may be funded through state and federal funds or private funds?

Mr. Roundtree

We're only talking about contracts that are funded through the City's Operating Budget.

Councilman Goode

So we're not talking about hundreds of millions of dollars in contracts that may be let through the Community Development Block Grant Program?

Mr. Roundtree

No. 18

Councilman Goode

And why are we not talking about those contracts?

Mr. Roundtree

Because we don't control -- at least from my perspective, we don't control the Community Block Grant's information and the TIFs. We do control what's going in the Operating Budget. And I think in relevance to Councilman Nutter's request, it was directly about the contracts that 641 2/25/03 - FY '04 OPERATING BUDGET the CRC reviews.

Councilman Goode

The original request was not made either of you two, but the original request was made through the Finance Director.

Ms. Davis

The four years worth of contracts?

Councilman Goode

Are we getting just things that are funded by the General Operating Budget and Capital Budget? Or are we also getting things that are funded by other sources of funds like private funds, state funds, and federal funds like Community Development Block Grant Program?

Ms. Davis

Those things that the City has oversight on where the City issued the contract are the ones that we will be dealing with. I don't have access to other people's contracts. If it's not a City contract --

Councilman Goode

For instance, the Office of Housing Community Development --

Ms. Davis

If it's a City contract, yes, we will be providing that; and that is a City contract.

Councilman Goode

Regardless of the source of funding?

Ms. Davis

Right. Because it is a City 642 2/25/03 - FY '04 OPERATING BUDGET department so that's a City contract.

Councilman Goode

That's the only point I need to clarify.

Ms. Davis

And the airport. Any that are City contracts we will be providing.

Councilman Goode

Thank you.

Council President Verna

Commissioner, I just have one last question to ask you. In the budget you have more than 1.3 million for advertising and promotional activities. Would you please provide us with a list of the newspapers that we advertise in and how much we have spent in the last year and what is being proposed for the coming year?

Mr. Gamble

Yes, Council President.

Council President Verna

Thank you. Are there any other questions from Members of the Committee? (No response.)

Council President Verna

Thank you so much. I appreciate your patience. We will take a five-minute break. (Brief recess.)

Council President Verna

The Board of 643 2/25/03 - FY '04 OPERATING BUDGET Pension and Retirement. Ms. Bell, may I ask you to summarize your testimony, please.

Council President Verna

The stenographer will be given a copy of your testimony.

Ms. Bell

Good afternoon, Council President Verna and Members of City Council. I'm Gwendolyn Bell, Executive Director of the Board of Pensions and Retirement; and with me, I have Anthony Johnson, Chief Operating Officer. Our budget requests for the year 2004 is $6,556,000, a decline of $200,000 from the budgeted amount for Fiscal Year 2003. It includes 71 staff members which is the same number we had budgeted for last year. We are reorganizing the Department and reassigning staff members but have not increased the number of employees. We are currently looking at and getting ready to mail out an explanation of Regulation 6 which was adopted by the Board of Pensions and Retirements which is a procedure to terminate the differed retirement option plan. That is explained in the testimony. But it basically extends the number of 644 2/25/03 - FY '04 OPERATING BUDGET days that a person can elect to enroll in the plan and gives us some administrative time to process these applications. We're also unifying the disability application process which is handled through the departments so that we're using a standardized application process. In 1999, there was a death audit initiated in the Department. It resulted in some press last summer that stated that we had paid deceased members. We have a policy in place, a very comprehensive policy in place to address those issues and we re currently pursuing collecting from 38 participants who had either collected funds fraudulently or mistakenly. We have recovered $80,000 of those overpayments, which were about $550,000. Our technology is enhanced. When I started last summer, they were calculating benefits manually. And we are now on-line to prepare calculations for estimates and we can provide multiple estimates. We're still offering the retirement seminars. There are several types, the DROP seminars, the regular retirement seminars, and the differed 645 2/25/03 - FY '04 OPERATING BUDGET compensation, which we are proud to say are attended very well and there is demand for us to go out into the departments to continue those. There is currently not a procedures manual for the Department. We have begun to work on that where we have collected information from the units within the department. And hopefully, within the next six months we should have that finished. For the investments, the market value of the fund as of December 2002 was $3.7 million, down from December 2001 from $4.2 million. Part of that is decline in the performance in stock and as well as benefits payments. The fund did outperform the benchmark by 3 basis points. We were negative 5.2 percent for last year. The asset allocation is currently 39 percent domestic equity, 15 percent international, 30 percent global, 7.5 percent private equity, and 5 percent in a tactical asset allocation. The asset allocation currently is overweighted in fixed income which has helped the fund, actually. The third paragraph of testimony tells you that we do have minority representation on within the 36 investment managers. We list the minority 646 2/25/03 - FY '04 OPERATING BUDGET and women-owned managers. And out of that are actively managed, we have 8 from the Philadelphia area. Our differed compensation plan is going out to bid. We are going to do a RFP process at the end of the year to look at other firms offering deferred Comp. We currently have a request in from a board to do an RFP. So I would respectfully request that you approve the budget submitted to you.

Council President Verna

Thank you. 13 Can you tell us if the pension fund is losing 14 over 5 percent and the benchmark is a negative 5 15 percent return, why do we continue to assume a 9 16 percent rate of return? 17

Mr. Johnson

9 percent rate of return is a 18 return that they forecast over a longer period of 19 time. It has been over the past three years that the stock market has performed as poorly as it has performed, totally unexpected by most of the folks in the market. I think they expected a downturn for maybe a year, but three years is far beyond what many believed would happen. The expectation going forward has been 647 2/25/03 - FY '04 OPERATING BUDGET reviewed by the actuary and our official report will be submitted to the board in March, I believe.

Council President Verna

The pension plan assets are invested with 36 managers. Is this more or fewer managers from prior years? And how do you decide the appropriate number of managers?

Mr. Johnson

I'll first answer the second half of your question. Our allocation to managers typically is designed to have two managers per asset class. We combine different styles of management so that when one manager is in favor another manager should be in favor at that time. The number of managers appropriate for our fund is dictated by the number of asset classes that we do have. The numbers of managers that we have in our plan today is about equal to what we had last year. We terminated several managers and then hired several more. We're about two managers higher than we were than last year. A significant increase was in the opportunity fund. We had such success over a year and a half that we were in that particular fund that we allowed them to expand the number of managers that they have up to 10 managers each. We have two opportunity 648 2/25/03 - FY '04 OPERATING BUDGET fund consultants. Presently, they have about six in one and seven in another.

Council President Verna

How much do we pay our money managers?

Mr. Johnson

On average for the entire plan we pay about basis points or 2.2 percent of the 8 fund is paid out in management fees. Going back 9 historically from Fiscal Year '98 through today, 10 it's been about the same, 20 basis points. 11

Council President Verna

Are their fees 12 related to performance? 13

Mr. Johnson

Their fees are related to the 14 market value of assets. If their assets go down, we 15 pay a lower fee; if assets go up, we pay a higher 16 fee. 17

Council President Verna

Would you be kind 18 enough to forward to us the listing of all the 19 managers and what they have been paid in the last 20 two years?

Mr. Johnson

Absolutely.

Council President Verna

Thank you.

Mr. Johnson

For clarification, do you want that as of fiscal year?

Council President Verna

Yes. 649 2/25/03 - FY '04 OPERATING BUDGET Are there any questions from Members of the Committee? (No response.)

Council President Verna

There are no 6 questions of you. Thank you very much. City Planning Commission is next. Councilman Nutter.

Councilman Nutter

Thank you, Madam President. Fortunately for the Planning folks for the moment and my colleagues, I'm going to have to leave. (Laughter.)

Councilman Nutter

I know we had a big snow day the other day for Capital Budget. And I'm assuming somewhere in the course of our budget season here, we'll have full presentation on that. Has that been rescheduled?

Council President Verna

We have sent a revised list of public hearings to all of the Councilmembers, and the Capital Budget is scheduled for March the 17th.

Councilman Nutter

Thank you, Madam President. I will be there.

Council President Verna

We have a copy of 650 2/25/03 - FY '04 OPERATING BUDGET your testimony. If you would summarize it, we'd be very appreciative. We'll make certain that the stenographer does transcribe your testimony in full. (See testimony attached.)

Ms. Griffith

Well then, Council President, since you have copies of the testimony, perhaps the best thing to do would simply be to launch into any questions. I have with me our Director of Administrative Services Carol Reba and also the Deputy Executive Director Rich Lombardo, and we also have with us Victoria Mason Ailey who is our Director of Community Planning and coordinates our community revitalization and NTI work. What you have before you is our request for the coming Fiscal Year and an outline of the work that that we believe we're going to be undertaking for the coming year and to some extent a recap of the work that we've done in the past fiscal year. I did promise my community planning and urban design staff that I would emphasize the fact that those two units collaborated and did a body of work which won a 2002 National American Planning Association Award for the best planning project in America. 651 2/25/03 - FY '04 OPERATING BUDGET And we'll be happy to take any questions you might have.

Council President Verna

Thank you very much. Can you provide me with detail concerning the stadium area transportation study?

Ms. Griffith

We have undertaken -- or we're about to undertake a transportation study, as you indicated, for that area. We obtained funds through the DVRPC, Delaware Valley Planning Commission. Obviously, with the new stadiums, we anticipate increased traffic and also perhaps different traffic patterns. And we don't have the wherewithal on staff to do that kind of study, so we've reached out. I'd be happy to get you a summary of the scope and also have my staff brief your staff in detail.

Council President Verna

Who is doing the traffic study?

Ms. Griffith

I don't believe we have chosen a firm or a group of firms. I know that our policy staff -- and unfortunately, they're not representing here -- just finished interviews with potential consultants and there's probably a recommendation in my inbox that I have not reviewed. But the study itself I don't believe is done. 652 2/25/03 - FY '04 OPERATING BUDGET

Council President Verna

I would really appreciate your keeping me apprised of that.

Ms. Griffith

I'd be happy to.

Council President Verna

Thank you. What type of information is contained in an "existing condition" NTI neighborhood study? Do you ask for input from the District Councilperson? And will you share these reports with us?

Ms. Griffith

Absolutely, to the last question first.

Council President Verna

Can you tell us what that really contains?

Ms. Griffith

The existing condition study in a way neutral or objective information. So staff goes out and documents the conditions of properties, for instance, whether there are trees on a block, whether a building has been vandalized, as well as looking at data that we have in the office. Is there a library? Is there a school? What's the condition of those entities? And once we complete the existing condition study, which is Phase of the overall community planning study, that existing condition study is submitted to Council and their staff for review and input, not only for comment, 653 2/25/03 - FY '04 OPERATING BUDGET but also to make sure that we have than the missed something, a building that looks vacant, for instance, from the outside, you and your staff may have knowledge that it's actually occupied, et cetera. So it is the first part of community revitalization study. Obviously, we have to know what's there before we can determine with Council what should happen in a community.

Council President Verna

Thank you. Of the 358 development plans reviewed by your community planning and development staff this year, how many were NTI related?

Ms. Griffith

We would have to get you that information. However, for the most part, they are not NTI related. For the most part, these are in some cases very small projects that have been put forward by developers; in some cases large process. But if we're talking about NTI as projects where NTI funds has been expended, which is sort of how we define them, that would be minimal. Let me Mr. Lombardo if he knows.

Mr. Lombardo

Council President, that would be the case. Most of these 358 properties listed in our testimony are various reviews we do under the 654 2/25/03 - FY '04 OPERATING BUDGET zoning code under the subdivision code under environmental. There could be projects that are with NTI areas along some of the commercial strips. If they're not NTI projects as such, they probably are more than likely are going to be private market projects where someone will be coming in for some type of review mandated by City or State law that we have to do reviews of.

Council President Verna

Okay. Thank you. The Chair recognizes Councilwoman Tasco.

Councilwoman Tasco

I don't have any questions. I think we'll wait for you to come back for the Capital Budget. But I'd just like to say thank you to you and your staff for the work you've done with us in the 9th Councilmatic District. And to say to your director planning and staff for working with us particularly in the Logan area and in the Lawncrest area on the planning program that we have up there. And I must say on Saturday we had our meeting with the Logan community and they seemed to be quite receptive of the concept that your office have come up with. So we're looking forward to having a continuing relationship with you.

Ms. Griffith

Thank you, so much 655 2/25/03 - FY '04 OPERATING BUDGET Councilwoman. We have actually enjoyed the interaction as well, especially our young staffers who ar very pleased that the work that they did was well received.

Councilwoman Tasco

Thank you.

Council President Verna

Are there any other questions from Members of the Committee? (No response.)

Council President Verna

Thank you very much. We appreciate your patience. The Committee of the Whole will stand in recess until tomorrow, Wednesday, February 26th at 9:30. Thank you. (Council adjourned at 3:55 p.m.) - - - 656 C E R T I F I C A T I O N I HEREBY CERTIFY that the foregoing proceedings of the Council of the City of Philadelphia of February 25, 2003, were reported fully and accurately by me, and that this is a correct transcript of the same. RE: COMMITTEE OF THE WHOLE ___________________________ Lisa C. Bradley, RPR and Notary Public