So is that20 a written document that you share which21 sort of states the mission statement, the22 Mayor's mission around that and then the23 role of your office as it relates to24 MBE/WBE or is that a conversation or25 69 4/5/11 - WHOLE - BILL 1101371 discussion that happens?2
I can't say for3 certain that we've had it in every single4 contract, but in most of the contracts5 that we do from my office, we do talk6 about it and we have put it in some of7 the contracts, yes. That's part of the8 template that we use.9
So my10 observation of that practice would be11 once the personalities are gone, there's12 no systemic structural piece that deals13 with that and so -- and I see in your14 testimony where your office produced15 thousands of documents. So purely a16 recommendation. When you hand a document17 to somebody in writing, it goes to one of18 Councilman Jones' philosophy, if it's not19 in writing, it doesn't exist. And so if20 we want to ensure systemic change around21 that issue, then one page or something22 really sends a clear message, because23 then when it's in black and white,24 there's no confusion. And that would be25 70 4/5/11 - WHOLE - BILL 1101371 a recommendation I would offer for all of2 those non-profits that come through the3 office looking for opportunities through4 your office.5 To do a follow-up on Councilman6 Goode's question, you indicated that the7 Welcome America has had the contract8 since nineteen ninety?9
And his12 subsequent question was, is that bidded13 out. It is not?14
So because17 they are a stakeholder, they don't have18 to bid? Just help me understand that.19
Just as services20 are offered or assistance to the21 Philadelphia Museum of Art or the African22 American Museum, Historic Philadelphia23 was started in 1994 for the specific24 purpose of the promotion of Philadelphia25 71 4/5/11 - WHOLE - BILL 1101371 historical aspects -- assets. And so the2 money has certainly gone down since 19943 when they received a larger amount of4 money to the 207,000 they receive now,5 but they're a unique organization in that6 they are the overseers of the Betsy Ross7 House as well as Franklin Square Park and8 other historical reenactments so that9 they can promote our history in Old City.10
All right,11 then. I better understand that.12 If you had to look to one or13 two achievements over your tenure as City14 Rep that really speaks to what you just15 talked about, connecting the tangible16 dots of commerce, increasing commerce and17 your work, what one or two achievements18 would you put at the top of the list?19
I would say the20 Philadelphia Marathon. When I started in21 2008, there were 16,000 people. Here in22 2010, we had close to 25,000 runners.23 The marketing has increased. We went24 from No. 11 to No. 9. We're in the top25 72 4/5/11 - WHOLE - BILL 1101371 ten. Our numbers at hotels have2 increased, and the people, when we did a3 study, it showed that -- give me one4 second and I can tell you exactly.5
Not a10 problem, because one of my questions was11 related to the Philadelphia Marathon12 anyway. How does your office project a13 continuation of that upward trend and14 what strategies did you implement to see15 that kind of increase?16
It's the ninth20 largest marathon in the nation. It's the21 fourth top Boston qualifier - New York,22 Chicago and then Philadelphia. The23 number of female participants increase24 every year. The Philadelphia Marathon is25 73 4/5/11 - WHOLE - BILL 1101371 unique in that in almost every other2 marathon, the half marathon, if it's run,3 fills up before the full. In4 Philadelphia, the full marathon fills up5 first.6
Runners World8 Magazine in 2007 said that we were the9 best place to run a Boston qualifier,10 primarily because you get your best time11 on our course, which is relatively flat,12 and it's a beautiful course. And we were13 just selected this year to be part of14 Runners World Challenge.15 Runners World is the top racers16 magazine in the country. So them picking17 Philadelphia as one of their three places18 is really incredible.19 We supported 11 charities in20 2010 and raised close to a million21 dollars for them. We had over close to22 25,000 participants and the largest group23 of females. Again, there's usually more24 males in full and half. We had 53.625 74 4/5/11 - WHOLE - BILL 1101371 percent females and only 46.4 males.2 There were 12,500 full marathoners, 9,5003 half marathoners and over 2,000 8k4 runners. And the change last year of our5 race, the 8k, instead of being on Sunday6 being on Saturday helped increase the7 number of people that participated, and8 also those people registered twice,9 because they wanted to run the 8k, which10 we now hold on Saturday, and they wanted11 to then try their luck -- they used the12 8k as a training ground for either the13 half or full marathon the very next day.14
So of that19 demographic, what percentage of those20 runners are under 18 years of age?21
Very few. We22 have a Kids Fun Run for kids from the age23 of 4 to 12.24
That25 75 4/5/11 - WHOLE - BILL 1101371 happens during?2
That happens on3 Saturday. I'm sorry. And we work with4 Students Run Philly Style, which train5 kids to and use it as a discipline and6 self-confidence promoter, and we have a7 large number -- she usually brings about8 200 students for that. And there are9 certain age limits in terms of what race10 they can run, whether it's the half or11 full. So it's 16.12
I'm13 familiar with Students Running Philly14 Style, in that our office is a partner15 with them.16
Oh, okay.23 All right. Just one more question.24 That was the tour guides.25 76 4/5/11 - WHOLE - BILL 1101371 Okay. So I'm done. Thank you very, very2 much.3
Any other8 questions of this witness?9 (No response.)10
Thank you.13 MR. McPHERSON: The next14 department is the Department of Commerce15 and Office of Economic Opportunity.16 (Witnesses approached witness17 table.)18
Good morning.21 Councilman, before I get started, this is22 a long testimony, and what I'm going to23 do is read only a few pages into it and24 then I'm going to ask you to see whether25 77 4/5/11 - WHOLE - BILL 1101371 the members would like us to not read any2 more and go right into questions. Does3 that seem okay?4
I'll tell you7 when. All right? It will be about two8 and a half pages in.9
Yeah. That's12 sort of the idea, because it's long13 otherwise.14
17 My name is Alan Greenberger. I'm the18 Deputy Mayor for Economic Development and19 the Director of Commerce. 1 million over Fiscal10 Year 2011 obligations. 17 As I understand, on April 12th,18 the Aviation Director, Mark Gale, will19 testify to the Division of Aviation's20 portion of the budget. 10 We do this in partnership with numerous11 other entities such as those departments12 and agencies that support economic13 development, including the Philadelphia14 City Planning Commission; the Office of15 Housing and Community Development; the16 Redevelopment Authority; the Mayor's17 Office of Sustainability; the Department18 of Licenses and Inspection; the Mayor's19 Office of Arts, Culture and Creative20 Economy; and the Philadelphia Industrial21 Development Corporation, to name some of22 the key ones. We are guided by several23 core principles. 783 million,2 excluding the Aviation Fund, and is3 summarized as follows:4 The General Fund budget for the5 Department of Commerce continues to6 reflect many of the Administration's7 priorities. 13 In the upcoming fiscal year,14 the Department's proposed budget15 contemplates the funding of 68 positions16 when you include all funding sources and17 which represents a reduction of two18 eliminated positions over Fiscal Year19 2011. 21 The Commerce Department is committed to22 supporting a diverse workforce across all23 levels of operations as reflected in our24 demographics. The Department boasts a25 84 4/5/11 - WHOLE - BILL 1101371 workforce that includes 68 percent female2 and 32 percent male. Additionally, 573 percent of the workforce is African4 American. There's a typo in there. I5 apologize. But it's 57 percent of the6 workforce African American, 35 percent7 Caucasian, six percent Latino and two8 percent Asian. 16 The proposed Fiscal Year 201217 budget represents the third fiscal year18 in which the Office of Economic19 Opportunity was fully integrated into the20 Department. Leveraging the resources of21 Commerce, OEO will more aggressively22 execute the Inclusion Works Strategic23 Plan, increasing the success of a ready,24 willing and able M/W/DSBE business25 85 4/5/11 - WHOLE - BILL 1101371 community and building a more diverse,2 work-ready labor force. 9 And if it's okay with you, this10 next section is what I propose simply to11 summarize by title. These are the12 accomplishments. 13
16 Meaning I'll just sort of list them out17 for you. 22 In FY12, we're proposing to23 expand our Business Services Portal to24 basically create a dashboard out of it25 88 4/5/11 - WHOLE - BILL 1101371 that would allow businesses to actually2 fill out forms online and ultimately pay3 for some of the permitting online. " Sorry for that. 12 We're not closing PIDC. 15 We are looking at how to create16 micro lending programs. 19 And then, lastly, I'd like to20 comment on the Department's commitment to21 supporting the Administration's goal, 2522 percent minority, women and23 disabled-owned business participation in24 City contracting. Commerce primarily25 89 4/5/11 - WHOLE - BILL 1101371 serves as a fiscal agent for a variety of2 entities such as organizations that share3 in the Hotel Tax, payments that are made4 to the Pennsylvania Convention Center5 Authority. Additionally, federal and6 state grants are made to certain7 non-profit entities which, on behalf of8 the City, carry out certain economic9 development activities. 18 With funds managed directly19 under Commerce, the level of for-profit20 contracts available in FY11 is21 approximately $95,000, most of which is22 the disparity study. We anticipate23 achieving and even exceeding our FY11 2524 percent, with an actual participation25 90 4/5/11 - WHOLE - BILL 1101371 rate of 37 percent. 7
Thank12 you very much.13 What is your funding request14 for 2012 in CDBG funding?15
Well, that's16 a bit of a hard question to answer,17 because we don't know the status of CDBG18 funding going forward from the federal19 government. As you know, they're still20 working on continuing resolutions, and21 they have given us no indication of what22 the funding allocation is likely to be23 for what will be our Plan 37 year. So24 right now we are planning around a25 91 4/5/11 - WHOLE - BILL 1101371 similar appropriation, which I think is2 $16.5 million, but we don't know whether3 that will actually happen.4
It is5 rumored that we could lose as much as 666 percent of our CDBG funding in our Fiscal7 2012 budget. If the City were to8 experience a reduction of this magnitude,9 how would your operations be affected?10
It would be11 dramatically affected. There are a great12 number of our staff who are paid for13 doing CDBG-eligible work. That would all14 basically have to be put on the table,15 not to mention the programs that CDBG16 runs that impact properties and people17 citywide.18 The one thing I will offer is19 that there was a proposal, House Bill 1,20 that did propose a 62.1 percent reduction21 in CDBG funding. That bill was rejected22 by the U.S. Senate, but, again, there are23 negotiations going on right now to figure24 out what that CDBG allocation is and we25 92 4/5/11 - WHOLE - BILL 1101371 don't have a clear picture of where it's2 going.3
That4 should be very interesting.5 You're requesting $1,372,000 in6 economic stimulus funding for Fiscal7 2012, which is the same amount as you8 received for Fiscal 2011. Is that so?9
Yes. That10 funding specifically is under contract11 with PIDC and it funds numerous numbers12 of our staff members.13
Can14 you tell us the criteria used in15 determining how you spent your 201116 funds, the projects that you funded and17 the benefit that the City will receive.18
Well, that's19 a fairly broad question and it covers20 many different categories of funding.21 For example -- are there specific ones22 that you had in mind before I answer?23
For instance,25 93 4/5/11 - WHOLE - BILL 1101371 there are both planning grant funding --2 I'm just going to give you some examples.3 Planning grants, as well as commercial4 corridor improvement grants that are done5 through a competitive process. There's6 essentially a call for proposals.7 There's a set amount of money that we8 have available. We form committees from9 various quarters of Commerce and other10 agencies to examine these proposals and11 determine a ranking system of value to12 determine how best to apportion the13 money.14 The criteria includes things15 like past performance, capacity to do the16 work necessary, criticality of doing the17 work. And I apologize. That's a generic18 answer to a fairly broad question.19
Thank20 you.21 You're requesting $42.5 million22 in Class 500 in the Hotel Tax Fund for23 2012. For the record, can you tell us24 who receives these funds and the amounts25 94 4/5/11 - WHOLE - BILL 1101371 they are paid?2
Good5 morning, Council President Verna. Sade6 Olanipekun-Lewis.7 I can provide to you the8 entities that receive the funding, but9 I'd have to get back to you with the10 actual allocation.11 COUNCIL PRESIDENT VERNA:12 Please.13
There14 are three entities that receive funding15 through this tax. One is the16 Pennsylvania Convention --17 COUNCIL PRESIDENT VERNA:18 Convention Center.19
The24 Convention Center Authority, the25 95 4/5/11 - WHOLE - BILL 1101371 Pennsylvania Visitors and Convention2 Bureau, and the Greater Philadelphia3 Marketing and Tourism Company. They each4 receive an allocation from this tax.5 Last year they received -- the first one6 received 19.2, the Visitors and7 Convention Bureau received 11.2 and8 Greater Philadelphia Marketing and9 Tourism Company received 16.5 in FY10. I10 can provide -- I can get the FY11 numbers11 for you at a later date.12
We13 would appreciate that.14 Is the use of these funds15 restricted by state statute?16
I don't17 know the answer to that question. We can18 find out.19
Yes,22 ma'am.23 COUNCIL PRESIDENT VERNA:24 Mr. Greenberger, on of your25 96 4/5/11 - WHOLE - BILL 1101371 testimony, you mention the mayoral2 initiative of creating five landscaped3 pedestrian plazas. Can you tell us their4 locations and how they were selected?5
We don't have6 locations yet, but I can tell you the7 background -- I can give you background8 of the initiative. This actually came9 out of Deputy Mayor Cutler's office, and10 it was instigated by seeing in other11 cities how some unused portions of12 basically roadways were being turned into13 green islands for the benefit of14 pedestrians and people walking around,15 and it seemed to be a very inexpensive16 way of recovering some roadways that were17 otherwise not being used by cars.18 We had a meeting to talk about19 it, and what Deputy Mayor Cutler asked us20 to do was to be able to move some of her21 funding -- that's the 157,000 -- into22 Commerce, because we have the contracting23 authority to deal with some of the soft24 costs involved with this program.25 97 4/5/11 - WHOLE - BILL 1101371 They're in the process of identifying2 potential sites where this could be3 applicable.4
And5 when do you think we would know where the6 sites would be?7
I think that8 will be evident probably in the next9 couple of months. She really wants to do10 these things. They're relatively easy to11 do.12 COUNCIL PRESIDENT VERNA:13 Great. Thank you.14 The Chair recognizes Councilman15 Goode.16
First a21 question about the CDC Tax Credit22 program. The first nine of ten-year23 partnerships will expire next year, and24 as we enter a second decade of the25 98 4/5/11 - WHOLE - BILL 1101371 program, I'm interested in knowing what2 changes your department recommends and if3 you know that yet, and, if not, could you4 forward those proposed changes in5 writing.6
Councilman, I7 missed the critical first word. Which8 programs?9
Councilman, my name14 is Kevin Dow. I'm the Chief Operating15 Officer.16 One, we understand that that17 program has been extended for one year as18 a result of -- or amended for one year.19 So that gives us time to evaluate the20 pros and cons of what happened there.21 We'd like to work with Revenue, with your22 office to determine what we would like to23 see going forward.24
I don't25 99 4/5/11 - WHOLE - BILL 1101371 understand what you mean by extended one2 year.3
Well, my4 understanding is that the legislation was5 amended for a period of one year so6 that -- no? Okay.7
No. There8 are ten-year agreements that will9 actually expire next year.10
Right. And there was11 agreement depending on which organization12 will expire over the next couple of13 years. Some have --14
Nine will15 expire next year. Another six will16 expire the following year.17
So if we19 start a new ten-year period for any20 organization, it's assumed that the other21 organizations will be entering the same22 program. So if you're starting a second23 decade of the program, the question is,24 will the program stay the same or how25 100 4/5/11 - WHOLE - BILL 1101371 should it change? And, of course, those2 people who want to apply for those new3 partnerships will want to apply this year4 so that they can have a new ten-year5 agreement next year.6
I think -- I agree7 100 percent with all of that. The only8 thing that what we would say is that we9 need to take a pause, evaluate the10 program, determine whether or not it11 needs to be changed or anything of that12 nature, determine whether or not we have13 done appropriate monitoring of the14 program to make sure that we are15 exceeding -- achieving the goals that16 we've set out, and then establish a new17 paradigm for that.18
I'm simply19 asking that if you don't have20 recommendations today, that you forward21 those recommendations in writing, because22 we actually need to move sooner than23 later, because there are a number of24 people who will want to enter into new25 101 4/5/11 - WHOLE - BILL 1101371 ten-year agreements who need to know what2 the new rules to the game will be, if3 there are going to be new rules.4
We'll be7 happy to do that.8 COUNCILMAN GOODE:9 Mr. Greenberger, what is the largest10 contract your department will award in11 Fiscal Year 2012?12
The largest13 contract is actually the one we have with14 PIDC, the so-called economic stimulus15 fund. That's the $1.372 million16 contract.17
The second20 largest is -- let me get my numbers21 right -- $162,000 contract with the22 International Visitors Council, and23 that's basically to fund part of their24 operation.25 102 4/5/11 - WHOLE - BILL 1101371
Many years.7 I actually don't know the answer to that8 question, but it's been ongoing for quite9 some time.10
It has not13 been bid because it is a direct contract14 with an agency that lives within the15 City. It's not a City agency, but it16 lives within our midst and we coordinate17 with it regularly. This is Nancy18 Gilboy's operation.19
I'm20 extremely familiar with the agency. Are21 you saying that no one else could perform22 those services or that it could not be23 bid?24
All I'm25 103 4/5/11 - WHOLE - BILL 1101371 saying to you is that it has not been2 bid. I don't know whether there are3 other agencies that could perform it.4
We do not.7 We think it's a successful operation that8 has been very helpful to the City over9 many years of service.10
So those11 services could not be provided by -- IVC12 is a non-profit?13
Let's say19 that the majority of the capacity of IVC20 is contained within Nancy Gilboy herself21 and she ran it as a for-profit. Then she22 would be qualified as a WBE to provide23 their services; is that correct?24
Is there no3 one else locally or nationally, no other4 minority-owned business or woman-owned5 business that could perform those6 services?7
Okay. I'll10 leave that there. And are there any11 subcontracting opportunities within the12 contract?13
Can you16 briefly describe the contract17 requirements.18
I'll have to21 get back to you. I don't know the22 details of the contract.23
Let me tell24 you where I'm going with this. I'm25 105 4/5/11 - WHOLE - BILL 1101371 actually looking at the top contract. In2 this case, it's to a quasi-governmental3 agency. So I'll go to the second4 question, which is to a non-profit, but5 whether it is for-profit or non-profit,6 in the largest contract that you award,7 to me it's the best way to examine how8 your contracting process actually9 happens. If it is a sole source that10 should not be a sole source, that's a11 problem. If it's a renewable contract12 that's not being bid, that's a problem.13 If there is no RFP, then there are no14 goals for disadvantaged business15 participation. If there are no goals for16 an RFP, there are probably no goals17 within the contract, and there's probably18 no goals in the contract because no one19 took the time to look at what the20 subcontracting opportunities might be for21 disadvantaged firms. And particularly if22 we are giving contracts to the same firms23 year in and year out, we should examine24 what opportunities are within those25 106 4/5/11 - WHOLE - BILL 1101371 contracts.2 Lastly, I'll ask -- lastly on3 that subject, I'll ask, is IVC currently4 in compliance with the City's living wage5 and benefits standard?6
I'm going to17 stay on the same theme. How do renewable18 contracts impact the Administration's19 business diversity efforts?20
Well, if the21 contracts are with minority and22 women-owned businesses, it supports the23 expansion of the capacity for those24 businesses. If the contracts are with25 107 4/5/11 - WHOLE - BILL 1101371 prime contractors who have subcontracting2 relationships, we look for those3 subcontracting relationships to be4 sustained throughout the term of that5 contract. If the contracts are rolling6 over without participation, there's an7 opportunity to generate participation on8 those contracts. And so we have9 departments that are looking at those10 contracts that are being renewed to see11 where we can have participation.12
Let me walk13 through that process. If a goal is set14 in the request for proposal and then a15 goal is set in the original contract, how16 would that goal be increased through a17 renewable contract? Wouldn't the goal18 just stay the same?19
The goals --20 well, I'm specifically thinking more of21 professional service kinds of contracts22 where they are more negotiable than a23 competitive bid contract. In competitive24 bid contracts, the goals are at a25 108 4/5/11 - WHOLE - BILL 1101371 minimum, but there's nothing that2 precludes a company from increasing those3 levels of participation.4
The question5 again is, if the goal is set in the RFP6 and then the goal is set in the contract,7 how would that goal actually be increased8 in a renewable contract? I mean, how9 would it happen? How would that process10 happen?11
If a14 diversity goal is not met in the first15 year of a contract, what are the odds16 that the contract will not be renewed?17
I would have18 to look at, along with the staff and19 operating department, the reason why the20 goals were not achieved on that contract.21 If there are specific reasons why a22 minority or female did not perform, then23 the requirement of the prime is to24 request a substitution for participation25 109 4/5/11 - WHOLE - BILL 1101371 on that contract.2
The question3 really is, what are the odds that the4 contract is not going to be renewed just5 because the diversity goals weren't met?6
Has a9 contract ever not been renewed because10 diversity goals were not met?11
I am aware of12 one contract just recently that was not13 renewed because there was a14 non-compliance issue, yes. So contracts15 have not been renewed as a result of16 failure to comply with participation.17
Beyond that18 one contract, how many times are19 contracts not renewed because they don't20 meet diversity goals?21
That I don't22 have an answer for. I can find that out23 for you.24
If you could25 110 4/5/11 - WHOLE - BILL 1101371 forward that through the Chair.2
Just lastly,4 I'm just talking process here. How are5 diversity goals reviewed for renewable6 contracts? I guess within that question7 is, how many contracts are actually8 reviewed for diversify goals as they're9 being renewed?10
I will admit11 that most of our resources within the12 Office of Economic Opportunity are driven13 by those transactions that are new, bids14 and RFPs that are on the street and the15 compliance with the contracts that are16 being awarded. There is a limited amount17 of review in terms of compliance on18 current contracts that will be19 automatically renewed by a department if20 the prime is performing. We provide21 compliance review on an exception basis22 in those cases, and that is when a23 minority or female says, You've got me24 listed on a contract and I'm not25 111 4/5/11 - WHOLE - BILL 1101371 receiving that work.2
Let me tell3 you what the problem is, and we've talked4 about this privately. What this budget5 process will reveal is that a lot of6 large contracts, many of the largest7 contracts, a bulk of contracting dollars,8 are renewable contracts.9
If any11 Administration comes in and makes a12 decision about diversity goals within an13 RFP and then goals within a contract and14 then does it as a renewable contract and15 does not focus on whether diversity goals16 are being met, then they've lost several17 years of opportunity and there actually18 is no growth for disadvantaged businesses19 for a number of different reasons. And20 if we're looking at contracting21 opportunities and not identifying22 subcontracting opportunities and then we23 are not setting the right goals within24 renewable contracts, then there won't be25 112 4/5/11 - WHOLE - BILL 1101371 an opportunity for growth for2 disadvantaged businesses.3
So this5 year's theme is renewable contracts have6 to have a review process in terms of7 whether people are meeting their goals or8 not, and if not, then there's no room for9 expansion in terms of contracting10 opportunities for disadvantaged11 businesses.12
We agree,13 Councilman, and one of the things I will14 add, last fall we created a compliance15 leadership team across the operating16 departments, and the operating17 departments' leaders meet on a quarterly18 basis to talk about compliance on major19 contracts. As a part of that team, we20 have the Inspector General's Office, the21 Controller, the Law Department, those22 critical players that are engaged with23 assisting us in terms of lending24 resources to audit particular25 113 4/5/11 - WHOLE - BILL 1101371 relationships where there may be an issue2 regarding non-compliance.3
Thank you.4 Thank you, Madam President.5 COUNCIL PRESIDENT VERNA:6 You're welcome.7 The Chair recognizes Councilman8 Green.9
My first15 question relates to a question that I ask16 every year and it has to do with business17 attraction. In budget testimony last18 year or testimony in response to19 questions, you confirmed that Karen20 Randal and Duane Bumb were the,21 quote/unquote, primary people in City22 government doing business attraction. I23 hold them both in very high regard, but24 as the fifth largest city in the country,25 114 4/5/11 - WHOLE - BILL 1101371 it's amazing to me that we have basically2 two people doing this work. We've had a3 lot of private conversations about this4 also, which I won't get into, but do you5 think we have enough people in your6 department focused on business attraction7 and retention?8
The short9 answer is, I'd like to have more, and10 living under the budget constraints that11 we do, we are actively looking at12 shifting some resources within the13 department as opposed to new resources to14 buttress that further.15
Well, has16 there been any sort of17 return-on-investment analysis to18 determine benefits of the City of getting19 additional people in those roles in terms20 of tax ratables, additional jobs and21 attendant wage taxes, et cetera, such22 that ultimately through several years of23 effort and a dedicated team, they would24 be paying for themselves?25 115 4/5/11 - WHOLE - BILL 1101371
The answer to2 your question I know as you mean it is3 no. There's not a return-on-investment4 analysis. And it's a legitimate point,5 because obviously you can, in theory, put6 as many people at this as you can muster,7 but that may actually not have the right8 return.9
I hear what12 you're saying. I'm not actually arguing13 with you. I just --14
I'd like to17 have more. And I think, by the way, I'd18 like to have more related to some very19 specific business areas. I think that's20 my focus. I mention in the testimony21 about playing to our asset strength.22 This is sort of a heads and tails kind of23 thing. The heads part is, there are24 strengths that we have that we need to be25 116 4/5/11 - WHOLE - BILL 1101371 doing more on on attraction. Clean tech2 is a perfect example of that. Arts and3 culture is actually an example of that,4 but we have a Mayor's Office that helps5 with that part.6 Other business areas may not be7 our natural strength and we might want to8 think carefully whether we want to put9 resources at it.10
Well, we11 lost 47,000 jobs over the last decade and12 about 140,000 over the last 30 years in13 the City of Philadelphia while our14 resident population has basically stayed15 the same roughly over that period of16 time. And what that means is, there are17 the same number of people and fewer and18 fewer jobs and our poverty rate19 increases, and so I don't think that20 there's a particular area that there21 should not be a focus in. For example,22 manufacturing is still, according to a23 recent PIDC report, a significant24 percentage of our local economy. I25 117 4/5/11 - WHOLE - BILL 1101371 cannot recall it, but I think it's 132 percent of jobs, something like that.3
It's actually4 a little higher, and when they talk about5 it, they talk about industrial, meaning6 manufacturing, distribution and repair.7
Right. So8 that manufacturing industry is shrinking9 and has been for the last 50 years, but10 what we have we want to keep.11
Right. With14 respect to, for example, clean tech, we15 could be doing manufacturing.16
Right. Now,17 we may discover that of those three18 pieces, manufacturing, distribution and19 repair, we're better suited for some20 rather than others. An example is Teva.21 Teva at the moment is not planning on22 manufacturing in Philadelphia. Maybe23 somewhere down the road they would be,24 but right now what they are planning on25 118 4/5/11 - WHOLE - BILL 1101371 doing is distributing.2
Do you know3 why they're not manufacturing in4 Philadelphia?5
They're6 manufacturing in six, I think -- let me7 see if my memory is right about this.8 I'm not sure about the number. They're9 manufacturing, I think, in 60 different10 places in the world. And, no, I don't11 know the answer to the question, because12 they've not proposed it as a possibility.13
Do you know14 why they could never economically15 manufacture in Philadelphia?16
It is19 because they would have to pay six20 percent of their profits on sales around21 the world from their manufacturing22 facility in the City of Philadelphia23 because of our net income tax, which24 kills the manufacturing industry.25 119 4/5/11 - WHOLE - BILL 1101371
What would be2 interesting to see in their case is where3 they do manufacture and what's the4 circumstances of those manufacturers.5 That's a worthwhile thing to look at.6
We're one of7 only four cities in the country that has8 a net income tax on businesses. So I'm9 confident they're not in one of those10 four jurisdictions. We're in great11 company, New York City, which is a12 different entity unto itself, Washington,13 DC, same thing, Detroit and Philadelphia.14 Okay. We received information15 from the Administration about the one and16 a half percent and three percent budget17 reduction scenarios prepared by18 departments. Could you provide some more19 detail about Commerce's three percent20 reduction scenario, which was a $104,90821 reduction in Class 200, quote/unquote,22 economic stimulus payments to PIDC and23 how you would think it would impact24 citizens if we were to not provide that25 120 4/5/11 - WHOLE - BILL 1101371 money.2
Yeah. The3 proposal relates specifically to the4 economic stimulus fund that the City pays5 into each year, and, in essence, it means6 that there would have to be an7 elimination of, depending on what they're8 talking about, one and a half percent or9 three, one or two positions.10
In the PIDC12 side of our employment ledger, that's13 correct. It would have to be there.14
So what do19 those people do in terms of economic20 stimulus?21
They are all22 over the map. Let me just get to my23 sheet here. This is a situation that has24 existed for probably about 18 years where25 121 4/5/11 - WHOLE - BILL 1101371 Commerce staff has been placed, and there2 is no pattern to who is in what category.3 So there are people, for instance, on4 this economic stimulus side on PIDC's5 side that include -- I'll just read off a6 couple of job titles -- the people who7 work directly for me, Deputy Mayor's8 staff; an executive assistant; land use9 manager; policy and planning director;10 receptionist. It is truly all over the11 map. It is not a category that has a12 distinctive job type pattern to it.13
Thank you.16 The land use director specifically works17 on brownfield issues with numerous18 companies throughout the City that are19 trying to do development and have20 brownfield concerns. Basically clean-up21 issues.22
Among other25 122 4/5/11 - WHOLE - BILL 1101371 things, they coordinate money that is2 available to us to help do investigations3 of the extent of brownfield -- the extent4 of HAZMAT contamination and then5 determining what the needs are to clean6 it up.7
So there is8 a 1,372,143 professional services9 contract with PIDC?10
Well, it18 doesn't cost them anything. It is coming19 directly out of this economic stimulus20 fund. So it's --21
That's22 confusing to me. So why do we need --23 are you essentially giving them the money24 to then pay the people --25 123 4/5/11 - WHOLE - BILL 1101371
It's a9 complication and it's one that we10 inherited that goes back a very long way.11 I can't give you the historical basis for12 it. It's something that goes way back13 into the early '90s.14
And I'd16 actually prefer to simplify it and have17 all these people on the General Fund.18
Well, you19 have the opportunity to do so now by20 making a request that we appropriate the21 money to you as Class 100.22
It's true.23 It's not, however, a simple24 administrative matter. We have to25 124 4/5/11 - WHOLE - BILL 1101371 investigate a whole series of problems.2 For example, the folks on the PIDC3 payroll are also on PIDC benefits. Those4 don't match up exactly with ours. So if5 people were to move back, we have to6 solve an issue, for instance, of how do7 you move accumulated pension benefits.8
Well, PIDC9 has been before us and testified, and10 basically what their testimony always is11 is, they don't set the economic12 development or industrial land use policy13 or anything like that for the City of14 Philadelphia. That's all directed from15 the Commerce Department. And they tell16 them what to do, and they just do it.17 They're pawns on your chessboard. And it18 seems to me like they're also paying the19 people who are telling them what to do.20 It's like from an accountability21 perspective, I don't understand how it22 works. They don't work for you. I23 assume -- you know what I mean?24
It seems2 like we ought to either be able to3 explain why we have to have it that4 way --5