cbd1a720-3218-4133-b3b0-301d6d4e3c4b (215) 561-2220 V A R A L L O Incorporated COUNCIL OF THE CITY OF PHILADELPHIA COMMITTEE ON APPROPRIATIONS - - - Room 400, City Hall Philadelphia, Pennsylvania Thursday, October 23, 2008 9:05 a.m. - - - PRESENT: COUNCILWOMAN JOAN L. KRAJEWSKI, CHAIR COUNCILMAN DARRELL CLARKE COUNCILMAN W. WILSON GOODE, JR. COUNCILWOMAN MARIA QUINONES-SANCHEZ COUNCILWOMAN DONNA REED MILLER COUNCILMAN FRANK RIZZO BILL 080743 - An ordinance authorizing transfers in appropriations for Fiscal Year 2009 from the Grants Revenue Fund, the Director of Finance - Provision for other grants to the General Fund, the Director of Finance - Indemnities. - - - V A R A L L O Incorporated Litigation Support Services Eleven Penn Center 1835 Market Street, Suite 600 Philadelphia, Pennsylvania 19103 215.561.2220 215.567.2670 cbd1a720-3218-4133-b3b0-301d6d4e3c4b (215) 561-2220 V A R A L L O Incorporated
Good morning. The Committee on Appropriations is now in session. I'd like to recognize Councilman Rizzo, Councilwoman Miller, Councilwoman Sanchez and Councilman Goode. Thank you. The Clerk will please read the title of the bills.
Bill No. 080743, an ordinance authorizing transfers in appropriations for Fiscal Year 2009 from the Grants Revenue Fund, the Director of Finance - Provision for other grants to the General Fund, the Director of Finance - Indemnities. (Witnesses approached witness table.)
-- members of the Appropriations Committee. My name is cbd1a720-3218-4133-b3b0-301d6d4e3c4b (215) 561-2220 V A R A L L O Incorporated 10/23/08 - APPROPRIATIONS - BILL 080743 Steve Agostini. I'm the Budget Director for the City of Philadelphia. I appear before you today to offer testimony on Bill 080743, which makes a transfer in appropriations from the Grants Revenue Fund to the General Fund, Director of Finance - Indemnities. The transfer of ten and a half million before you is needed to pay two large claims that have recently been settled. The first claim is the final settlement with property owners whose 14 homes were destroyed by the MOVE fire on 15 Osage Avenue. The second claim is as a 16 result of a class action suit arising 17 from strip search practices employed by 18 the staff of the Philadelphia Prison. It 19 is unusual to have a claim of this 20 magnitude in any given fiscal year, let 21 alone two such settlements in the same 22 year. 23 I appreciate the opportunity to 24 testify before you. I'd like to emphasize that the cbd1a720-3218-4133-b3b0-301d6d4e3c4b (215) 561-2220 V A R A L L O Incorporated 10/23/08 - APPROPRIATIONS - BILL 080743 need for this is rather significant. For all intents and purposes, the $25 million that we have in the FY09 budget for indemnities has been exhausted or committed for claims that we know about. That does not include these two claims, which would take our expenditure and the need for appropriations up to approximately $36 million for the year. I think standing right now we believe we are in deficit in the fund, and so I'd like to emphasize the sort of need for this moving forward. I appreciate the opportunity to testify before the Committee this morning. I'm happy to answer any questions. Additionally, Shelley Smith, the City Solicitor, is here to answer any questions. And thank you and appreciate the time.
Thank you. I also would like to acknowledge Councilman Clarke is here. cbd1a720-3218-4133-b3b0-301d6d4e3c4b (215) 561-2220 V A R A L L O Incorporated 10/23/08 - APPROPRIATIONS - BILL 080743 Good morning, Councilman.
Are there any questions from members of the Committee?
I guess I'll ask the City Solicitor. Do we have any type of outside insurance? Do municipalities ever engage in that to protect us from these substantial losses, the Lloyd's of London type of arrangement that could have protected us on these significant lawsuits?
Do municipalities ever? Yes. The City of Philadelphia is self-insured.
Is there any reason we should look based on these significant settlements that we ought to consider some type of insurance cbd1a720-3218-4133-b3b0-301d6d4e3c4b (215) 561-2220 V A R A L L O Incorporated 10/23/08 - APPROPRIATIONS - BILL 080743 protection?
The City has not -- has only sought insurance in extraordinary cases. As Mr. Agostini testified, it is extraordinary to have even one such settlement, much less two. I don't anticipate the need as a regular matter for the City to seek insurance.
Could you look into that and send that to the Chair to see if we -- we don't have a crystal ball. If you knew we would have had this type of a claim, that's why you have insurance, for the unexpected, not for day-to-day activity. So could you look and see what the cost to have that kind of a coverage would be and report back to the Chair, please.
If I may, Councilman Rizzo. Over the last ten years of my experience with municipalities, it has been increasingly difficult for municipalities to purchase cbd1a720-3218-4133-b3b0-301d6d4e3c4b (215) 561-2220 V A R A L L O Incorporated 10/23/08 - APPROPRIATIONS - BILL 080743 insurance, which is why many, if not most, of the larger cities have moved to a self-insurance form. But we will go and look at that.
Could you please look at it and let us decide how we want to -- what we want to recommend to you? Thank you.
Thank you, Madam Chair. I actually have a question for the City Solicitor based on your testimony that I understand is going to be read into the record.
The strip cbd1a720-3218-4133-b3b0-301d6d4e3c4b (215) 561-2220 V A R A L L O Incorporated 10/23/08 - APPROPRIATIONS - BILL 080743 search.
The claim alleged that the Prison's policy, which no longer exists, of strip searching all prisoners as part of the intake process violated their constitutional rights.
The policy I believe goes back to 2003 at least. It may have existed before that, but I know it goes back to 2003. As I said, that policy has been changed, so that the constitutional parameters around strip searches guide the policy and strip searches occur when there's individualized suspicion to justify them.
And the MOVE settlement, this is the last for the MOVE?
Okay. cbd1a720-3218-4133-b3b0-301d6d4e3c4b (215) 561-2220 V A R A L L O Incorporated 10/23/08 - APPROPRIATIONS - BILL 080743 All right. Thank you. Thank you, Madam Chair.
Thank you. Is there anyone else here to testify for or against this bill? (No response.)
That ends our hearing on Appropriations. Now we will go into our public meeting. cbd1a720-3218-4133-b3b0-301d6d4e3c4b (215) 561-2220 V A R A L L O Incorporated 10/23/08 - APPROPRIATIONS - BILL 080743 The Chair recognizes Councilman Goode.
Thank you, Madam Chair. I move that Bill No. 080743 be reported out of Committee with a favorable recommendation and the rules of Council be suspended so as to permit first reading at our next Council session. (Duly seconded.)
Thank you. Therefore, Bill 080743 will be reported out of this committee with a favorable recommendation, with the rules of Council being suspended so as to permit first reading at the next session of Council. Thank you all very much. cbd1a720-3218-4133-b3b0-301d6d4e3c4b (215) 561-2220 V A R A L L O Incorporated 10/23/08 - APPROPRIATIONS - BILL 080743 (Committee on Appropriations adjourned at 9:10 a.m.) - - - cbd1a720-3218-4133-b3b0-301d6d4e3c4b (215) 561-2220 V A R A L L O Incorporated CERTIFICATE I HEREBY CERTIFY that the proceedings, evidence and objections are contained fully and accurately in the stenographic notes taken by me upon the foregoing matter on October 23, 2008, and that this is a true and correct transcript of same. ______________________________ MICHELE L. MURPHY RPR-Notary Public (The foregoing certification of this transcript does not apply to any reproduction of the same by any means, unless under the direct control and/or supervision of the certifying reporter.)