If the issue is the 23 timing of the project and whether or not you lose 24 the deal, once you bring it here we could decide, well, we need an impact study and we can go out and 79 3/26/03 - FINANCE - BILL 030015 get a third party. It doesn't take 90 days; it takes six months.
Councilwoman, you're absolutely right. Council can do an economic impact analysis on anything that we bring to you. My problem is legislating that the City Controller has to do this.
And he's going to do an audit of the project at the end of the project.
You know the City Controller has the responsibility as to how government money is spent in the City of Philadelphia. Why do you oppose him? That's what he's there for. And if he calls attention to something, we ought to pay attention to it. Then the decision is ours. Why do feel you ought to have the right to go ahead with the project even if the City Controller says, "This is a huge waste of money; the project has no merit"? Is that what you're saying, you don't want to be interfered with? You want to control the flow of information to us? 80 3/26/03 - FINANCE - BILL 030015 You have no right to control that flow of information to us. We want it from everybody, not just from the proponents of a project. We want to hear from the opponents of a project so we can make a sound decision. You sound just like the Mayor. No 8 wonder you don't have to talk to the Mayor. You're following his view. You want to have the absolute right. You're not going to get it from this Council because it would violate the Home Rule Charter. It would violate the best interests of the citizens of the City. Why do you feel you ought to have the right to control the flow of information to the Council?
I think we need another office because we need somebody to control the Controller and then we're there.
That's right. The Controller could be out of control, and we need somebody to control the Controller, since we're creating new jobs and responsibilities. Councilman Nutter. 81 3/26/03 - FINANCE - BILL 030015
Madam Chair, I know that you have some questions for me on the amendments, and I also saw your note and I've made what I think might be a potential response to that. I just need to ask Mr. Cuorato, I think, maybe two questions. One, the developers that you mentioned earlier that do projects in the City, do they conduct their own feasibility studies or economic impact statements before they spend their money?
Forget about the City. I'm in the development business. I want to build a big building. Does the president of the organization or the CEO or the chairman just say, "Hey, today we're going to build XYZ building. It's going to cost ABC amount of money. Start work tomorrow." Is that what they do?
Forget about the City. I'm just talking about business people, how they spend their money. Does the chief financial 82 3/26/03 - FINANCE - BILL 030015 officer, does the investment officer, does the comptroller of the company, does a clerk in the mail room, does somebody say, "What's it going to cost and what's it going to do for us and what's the cost benefit analysis and what's the return on investment and what is this going to mean for the company?" Is that what they do when they're trying to figure out how to spend their money?
So do you think that the City Controller would inappropriately or unnecessarily seek to not provide an economic impact statement, if asked?
That's a fair response. Under the framework that we've laid out in some of the discussion that we've had here, do you feel we have a need for a City Controller?
As it relates to this Bill, or is that a general overall philosophical question?
It's not a 83 3/26/03 - FINANCE - BILL 030015 philosophical question. It's a public policy question.
As it relates to this Bill, I believe the City Controller has no role --
Okay. Thank you. Madam Chair, you had some questions for me on the proposed amendments?
I think we've explored my questions in this wonderful, positive discussion. Do we have more questions about this Bill?
I do want to put the amendments forward and I want to seek to incorporate what you had given me.
All right. Do you want to do that in the stated meeting part after 84 3/26/03 - FINANCE - BILLS 030022, 0300023 we discuss the next two Bills?
All right. We will now have the Clerk read the titles of the next two Bills introduced by Councilman Goode, Bill Nos. 030022, 030023. After the titles of the Bills are read, Councilman Goode will make opening statements and then we'll ask you for your testimony.
Bill No. 030002, an Ordinance amending Chapter 19-200 of the Philadelphia Code entitled, "City Funds - Deposits, Investments, Disbursements," by prohibiting the City Treasurer from depositing funds in banks and institutions that have failed to submit statements of community reinvestment goals for low and moderate income neighborhoods in the City of Philadelphia, under certain terms and conditions. And Bill No. 030023, an Ordinance 24 amending Chapter 19-200 of the Philadelphia Code entitled, "City Funds - Deposits, Investments, 85 3/26/03 - FINANCE - BILLS 030022, 0300023 Disbursements," by revising the list of City depositories because of non-compliance with certain provisions of that Chapter, under certain terms and conditions.
Thank you, Madam Chair. I will try to move very quickly, although I do have some ground to cover. For Members of the Committee, there is a red folder here that actually contains the reinvestment statements that have been offered by the banks that offer them. Also, the package with the binder clip on it is actually related to these two Bills. I just wanted to start by saying that when I came to City Council a few years ago, one of the first things that I did within my first month of being sworn in was issue a report, the Greater Philadelphia Capital Access report, which was focused on small business lending within the region. The report showed that 90 percent of the lending was concentrated in middle and upper income neighborhoods, that only 10 percent of lending 86 3/26/03 - FINANCE - BILLS 030022, 0300023 resources were available to low and moderate income neighborhoods. In September of that year, I met with Greater Philadelphia Urban Affairs Coalition's Committee on Community and Economic Development and began to work with some of the banking members of that community on a solution to that. That solution was never really forthcoming by members of that committee. After that, I actually met with members of the banking community to try to forward how we would resolve this problem and address the issue of disparity in lending between low and moderate income neighborhoods and middle and upper income neighborhoods in separate meetings. Still, no real proposal was forthcoming. I've offered additional reinvestment legislation, including the forming of a commission where members of the banking community sit. And this past fall, we actually held hearings on the state of community reinvestment within the City, with particular attention still paid to small business lending. And we found that, since my initial policy legislative work a couple of years 87 3/26/03 - FINANCE - BILLS 030022, 0300023 ago, actually, that disparity had actually widened. At that point we found within testimony at that hearing that the banking community wanted to be represented by the Greater Philadelphia Urban Affairs Coalition. They chose to be represented by the Federal Reserve Bank, which I felt was inappropriate. In the last week or so, they chose to be represented by the Greater Philadelphia Chamber of Commerce in trying to not only oppose these two Bills through those entities, but also escape their individual policy positions. We actually have had no direct response from any member of the banking community. I've met with several over the last week or two, over the last several months, before the hearings in the fall. No bank, First Union, PNC, Citizens, Commerce, United Bank or any other bank has opposed these Bills directly. In fact, I'm very proud of what they have done in actually issuing their reinvestment statement. Because of the statements they have issued -- and you'll find the full statements in the red package and summaries of the statements within the package with the binder on it. Because members of this Council passed a Fair 88 3/26/03 - FINANCE - BILLS 030022, 0300023 Lending Law, co-introduced by all members of Council, passed by all Members of Council, signed by the Mayor, we have a commitment this year for those five banks mentioned before of 1,377 small business loans, 3,056 home improvement loans, home mortgages, other refinances and community development 8 investments. I think for the $361 million we have 9 invested in those banks, deposit in those banks on a 10 daily basis, it's only right that they tell us what 11 they're going to do in low and moderate income 12 communities. 13 So on one hand, I salute those five 14 banks for their reinvestment statements.
I have to 15 note for the record that through the Greater Philadelphia Chamber of Commerce, through the Pennsylvania Bankers Association, through Greater Philadelphia Urban Affairs Coalition, they still behind the scenes are trying to shelf their responsibility of telling us on an annual basis how they will reinvest in our communities. Interestingly enough, the vehicle they're trying to use is Act 55, which is a law that was passed on the state level to actually take action against legislation authored by Councilwoman Tasco in her 89 3/26/03 - FINANCE - BILLS 030022, 0300023 fight against predatory lending. And while they claim that they can preempt any legislation that we offer in this Council, I believe that the City and the City Solicitor can defend its actions and decide what they do with City depositories. We decide, as a matter of Home Rule, who we deposit our money in. This Council decides, as a matter of Home Rule, who is authorized to receive those deposits, not only by the last Charter, but by the Charter before it. Even by the 1919 Charter, that power is invested in this Council to decide who is authorized. So those statements, I will just say that I look forward to the testimony. I plan on moving, taking action on the first Bill today, 030022. I'm planning on amending the second Bill because, actually, there's a technical mistake in it. The way the Bill reads now, it actually lists the five banks that we want to keep as City depositories because of their commitments. We actually need to make that technical amendment to show the banks that we would actually be striking from the list of City depositories in order to keep those five. I want to keep that Bill in Committee after amending it, not 90 3/26/03 - FINANCE - BILLS 030022, 0300023 only to deal with some of the technical issues involved and to make sure that we are legally amending it by holding another hearing on it, but also, I don't think we should take the responsibility of axing City depositories lightly. So I want this Committee, I want this full Council to do it and to do it for the right reasons, decide which ones we will ax. And finally, I would note for the record that the actual list of City depositories actually needs a lot of cleaning up anyway, because there are banks that are defunct, have merged and so forth. So I will be taking action on 22, but I will actually seek to amend and keep it in Committee. 16 Thank you, Madam Chair. 17
Thank you, 18 Councilman. 19 Please identify yourself for the record. 20 Good morning. 21
First, I'd like to make note that there is an error in my written testimony. 91 3/26/03 - FINANCE - BILLS 030022, 0300023
Good Morning, Chairwoman Blackwell. I'm Corey Kemp, the City Treasurer. I want to make note that there is an error in my written testimony. It speaks to the Committee on Commerce and Economic Development instead of the Finance Committee. I apologize for that oversight. Like I said before, I am Corey Kemp, City Treasurer. With me is Joseph Faraldo, Deputy City Treasurer. We are here to provide information relative to Bill No. 030022, which requires the City Treasurer on July 1st of each year to certify to the President of Council whether or not each bank on the list of City depositories have provided the City with an annual statement of community reinvestment goals. Bill No. 030022 also requires the City Treasurer to withdraw all funds from any bank or institution that has not complied with this requirement. The following banks have provided information pertaining to their annual statements of community reinvestment goals: Citizens Bank, whose goals include 800 residential mortgage loans, 200 home improvement 92 3/26/03 - FINANCE - BILLS 030022, 0300023 loans, 300 small business loans and community development loans. Commerce Bank, whose goals include 150 residential loans, 50 home improvement loans, 80 small business loans and $3 million of grants in community investments. First Union, whose goals include 1,290 residential mortgage and home improvement loans and 579 small business loans. PNC, whose goals include 500 residential mortgage and home improvement loans, 400 small business loans and $1,500,000 of grant funding in community development investments. United Bank, whose goals include small business loans, 66 consumer loans, 500 student loans, 500 credit card approvals and 30 loans to disabled individuals. Mellon Bank, HSBC, and Republic First Bank also provided information in response to their community reinvestment goals. We are also here to provide information relative to Bill No. 030023. To be considered as a City depository, a bank or financial institution must be insured by a federal corporation, have been 93 3/26/03 - FINANCE - BILLS 030022, 0300023 established for a minimum of five years, have been profitable for at least two years and have a minimum of $100 million in assets. Banks or institutions designated by City Council as depositories of City funds shall deposit with a Federal Reserve Bank or another commercial bank, secure these as described in Chapter 19-201, Section 4A as collateral for such deposits. The process to change depositories could prove to be difficult and take considerable time. A new depository to handle the corresponding City funds will have to be selected and the proper procedures put in place to make a smooth transition. This change could also require the task of setting up accounts, making sure that our computer systems are compatible, and the involvement of other departments within the City government. Thank you for the opportunity to appear before the Committee today. I will be happy to answer any questions the Committee has for me at this time.
Thank you, Mr. Kemp. Questions from Members of the Committee? 94 3/26/03 - FINANCE - BILLS 030022, 0300023 Councilman Goode.
Mr. Kemp, very quickly. Which banks do you view as being in compliance with the Fair Lending Law?
Citizens Bank, Commerce Bank, First Union National Bank, PNC, United. And I also included Mellon, HSBC and Republic First Bank because they did reply to the request for information.
If we were to limit the list of City depositories to those eight, would that provide any problems in terms of our depository relationships in terms of where our money is deposited at this point?
If we limit it to the five that I've talked about that actually presented numerical goals, would that present any particular problems?
It would only because Mellon Bank has our pension payroll account, which obviously we use to pay our pensioners on a monthly 95 3/26/03 - FINANCE - BILLS 030022, 0300023 basis. So we would have to make some changes to that.
For the record, can we ask them again for numerical goals?
Thank you very much. Are there further questions from Members of the Committee with regard to either of these two Bills? (No response.)
Thank you very much. We will then close our public hearing and enter into stated meeting. - - - COUNCIL OF THE CITY OF PHILADELPHIA 96 PUBLIC MEETING COMMITTEE ON FINANCE - - - March 26, 2003 - - - Public Meeting conducted by the Committee on Finance, held in Room 696, City Hall, Philadelphia, Pennsylvania, on the above date, to consider action on the following: BILLS 030015, 030022, 030023. - - - PRESENT: COUNCILWOMAN JANNIE BLACKWELL, Chair COUNCIL PRESIDENT ANNA C. VERNA COUNCILMAN DAVID COHEN COUNCILMAN FRANK DICICCO COUNCILMAN W. WILSON GOODE COUNCILMAN JAMES KENNEY COUNCILMAN MICHAEL NUTTER COUNCILMAN ANGEL ORTIZ COUNCILWOMAN MARIAN TASCO - - - 97 03/26/03 - FINANCE - PUBLIC MEETING
The Chair would like to recognize Councilman Nutter with regard to amendments to Bill No. 030015.
Thank you, Madam Chair. Madam Chair, the proposed amendments have been circulated with regard to 030015. There is one additional amendment that I wish to put forward at the Chair's recommendation with regard to some of the discussion around the term, "interested party." We put on the record what the legislative intention was, but I think the Chair's note on that, what I would suggest is that I could in that -- on , Section 17-1102(B), right after the phrase, "interested party," Madam Chair, I could put in parentheses or suggest in parentheses, "which may be the City, a City" --
Excuse me one moment. We're going to write exactly what you say. You want the words, "which may be"?
Yes. I was going to insert it right after "interested party" and then put in parentheses so that it's defining the 98 03/26/03 - FINANCE - PUBLIC MEETING interested party. "(Which may be the City, a City-related agency or Member of City Council)" and then the sentence would continue, detailing the attempts.
All right. And I believe the other amendments have been circulated?
The other amendments have been circulated and they are printed and I'll tremendously quickly go through. On , 17-1102, in one, that sentence could have been read to be construed that a member could not introduce a Bill or Resolution on a particular matter. Obviously, that actually doesn't make any sense, and I would not be seeking to prevent any member from introducing anything. So the word "no" is deleted and the word "a" to start that sentence is added. The other significant amendment is on , number 5. It strikes the first sentence which reads, "It shall be the duty of the City Controller upon receiving a written request from the Mayor or a Member of Council to provide an economic impact statement or other statement required by Subsection 1A." That addresses a concern raised by 99 03/26/03 - FINANCE - PUBLIC MEETING the Law Department as to Council's legal authority to require action by the City Controller. They have a very long and detailed legal explanation about the separation between the two entities, but suffice to say, I want to address that particular issue. And then all of the other amendments are listed in the Bill, but those were the significant ones.
Madam Chair, I would move the adoption of the amendments as printed, and as read into the record, the additional one regarding better defining "interested parties" to Bill 030015. (Duly seconded.)
It has been moved and seconded that the amendment as read and also circulated for Bill No. 030015 be approved. All in favor? (Aye.)
The ayes have it. And so the amendment is reported out of this stated meeting. 100 03/26/03 - FINANCE - PUBLIC MEETING The Chair recognizes Councilman Nutter for a motion for Bill No. 030015, as amended.
Thank you, Madam Chair. I move that Bill 030015 as amended be reported out of this Committee with a favorable recommendation and a further recommendation that the Rules of Council be suspended so as to permit first reading at our next Session. (Duly seconded.)
It has been moved and seconded. All in favor? (Aye.)
The ayes have it. And therefore, Bill No. 030015, as amended, has been reported out of Committee with a favorable recommendation, and also a recommendation for suspension of the Rules so as to be considered at our next Session of Council. The Chair now recognizes Councilman Goode with regard to Bill 030022. 101 03/26/03 - FINANCE - PUBLIC MEETING
Madam Chair, I move that Bill 030022 be reported out of Committee with a favorable recommendation and that the Rules of Council be suspended as to permit first reading at our next Council Session. (Duly seconded.)
It has moved and seconded that Bill No. 030022 be reported out of Committee with a favorable recommendation, and also a recommendation for a suspension of the Rules so as to be considered at our next Session of Council. All in favor? (Aye.)
Councilman Goode, we would like to recognize you with a statement with regard to Bill No. 030023.
Thank you, Madam Chair. With regard to Bill 030023, I circulated amendments to all Members of the Committee and I move for the approval of the amendment. (Duly seconded.) 102 03/26/03 - FINANCE - PUBLIC MEETING
It has been moved and seconded that amendment to Bill No. 030023 be approved. All in favor? (Aye.)
Therefore, the amendment to Bill No. 030023 has been approved. Councilman Goode.
Thank you, Madam Chair. I would like to hold that Bill as amended in Committee for further hearings.
All right. Thank you very much. This will end our Finance hearing. We thank all Members of the Committee as well as all those who testified and who are here. Thank you. (Council adjourned at 12:20 p.m.) 103 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 March 26, 2003, were reported fully and accurately by me, and that this is a correct transcript of the same. RE: COMMITTEE ON FINANCE ___________________________ Lisa C. Bradley, RPR and Notary Public