COUNCIL OF THE CITY OF PHILADELPHIA COMMITTEE ON FINANCE - - - Room 400, City Hall Philadelphia, Pennsylvania Wednesday, June 9, 2010, 12:05 p.m. - - - BILL 100129 - Agreement with Wachovia Bank for provision of payroll banking services. BILL 100223 - Creating a Philadelphia internship tax credit. BILL 100224 - Electronic payments and filings. BILL 100305 - Constituting 10th Supplemental Ordinance to Amended and Restated General Airport Revenue Bond Ordinance. BILL 100307 - PGW capital expenditures. BILL 100357 - Authorizing Dir. of Housing to file applications HUD for CDBG. BILL 100362 - Capital Loan bill. COMMITTEE MEMBERS PRESENT: Marian B. Tasco, Chair Jannie L. Blackwell, Vice Chair Blondell Reynolds Brown Bill Green James F. Kenney W. Wilson Goode, Jr. William K. Greenlee Also Present: Councilman Curtis Jones, Jr. - - - 2 6/9/10 FINANCE COMMITTE HEARING
Good morning. I'd like to call the Committee on Finance to order and recognize that we have a quorum in the presence of Councilwoman Blondell Reynolds-Brown, Councilwoman Jannie Blackwell, Councilman Goode, Councilman Green, and Councilman Greenlee. We'll ask the clerk to please read the bills that will come before us today. This meeting was recessed from... some other time. Thank you.
Bill No. , for provision of payroll banking services to the City, under certain terms and conditions. Bill No. 100305, an ordinance 24 constituting the 10th Supplemental Ordinance to the Amended and Restated 3 6/9/10 FINANCE COMMITTE HEARING General Airport Revenue Bond Ordinance; authorizing the Mayor, the City Controller, and the City Solicitor, or a majority of them, to issue and sell one or more series of tax-exempt or taxable Airport Revenue Bonds of the City of Philadelphia; designating the obligations to be refunded from certain proceeds of such Airport Revenue Bonds; setting forth the use of proceeds; providing for the pledge of certain passenger facility charges soley for bonds which refund the City of Philadelphia, Pennsylvania, Airport Revenue Bond, Series 1998B; determining the sufficiency of pledged amounts available for debt service; covenanting for the payment of interest and principal; authorizing the Bond Committee to take certain action with regard to the terms and conditions of the Airport Revenue Bonds and related agreements and the elections under the Amended and Restated General Airport Revenue Bond Ordinance; authorizing the 4 6/9/10 FINANCE COMMITTE HEARING Director of Finance to take certain actions with regard to the sale of such Airport Revenue Bonds, the investment of the proceeds thereof, and the City's continuing disclosure obligation; and specifying the applicability of sections of the First Class City Revenue Bond Act and the Amended and Restated General Airport Revenue Bond Ordinance. Bill No. L. 1449, Section 25 4, as amended, to prevent and eliminate 5 6/9/10 FINANCE COMMITTE HEARING blight; authorizing the Director of Housing and the Director of Commerce to file applications to obtain other grants from the Commonwealth; authorizing the Director of Commerce to use the Section 7 108 Lone Guarantee Program; and authorizing the Director of Housing and the Director of Commerce to enter into all understandings and assurances contained in such applications and take all necessary action to accept the grants, all under certain terms and conditions. Bill 100223, an ordinance 16 amending Chapter 19-2600 of the Philadelphia Code, entitled "Business Privilege Taxes," by creating the Philadelphia Internship Tax Credit, under certain terms and conditions. Bill No. 100224, an ordinance 22 amending Chapter 19-500 of the Philadelphia Code, entitled "Taxes and Rents General," by adding a new section 25 19-511, entitled "Electronic Payments and 6 6/9/10 FINANCE COMMITTE HEARING Filings," providing for mandatory and voluntary payment by the electronic fund transfers and electronic filing, all under certain terms and conditions. Bill No. 100307, an ordinance 7 approving the Fiscal Year 2011 Capital Budget, providing for expenditures for the capital purposes of the Philadelphia Gas Works (including the supplying of funds in connection therewith) subject to constraints and conditions and acknowledging receipt of the forecast of capital budgets for Fiscal Years 2012 through 2016. Bill No. 100362, an ordinance 17 authorizing the Bond Committee to sell bonds at public private-negotiated sale to provide funds towards various capital municipal purposes, providing for appropriations to the Sinking Fund Commission for the payments of such bonds; authorizing agreements to provide credit or payment or liquidity sources for the bonds in connection with issuance 7 6/9/10 - FINANCE COMM. - BILL 100129 of the bonds and certain other actions; providing for obtaining the consent of the electors to increasing the indebtedness of the City and fixing a day and providing for the arrangements for holding the election for obtaining such consent.
Thank you very much. The Chair recognizes Mr. Don Scott and Robert L. Archie from Wachovia Wells Fargo. (Witnesses come forward.)
My name is Robert Archie, and I'm special counsel to Wachovia, which is now a Wells Fargo Bank. Sitting to my right is Don Scott, and we're here to answer questions which were raised at our last hearing regarding Bill No. 100129. 8 6/9/10 - FINANCE COMM. - BILL 100129 Mr. Scott?
Thank you, Madam Chair. Good afternoon, gentlemen. PANEL MEMBERS: Good afternoon.
Mr. Scott, at our last hearing, on May 26th, I posed a question to you with regard to a strategy plan, which is required under the Philadelphia Code with regard to disparities that are disclosed through the Annual Lending Disparity Study. My question was specifically related to home mortgage lending to African-Americans and whether your previous strategic plan and your future strategic plans covered that disparity -- those disparities that were found in the past and in the latest disparity study. Your answer at that time was, 9 6/9/10 - FINANCE COMM. - BILL 100129 "I'm not sure if I can answer that question." Are you prepared to answer that question now?
Yes. Councilman Goode, we have reviewed the results of the 2008 eConsult study, and we recognize that there is a significant gap between our performance and the performance of the peer banks. We will present to the Finance Committee, to the Treasurer's Office a strategic plan which will address the disparity.
And the disparity that was disclosed for your previous strategic plan was based upon only 18 percent of lending going to African-Americans. The disparity found in the latest disparity study was only 9.4 percent. Your strategic plan will address both of those disparities, and you expect that it will trend toward peer performance? 10 6/9/10 - FINANCE COMM. - BILL 100129
Thank you for sharing with us the percent, and I 4 guess that would have been '07. The 9 5 percent performance -- 9.01 -- 6
9.4 percent was for 8 '08. 9 And the plans that we put in 10 place did afford us an opportunity to 11 approach 20 percent in '09, and we are 12 hovering around 20 percent for the first 13 quarter of 2010. 14 And we are hopeful that the 15 plan that we will present to the Finance 16 Committee and the City Treasurer's Office 17 will allow us to improve upon that 18 performance.
Thank you very much. 11 6/9/10 - FINANCE COMM. - BILL 100307
The Chair recognizes Janet Parrish, Executive Director of the Philadelphia Gas Commission, and Craig White, if they're here. (Witnesses come forward.)
Thank you. My name is Janet Parrish. I'm the executive director of the Philadelphia Gas Commission, here to testify in support of Bill No. 100307. And seated to my left is Craig White, the executive vice president and acting chief operating officer of Philadelphia Gas Works. 12 6/9/10 - FINANCE COMM. - BILL 100307 If I may, I will dispense with reading the written testimony, which we have submitted, but it does reflect the recommendations of the Philadelphia Gas Commission to this Counsel, which were adopted at its meeting held on April 26th of this year. Attached to the testimony is a copy of Gas Commission's resolution 10 and order in this matter. If I might just briefly summarize, I would characterize this year's Fiscal 2011 Capital Budget for PGW as being rather vanilla in nature, and about -- it is about 6 or $7 million less than a typical capital budget has been simply because of the fact that a major portion of expenses in the operating side of the company for joint-clamping and main encapsulation have been reclassified from capital to operating expenses. So although the budget may appear to be significantly lower, there is an accounting reason for that, and that is something that PGW did have 13 6/9/10 - FINANCE COMM. - BILL 100307 blessed by its outside auditors. The only other significant point I would note is that in conjunction with the adoption of this budget, the Gas Commission in its review did request PGW to come forward with its goals for DBE participation in the Capital Budget, as well as the Operating Budget, because I think, as you'll see from our testimony, the Capital Budget that Council sees really only represents about percent 13 of PGW's expenditures, which potentially 14 could have DBE participation attached to 15 them. 16 PGW initially projected a goal 17 of 16.3 percent for Fiscal '11. Since 18 the Commission took action in this 19 matter, PGW has taken a harder look at 20 the components of its spending and has 21 determined on a line-by-line basis that a 22 more appropriate goal for Fiscal '11 23 actually is in the 17 to 21 percent 24 range. 25 And as you will see from PGW's 14 6/9/10 - FINANCE COMM. - BILL 100307 testimony, expenditures in this area have been on an upward trend since Fiscal '96, but I think we're not finished and they're not finished. The Gas Commission has imposed new reporting requirements that PGW will report on actuals compared to its targets throughout the course of the year, and we'll able to report back to Council as progress continues to be made. To support that progress, PGW intends to undertake additional outreach, targeted outreach efforts to reach out to additional vendors and has really placed, I think, a new and renewed focus in this area. That's pretty much the gist of what we're here with today. We are requesting that the bill be reported out with a favorable recommendation and a suspension of the rules so that it may be heard at Council's next session. And both Mr. White and myself will be happy to answer any questions 15 6/9/10 - FINANCE COMM. - BILL 100307 that you may have.
Thank you. Mr. White, do you have anything that you'd like to say?
Any questions from this committee? (No questions.) I'd just like to say thank you, Miss Parrish, for working with PGW on the whole issue of inclusion and the Gas Commission for recognizing the concerns raised by this finance committee at other hearings around the inclusion of -- the diversity of your vendor package. So we appreciate all that you've done. And thank you, Mr. White, too. Send the message back to PGW.
Thank you very much. 16 6/9/10 - FINANCE COMM. - BILL 100362
The Chair recognizes Mr. Dubow, Finance Director, regarding the Capital Loan bill. (Witness comes forward.)
Thank you. Would you identify yourself for the record, please.
Yeah. I'm Rob Dubow, the Finance Director, and I'm here to testify in support of Bill No. 100362. The purpose of the bill is to obtain approval from Council to place a loan authorization question on the election ballot on Tuesday, November 2, 2010. The Commissioners' schedule requires that a ballot question be submitted by September 20th, which is six weeks prior to the date of the election. And we request that the bill 17 6/9/10 - FINANCE COMM. - BILL 100362 have first reading on June 17th so that it may receive final passage in Council's first session in the fall, which is September 16th. The loan question requests an increase in indebtedness in an amount not to exceed $106.69 million to fund the City's Fiscal Year 2011 Capital Budget, as approved by Council. State law requires the City to place a question before the electorate during the election to increase its borrowing authority. And as you can see in the testimony, we lay out how that -- the authorization is divided between the various categories. As of November 1, 2009, the City's legal debt limit was about $1.46 billion, and the amount of debt applicable to that limit was about $1.34 billion. But in February, we had a new analysis, and that debt limit had increased to 1.52 and the margins had increased to $179 million. 18 6/9/10 - FINANCE COMM. - BILL 100362 Of that amount, 65 million was used towards the FY '10 Capital Budget, leaving the City with a capacity of about $114 million, and that capacity will increase with repayment of 2011 debt service and increases real-estate tax assess, which is the average of the assessments over the last ten years. The Controller's Office will provide the certification required by the act prior to passage of this bill in the fall. And that concludes my testimony and I'd be happy to answer any questions.
Thank you. That is the capital ballot -- the loan ballot issue that we just passed in 2011?
All right. Are there any questions from members of Council? Councilman Green. 19 6/9/10 - FINANCE COMM. - BILL 100362
Thank you. I'm sorry. I was trying to catch up and find the bill in my stack here, and I haven't done it. Is this bill for authorization -- simply for authorization of the borrowing on the ballot?
So we'll pass it out with the first reading on the 17th.
Correct. That's what we were requesting, and final passage in September.
Stay, Mr. Dubow. We're going to talk about the Airport.
Is 20 6/9/10 - FINANCE COMM. - BILL 100362 Mr. Gale available? (Witness comes forward.)
I think there were some questions from the last hearing raised by a number of the members of Council. Councilwoman Blondell Reynolds-Brown requested some information regarding the demographics of the firms involved with the upcoming Airport transaction.
Yes. And I think we provided a written response with those demographics.
The brief conversation held with my staff and me.
Oh, that we had with you yesterday about how we'll work 21 6/9/10 - FINANCE COMM. - BILL 100362 to ensure inclusion in our deals. We do a number of things. We meet with potential participants to explain to them how our process would work so that they know what they have to do to get in on deals. We send out e-mail blasts to people, letting them know that there are upcoming opportunities so that they can propose. And we ensure that on every deal, there is minority participation and local participation.
Mr. Gale. At the end of the day, once all of the responses are in, what is the process for the selection?
For your -- for -- oh, I'm sorry, I'm sorry. I got something else in my head. I'll talk 22 6/9/10 - FINANCE COMM. - BILL 100362 to you about it later. I'm sorry.
The question I wanted to ask is, you are doing -- this does not have anything to do with the Revenue Bond deal, but you're getting ready to do some construction at the Airport, and if you put a RFP out or a RFQ out, what is the for process for someone to apply, and then how is the selection made?
Madam Chair, some of the construction work that we're contemplating, the hard construction dollars that we're asking for in this ordinance, the projects are already under design. We hadn't come before Council back in 2007. We had approval from our airlines to move forward with the design. So the Terminal F expansion, for example, is already moving through the design process, and we're coming back to you for the construction dollars. Moving it from here, certainly 23 6/9/10 - FINANCE COMM. - BILL 100362 pending approval from the committee and favorably coming out of Council, we would then go to the bond market this summer, and we will look to be putting those projects out to bid.
Okay. So you haven't put anything out to bid yet on some of those projects?
Thank you. Thank you very much. Any other questions? Councilman Green.
Thank you. This chart here, in response to -- I'm referring to the chart that is attached to a letter from May 28, 2010, that I guess has a breakdown of sort of demographics of the firms that have already been hired as of that date.
When we were in the last hearing, we discussed local 24 6/9/10 - FINANCE COMM. - BILL 100362 hiring. And specifically with respect to this, I note that no underwriters are listed here. Has any movement been made on decisions on underwriters on this transaction?
Okay. And is it your intention to have local underwriters participate as at least co-bookrunners in this transaction?
25 6/9/10 - FINANCE COMM. - BILL 100362 I'm good.
Okay. Thank you. Any other questions? (No further questions.) Thank you very much. Do you want a suspension of the rules?
All right. Thank you. The Chair now recognizes Miss Deborah McColloch. (Witness comes forward.)
I do believe from our last hearing that you have offered some amendments? MS. McCOLLOCH: Yes.
For the Year 36 Consolidated Plan? MS. McCOLLOCH: Yes.
Would you like to offer those? MS. McCOLLOCH: Yes. I have 6/9/10 - FINANCE COMM. - BILL 100357 copies here. Good morning. My name is Deborah McColloch. I'm the Director of Housing, and I am submitting to you a proposed amendment to Bill No. 100357 as part of Exhibit A to the Consolidated Plan, the Year 36 Consolidated Plan. As described in the markup that you have, budget pages 129, 130 and 133 of the budget detail section will be amended to do the following things: Reduce CDBG funding in Year 36 for neighborhood-based rental by $500,000, from 1.838 million to 1.338 million. That's on . Add a new line item in Year 36 under the Affordable Rental Housing budget section called Mixed-Use Pilot Program, funded with $500,000 in CDBG resources. That's on . Reduce CDBG funding in Year 36 for Weatherization and Basic Systems Repair Program, Tier II, from 10.521 million to 10.321 million. That's 27 6/9/10 - FINANCE COMM. - BILL 100357 on . Increase CDBG funding in Year 36 for the Utilities Emergency Services Fund from 1.325 million to 1.525 million. That's on . Reduce CDBG funding in Year 36 for the PIDC business loan programs from 7 million to 6.5 million. That's on 133. And add a new line item in Year 36 under "Business Assistance," called Mixed-Use Pilot Program, funded with $500,000 in CDBG resources. That's on . Then the following text would be inserted on pages 9 and 43 of the Year 36 Consolidated Plan describing the mixed-use pilot program. "During Year 36, OHCD and the Commerce Department will develop a pilot program to support mixed-use commercial and residential development on or adjacent to commercial corridors. The program will address the issue of vacant commercial storefronts 28 6/9/10 - FINANCE COMM. - BILL 100357 with potential rental apartments on upper floors. A request for proposals will be used to identify projects for the pilot program. Year 36 CDBG Funds not allocated to specific projects in Year 36 will be available for reallocation to other housing and economic-development activities. The City expects to formalize a mixed-use development program in Year 37." Other sections of the Year 36 Consolidated Plan would be revised as necessary, consistent with these two changes. These two changes would cause a ripple effect throughout the content on other pages that we would adjust to meet this amendment.
Thank you very much. The Chair recognizes Councilman Jones.
Thank you, Madam Chair. I want to thank the 29 6/9/10 - FINANCE COMM. - BILL 100357 Administration as well as this body for considering this. I think it is probably one of the most significant changes in our CDBG allocation germane to small businesses that we have done in quite some time. I'm coming from a history of being the president of the Philadelphia Commercial Development Corporation. I had a discussion with this mayor about dissolving of the corporation. And at that time, they made a commitment that irrespective of the acronym, that the commitment to small business, mixed-use business particularly in commercial corridors, of which are there are over 100 commercial corridors in the City of Philadelphia, I think this program will significantly impact neighborhoods like North Philadelphia, West Philadelphia, Germantown, South Philly, all over the City, and allow small entrepreneurs, not just the big franchise companies, the big chain stores, but small mom-and-pop shops 30 6/9/10 - FINANCE COMM. - BILL 100357 to actually have like when we used to remember commercial corridors, a business below and actual customers above. We did a study on Germantown Avenue. It went from Chestnut Hill down to Logan. And there was a direct correlation between the number of occupied second-story, third-story dwellings and the viability not only of the commercial corridor but the neighborhood. And we think this is a significant move in the right direction that will begin to address some of the blight on commercial corridors, some of the abandonment on commercial corridors. In my district, on Market Street, because of the great work that was done on the elevated system, the subway there, over 50 small businesses, mom-and-pop shops, closed. And without this kind of financial vehicle available to them, I daresay they may not ever reopen. 31 6/9/10 - FINANCE COMM. - BILL 100357 So I'm thankful to the Administration, Office of Housing and Community Development, and the Mayor for considering this option to address this critical need. Thank you, Madam Chair.
Are there any other questions? Councilman Clarke, do you have a question or a comment?
Thank you, Madam Chair. Madam Chair, I just wanted to make a comment with respects to the letter that was just distributed among the committee members. There have been a number of questions raised about properties that could conceivably, under existing statutes in both PHDC and the Redevelopment Authority, as it relates to the disposition of those properties at a 32 6/9/10 - FINANCE COMM. - BILL 100357 certain stage within -- as related to their inventory that would not require any authorization by Council, and in some cases, no authorization by the original funder, for purposes of that acquisition. We had informally talked about an amendment with both members of the committee and representatives from the Office of Housing and Community Development, and we think that amendment would have resolved the issue as it relates to having involvement by Council in the subsequent disposition. We think that, based on a letter that you've seen from the Mayor, that is a reasonable compromise that will essentially give the opportunity for District Councilpeople in particular to be involved in that decision as it relates to the secondary disposition of those properties, in addition to which it -- I'm assuming it resolves some of the concerns that some Administration members may have as it relates to needing 33 6/9/10 - FINANCE COMM. - BILL 100357 to make relatively quick decisions, as required by certain outside funding agencies, relating to changes in the project that don't impact the significance of the project but may relate to the names or some different formulation of a partnership, and that was not the intent. So this letter will essentially -- signed by the Mayor, will essentially require all future contracts to deal with not only disposition issues as we move forward, but all prior acquisitions from prior contractual relationships with all of those aforementioned agencies. So based on this and talking to some of our experts on Council, we think that this is a sufficient compromise that will resolve both concerns that we have had. MS. McCOLLOCH: Thank you.
And Miss McColloch can speak for herself as it 34 6/9/10 - FINANCE COMM. - BILL 100357 relate to the concerns that the Administration may have. MS. McCOLLOCH: Thank you. Yes, I think this letter that the Mayor signed that indicates the commitment of the Office of Housing and Community Development to add specific contract language in our contracts with the Redevelopment Authority and with the Philadelphia Housing Development Corporation requiring written approval by District Councilmembers before the disposition of any properties will serve both the needs that the Councilman has expressed and our concerns about the timing.
In light of some of the questions raised by the Councilmembers here on this letter, does it mean that this agreement will be effective the moment we pass the plan, the bill? MS. McCOLLOCH: It will be included in the Year 36 contract, which 35 6/9/10 - FINANCE COMM. - BILL 100357 starts July 1st. So I would say, theoretically, there might be a gap between today and July 1st, but the spirit of this is to get Councilmatic approval before any dispositions would take place. And so --
Between now and July 1st, you would still get permission from the Councilperson. MS. McCOLLOCH: Exactly. It would not be a contract requirement because it will be in the contract that starts July 1st, but we will pledge to get that. Should there be any dispositions that have to take place between now and July 1st, we will come back to City Council to secure that approval.
Okay. Thank you very much. The Chair recognizes Blondell Reynolds-Brown. 36 6/9/10 - FINANCE COMM. - BILL 100357
Sure. Having heard Councilman Jones' number of the business corridors or commercial corridors in the City, he stated 100, and recognizing fully that the mixed-use pilot program is new, what strategies, what considerations, what processes do you intend to use to ID the X-number of lucky commercial corridors that had access to these dollars? MS. McCOLLOCH: We will issue a request for proposals, and potential developers will come forward with whatever they are proposing that would be a mixed-use project that would have commercial on the ground floor and residential on the upper floors. It could be either a single -- we haven't specified. It could be either a single building with one store and two apartments, or it could be a larger, new construction development potentially, with a larger number of storefronts on the first floor and -- 37 6/9/10 - FINANCE COMM. - BILL 100357
So there's flexibility -- MS. McCOLLOCH: Yes.
-- in the offerings that may come back to you. MS. McCOLLOCH: Yes. We're going to issue a request for proposals to see what's out there.
Okay. MS. McCOLLOCH: And then review it. It will be jointly reviewed by the Commerce Department and the Office of Housing and Community Development.
I s there any ceiling on the budget for the RFP? MS. McCOLLOCH: Well, the total amount of funding that this amendment is committing is $1 million -- $500,000 on the housing side and $500,000 on the commercial side.
I 38 6/9/10 - FINANCE COMM. - BILL 100357 see, I see. All right, then. Thank you very much. Well, the follow-up question would be -- so next year at this time, you will be prepared to give us a report on what the experience has been, et cetera? MS. McCOLLOCH: Yes, of course.
Would you please stay and not leave? MS. McCOLLOCH: Yes, of course.
Okay. Thank you very much. MS. McCOLLOCH: And I would respectfully request a suspension of the rules to allow first reading at the next Council session. All I can do is respectfully request.
Oh, I understand. Thank you very much. We will now hear testimony on 39 6/9/10 - FINANCE COMM. - BILL 100224 Bill No. 100224, electronic payments and filings. Is the Revenue Commissioner available? (Witness comes forward.) COMMISSIONER RICHARDSON: Good afternoon, Councilwoman Tasco. Keith J. Richardson, the Revenue Commissioner.
Good afternoon. Forgive me. I'm sorry. COMMISSIONER RICHARDSON: Not a problem.
Would you identify yourself and proceed with your testimony. COMMISSIONER RICHARDSON: Yes. Again, good afternoon. Keith J. Richardson, the Revenue Commissioner. Good afternoon, Councilwoman Tasco and members of the City Council Committee on Finance. I'm here to testify in support of Bill No. 100224, which proposes mandatory electronic filing of tax returns, electronic transfer of tax payments due to the City 40 6/9/10 - FINANCE COMM. - BILL 100224 and School District of Philadelphia. Electronic tax filing and payment will allow more efficient and effective tax administration with positive impacts on the City's finances and on customer service. Mandatory electronic filing and payment will not be an unfamiliar concept for business taxpayers in Philadelphia, as the Commonwealth of Pennsylvania requires through electronic filing through its T tied system. With mandatory e-payment of filing, we will be able to avoid costs currently associated with tax administration such as postage and the printing of tax forms. The department will see a reduction in the need for machinery and manpower to open envelopes and process tax forms and payments, allowing us to devote resources elsewhere, including enhanced collection enforcement activity and customer service. 41 6/9/10 - FINANCE COMM. - BILL 100224 Electronic filing will also reduce opportunities for user errors and calculations on tax forms and the submission of incomplete returns. This will cut down on the time and effort needed to review and revise returns by both the Department of Revenue staff and taxpayers. The ability to post filings and returns on our tax database more quickly will enable realtime information for taxpayers and reduce delays in cashing for checks. This will improve our ability to serve taxpayers and maximize interest earnings on City funds. We do anticipate costs associated with the startup of the electronic payment filing initiative related to information technology and customer service. Although the Department of Revenue already has electronic filing in payment options for many tax types, as we move toward mandating their use, we must ensure the 42 6/9/10 - FINANCE COMM. - BILL 100224 programs are able to handle greater volumes of users and be used in even the most complicated tax situations with ease, in part achieved through seeking compatibility with the State tax filing system that taxpayers are already familiar with. It is for this reason that the Department of Revenue intends to phase in this program, beginning with the largest taxpayers. This will give the department the time necessary to ensure a smooth transition. Although we have not yet finalized a timeline for rolling out mandatory payment and filing, we anticipate the electronic payment requirements will start in January of 2011, and the electronic filing the following year, in January of 2012. As this initiative remains in the early planning stage, we do not have yet firm costs and benefits associated with mandatory e-payment and e-filing. 43 6/9/10 - FINANCE COMM. - BILL 100224 Analysis prepared last year suggested that mandatory e-payment for taxpayers making payments in excess of $50,000 could yield an additional $625,000 in interest earnings for the City. Moving to mandatory e-filing could result in roughly a quarter million dollars in saving from reduced printing costs, plus approximately $50,000 in savings of postage. There will be several types of costs associated with the implementation. We are working on understanding the information technology requirements and evaluating the outreach in public education efforts associated with the mandatory e-payment and e-filing. We do know that customer- service resources will be needed up front to set up the e-setup accounts to enable electronic fund transfers. E-setup takes 15 minutes. To set up the 2000-plus accounts that pay over $10,000, it will 44 6/9/10 - FINANCE COMM.
- BILL 100224 require about 5200 man hours based on the hourly pay for a customer-service representative of just under $20 per hour. This aspect of the implementation will require 100,000 in salaries, plus benefits and any associated expenses. We'll be doing an updated and more detailed analysis, but generally, we believe that the initial one-time cost will be recouped in the first several years following implementation of this program. I am more than happy to update City Council as our plans take shape. We appreciate Councilman Jones' introduction of this legislation, and we urge the committee to support Bill 100224. And we believe that this represents a step forward for both taxpayers and the Department of Revenue as we seek swift approval. Thank you. And I'm happy to answer any questions that you may have. And we respectfully request a 45 6/9/10 - FINANCE COMM. - BILL 100224 suspension of the rules for this as well.
Thank you very much. The Chair recognizes Councilman Clarke.
Thank you, Madam Chair. Good afternoon, Commissioner. COMMISSIONER RICHARDSON: Good afternoon, sir.
I'm going to ask you a question, and it's barely related to the bill, but since I have you here, I'm going to ask you the question anyway. How many BPT payers do we have that are located within the City of Philadelphia and how many are located outside of the City of Philadelphia? 46 6/9/10 - FINANCE COMM. - BILL 100224 COMMISSIONER RICHARDSON: If you give me a few minutes, I'll have that information for you. I think that was requested, and we did send it to the Mayor's Office on Monday, I think.
Thank you. COMMISSIONER RICHARDSON: I'll get that for you.
Thank you, Madam Chair. I just want to recognize that this is not a new idea. There are no new ideas, but it is one that we kind of championed in the Freshmen 15 -- Bill 18 Green and Maria Sanchez. And I want to acknowledge that this is something that we really tried to hit 'em over the head with because of the budget priorities. Mow, it takes nine votes to get anything done, so I want to thank my Council colleagues for recognizing and continuing to support this effort. 47 6/9/10 - FINANCE COMM. - BILL 100224 I do believe, however, that in this modern age of electronic transfer, that we will stand to gain a lot more than just that, but a confidence in the voters that we're doing everything we can do to save every dollar that we can. There was a $6 million check from the federal government that went uncashed that we lost revenues for, and this will never happen again based on the fine effort of our revenue commissioner in recognizing this need. So I want to thank the Administration but also my colleagues for pushing this effort forward. Thank you.
Councilman, what are you going to do after the next election, when you can't say "Freshmen 15"? (Laughter.)
And we remind Freshmen 15 that this is not a new 48 6/9/10 - FINANCE COMM. - BILL 100224 idea. We never got the cooperation we needed.
Thank you, Madam Chair. We realize that. After that, we'll have some in freshmen, and then, uh -- or maybe not. (Laughter.)
Thank you. Let me just ask you a question. As we move to the technology age and further on down the track, how do we accommodate senior citizens who have not yet been able to deal with the whole issue of -- you know, I made a call the other day; it was most frustrating, and I think I'm fairly intelligent. But just trying to get through telephone to a doctor's office. Push this. And if you know the name, type in the first name and the last name. I hardly knew the last name. 49 6/9/10 - FINANCE COMM. - BILL 100224 I mean, it's very frustrating for some people who will not even -- particularly senior citizens, who have not come into the electronic age yet. COMMISSIONER RICHARDSON: Well, Madam Chair, in regard to this bill that we're proposing with the Councilperson, this will not pertain to individual taxes; this is for business taxes.
Okay. COMMISSIONER RICHARDSON: So this will have nothing to do with individuals, whatever their real estate.
So when you move to other kind of taxes, you'll take that into consideration. COMMISSIONER RICHARDSON: Well, the business community has already been working with this for the last five years. The Commonwealth of Pennsylvania (indiscernible) back in 2005, so the business community is well prepared for this, even the small mom-and-pop shops as well. 50 6/9/10 - FINANCE COMM. - BILL 100224
Okay. Thank you very much. Any other questions? COMMISSIONER RICHARDSON: To answer Councilman Goode's question, it's 3,934 as of 2009, sir.
Businesses located outside the City? COMMISSIONER RICHARDSON: The BPLs, yes.
So if we charge them an annual fee of $1,000 to do business inside the City of Philadelphia, that would be about to million. COMMISSIONER RICHARDSON: Approximately.
Get ready. The idea is coming. COMMISSIONER RICHARDSON: More money for its City, I'm happy. (Laughter.)
Okay, 51 6/9/10 - FINANCE COMM. - BILL 100223 thank you very much. COMMISSIONER RICHARDSON: You're welcome.
Thank you. Do you want a suspension of the rules? COMMISSIONER RICHARDSON: Yes, ma'am.
All right. We will now hear testimony on Bill 14 100223. Our first panel will be Mr. Richardson, Revenue Commissioner; Stephanie Tipton, Assistant to the Revenue Commissioner; Jordan Harris, Executive Director of the Youth Commission; Sally Glickman, Philadelphia Workforce Investment Board; Stacy Holland, Co-President of Philadelphia Youth Network. If you're present, please come forth. If you do not plan to testify, 52 6/9/10 - FINANCE COMM. - BILL 100223 that's okay too. (Witnesses come forward.)
Good afternoon. Would you please state your name again for the record and proceed with your testimony. COMMISSIONER RICHARDSON: Good afternoon, again. Madam Chair Keith J. Richardson, the Revenue Commissioner. I'm here to testify regarding Bill No. 100223, which would amend Chapter 19-2600 of the Philadelphia Code, entitled "Business-Privilege Taxes," by creating THE Philadelphia internship tax credit. First let me say that we are in full support of the concept of encouraging businesses to provide internship to students in Philadelphia. Internships can provide valuable real-world learning experience to students and help them build their résumés. In these difficult economic times, when unemployment is so high, we 53 6/9/10 - FINANCE COMM. - BILL 100223 must first find creative ways to encourage development of our local workforce. My colleague Stephanie Tipton will also be testifying regarding the work the City itself is doing to provide internship opportunities in city government. So the Administration commends Councilman Jones for bringing this proposal to the table. We have some concerns about how the program is structured in the bill, as introduced, and we will offer up some amendments suggesting changes in a number of areas. First, we think it is important that tax credits serve as an incentive for actions that the business would not take absent the tax credit. For this reason, the amendments would prohibit the credit for an intern already working for the business and will require that participating business certify both the decision to employ the intern was 54 6/9/10 - FINANCE COMM. - BILL 100223 motivated by the credit and that the business expects a net increase in intern employment hours in the year of the credit in relation to the previous year. Second, we propose to reduce some of the qualifications for receipt of the internship. We have learned from experience, particularly in the context of the (indiscernible) tax credit for ex-offenders, which was reported on yesterday in the Inquirer, that if we create too many barriers to entering a program such as this, either individuals or the businesses, or both, will likely decide not to take advantage of the program. Moreover, we understand that the Law Department has advised that there may be some significant legal issues raised by the restrictions related to whether the students are Philadelphia residents or attend Philadelphia schools. Lastly, when there are so many requirements associated with 55 6/9/10 - FINANCE COMM. - BILL 100223 qualification for the tax credit, I have to devote substantial resources from my office to evaluate the qualifications of the applicants. Such time devoted by revenue examiners takes away their revenue collection efforts. Particularly, given the City's current economic situation, I would much prefer to devote as much time of my examiners to revenue collections as possible. Third, we suggest reducing the size of the program, at least initially, to provide for credits for 750 potential internships. In difficult economic times, we have to be wary of costs to our bottom line. And as a new program, it will be important to develop it gradually, as we believe that if people take full advantage of the program, 750 new internships would be a significant achievement. Lastly, even with the amendments we propose, there will be 56 6/9/10 - FINANCE COMM. - BILL 100223 significant costs to my department, particularly the time that must be devoted by the revenue examiners who otherwise would be seeking to collect new revenue to the City to administer it. For this reason, we propose giving the Finance Director the option of establishing a grant program as an alternative to the tax credit program. It recertifies to the Council that the grant program will provide incentives for the creation of internship opportunities in Philadelphia comparable in scope and magnitude to the proposed tax credit program.
Thank you for consideration of my testimony and our proposed amendments, which I offer up to you now. And I'll be glad to address any questions you may have.
Thank you very much. We'll have the panel open up the questions. Please let the record show that 57 6/9/10 - FINANCE COMM. - BILL 100223 Councilman Kenney has showed up about a half hour ago. Thank you. The Chair recognizes the young ladies.
Good afternoon, Madam Chair. My name is Stephanie Tipton. I'm Assistant to the Director of Finance for the City of Philadelphia. I want to thank you for the opportunity to testify about Bill 100223, which proposes amending Section 19-2600 of the Philadelphia Code by offering a tax credit to businesses who are providing qualified paid internships. In my current role, I oversee the Office of Leadership Investments, a unit within the Office of the Director of Finance. In 2008, Mayor Michael Nutter created the Office of Leadership Investment to provide central coordination and management for the internship and fellowship opportunities 58 6/9/10 - FINANCE COMM. - BILL 100223 available within the City of Philadelphia municipal government. Our goal is to develop a continuum of leadership and development opportunities within municipal government and provide these opportunities to young people in high school through postgraduate school. To reach this goal, we currently offer two summer internship programs: The Mayor's internship program for college and graduate level students, and the Summer in the City high school internship for current Philadelphia high school students. Since 2008, we have engaged over 250 young people in our summer internship experiences. We'll have another 148 high school, college, and graduate-level interns join us this summer through both endeavors. We have also seen the potential for these internship programs to have a positive impact on the participants. For example, one hundred percent of the 59 6/9/10 - FINANCE COMM. - BILL 100223 respondents to the 2009 Mayor's internship program end-of-program survey indicated that they felt motivated to live and work in Philadelphia upon graduation because of their participation in the Mayor's internship. In addition, 94 percent of high school intern respondents felt better prepared for future employment because of their participation in the Summer in the City internship program. In addition, since FY '07, the City has provided a total of $2.5 million to the Philadelphia Youth Network to support the Work Ready Program, which offers high school students paid summer employment. The Administration has committed another $500,000 to the organization in FY '11. The City is also one of the largest participating summer employers with the Work Ready Program, offering 100 paid high school internships annually since 2008. 60 6/9/10 - FINANCE COMM. - BILL 100223 I provide you with this information to demonstrate this administration's commitment to providing meaningful internship experiences. We view these programs not only as a means to boost the City's productivity but also as an opportunity for our participants to learn crucial workplace skills, grow as professionals, and experience what the City has to offer as a place of future employment. I thank you again for the opportunity to speak today regarding Bill 15 No. 100223 and am available to answer any questions you may have.
Thank you very much. Next is Jordan Harris, Executive Director of the Youth Commission. (Witness comes forward.)
Good morning, Madam Chairwoman Tasco. My name is Joseph Hill. I was the one from the 61 6/9/10 - FINANCE COMM. - BILL 100223 Philadelphia Youth Commission who was told to offer testimony today.
So good morning, Madam Chairwoman Tasco and members of the committee. My name is Joseph Hill, a commissioner on Philadelphia Youth Commission, and I'm here to testify in favor of the amended version of Bill No. 12 100223, which creates an internship tax credit to encourage businesses to create paid internships for college and high school students. Historically, Philadelphia has had a problem retaining recent graduates in the Philadelphia region. A 2004 knowledge industry partnership study shows that the City retains 86 percent of locally-born graduates but loses 71 percent of students who are not from the area. Philadelphia must do a better job at holding on to graduates of its academic institutions because a highly 62 6/9/10 - FINANCE COMM. - BILL 100223 educated young workforce is essential to the future growth and development of our city. The Philadelphia Youth Commission fully supports this bill 7 because we believe it will give more college and high school students the experiences of working and living in the City of Philadelphia. While this alone will not solve the brain-drain problem, it's an important step forward. Besides encouraging college students to intern in Philadelphia, this bill would also incentivize employers to create internships for high school students. These internships would be extremely beneficial to the development of our youth and provide opportunities for engagement outside the classroom for the best and brightest our city's educational institutions have to offer. We hope that time spent in the workplace will excite high school students and push them to further their 63 6/9/10 - FINANCE COMM. - BILL 100223 education, allowing both the individual and Philadelphia to benefit from their real-world experience. The Youth Commission supports the flexible nature of this bill in allowing a diverse group of students to take advantage of the credit. This legislation enables students attending Philadelphia post-secondary institutions and students who are from Philadelphia to benefit from the credit. This bill will begin to allow students from outside of the City to become permanent members of our community while also making sure this city does not forget about current residents seeking to build a sustainable lifestyle in their home city. While we support the ultimate goal of this legislation, we believe it can be further improved to ensure that businesses and students can fully take advantage of this opportunity. Admirably, the bill attempts to 64 6/9/10 - FINANCE COMM. - BILL 100223 guarantee oversight by providing detailed requirements that are necessary to allow a business to apply for the credit. However, in so doing, the legislation may not be applicable to a wide range of internships. Often, students seeking internships both apply for positions and are notified of their acceptance close to the time when they'd be starting. Also, some students can only choose to apply or accept positions where they will be compensated for their work as an intern because. But because Section F, Subsection 1 requires that businesses have a specific intern before completing paperwork, they will be rendered unable to inform potential interns whether or not they will be compensated. Most businesses would need to know that they're going to receive a tax credit before they can offer paid opportunities. Therefore, we recommend that 65 6/9/10 - FINANCE COMM. - BILL 100223 the bill, as amended, contain a more general application that would require businesses to provide a detailed overview of the compensation structure and a job description but omit details regarding a specific candidate. Such information could then be attached to the tax return, along with the paperwork required to ensure businesses have complied with all the guidelines in Section H. Additionally, the Youth Commission would like the final bill to include a requirement for the City to assess the economic impact of the tax credit.
The creation of an exit survey for businesses and interns would be a great source of data that could provide insight into the effects of the credit. We feel that the impact of this legislation must be measured in order to ensure that tax credits and compensation being paid is utilized in a way that enhances the bill's impact. Whether interns use their compensation to make 66 6/9/10 - FINANCE COMM. - BILL 100223 purchases in the City, and if these internships translate into jobs are important questions to consider should this bill become law. The Philadelphia Youth Commission applauds the efforts of Councilman Curtis Jones, Jr. and his staff to address the brain drain. We'd also like to thank Councilman Jones and his staff for engaging in a meaningful dialogue with the Youth Commission and other stakeholders with regard to the drafting of this bill. And we hope that the Committee on Finance will include our suggestions and send Bill 100223 to a full session of Council with a favorable recommendation. Thank you. And I'm open to any questions you may have.
Thank you so much for a very thoughtful testimony, and I appreciate your participation in the area.
Thank you. You're doing a good job with the Commission. Next is Sally Glickman. Is she testifying? (Witness comes forward.)
Good afternoon, members of Council. I actually submitted written testimony, so I'm going to cut to the chase. We too are in support of anything that advances internships for all of the reasons that you heard earlier. We have three recommendations we would make in the passage of any bill, though, and I want to focus on that. The first is, we really believe, for all kinds of administrative reasons, that there are some existing internship structures in the City and we would recommend that the consideration be given about attaching the tax credit to advance and enhance the existing internship structures. I know Stacy 68 6/9/10 - FINANCE COMM. - BILL 100223 Holland is going to be following me, talking about the Philadelphia Youth Network. I think that would ease a lot of administrative burdens and enhance the ability to build our own existing structure. But in doing that, I would also caution that money that comes through the tax credit not be used as replacement money for the appropriation that the City gives annually, when it can, to our existing structures, particularly the Philadelphia Youth Network and, on the college side, Campus Philly. The City is already investing in this program. I would hope that if the tax credit is enacted that it would be in addition to augment those existing programs and not replace any General Fund dollars that are going into those efforts. And, third, just with regard to the hurdles and sort of the administrative burden, I think that there's a real desire to connect 69 6/9/10 - FINANCE COMM. - BILL 100223 internships to education and, of course, of study; and, of course, that's useful. But there's also a value to work, particularly for young people, and exploration, when people are just starting their career or still in high school. So I would think about maybe scaling back some of the burden of the connection -- the connection to the course of study in some cases. And I think by connecting these to existing internship networks, either through Campus Philly or the Youth Network or through some of our colleges, that mechanism would automatically be in place, and it wouldn't be a burden to the Revenue Department or to the City to try to determine if it was a good match or a good internship. I'm certainly happy to take any questions. Thank you very much for having me.
Thank you very much. We're going to wait until the 70 6/9/10 - FINANCE COMM. - BILL 100223 panel is completed. Stacy Holland. (Witness comes forward.)
Good afternoon, Councilwoman. Please forgive my cough. I'll try and make this brief so that I will not be coughing on camera. My name is Stacy Holland, and I'm the Co-president and Chief Operations Officer of the Philadelphia Youth Network. It's the nonprofit organization that manages the City's workforce development funding on behalf of the Philadelphia Workforce Investment Board, and we also staff the board's Council of and Career Success. You also have my full testimony, so I'll actually give a summary, if that is okay. On behalf of the City's youth and young adults, I first want to thank specifically City Council and specifically Councilwoman Marian Tasco because you were responsible for the 71 6/9/10 - FINANCE COMM. - BILL 100223 first infusion of funding that supports the Work Ready Program in 2007. 5 million worth of internship opportunities that have resulted in 2,000 internships. This being the case, there are several things that we know about internships. The first is that they have a powerful and positive impact for young people, particularly those who are economically disadvantaged. We've seen improvements in academic achievement, increased acquisition of 21st-century life and learning skills and enhanced career opportunities, as measured by employment gains and earnings. Lastly, it allows young people to contribute financially to their household; and in these tough economic times, that's extremely important. So there are many good reasons why we should continue this work Also, recognizing the 72 6/9/10 - FINANCE COMM. - BILL 100223 importance of high-quality work experiences for young people. In 2003, the Workforce Investment Board established the Work Ready system, which coordinates existing youth career preparation programs and expands their ability to serve more Philadelphians. In the summer of 2010, we will see approximately over 11,000 young people that will be able work through the system Employers have been a major part of Work Ready success due primarily to the strong working relationships between the Youth Council, the Philadelphia Chamber of Commerce, and employer champions such as Joe Frick of Independence Blue Cross; Tony Bartolomeo, the president of Pennoni Associates; and many others As a result of these efforts, since 2007, Philadelphia-area employers have supported more than 3,500 internships and expect to host another 1,000, even during these tough economic 73 6/9/10 - FINANCE COMM. - BILL 100223 times Employer tax credits are often viewed as a means to stimulate private investment in youth employment. PYN is an improved -- an educational improvement organization for the purposes of EITC and has received contributions targeted to youth workforce preparation from several area employers through that vehicle Based on that experience and Penn's history of managing Philadelphia's workforce system, I would like to offer the following suggestions to the proposed Philadelphia internship tax: Because of the strength of the City's Youth Council's efforts to engage private-sector employers through Work Ready Philadelphia, I urge that any new tax credit complement and be coordinated with the City's current system of employer-paid internships. Second, connections to education are potentially desirable but they are likely to require thoughtful 74 6/9/10 - FINANCE COMM. - BILL 100223 concern and planning for how to operationalize that connection. Large educational systems like the School District of Philadelphia would need to work with the City to establish coordinated mechanisms that would determine whether or not that internship is viable for economic credit. In Philadelphia, we find many employers prefer to have an intermediary organization serve as the employer of record for young people's employees and their interns rather than placing them on their payrolls directly. I believe that the proposed amendments address this issue, making these types of contributions eligible also for the tax credit.
As I stated earlier, we deeply appreciate the City's investment in youth internships over the past several years. I urge the Council to continue these investments, which, if funded at the same level of $500,000 in this current fiscal 75 6/9/10 - FINANCE COMM. - BILL 100223 year, will provide high-quality work experiences for at least 350 young people in the summer of 2010, which will also complement the larger Work Ready system that's already established and not replace the City's support for youth jobs and internships Again, thank you so much for time and attention and this opportunity to present testimony today and your continued commitment on behalf of young people I'd be happy to answer any questions after the panel finishes. Thank you.
Thank you very much. Don't leave. Councilman Jones has a comment to make before we go to the second panel and questions of this panel. I think he has some clarifying information.
No, I just want to acknowledge that we are very much 76 6/9/10 - FINANCE COMM. - BILL 100223 in support of the suggested amendments and have submitted them to downscale a bit, to tighten up much, and to acknowledge some of the giants that have already done many of the things that we are proposing in their own way and by their own means. And so, clearly, we're not trying to reinvent the wheel and want to work closely to augment but not supplement what they are already doing. I just wanted to just emphasize one fact, that Germany has a mentorship program that has been world-renowned and has been the subject of many news articles, where they take high school people and put them into DaimlerChrysler, and high school students learn how to repair catalytic converters. And at their graduate, they offer them entry- level jobs into the corporation. And there are examples of this around the world, and I think if we're ever going to be as competitive as we can be internationally, we have to adopt what 77 6/9/10 - FINANCE COMM. - BILL 100223 works and work with the private sector to create educational opportunities that lead to internships that lead to real career opportunities at the end of the day. I just want to acknowledge some of our interns that are working for free right now and are anxiously anticipating the passage of this legislation. I wanted to quickly have them stand up and say where you're from and where you go to school.
Good afternoon. My name is Emanuel Coker. I'm from Philadelphia. I go to Duke University and am going into my junior year, and my major is economics.
Hi. My name is Dan Rosenseig. I'm a junior at Drexel University. My major is history, and I'm originally from New Jersey.
My name is Lauren Williams. I'm from Collegeville, 78 6/9/10 - FINANCE COMM. - BILL 100223 Pennsylvania. I'm going to be a junior at St. Joe's and my major is economics and public administration.
My name is Kevin Gainey. I'm going to be a senior at St. Joseph's University. I'm an international relations major and originally from New Jersey. (INDISCERNIBLE NAME): My name is Shawn (indiscernible). I just finished my sophomore year at the University of Rochester, in Rochester, NY. I'm a political science and history double-major, and from Lower Merion, just right outside the City.
My name is India Jones. I'm currently a senior, graduating in December from Bloomsburg University. My major is criminal justice, with a minor in computer 79 6/9/10 - FINANCE COMM. - BILL 100223 forensics. And I'm from North Philadelphia.
Good morning. My name is Catherine Puccio. I'm a (indiscernible) junior at Boston College, and my major is political science, and my minors are Spanish and environmental studies.
Good afternoon. My name is Kia Hales. I'm a senior at the University of Pennsylvania, studying political science. And I just quickly wanted to state that although I'm from New Jersey, I can sincerely see my future, here in Philadelphia, and I see my time interning here as an investment in my future career and, hopefully, my new home.
Hi. My name is Elise Ellinger. I just graduated from 80 6/9/10 - FINANCE COMM. - BILL 100223 Bodin College, in Maine. And I'm originally from Burlington, Connecticut. Thank you.
Would the Philadelphia Youth Network please come back to the table. (Witnesses return to witness table.)
My interest is always in making sure that young people across the board have opportunity. And so, tell us for the record the recruitment process for your organization. 81 6/9/10 - FINANCE COMM. - BILL 100223
The recruitment process for the summer of 2010 is actually online. We've had a wonderful response. As of yesterday, there were 29,000 young people who have initiated an application. Out of that 29,000, we have about 13,000 of those young people who have completed the process. So the website was available as of May the 4th, and recruitment went through June the 4th. And once that young person actually completes their application online, there's two ways. One is community-based organizations. There are over 55 organizations that are actually working to enroll those young people and place them into opportunities. And at the same time, we've also been working in close partnership with the City and the School District this year to coordinate those efforts at the school level as well as our after-school-time programs to make sure 82 6/9/10 - FINANCE COMM. - BILL 100223 young people have access to computers and as many opportunities as possible.
Yes, ma'am. This year, we're fortunate enough -- we went from 8500 opportunities last year to over 11,000 opportunities this year. The way we were able to do that was a fund called TANF Contingency, however, TANF dollars do require participants to meet the income requirements of 235 percent above poverty.
So it's based on the numbers in their household as well as their annual income. The unfortunate part about this increase is that we don't have what are called "flexible dollars," and those are for those young people who do not meet the income requirements. We are unable 83 6/9/10 - FINANCE COMM. - BILL 100223 to serve them this year due to the fact that the money's restricted to only those that meet the income requirements.
At any point during the year, do you do an analysis where you look to see where we have our greatest areas of poverty and match that with where those young people are coming from?
Yes, ma'am. We're actually -- we did two things this summer before the start of the program. The first is that we looked at the high-crime districts and made sure that there were services in those districts, meaning that there were providers that were creating jobs in those districts; and in some cases, we had to create opportunities. And the second thing we're doing is, we're actually watching the number of young people that are meeting the income criteria versus those that are over income. And I can tell you that the 84 6/9/10 - FINANCE COMM. - BILL 100223 percentage of over income uses as of yesterday was less than percent of the 4 total applicant pool of 29,000 kids. 5 So there's not as many kids who are over income that are trying to engage in the system.
And then we'll watch every week through the course of the program. The program starts on July the 6th and it ends on August the 13th. We will watch every week to make sure that the areas are covered and also watch the geographic distribution -- where are those young people working -- and making sure that they're not having transportation issues or payment issues or anything of that sort.
And what about young people in homeless shelters and in foster care programs?
There are actually providers that are actually 85 6/9/10 - FINANCE COMM. - BILL 100223 targeting both young people of special needs, young people in foster care. We also have a partnership and a contract with Valley Youth House that actually runs the Achieving Independence Center.
That's the center that works with young people transitioning out of foster care.
And then we also have providers that are specifically targeting those kids who are homeless, who really require a whole different level of support.
So then, you have a commitment to a number, X-number, of young people coming from those difficult circumstances; is that what I'm hearing?
There are 86 6/9/10 - FINANCE COMM. - BILL 100223 targeted efforts to make sure that those young people are targeted --
And that they actually are -- that they can make it through the enrollment process. What we find is, those young people really are organized. They organize themselves in a lot of ways by the services that are already out there. Our job is to make sure that those providers that serve those kids actually have access to the system, and that's very intentional.
Okay, very good. My final question will be: At the back end of this experience in August, what program, if any -- what strategies do you consider that connect 87 6/9/10 - FINANCE COMM. - BILL 100223 them, if you will, to the next step or stage of a job, employment, career experience?
One of the requirements of any provider that actually participates as a Work Ready provider is for them to actually develop strategies to keep those young people connected after the program ends. Many providers have existing year-round programs and they're trying to provide that connection for young people. As always, the challenge becomes is that those efforts are not necessarily funded at the levels that you can provide support during that six-week experience.
So while we strongly encourage it, there's not an organized system to allow these people to transition because the dollars don't follow. 88 6/9/10 - FINANCE COMM. - BILL 100223
But providers do make every effort, where appropriate, to connect those young people, specifically those kids who have some type of what we call "an accelerated need." And a great example I have is the Communities in Schools Start on Success Program. These are young people that have all kinds of developmental disabilities and physical handicaps. They actually are served by the Office of Specialized Services during the school year. And then Communities in Schools kind of carries that support for them through the school year after school to help them in their transitional services and to a job. In that instance, you have both the School District working very closely and the community-based organization, and they're using the Work Ready experience to plug the gap of the internship and 89 6/9/10 - FINANCE COMM. - BILL 100223 career exposure piece. They do a phenomenal job. Valley Youth House, who serves foster car, is another wonderful example that they're coordinating their social support needs with their career exploration needs through Work Ready.
Okay. Let me commend you on the comprehensiveness of the work that you do. Can councilmembers have access to those young people?
Actually, there's a concerted effort, through GPUAC, to make sure that you have an intern if you so desire. And if you would like, I can reach out to you directly and provide that information.