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Committee Hearing, March 23, 2011

Minutes from Philadelphia City Council Committee Hearings, Mar 23, 2011

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Mr. Bumb

I can --17

Ms. Rhynhart

In terms of18 another bond deal for commercial19 corridors, I mean, I think at this point20 our debt levels are very high. We're21 getting -- the rating agencies in Wall22 Street continually say that that's one of23 the reasons why our bond rating is second24 lowest of the top 20 cities, only to25 131 3/23/11 - WHOLE - BILL 100135, ETC.1 Detroit is the only one lower than us,2 and our high debt levels are one of the3 main reasons for that. So we don't have4 another bond deal for commercial5 corridors planned at this time.6

Councilman Jones

Okay. So we7 should not look for much by way of8 commercial corridor improvement in this9 budget at this point?10

Councilman Jones

It's the12 million dollars.13

Mr. Bumb

That's right, it's14 the million dollars per year over the15 Five Year Plan.16

Councilman Jones

How are we17 working with transit-oriented18 development? How are we coming along19 with that plan by way --20

Ms. Rhynhart

I'm sorry. What21 plan?22 COUNCILMAN JONES:23 Transit-oriented development.24

Ms. Rhynhart

Transit, I think25 132 3/23/11 - WHOLE - BILL 100135, ETC.1 Steve Buckley could speak to that.2

Mr. Jastrzab

Councilman,3 that's one of the issues that we're4 attempting to address as part of the5 district plans in the Comprehensive Plan.6 We're going to be taking a closer look at7 nodes, transit nodes, in the City and8 making recommendations, should Council9 approve a new Zoning Code, remapping --10 doing zoning map adjustments in these11 districts that would promote the idea of12 transit-oriented development around major13 transit stations.14 So I guess I could say that15 it's in the planning currently. We're16 looking at that closely. We're very17 supportive of the idea of18 transit-oriented development and getting19 people out of their cars and onto20 transit.21

Councilman Jones

I just want22 to put a plug in for the 3rd District,23 because Councilwoman Blackwell suffered24 through the construction period, which25 133 3/23/11 - WHOLE - BILL 100135, ETC.1 lasted about six years.2

Councilwoman Blackwell

I3 wish.4

Councilman Jones

Ten years.5 And that we put a major beautiful6 transportation piece there, and it takes7 seven minutes from, what, 63rd Street to8 get to 30th Street? And I can't think of9 a better location than having suffered10 through all of that, ten years of11 construction. That would be something12 that we would think would be a good13 investment.14

Mr. Jastrzab

We have done15 some planning around the 46th Street stop16 on the Market-Frankford Line, and we'll17 be doing other planning as we move18 forward with our district plans.19

Councilman Jones

I was20 lobbying more for 63rd Street, which is21 in the neighborhood. I understand 46th22 Street is near University City and it's23 up and coming, which is in your district,24 which I love too, but 63rd Street is25 134 3/23/11 - WHOLE - BILL 100135, ETC.1 closer to my district.2

Ms. Rhynhart

Okay. We hear3 you. We'll look at it.4

Councilman Jones

Take a look5 at that, too.6 Thank you, Madam President.7

Ms. Jones

Councilman, I'm8 Frances Jones, Assistant General Manager9 at SEPTA. I just want to say that we10 have been working with the community out11 in the 52nd Street area and for years12 there had been a request for some changes13 with the 52nd Street loop. I'm here14 today to say that we've got monies and15 the notice to proceed for the new 52nd16 Street -- the new Parkside loop. The17 notice to proceed will be issued, and we18 expect to do a groundbreaking or19 something to that nature in April, which20 will be an eight-month project. So prior21 to the onset of the holiday season, the22 new loop should be in place, which will23 absolutely positively be an asset to the24 area around the shopping center at 52nd25 135 3/23/11 - WHOLE - BILL 100135, ETC.1 Street where you talk about the bridge.2

Councilman Jones

We3 appreciate your work in that regard. A4 lot of the community is going to benefit5 from the new amount of shoppers that go6 there. That loop-around is going to mean7 a whole lot to the businesses in there,8 and we're appreciative.9

Ms. Jones

In addition,10 starting in June, intermittent 52's will11 now go into the shopping center, which12 will allow the complaints that we heard13 from the seniors and those that were not14 able to have cars to get to the shopping15 center will now be able to get to the16 shopping center to shop and be able to17 get a bus out of the shopping center with18 ease.19 We understand that with the20 increase with gas, that we are now hoping21 that people will begin to use public22 transit as a transportation of choice,23 and so we're looking at ways and methods24 in which we can increase transportation25 136 3/23/11 - WHOLE - BILL 100135, ETC.1 based upon the needs of the ridership and2 particularly around commercial corridors.3 When we completed the project4 out in West Philadelphia from 46th Street5 to 63rd Street in the City, we were real6 clear that the improvements that we made7 would increase and improve the community8 tremendously and thereby increase and9 improve the commercial corridors. And so10 that was all a part of the plan as we11 developed and worked along with both12 Councilpeople in the district. So we now13 see the fruits of our labor, because14 people are now shopping in the districts15 and are taking public transportation to16 get there. So we hope that that17 continues.18

Councilman Jones

Thank you.19

Ms. Jones

You're welcome.20

Councilman Jones

Thank you,21 Madam President.22 COUNCIL PRESIDENT VERNA:23 You're welcome.24 The Chair recognizes25 137 3/23/11 - WHOLE - BILL 100135, ETC.1 Councilwoman Blackwell.2

Councilwoman Blackwell

Thank3 you.4 And, Frances, let me add too as5 a member of Sharon Baptist Church, we6 called you too supporting my colleague7 and my church for all the people who8 asked that transportation go in the malls9 like next door to my church, and we hope10 that as you do intermittent schedules,11 that you have schedules that are written12 so that people will know when they stop.13 You said they're intermittent. I don't14 know what you mean time-wise. Would you15 print schedules so that we can have them16 so that we can let the seniors know and17 others --18

Councilwoman Blackwell

--20 even on Sunday mornings about that as21 well?22

Councilwoman Blackwell

And we24 also had some meetings around 46th and25 138 3/23/11 - WHOLE - BILL 100135, ETC.1 Market about those barriers that you all2 are going to remove and allow us to turn3 left, right? You and Streets Department.4 Thank you. And because it really looks5 like it's always under construction when6 you have Jersey barriers in the middle of7 the street. So those are real concerns.8

Ms. Jones

Thank you.9

Councilwoman Blackwell

Those10 are real concerns for us.11 And I have another question. I12 won't bring up islands. I'll let that13 go. I promised I would.14 Let me ask someone about ITF15 funds. I'm wondering if we can use ITF16 funds for Mural Arts projects. Would you17 approve that? Can somebody deal with18 that issue?19

Ms. Rhynhart

If it's eligible20 for --21

Councilwoman Blackwell

Well,22 we usually use them for recreation. I23 want to do a Mural Arts project.24

Ms. Rhynhart

I'm actually not25 139 3/23/11 - WHOLE - BILL 100135, ETC.1 sure offhand of what the qualifications2 of it are, but we can talk to you about3 that.4

Councilwoman Blackwell

It's5 our discretionary funding.6

Ms. Rhynhart

I mean, I'm not7 sure that it would work, but we could8 talk to you. I don't know offhand what9 the --10

Mr. Colletta

Tony Colletta,11 Deputy Budget Director.12 Councilwoman, Mural Arts stuff13 probably would not fall under capital14 eligibility because it's really not15 enhancing --16

Councilwoman Blackwell

Well,17 I will tell you what it is. It's not18 technically the Mural Arts Department. I19 have a museum in my area, the Joseph20 Tiberino Museum that's in Powelton21 Village. We have met with them. We've22 talked with them. We talked with Public23 Property. We've talked with everybody,24 and they have -- we have a design. We25 140 3/23/11 - WHOLE - BILL 100135, ETC.1 tried to have them use the portal across2 from Macy's coming into City Hall and do3 wall murals that would not be permanent4 on the building so that other people5 could do them. It would really make it6 great, but the City doesn't want to do7 that. For whatever reason, the City says8 no, they don't want to have beautiful9 artwork as you enter these dead areas of10 City Hall. Okay. So we're forced to11 accept it.12 So the same museum from my area13 came up with an idea and we talked to the14 Public Property Commissioner about it,15 and I have samples of drawings, if16 anybody would like to have them, of some17 art designs on the side of Municipal18 Services Building, which certainly is not19 the 3rd District. I am willing to20 finance it, since it becomes such a big21 thing, out of my ITF dollars if the City22 says okay.23

Mr. Colletta

I really don't24 think the Controller's Office would agree25 141 3/23/11 - WHOLE - BILL 100135, ETC.1 to the capital eligibility of it, because2 it's paint. Capital improvement, if a3 wall fell down and they were putting it4 up and doing something with it. But if5 you're just --6 (Witness approached witness7 table.)8

Councilwoman Blackwell

Thank9 you, Commissioner. Commissioner, would10 you add something to this, please. I11 don't understand why. I really didn't --12 it was bad enough that we gave up what we13 really wanted, was the dead ways entering14 City Hall, to brighten them up. The15 Commissioner told me that we couldn't do16 that. So we're happy to do the other.17 Commissioner, thank you for18 coming forward.19 COMMISSIONER SCHLOTTERBECK:20 You're welcome. Joan Schlotterbeck,21 Public Property Commissioner.22 Councilwoman, I'm glad we23 finally identified a location, and24 certainly it's acceptable. You cannot25 142 3/23/11 - WHOLE - BILL 100135, ETC.1 use capital funds for it, though. If it2 was part of a construction project and it3 was a Percent for Arts, which is where4 we're moving with Mural Arts, that would5 be one issue, but in this particular6 instance, it would not be eligible for7 capital.8

Councilwoman Blackwell

All9 right. Maybe somebody can tell me what10 it's eligible for. We're just trying to11 do a little art project.12

Ms. Rhynhart

It probably13 would have to be an operating cost.14

Councilwoman Blackwell

Maybe15 you all can take it out of one of your16 departments. I mean, how do we fund it?17 I don't -- somebody has got to know18 somehow how we can fund a little art19 project from a museum in Powelton20 Village, the Tiberino Museum. How do we21 then fund it?22

Ms. Rhynhart

We would need --23 I mean, I don't know what the cost is,24 but it would need to be put into the25 143 3/23/11 - WHOLE - BILL 100135, ETC.1 Operating Budget and something else would2 need to be taken out of the Operating3 Budget. It would have to be an Operating4 Budget discussion.5

Councilwoman Blackwell

I6 don't understand why in 2011 one can't7 have an idea that doesn't already exist8 and be shot down. I really --9

Ms. Rhynhart

Well, maybe we10 can talk to you further about it.11

Councilwoman Blackwell

I'm12 talked out. I want solutions. That's13 why I'm bringing it here, because we've14 had private meetings. I've taken up15 plenty of the Commissioner's time. I've16 taken up the Mayor's Office time. And17 all I'm saying is, so finally, since18 nobody seemed to find a way to fund it, I19 said I'll take some of my money out of my20 district to fund a Center City project,21 and I can't even do that. So I'm asking22 you then what you suggest we do.23 "No" is always easy. That's24 the easiest thing in the world, but how25 144 3/23/11 - WHOLE - BILL 100135, ETC.1 do we do it, is my question.2 COMMISSIONER SCHLOTTERBECK:3 Actually, Councilwoman, I do have your4 proposal on my desk and if my memory5 serves me right, it's about $70,000. I6 mean, I'm not in a position to offer7 those funds out of my department. I'm8 tapped out, frankly. So I really don't9 know the answer. It would have to be10 operating money, though.11

Ms. Rhynhart

We would need to12 talk about it, Council, about -- if you13 wanted to put $70,000 in for that14 purpose, we would just have to figure out15 what would need to be -- how we can work16 that in.17

Councilman Rizzo

Point of18 information.19

Council President Verna

The20 Chair recognizes Councilman Rizzo.21

Councilman Rizzo

I haven't22 heard anybody make the suggestion. It23 could become part of the Mural Arts24 Program. It's basically the same thing,25 145 3/23/11 - WHOLE - BILL 100135, ETC.1 but it's not physically painted on the2 wall. Why couldn't that be considered?3

Ms. Rhynhart

Put into the4 Mural Arts budget?5

Councilman Rizzo

Yeah.6

Ms. Rhynhart

Yeah. I mean, I7 think that -- I'm not sure. We could8 talk about it. I mean, I think I need to9 know -- I don't have the background on10 this project, but I'm happy to talk to11 Joan offline and get back to you.12

Councilman Rizzo

It doesn't13 sound like it's too complicated.14

Ms. Rhynhart

Right. It seems15 like we just need the $70,000 in the16 Operating Budget.17

Councilwoman Blackwell

We had18 a meeting. We had Mural Arts in the19 room. We had the -- what do you call the20 Philadelphia -- the tourist people in the21 room, Gary Steuer. We've had everybody22 in the room, the Mayor's Office, to try23 to talk about it. Mural Arts is happy to24 take it under its umbrella, except for25 146 3/23/11 - WHOLE - BILL 100135, ETC.1 the funding. So I defer back to you -- I2 defer back to all of you about finding3 the funding.4

Ms. Rhynhart

I know that you5 said you're talked out about it because6 you've --7

Councilwoman Blackwell

I8 mean, I'm always happy to talk, but the9 Commissioner knows, we've had this10 discussion. When we talked about doing11 it on the walls in the subway and about12 how it would attract tourism, bring the13 City money, even on the MSB wall, it14 would bring the City money, it would be a15 tourist attraction, but, you know, it's16 the same thing Councilman Goode said, you17 old folks said this, we're penny-wise and18 pound cheap. These are projects that19 would help the City earn money, but20 because -- I feel that we're always taken21 aback because the City didn't think of22 it, it's not on their agenda. Well, how23 are ideas formed if somebody doesn't24 think of them? And here we have artists25 147 3/23/11 - WHOLE - BILL 100135, ETC.1 who have been around the world and who2 have all this experience and we say,3 Well, there's no way to do it. You can't4 even give the money out of your own5 funds. It doesn't make sense to me. I6 just don't understand why we can't find a7 way to do a little $70,000 project. I8 don't understand it. I don't understand9 it. I don't understand it.10

Ms. Rhynhart

Why don't we --11 I know you -- why don't we talk about it12 and get you a response. I know that --13

Councilwoman Blackwell

I'll14 accept that.15

Ms. Rhynhart

Thank you.16

Councilwoman Blackwell

Thank17 you, President Verna.18 COUNCIL PRESIDENT VERNA:19 You're welcome.20 I know I'm going to ask a very21 foolish, foolish question, but I'm going22 to ask anyway. What is the proposed23 funding for 2012 for alley lights?24

Ms. Rhynhart

For streetlights25 148 3/23/11 - WHOLE - BILL 100135, ETC.1 or alley lights?2

Council President Verna

Alley3 lights.4

Ms. Rhynhart

I don't know5 that offhand.6 DEPUTY COMMISSIONER BUCKLEY:7 Steve Buckley, Streets Department.8 There is no budget for alley --9 capital budget for alley lights in 2012,10 that we have not added alley lights in a11 long time.12

Council President Verna

It's13 been several years now --14 DEPUTY COMMISSIONER BUCKLEY:15 Yes.16

Council President Verna

--17 that we have no allocations at all for18 alley lights.19 DEPUTY COMMISSIONER BUCKLEY:20 Not for capital.21

Council President Verna

Can22 you tell me why? Is there a need? Do23 you have a pending list of a need for24 alley lights in some areas?25 149 3/23/11 - WHOLE - BILL 100135, ETC.1 DEPUTY COMMISSIONER BUCKLEY:2 We have requests for them, but we have3 not allocated funding for alley lights4 in, I believe, several years now.5

Council President Verna

So6 even if you feel that it's absolutely7 necessary for the safety of the area8 residents, you cannot do anything about9 it because you do not have the proper10 funding.11 DEPUTY COMMISSIONER BUCKLEY: I12 didn't say that it was necessary for the13 safety of residents, but --14

Council President Verna

I15 said it's for the safety of residents,16 and in many instances it is. Now, in a17 case like that, what do you do when the18 request is placed?19 DEPUTY COMMISSIONER BUCKLEY:20 We have a queue of requests at this21 point.22

Council President Verna

Did23 you request any funding from the24 Administration?25 150 3/23/11 - WHOLE - BILL 100135, ETC.1 DEPUTY COMMISSIONER BUCKLEY:2 At this point, we requested -- our3 funding was primarily for street4 lighting.5

Council President Verna

So6 you did not ask for funding for alley7 lights?8 DEPUTY COMMISSIONER BUCKLEY:9 We have not had an alley light program in10 several years.11 COUNCIL PRESIDENT VERNA:12 There's a difference between having a13 program and having a need for -- there14 are areas that are quite old in the area,15 and what they did was, they removed an16 alley light from the center of the block17 of the alley and moved it to the corner.18 Now there's all darkness throughout the19 back of the yards.20 Why can't we have some funding21 allocated for alley lights? And I do22 think -- and I don't care whether you23 agree with me or not -- it is a public24 safety issue.25 151 3/23/11 - WHOLE - BILL 100135, ETC.1 DEPUTY COMMISSIONER BUCKLEY: I2 mean, alley lights are located on a back3 side of private properties, and even our4 current alley lights that are there are5 on private property. I mean, the6 residents always have the option of7 lighting their backyards, and, I mean,8 that is something that occurs.9

Council President Verna

So10 then we should do away with all alley11 lights and tell people, Oh, you install12 your own light in the back of your13 property?14 DEPUTY COMMISSIONER BUCKLEY:15 In most cases, it's in the back side of a16 private property.17

Council President Verna

I'm18 not going to ask any more questions. I19 think it's a disgrace that we have gone20 this direction.21 The Chair recognizes Councilman22 Jones.23

Councilman Jones

Thank you,24 Madam President.25 152 3/23/11 - WHOLE - BILL 100135, ETC.1 Airport, I'd like to just2 finish up with that, on a good note.3 It's my misunderstanding that we have a4 $6.4 billion project before us that is5 going to create jobs, it's going to6 create airfields, some terminals, things7 like that. Can you talk about that?8 That's our own stimulus package right9 there. Can you describe it for us,10 please.11

Mr. Gale

Sure. Good12 afternoon, Councilman. Mark Gale, Chief13 Executive Officer for Philadelphia14 International Airport.15 I think we've been heard about16 in the news frequently on the Airport's17 expansion program, something that's been18 planned for a decade now and underwent a19 very thorough and extensive federal20 environmental review process that lasted21 over seven years.22 Philadelphia, unfortunately,23 carried notoriety of being a very24 congested and delayed airport now for the25 153 3/23/11 - WHOLE - BILL 100135, ETC.1 last two decades. The plans that we've2 put forth with the FAA, the $6.4 billion3 program that you've referenced, not only4 addresses inefficiencies of our airfield5 that causes a lot of those delays and6 congestions, but will help set7 Philadelphia International Airport up in8 the future to handle the traffic demand9 that's forecasted to come at us over the10 next 20 and beyond years in a much more11 efficient manner. Days like today where12 as soon as the skies turn gray and we get13 a little bit of rain, our efficiency14 drops drastically because of the way the15 Airport has been configured since the16 beginning of its inception back in the17 early 1920s.18 What's lost sometimes in that19 cost figure does not go entirely to the20 airfield. Only about half of it goes to21 the airfield. The other half of it goes22 to building new terminal facilities and23 redeveloping some existing terminal24 facilities to today's modern standards,25 154 3/23/11 - WHOLE - BILL 100135, ETC.1 the things that our passengers have long2 asked for, people mover systems, wider3 and more modern, efficient terminal4 facilities, consolidated ground5 transportation facilities that connect6 well with rail and move people in and out7 of the Airport efficiently on the roadway8 system. All of those projects combined,9 in addition to redeveloping the Airport's10 cargo center, what we call Cargo City, so11 that we can begin to attract and retain12 long term the ability for cargo carriers13 to come to Philadelphia and ship their14 goods directly out of our airport as15 opposed to trucking them to the likes of16 Kennedy or Newark or Dulles and put us in17 the game so that the businesses that are18 located in this region have a very viable19 and efficient transportation system to20 get those in and out. And all of that,21 Councilman, right now is projected to be22 about a 12- to 13-year construction23 period, which will generate approximately24 100,000 jobs over that timeframe, about25 155 3/23/11 - WHOLE - BILL 100135, ETC.1 44,000-plus construction jobs and another2 52,000 indirect jobs that are tied to3 those activities, and it also will4 produce approximately 3,000 permanent new5 job at the Airport in the long run and6 truly set up not only the City but the7 region to move forward in the 21st8 century.9

Councilman Jones

So could you10 describe -- we're talking about an11 airfield. We're talking about two12 terminals?13

Mr. Gale

We're talking about14 several new terminals. The redevelopment15 of a new commuter terminal facility over16 on Island Avenue. For those that have17 been around for a while, remember what we18 called the old Overseas Terminal. That19 was our international terminal for 2020 years and was woefully inadequate. We21 call for a new regional commuter facility22 to be placed on the east side of the23 airfield and connected with the main24 terminal building by an automated people25 156 3/23/11 - WHOLE - BILL 100135, ETC.1 mover system.2

Councilman Jones

When you say3 "people mover system" --4

Mr. Gale

Think Disney World5 and monorail-type mover. If you've been6 to Dallas-Fort Worth, Detroit, Orlando,7 many, many other major airports across8 the country, that is the choice, the9 method, to move people around the10 facility efficiently.11 But we also call for new12 terminal facilities to be built in what13 we refer to as our terminal core, where14 all the terminals are currently located15 right now. Some of our terminals go back16 and date back into the late 1950s, early17 1960s. They are 50, 60 years old and18 they really are getting tired, and our19 passengers, I think, long term deserve20 better than what they currently have in21 many respects.22

Councilman Jones

So with all23 of this prosperity -- I mean, this24 probably represents the largest part of25 157 3/23/11 - WHOLE - BILL 100135, ETC.1 our Capital Budget, I'm estimating, and2 so I'm happy about it. I want everyone3 to know. Are we under -- and let me take4 a page from my colleague Blondell5 Reynolds Brown and Wilson Goode. Are you6 under the federal guidelines for7 inclusion by way of disadvantaged8 businesses and does that include minority9 and female businesses?10

Mr. Gale

For any project that11 has federal dollars that are inserted12 into it, yes, we fall underneath the13 federal guidelines as far as the DBE14 program is concerned. For projects where15 there are no federal funds, let's say16 it's entirely bond funded or other17 Airport cash or revenue sources, then we18 work with the Office of Economic19 Opportunity to set the appropriate goals20 and ranges depending upon the capacity21 that's at hand for the particular type of22 work that we're going out for.23

Councilman Jones

That's good24 news. And when will the process start,25 158 3/23/11 - WHOLE - BILL 100135, ETC.1 the 13-year period or 12-year period?2

Mr. Gale

Well, we just3 received the final record of decision4 from the FAA. They signed it on December5 30th of 2010 and they published it on6 January 4th. Right now we have an7 agreement with our airlines, an agreement8 in principle. There was some concern9 obviously with the economic recession10 about moving forward with an extensive11 program, but we believe that it's12 absolutely necessary and vital for the13 region. And we've worked with our14 airlines to come to an agreement for an15 extension of our existing agreement with16 them for a period of two years. Their17 agreement now expires June 30th of this18 year, and we're going to be looking to19 extend that for two years. In return for20 that, they're going to pre-approve for21 the Airport $250 million worth of capital22 expenditures to get started on the23 program, to do things like land and24 property acquisition, early design work25 159 3/23/11 - WHOLE - BILL 100135, ETC.1 and put the administrative legs2 underneath the program so that we can3 actually get going in construction, hard4 shovel to dirt construction, in5 approximately two years after that.6

Councilman Jones

So the first7 jobs created from this we can anticipate8 when?9

Mr. Gale

The first jobs --10 certainly I believe by the end of this11 year, Councilman. Our first task at12 hand, which we will be in front of City13 Council for in the short term, will be to14 do two things. One will be to gain15 approval from the Council on that16 two-year use and lease agreement17 extension. Because it's greater than one18 year, we'll be coming in front of you to19 ask permission to extend it by two years,20 to which the airlines have agreed and21 they're paying a lot of the bills down at22 the Airport. And we'll be in front of23 you also at the same time to ask24 permission for the contract, the ability25 160 3/23/11 - WHOLE - BILL 100135, ETC.1 to enter into a capital contract with a2 program management team that will help3 guide this process over the next 134 years, so that we're not changing, as I5 refer to it, changing the horse every6 couple of years.7 We need consistency in order8 for this program to be run effectively9 over a decade long. So we'll be looking10 for your approval on those two things.11 And then in the fall, we'll be coming in12 front of you to sell bonds, and those13 bond funds will be used to actually begin14 the process and start letting contracts15 for design services and work with us on a16 variety of administrative tasks. And,17 again, the actual hard construction where18 you'll actually see public works19 contracts will probably hit in the20 calendar year 2013 timeframe.21

Councilman Jones

Were these22 dollars competitively obtained from23 federal sources? Were we in competition24 with other cities?25 161 3/23/11 - WHOLE - BILL 100135, ETC.1

Mr. Gale

We're always in2 competition with other major airports for3 federal dollars. This program, our plan4 of finance calls for it to be Airport5 revenue bond funded. About two-thirds of6 it is Airport revenue bond funded. The7 remaining one-third is covered by other8 revenue sources that we bring to the9 table; for example, passenger facility10 charges, what we refer to as PFCs.11 There's a $4.50 charge that's in your12 ticket when you buy it.13

Councilman Jones

So none of14 this is federal money?15

Mr. Gale

No. We actually16 have been in discussions with the federal17 government, with the FAA, for several18 years now. We're going to be looking for19 a magnitude of about a half a billion20 dollars from the federal government to21 help us with these construction efforts.22

Councilman Jones

So when you23 say -- this is matching dollars?24

Mr. Gale

Matching only in the25 162 3/23/11 - WHOLE - BILL 100135, ETC.1 sense that we're typically -- when we get2 an airport improvement grant as a large3 airport, if the FAA has the money4 available to them to give to the Airport,5 it's usually a 75/25 match, 75 percent6 federal and we match the 25 percent. In7 this case here, because the project is so8 long term, we're looking to enter into a9 different type of program with the10 federal government, what they call a11 letter of intent, meaning they've taken a12 look at our program, the cost-benefit13 analysis, how much it's costing and would14 enter into a letter of intent with the15 Airport that says we want to try to16 commit to you on an annual basis for the17 next 12 to 13 years X millions of18 dollars, and we envision that will be19 about $30 to $40 million per year that20 we'll take for mostly airfield21 construction work.22

Councilman Jones

Final23 question. How does this affect our bond24 rating?25 163 3/23/11 - WHOLE - BILL 100135, ETC.1

Mr. Gale

The Airport has its2 own bond ratings, which I think are quite3 good, relatively speaking. We have A's4 across the board. We're A with Fitch, A25 with Moody's and A-plus with Standard &6 Poor's. Certainly when an airport7 undertakes a major project like this, we8 have to be very careful as we move9 through it so that our costs don't become10 too onerous on those that operate the11 airport. That's why we're in discussions12 with our airlines. But we believe that13 we can do this project efficiently, and14 it will yield great, great returns for15 this region.16

Councilman Jones

How do you17 compare to other airports by way of bond18 rating?19

Mr. Gale

I think you'll see a20 lot of airports that have better bond21 ratings, let's say, than the municipality22 that owns the airport. You'll see a lot23 of airports that have A ratings across24 the board.25 164 3/23/11 - WHOLE - BILL 100135, ETC.1

Councilman Jones

Good asset.2 Thank you.3

Mr. Gale

Thank you.4

Councilman Jones

Thank you,5 Mr. Chairman.6

Councilman Clarke

Thank you,7 Councilman.8 Any other questions of these9 witnesses?10 (No response.)11

Councilman Clarke

This was12 the quickest tenure at this table that13 I've ever seen.14 We will be recessing until15 Monday, March 28th, 10:00 a.m.16 (Committee of the Whole17 adjourned at 4:30 p.m.)18 - - -19 20 21 22 23 24 25 165 1 CERTIFICATE2 I HEREBY CERTIFY that the3 proceedings, evidence and objections are4 contained fully and accurately in the5 stenographic notes taken by me upon the6 foregoing matter on March 23, 2011, and that7 this is a true and correct transcript of same.8 --------------------13 MICHELE L. MURPHY14 RPR-Notary Public15 (The foregoing certification of this19 transcript does not apply to any reproduction20 of the same by any means, unless under the21 direct control and/or supervision of the22 certifying reporter.)23