COUNCIL OF THE CITY OF PHILADELPHIA PUBLIC HEARING COMMITTEE ON FINANCE - - - - Room 400, City Hall Philadelphia, Pennsylvania Tuesday, June 8, 2004 10:40 a.m. - - - - BILL 040023 - An Ordinance amending Section 19-2604 of The Philadelphia Code, relating to tax rates... BILL 040153 - An Ordinance approving the Fiscal Year 2004 Capital Budget... BILL 040328 - An Ordinance Authorizing the creation of a loan or loans to provide funds for and toward various capital municipal purposes... BILL 040559 - An Ordinance amending the Ordinance approved July 12, 1968... PRESENT: COUNCILWOMAN JANNIE BLACKWELL, Chair COUNCILMAN W. WILSON GOODE COUNCILMAN RICHARD MARIANO COUNCILWOMAN BLONDELL REYNOLDS BROWN - - - - V A R A L L O Incorporated Litigation Support Services Eleven Penn Center 1835 Market Street, Suite 600 Philadelphia, Pennsylvania 19103 215.561.2220 215.567.2670 I N D E X BILL 040559 PAGE JOSEPH BOGDONAVAGE, PGW.............. 3 06/08/04 - FINANCE
Good morning. The Committee on Finance is now called to order. Today we're here to consider -- there are two bills scheduled had for today, Bill No. 040023, adjust the business privilege tax. The other is an amendment to PGW's pension plan. I'll also note that Bill 9 No. 040328 dealing with municipal capital improvements and Bill No. 040153, PGW Capital Budget was recessed after we took testimony and is scheduled to be reported out today at the public hearing. But what we will do is continue the PGW bills after we take testimony until tomorrow because tomorrow at 9 a.m., the Finance Committee has two PGW bond ordinances that are likewise to be heard. We have a quorum. To my left, Councilman W. Wilson Goode; to his left, Vice Chair, the Honorable Councilwoman Blondell Reynolds Brown; and to my right, Councilwoman Marian Tasco; and also Councilman Rick Mariano. They are here. Thank you very much. We would ask the Clerk to read the title of the first bill. 4 06/08/04 - FINANCE - BILL 040023
Bill No. 040023, an ordinance amending Section 19-2604 of The Philadelphia Code, relating to tax rates, credits and alternative tax computation for the business privilege tax, by reducing certain tax rates; all under certain terms and conditions.
Thank you very much. We are going to ask that the Bill 11 sponsor make comments regarding this bill.
Thank you, Madam Chair. I'm glad to speak on this bill. It's a bill I introduced along with the tax reform bills at the end of January. It was thoroughly discussed in the hearing on the Tax Reform Commission resolution. It has also been discussed throughout Mayoral briefings. People have actually considered this bill 20 along with other bills, but I held it Finance Committee rather than move to the Committee of the Whole. I decided while we're working toward a compromise on tax reform that we should consider this bill, so I'm asking for it to be considered today. And I will be 5 06/08/04 - FINANCE - BILL 040559 offering amendments during the public meeting.
Thank you very much. The Clerk will read the title of the next bill.
Bill No. 040559, an ordinance amending the ordinance approved July 12, 1968, as last amended and restated effective June 26, 2002, relating to pension benefits for employees working on behalf of Philadelphia Gas Works by revising the Philadelphia Gas Works Pension Plan to incorporate amendments thereto, clarify the operation thereof, and add certain provisions as required by the Internal Revenue Code of 1986, as amended.
Thank you very much. Please identify yourself for the record and begin your testimony.
Good morning, Madam Chair. My name is Joseph Bogdonavage, I'm the Senior Vice President for Philadelphia Gas Works in Finance, and we're here to 6 06/08/04 - FINANCE - BILL 040559 support Bill No. 040559, which is amendment of a technical nature to the Philadelphia Gas Works pension plan. The amendment before you was necessary as a result of the Internal Revenue Service Federal Tax Code compliance. The definition that we need to amend the ordinance was on a calculation of the actuarial equivalent for a beneficiary of the plan, and we needed to codify the actuarial assumptions used for deriving the plan benefit for the --
Just as a way of background, our plan was established in 1968. The plan was amended and restated in many ordinances since that point of time. And subsequent to the enactment, we finally thought that we were a qualified municipal plan under the IRS Tax Code. The IRS had passed some Tax Code changes. We have filed with the IRS to be a qualified plan, and we have a favorable determination from the Internal Revenue Service for the PGW pension 7 06/08/04 - FINANCE - BILL 040559 plan. At this time, there were only one or two minor technical adjustments that the IRS needed to see in the ordinance. And PGW through this ordinance is identifying those, as I pointed out, which would be the amending of the benefit and how its calculated based on certain earning assumptions for the benefit calculation and also for the plan itself. We needed a technical amendment to talk about the mortality table that would be used for survivor benefits. And at this point in time, I'd be happy to answer any questions that you may have about the technical amendment. And with me outside counsel John Nixon from Blank Rome.
Thank you very much. Are there any questions? (No response.)
Madam Chairwoman, I'd also ask the Council's permission to suspend the Rules to have expeditious approval 8 06/08/04 - FINANCE - BILL 040559 of this.
For the purposes of clarification, we are going to continue Bills No. 040328 and 040153 until tomorrow at 9 a.m. We are prepared to enter into a stated meeting with regard to Bill No. 040023 only. This will end our stated hearing. - - - - 9 COUNCIL OF THE CITY OF PHILADELPHIA PUBLIC MEETING COMMITTEE ON FINANCE - - - - Tuesday, June 8, 2004 - - - - Public meeting conducted by the Committee on Finance, held in Room 400, City Hall, Philadelphia, Pennsylvania, on the above date, to consider action on the following: BILL 040023. PRESENT: COUNCILWOMAN JANNIE BLACKWELL, Chair COUNCILMAN W. WILSON GOODE COUNCILMAN RICHARD MARIANO COUNCILWOMAN BLONDELL REYNOLDS BROWN 10 06/08/04 - FINANCE - MEETING
We will enter into our public meeting. The Chair recognizes Councilman Goode with regard to Bill No. 040023.
Thank you, Madam Chair. I move the amendment that was circulated to the Members of the Committee to 040023 be approved.
The amendments have been circulated. A motion has been made to approve the amendments to Bill 13 040023.
It is moved that the amendment to 040023 be adopted. All in favor? (Aye.)
The ayes have so the amendment is adopted. I now recognize Councilman Goode for a motion to report Bill 040023, as amended, 11 06/08/04 - FINANCE - MEETING out of Committee with a favorable recommendation and a recommendation for suspension of the Rules so as to permit first consideration at our next Session of Council.
Thank you, Madam Chair. I move that Bill 040023, as amended, be reported out of Committee with favorable recommendation and a further recommendation that we suspend the Rules of Council for first reading of this bill at our next Council Session.
The ayes it. Bill No. 040023, as amended, will be reported out of Committee with a favorable recommendation, and also a recommendation for suspension of the Rules so as to permit first 12 06/08/04 - FINANCE - MEETING reading at our next Session of Council. Tomorrow at o'clock, Bill Nos. 4 040153, 040559 and 040328 will be heard. 5 This hearing is now recessed. Thank 6 you all for your patience and your 7 consideration. Thanks. 8 (Council adjourned at 10:50 a.m.) 9 - - - - 13 C E R T I F I C A T I O N I HEREBY CERTIFY that the foregoing proceedings of the Council of the City of Philadelphia of Tuesday, June 8, 2004, were reported fully and accurately by me, and that this is a correct transcript of the same. RE: COMMITTEE ON FINANCE _________________________ Lisa C. Bradley, RPR