COUNCIL OF THE CITY OF PHILADELPHIA PUBLIC HEARING - COMMITTEE OF THE WHOLE - - - Room 400, City Hall Philadelphia, Pennsylvania Monday, April 5, 2004, 10:20 a.m. - - - BILL 040257 - An Ordinance to adopt a Capital Program for the six Fiscal Years 2005-2010 inclusive. BILL 040258 - An Ordinance to adopt a Fiscal 2005 Capital Budget PRESENT: COUNCIL PRESIDENT ANNA C. VERNA COUNCILWOMAN BLONDELL REYNOLDS BROWN COUNCILMAN DAVID COHEN COUNCILMAN W. WILSON GOODE, JR. COUNCILMAN JACK KELLY COUNCILMAN JAMES F. KENNEY COUNCILMAN JUAN F. RAMOS COUNCILMAN FRANK RIZZO COUNCILMAN FRANK DI CICCO COUNCILWOMAN JANNIE L. BLACKWELL COUNCILMAN MICHAEL A. NUTTER COUNCILMAN DARRELL L. CLARKE COUNCILWOMAN JOAN L. KRAJEWSKI COUNCILMAN RICHARD T. MARIANO COUNCILWOMAN DONNA REED MILLER COUNCILWOMAN MARIAN B. TASCO COUNCILMAN BRIAN J. O'NEILL - - - V A R A L L O Incorporated Litigation Support Services 1835 Market Street, Suite 600 Philadelphia, Pennsylvania 19103 215.561.2220 215.567.2670 2 Whole - Bills 040257, 040258 - 4/5/04 P R O C E E D I N G S - - -
Good morning, everyone. May I have your attention, please. This is a public hearing of the Committee of the Whole. I would ask Mr. McPherson to please read the title of Bill 10 numbers 040257 and 040258. MR. McPHERSON: Bill Number 040257, an Ordinance to adopt the Capital Program for the six fiscal years 2005 through 2010 inclusive. Bill number 040258, an Ordinance to adopt the fiscal 2005 Capital Budget.
I would ask members of the Administration who will be testifying to please approach the witness table. And to my colleagues, I would tell you that the first go-around for questions will be five minutes, and then we will have a second go-around, so that everyone will have an opportunity to ask questions. Thank you. 3 Whole - Bills 040257, 040258 - 4/5/04
Good morning. My name is Maxine Griffith. I'm Secretary for Strategic Planning and Executive Director of the Philadelphia City Planning Commission.
Thank you. Before I start my testimony, I have an apology to make. It's my understanding that our first transmittal of the Capital Program and Budget had some omissions, including one page on aviation.
Aviation. And some of the totals also, because of a formatting problem, did not appear. This is only on the electronic transmission. The book that was handed out is correct. And I apologize. It was a combination of human error, and also we have a new computer program that I'm sure will be excellent once we get the bugs out. But right now we have some difficulty 4 Whole - Bills 040257, 040258 - 4/5/04 between the two computers translating.
Is the amendment that you submitted with the black lines, was that --
Yes. All of the corrections have been made. And also, I want to thank your staff and Council's technical staff. They were tremendously helpful and supportive during this challenging period.
Thank you. And is the Aviation Department in the latest copy that we received with the amendments?
Thank you. And now for testimony, and we also have a PowerPoint. Good morning, Council President Verna, and honored members of the City 5 Whole - Bills 040257, 040258 - 4/5/04 Council. I am Maxine Griffith, Executive Director of the City Planning Commission and Secretary for Strategic Planning. I am pleased to be here this morning to present for your consideration the City Planning Commissions recommended FY 2005 to 2010 Capital Program and FY 2005 Capital Budget. One of the Home Rule Charter mandated responsibilities of the City Planning Commission is to prepare and submit to the Mayor a recommended Capital Program and Budget. As you know, this recommended Capital Program and Budget is the Administration's proposed six-year plan for investing in the City's public buildings, community facilities and physical infrastructure. The City's Capital Program supports numerous municipal government priorities. Among these are the continued development of the City's economy, improvement to the City's neighborhoods, and the quality of 6 Whole - Bills 040257, 040258 - 4/5/04 life of its citizens, improving conditions related to public health and safety, promoting the City's fiscal stability by increasing the efficiency of governmental operations, and supporting the repair and renovation of our civic infrastructure. This year we are again recommending a lean and efficient spending plan that makes effective use of the City's increasingly constrained resources. This is an austere but comprehensive Capital Program that strategically allocates our limited resources so as to preserve the City's ability to deliver essential public services. The recommended level of spending in the FY 2005 budget year is minimally sufficient to maintain municipal facilities. The City's borrowing limit for capital spending, set by the Constitution of the Commonwealth of Pennsylvania, will continue to impact our ability to fully fund needed facility and infrastructure 7 Whole - Bills 040257, 040258 - 4/5/04 improvements over the life of this Capital Program. As a result, we are recommending funding only for the most critical renovations of City facilities. 139 billion over a six-year period to renew the City's extensive infrastructure and public facilities. 5 million residents. Some of these facilities are physically deteriorated and under utilized. Over the coming months, we will work closely with the Managing Director's Office, our other sister agencies: The School District, community based organizations, and of course members of the City Council, to consider a range of strategies. 8 Whole - Bills 040257, 040258 - 4/5/04 These include but will not be limited to determining which facilities should be combined and placed in enhanced structures and which services can be incorporated into other facilities, such as new or renovated school buildings. Our objective remains the provision of excellent public facilities and services for the people of Philadelphia but right sized for our City. Sources of funds. million. million or nine percent is funded by new, City issued general obligation bond funds. An additional 27 million or three percent will come from operating revenue and tax supported loan funds that were authorized previously. 1 million or 54 percent of total budget year 9 Whole - Bills 040257, 040258 - 4/5/04 funds. 1 million or 31 percent in the budget year. Over 192 million of this other government funding is budgeted for transit related projects. 2 million or less that one percent of FY 2005 funding will be provided by private sources. Most of my testimony will focus on FY 2005, the budget year of the Capital Program, since it is this budget year funding that becomes actual appropriations. Projects and priorities for the subsequent five years of the Capital Program represents planned spending based on our best estimates of future needs of the City. Uses of funds. The uses of funds in FY 2005 Capital Budget are divided into five broad categories.
The largest portion of these funds is allocated for economic development, with 385 million or 49 percent 10 Whole - Bills 040257, 040258 - 4/5/04 of the total budgeted for projects that support the growth of the City's economy. 6 million or 33 percent budgeted for renovations to neighborhood facilities and physical infrastructure improvement. 3 million targeted to civic infrastructure projects that fund quality of life improvements for all City residents. Capital investment for economic development category aims to retain and attract businesses, provide jobs for residents... Excuse me. provides jobs for residents. I have lost my place.
Let me start from Neighborhood Development. Neighborhood development is the next largest allocation. 11 Whole - Bills 040257, 040258 - 4/5/04
Capital investment in the economic development category aims to retain and attract businesses, provide jobs for residents -- you're correct -- spur economic activity in the City's neighborhoods, and support other development initiatives. A total of 385 million is recommended for economic development projects in FY 2005. An ambitious improvement program continues at Philadelphia International Airport, in order to maintain this facility at world class standards. 5 million of private funds, are recommended for airport improvements in FY 2005. 12 Whole - Bills 040257, 040258 - 4/5/04 Funding is recommended for the City to acquire existing airport parking facilities, including five parking structures, surface lots, and associated facilities and equipment. Funding is also recommended for projects to increase airfield capacity, renovate maintenance and service buildings, upgrade ground transportation facilities, and soundproof private residences adjacent to the airport to meet Federal environmental standards. The terminal expansion and modernization program will continue to make mechanical and cosmetic improvements needed to ensure passenger comfort and convenience. 25 million of federal, state, and self-sustaining funding is recommended for airfield and facility improvements at Northeast Philadelphia Airport. In support of future development at Penn's Landing, 500,000 is recommended for 13 Whole - Bills 040257, 040258 - 4/5/04 critical infrastructure repairs and other necessary site improvements. An additional 500,000 in combined City and state funds is also recommended for improvements to the Schuylkill River Greenway and Trail. Continued funding to support development in the City's industrial parks is also recommended in FY 2005. A total of 475,000 in new City tax-supported loan funds will support site preparation and infrastructure improvements in these areas. Resources from existing revolving funds are also recommended for continued environmental testing and remediation, land acquisition, and roadway and utility line improvements. Neighborhood development projects directly support a range of community revitalization efforts, including the Neighborhood Transformation Initiative, through the renewal of community facilities, including libraries, park and recreation, police and fire stations, and 14 Whole - Bills 040257, 040258 - 4/5/04 site improvements in support of neighborhood commercial revitalization programs. Improvements to transit stations and other SEPTA facilities, street reconstruction and resurfacing, street signage and traffic control improvements and the replacement of water and sewer mains are also included in this category. 6 million is recommended for neighborhood development projects in FY 2005. In the Recreation Department, funds are recommended for the renovation of playgrounds, basketball and tennis courts, lighting and needed repairs to recreation facility roofs, heating and safety systems, and other code compliance issues. Swimming pools will continue to be upgraded to improve health and safety conditions, as well as to minimize water losses due to outdated circulation systems. Through a state grant matched by million of City funds, additional 15 Whole - Bills 040257, 040258 - 4/5/04 neighborhood playground and recreation centers will be renovated. 55 million in new City tax-supported funds are budgeted for these recreation projects in FY 2005. The Fairmount Park Commission will continue to renovate and restore its ground and athletic facilities, many of which serve City neighborhoods. Budget year funding totaling 525,000 is recommended for athletic and play area improvements at Hunting Park, the Tabor Rams facility, and other sites throughout the City. Funding also continues to be recommended for planting new park and street trees, and the removal of dead and dangerous trees throughout the City.
The Free Library is nearing the completion of the construction phase of its Branch Library Rehabilitation Program, using a combination of public and private funding. In FY 2005 City funding totaling 16 Whole - Bills 040257, 040258 - 4/5/04 950,000 is recommended to enable the Free Library and make needed mechanical, structural and safety improvements at the Central Library and its various neighborhood branches. Improvements in neighborhood commercial centers will continue, with 1 million in City tax-supported funds, matched by an equal amount of state funding for site improvements, curbs, sidewalks, street trees, signs, lighting and public parking. These improvements as part of a program of comprehensive neighborhood and commercial district plans, are intended to attract and leverage other investments in retail and residential projects. 5 million is recommended for neighborhood street reconstruction, reconstruction and resurfacing, bridge reconstruction, traffic control and street lighting improvements, and school and pedestrian crossing signs. 7 million in state and federal funds. 4 million in self-sustaining funds recommended for these projects. The Health Department will continue to upgrade its neighborhood health facilities with recommended funding of 640,000 for FY 2005. HVAC and other building improvements will be made at health centers in West Philadelphia and Germantown, at the Employee Health Services Building, and Air Management Laboratory, and the City's Animal Control Facility. Other facilities will receive new equipment and furnishings to provide better service and more effectively compete with private sector providers in attracting and maintaining insured customers. 18 Whole - Bills 040257, 040258 - 4/5/04 The Police and Fire Departments will continue major investments to improve working conditions for its personnel, and to ensure the continued operational effectiveness of its stations. Recommended funding in FY 2005 emphasizes the rehabilitation of existing fire stations, with 2 million budgeted for heating, ventilation and air conditioning systems, roof replacements, and other needed interior and exterior renovations. 8 million in new City funds, matched by over 192 million in contributed federal, state and regional funds, are recommended for transit infrastructure investments that. Support overall neighborhood development. Among these are the continuing reconstruction of the Market Street Elevated Line, improving station accessibility through installation of elevators and escalators, continued renovation of the Suburban Station Concourse, the acquisition of paratransit 19 Whole - Bills 040257, 040258 - 4/5/04 vehicles, and a variety of other track, signal, maintenance facility, infrastructure and environmental improvements. In the health and safety category, the recommended FY 2005 to 2010 Capital Program provides funds for improvements to the City's Water Treatment and Waste Water Treatment Plants, renovations to the River View Home, and the Health Administration Building, asbestos abatement and life safety improvements at facilities, and City matching funds for public transit projects that affect rider safety and accessibility. 9 million is recommended for health and safety projects in FY 2005. Recommended projects in this category include 235,000 in new tax-supported funds for mechanical and interior improvements at the City's Gateway, Stenton and Woodstock Shelters in FY 2005, at the River View Home, the City's residential facility for indigent elderly, and 875,000 is recommended for building 20 Whole - Bills 040257, 040258 - 4/5/04 modernization and fire alarm improvements. The City's fiscal stability is improved by investing in projects that enable government operations and services to be provided more efficiently. 5 million is recommended for fiscal stability projects in FY 2005.
Recommended projects in this category include improvements in communication and dispatch system used by the Police and Fire Departments. The Managing Director's Office will continue the development of an integrated database to coordinate the efforts of the Health Department, Department of Human Services, Office of Emergency Shelter and Services, and the City's Prison System, in providing social services to children, families, and individual adults. Other fiscal stability projects recommended in FY 2005 promote greater effectiveness in delivering government services, by consolidating functions and investing in new technology. 21 Whole - Bills 040257, 040258 - 4/5/04 Advances in digital technology, for example, have had a substantial impact on communications and information management. In the budget year recommendations are made for several such communication and technology improvements. The Municipal Energy Office has spearheaded efforts to make the City's use of energy more efficient. The Green Lights Program focuses on installing energy efficient lighting fixtures. And in 2005, 250,000 is recommended for lighting upgrades at facilities throughout the City. A similar amount is recommended for the Energy Star Program to replace HVAC and other mechanical systems at City facilities, with more efficient units. The Capital Program is committed to these and similar projects because they generate substantial operating budget paybacks, in the form of reduced energy costs. Finally, civic infrastructure projects make an important contribution to 22 Whole - Bills 040257, 040258 - 4/5/04 the livability of Philadelphia as a whole, as well as to the City's reputation as a destination for tourists and visitors. 3 million is recommended for improvements to cultural facilities that are used and enjoyed by all citizens. Among these projects is the restoration of City Hall, being effectively managed, I might add, by the City's Capital Program Office. The western facade and roof restoration is scheduled for completion this fall, and the next phase will address the southern facade and roof. This project is revealing the true magnificence of this building's sculptures, cast iron pieces, and other architectural details. Recommended funding of 5 million for City Hall in FY 2005 will allow continued roof and exterior treatments, as well as improvements to interior heating and cooling systems. An additional 21 million is programmed for this project before its 23 Whole - Bills 040257, 040258 - 4/5/04 anticipated completion in 2010. 2 million is recommended for renovation work at the recently acquired Perlman Building. An additional 1 million is recommended to continue improvements to the Art Museum's security system. 8 million of City funding is recommended for improvements to historic structures, utilities, drainage and landscaping, footways, stables, and parking areas. 9 million in federal, state and private funding for these improvement projects. In conclusion, let me say again that this recommended Capital Program and Budget strategically allocate very limited resources to ensure the City's ability to deliver needed public services. It also provides for the kind of investment in Philadelphia's physical infrastructure that is critical to the City's economic health and growth. 24 Whole - Bills 040257, 040258 - 4/5/04 I'd also like to introduce my two partners, Rich Lombardo, who is the Deputy Executive Director of the Planning Commission, and of course Rub Dubow, Budget Director, who needs no introduction and will be making a testimony of his own.
Good morning. I'm here to testify on amendments to Bills Number 040257 and 040258. The modifications we are proposing add appropriations necessary to carry forward all of the unobligated funding from Fiscal Year 2004 appropriations. In the proposed amendment all unobligated general obligation, PICA and revenue bond capital appropriations have been carried forward from prior years, with a few exceptions. The exceptions fall mainly into four categories. The first is unspent appropriations for which projects have been completed under budget. The second is 25 Whole - Bills 040257, 040258 - 4/5/04 aviation projects that were either funded with other sources or completed. Third is water payroll costs which don't carry forward. And the fourth the state and federal grant appropriations which didn't materialize, mostly in Commerce and Streets Department. There are a large number of projects that have been included in the carry forward budget, at the direct request of City Council members. I can assure the members of Council that all of the remaining funding for these projects has been included in the carry forward amendment proposed today. This recommendation does not include the lapsing of any unencumbered funding for projects of this nature, whether or not those projects have been completed. Other than the addition of these carry forward appropriations, there is one other proposed modification to Bill Number 040257 as introduced. The requested modification is to add a general obligation Whole - Bills 040257, 040258 - 4/5/04 appropriation of 1.6 million in Fiscal Year 2006 for the Belmont Mansion project. That concludes my testimony, and I would be happy to answer any questions. Thank you.
Thank you. At this time the Chair recognizes Councilman Clarke.
Can you briefly talk to me about the City's debt capacity. For the last several years we've been talking about us approaching our limit, our Constitutional limit, as set by the state. What is our long-term strategy forward? Is it simply reducing the amount that we're allocated per year for capital projects or are we looking at a process of accelerating or repayment of our debt? What are we going to do years out? I know some of us may not be around in a few years, but I'd like to look to the future. 27 Whole - Bills 040257, 040258 - 4/5/04
I would call upon the Budget Director to respond to that question.
There... I guess there are two things that limit how much debt we can incur. One is the State Constitutional limit, and then the other is just our debt as a percent of our revenue which is what rating agencies look like. And we're near our cap in both places. So, I mean, the thing we really looked at is limiting the amount of new debt we issue. Another approach, as you discuss, would be to accelerate our debt repayments. But if we do that, then we're increasing the percent of our operating budget that has to go to those debt payments, and it would squeeze other things out. So we haven't really been looking at that.
Have we looked at... And I don't know where we are, in terms of interest rates and municipal 28 Whole - Bills 040257, 040258 - 4/5/04 borrowings. But I know here recently people were able to, on an individual basis, go out and refinance their home because the interest rates were so great. Was there a time over the last several years or do we foresee a time where we can essentially refinance our debt to increase our ability to accelerate the repayment?
Yeah. We actively look for any opportunity to do that. And we have done some refinancings over the last couple years. And I assume as the opportunities go, we'll still do more, and that will get us some more capacity. It won't be a panacea that will get us, you know, hundreds of millions of extra capacity, but it will get us some extra.
I think for the last several years while interest rates have 29 Whole - Bills 040257, 040258 - 4/5/04 been low, we've been...
You answered. Do we see similar reductions in the interest rates in your ability to refinance on a municipal level, as we've seen in the housing market?
Yes, there have been real opportunities for refinancings. And we've taken advantage of some of them.
Yes. Now our debt service is lower than it would have been otherwise.
Is there a point of time in the foreseeable future, if interest rates continue to be low, that we can foresee a situation where we're able to increase our spending or our borrowing 30 Whole - Bills 040257, 040258 - 4/5/04 capacity?
I would say probably slightly but not -- not a significant increase.
Well, of course a strategic objective which is to increase development and redevelopment to the level that the basis on which these calculations are made also rise. In other words, the more successful development, the more tax-paying and revenue generating entities there are on the ground. And that forms the basis for the formula. But that is a long-range objective. That's the objective of NTI. Obviously, that's the objective of the River City Initiative, and the other development oriented initiatives.
Where is that in the ranking, in terms of our ability to reduce taxes? I know we're talking about 31 Whole - Bills 040257, 040258 - 4/5/04 the return on our investment. We talk about a number of ways that we're planning on spending that money.
Is that high on the list or is it low on the list or...
It's not a linear concept. It really is a dialogue between all of the objectives, but that's one piece of it.
Right. Consolidation of facilities. For the last, I guess two years, there's been a discussion about consolidating our facilities, particularly with the School District, and this whole Capital Improvement Program. And while I've heard the proposal and talked about the concepts, I have yet to see any substantive activity related to that. As recent as three weeks ago, I met with Mr. Vallas and talked to him about it. And he indicated that his work was done, as 32 Whole - Bills 040257, 040258 - 4/5/04 it related to his capital facilities and recommendations. But he also said that he had not heard from the City and its recommendations for the potential consolidating facilities, as we shut down some rec centers and possibly utilize schools. Where are we with that? Are we going to get there? Are we really having discussions? Are we just talking about this? Or is there somebody working on it or what?
Well, Councilman, as you may know, the Mayor recently formed a working group that's led by the Managing Director's Office. However, the City Planning Commission, the Recreation Department and others are part of this group. As you probably know, Commissioner Richards has for a while had some concepts and some suggestions about how to move forward on this. We are now sort of supporting that 33 Whole - Bills 040257, 040258 - 4/5/04 with a demographic analysis and data. And I believe the Managing Director has begun to meet with Council members to understand better their priorities and concerns.
When are they going to meet with the School District? That's the concern.
We've been meeting with the School District on an ongoing basis. As you may know, the Planning Commission has a Charter mandate or responsibility to review both School District siting decisions and their Capital Program. And we have been doing that and making suggestions on an ad hoc basis where they make sense. However, I think the sense is that the City also needs to develop a forward-looking plan that doesn't necessarily rely on using School District facilities and relies on that only for enhanced and not for core services. At least, that's, as I understand it, the way the Recreation Commissioner has wanted to 34 Whole - Bills 040257, 040258 - 4/5/04 move forward. So, to give the same level of service to the residents of Philadelphia we do now through enhanced City facilities initially, and then to work with the School District to try to enhance those facilities.
Miss Griffith, you're going to have to give shorter answers.
No, no. You're cutting into my time. Thank you, Madam President. I'll come back.
Thank you. The Chair recognizes Councilman Tasco. 35 Whole - Bills 040257, 040258 - 4/5/04
Good morning. On would you explain the 322.6 million self-sustaining funds for the Airport improvement?
Well, as I understand it -- I'm going to let the Budget Director --
Those dollars, loan fund dollars, are they dollars that are traditionally provided by the airlines for the support of the Airport? I thought most of the operation funding for the Airport came from the airlines.
Is there anybody from the Airport here? We're going to give a global answer. A more detailed answer would be helpful.
Good morning. My name is Ed Anastasi. I'm the Deputy Director of Aviation for Finance and Administration. I'm here representing Charley Isdell today, the Director of Aviation. Mr. 36 Whole - Bills 040257, 040258 - 4/5/04 Isdell was called to a family emergency this morning. So I'll do my best to handle any questions that you may have.
I'd like for you to explain the 322.6 million self-sustaining funds, and what are they, and what will they be used for. And isn't it traditionally that the Airport is sustained by the airlines?
Yes. The $322 million in self-sustaining funds are, generally speaking, new airport loans. They are called general airport revenue bonds. And the debt service on the general airport revenue bonds are paid for through the rates and charges that the airlines pay for the use of terminals and air field facilities at Philadelphia International Airport.
These specific funds would be used for a number of projects, 37 Whole - Bills 040257, 040258 - 4/5/04 including our... on the air side our taxi-way expansion program which is budgeted in FY 2005 at $101.1 million, new air field lighting improvements which are budgeted about 500,000, the acquisition of airport parking facilities budgeted at 275 million. Also, other modifications include terminal D and E alterations which are budgeted for Fiscal 2005 in the amount of $20 million. And all of these projects, as I said at the beginning, are developed and funded by loans that are self-sustaining in nature, that are used for the continuing expansion and development of the Airport.
Do you have to have approval by the airlines, relative to these Capital funds?
Yes, we do. There is a process in our use and lease agreement with the airlines, Councilwoman, which provides for the airlines to be notified of the specific projects, to be told of the 38 Whole - Bills 040257, 040258 - 4/5/04 cost, and also to be told of the impact of that project to the rates and charges they pay at Philadelphia International, including what effect on landing fees, what effect on terminal rentals that they pay, and so on.
What is the increase in cost to them? Is there an increase to cost?
There is an increase in cost which, generally speaking, is that the debt service that is charged under these general airport revenue bonds. So if it is a $300 million increase in bonds, that probably would roughly be equivalent to about a $20 to $25 million increase in rates and charges. That probably would not be an immediate increase because in most cases they are capitalized interest. There is capitalized interest on these projects. So, probably the increase in debt service will be phased in over a four- or five-year period. 39 Whole - Bills 040257, 040258 - 4/5/04
Well, in some cases we have gone to them, if the project was far along enough, to obtain their approval. In some other cases, however, we would be putting together what we call an MII report, a majority in interest report, which would go to the airlines, and the airlines would have a 45-day period to consider that project.
Are you saying that this... if we have this amount of money programed in the Capital Budget now, do you have their approval to ask for the increase that they would pay for?
Yes, we do. We certainly would have the approval to ask for that increase. And as I said before, we would 40 Whole - Bills 040257, 040258 - 4/5/04 prepare the majority in interest report that would be submitted to the airlines. That would include the descriptions of the projects, and the impact on their rates and charges, and how the debt service would be phased in over the four- or five-year period that I was referring to.
Okay. So you're saying we pass the budget, and as you approach each project you would get their approval?
So in essence if we pass the budget, we're approving what you will use this money for.
We are approving what we would use the money for. You would be approving the line item, the appropriation within the Capital Budget. But we would still have to, in cases 41 Whole - Bills 040257, 040258 - 4/5/04 where we haven't gotten airline approval, do the MII report to get it to the airlines to give them sufficient time to consider the project.
Well, we don't know what the airlines have approved at this point in time.
We could provide you with information for each line item as to whether or not they have approved.
We think we could certainly provide that information to you.
Because I notice that in the recommended budget it has, funds will be used to acquire existing parking facilities of the Philadelphia International Airport, including five parking structures, service lots, and 42 Whole - Bills 040257, 040258 - 4/5/04 associated facilities and equipments. And that's to the tune of $275,000. Has that been approved?
That has not been approved. However, in a number of cases, the airlines have approached us, and indicating to us that they would be supportive of that project. However, that is not to say that is an approved project. We would still have to do the MII report to submit to the airlines, and the preparation of that MII report is in process.
I think Councilman O'Neill would just like to piggyback on that.
How recently have they approached you? And I understand what you're saying, that from time to time they had asked. But it was my understanding that that was not 43 Whole - Bills 040257, 040258 - 4/5/04 in the recent past; it was in the distant.
Well, as a matter of fact, back... I believe it was in July or August, Councilman, of 2003, we had a rates and charges meeting with the airlines. And what that is, we proposed to the airlines are operating at cost for the next year. And we calculate what the rates and charges would be for fiscal 2005, based upon those operating costs and non-airline revenues, and so on. And at that point in time, they raised this issue with us, indicating their support, that they would provide their support for our acquisition of the airport parking garages.
That was in July or 44 Whole - Bills 040257, 040258 - 4/5/04 August of '03.
Thank you. The Chair recognizes Councilwoman Brown.
Thank you, Madam President. I do know that my colleague for the Fourth Councilmanic District, Councilman Michael Nutter, has been intimately involved with this issue; and I pay attention as well, given my responsibilities as Chair of Recreation, Parks and Cultural Affairs. The issue is Belmont Mansion. Can you provide me an update, if you will, on the status of the renovations there or restoration there, the third floor, where that is at this hour?
Yes. I'm going to ask the Rick Tustin of Capital Program Office to come up. But as you heard in the Budget Director's testimony, funds are being allocated for that work. And we're 45 Whole - Bills 040257, 040258 - 4/5/04 very pleased, that it looks like that that is finally going to be moving forward. But Rick can give more detail.
My name is Rick Tustin, and I'm the Director of the Capital Program Office. You are correct. This project has been on the boards for quite a while now. There was some debate over how the building should be finally constructed as a two- or three-story facility. That debate has been resolved. And we've gotten... As Maxine just stated, we've gotten approval for additional funding in '06 so that we can move forward now and complete the design documents for three-story facility. We're starting that process right now. We just got the final approval probably no more than a week ago on the additional funding. 46 Whole - Bills 040257, 040258 - 4/5/04 So we're starting the process right now of redesigning. And that is normally a ten-month process. And then we'll get into construction: Bid, award and construction. So I would more than likely say that this time next year it will be under construction, the project.
Very good. So excepting minor glitches that come up with these type of projects generally, the bottom line is, at some juncture months 13 from now or 12 or 24 months from now we 14 will see a new third-floor restoration of 15 Belmont Mansion? 16
12 months from now 17 you'll see the construction started. It 18 will probably take anywhere from 18 months 19 or longer to complete. 20
It's a very complicated 23 building, and we have to put a structure 24 within the structure --
Okay. Thank you for the testimony on that. Following up on Councilman Darrell Clarke's interest with regards to rec centers, we've heard and paid attention to a lot of the dialogue and challenges facing the Administration around rec centers. My interest lies with salvaging the programs. And buildings are important, but what matters more are the programs in them. And of course we have programs because you have staff to make them happen and/or real. A number of the programs you have indicated will be salvaged, picked up, embraced by the School District in a very strategic way.
Well, not simply by the School District. And perhaps I should ask Vic Richards to come to the microphone. But not just by the School District. I think the team that the Managing Director has pulled together has a concern 48 Whole - Bills 040257, 040258 - 4/5/04 that we're able to provide these basic core services out of City's facilities. In some cases they may be enhanced facilities, combining more than one program in a nearby facility.
One of the things that my staff is doing is developing criteria based on national criteria and what Parks Associations and others are recommending about how far you should have to walk to get to a facility if you're a child.
And developing parameters also around the loss of population and the expected gain of population through NTI and other neighborhood development projects which is a little complicated. And we will be meeting with all Council members, including the at-large Council members, about this. Vic, do you want to add anything? 49 Whole - Bills 040257, 040258 - 4/5/04
Good morning. Vic Richard, Recreation Commissioner. I had the opportunity to meet with a... I want to say six or seven of the Council District members, and our goal was to get to every member of City Council...
...once we finished the members. Our number one priority, as you said, Madam Councilwoman, is to not lose the services. And all of those have been taken into very high consideration in the criteria. As Maxine talked about, the proximity of one facility to another and everything that we propose so far has addressed that no disruption in any of the services for the parents or the children is in place.
And given the complexity -- 50 Whole - Bills 040257, 040258 - 4/5/04
Councilwoman, your time is up. So this will be your last question for this go-around, please.
All right, then. I get one more? The complexity of government, when it comes to a number of different activities happening at the same time, what type of safeguards are in place to ensure that we're not investing funds in a facility that may ultimately face the decision that it simply doesn't fit with the overall plan?
That has been considered in the initial planning as well. We put together a listing, showing the age of the facility, when it was initially built, when it was most recently renovated. We went back and also applied to any monies that has been spent in the last four years from '02 up to '04, and we also created another spreadsheet column, showing the money that has been appropriated on the 51 Whole - Bills 040257, 040258 - 4/5/04 recommendations. And all of those are on hold based on final decisions by the City Council.
I would just add that obviously any repair that relates to the safety of children and relates to code compliance, we would move forward and make in any case. But certainly those long range or strategic improvements and enhancements would not be done on facilities that, where it seems from the criteria that the Commissioner developed, that we would not be moving forward and maintaining that facility.
Thank you. Thank you very much for your testimony. Thank you, Madam President.
You're welcome. What is the amount of the tax-supported new loans in the FY '05 budget for economic development? And can 52 Whole - Bills 040257, 040258 - 4/5/04 you please give us the breakdown of the funds?
It's taking us a moment because that number is spread through a number of agencies and entities. We're going to have to get back to you, Madam Council President, because as I said, the number is spread through a number of agencies.
Well, before the end of the hearing, I think you would be able to provide us with that.
I'd like to know what the breakdown of the funds are, and how these funds integrated into the City's overall economic development strategy.
Thank you, Madam Chair. I just have a couple questions that 53 Whole - Bills 040257, 040258 - 4/5/04 it has to do with the Planning Commission per se. One of the -- One of the mandates of you is to present the Mayor's recommended Capital Program and Budget, and you did so this morning. But one of the other mandates of the City Planning Commission is the orderly physical development of a City requires... Bears with me. Requires current and long-term planning and a master development plan. The 1951 Charter, the people that worked on that Charter definitely were visionaries. They gave you a tremendous amount of power. They looked at you as the engine of creativity for this City. Economic development was one of the things that they charged the Mayor with, and passes it on, to a certain extent, to other departments and functions of government, including the Planning Commission. How far are you in keeping with that 54 Whole - Bills 040257, 040258 - 4/5/04 charge that was mandated in the 1951 Charter then? You do long-term planning, and then you have a master development plan.
I think we've done a pretty good job. We have a Strategic Planning and Policy Division, and many of those folks are here. Would the members of that division raise your hands? (Indicating.)
These are also the staff that helped develop the Capital Program. And the concept is that the Capital Program becomes sort of the framework or the armature for the orderly development of the City. I think it was determined by a number of cities sometime ago, including my hometown, New York, and Philadelphia, that rather than a static master plan that said this building shall go here in five years and that building will go there in ten years -- because those things never necessarily come to fruition because of 55 Whole - Bills 040257, 040258 - 4/5/04 market forces and federal and state programs, et cetera -- that we would develop frameworks. Zoning is one framework that speaks to where housing should go, where commercial development should go, et cetera. The Capital Program provides another framework, although in these lean times we're not able to necessarily support a great deal of additional development. But still, where we do place our funding supports this overall vision. And then the Mayor has developed a vision, which speaks to keeping the Center City engine churning.
But you understand that the Charter says -- That's fine that the Mayor has a vision. We have heard about his vision now for a number of years. But does the Planning commission have a vision?
Yes. As a matter of 56 Whole - Bills 040257, 040258 - 4/5/04 fact, those members who are here a couple years ago probably heard me say that one of our objectives was to take the City to the water, to revitalize our waterfront. That has now been sort of translated into a Philadelphia as a new river city. And I'm pleased and proud to say that along with the Commerce Department and PIDC, and other economic development entities, we've been part and parcel of that planning through the North Delaware Riverfront Plan, through supporting the Navy Yard Plan, and supporting the Schuylkill River Development Plan, our involvement in the Penn's Landing Plan, et cetera. So, although there is not a huge master plan -- and I can tell you in New York there is a number of people who have supported their coffee tables based on the master plan that was developed but not voted on there in the '60s. Rather than a static master plan, we have developed strategic plans, both community based strategic plans through NTI 57 Whole - Bills 040257, 040258 - 4/5/04 planning, and these larger scale economic development plans as the North Delaware Riverfront Plan.
But it seems to me that it is within the Mayor's vision of Philadelphia which is to a certain extent -- And though he's a visionary individual, that it's within the framework of him being Mayor of the City of Philadelphia. Do you have something that goes beyond some of the projects and programs that the Mayor has proposed?
Well, I mean -- COUNCIMLAN RAMOS: River City is the Mayor's -- I heard when he brought it up at the Chamber of Commerce. And I'm hearing you say -- and it's rightfully so for you to reiterate the plan of the Mayor. But I believe that this Planning Commission, and recently you had the Chair of your Commission resign. I've reached out to him. He's not available right now. But I sure would like to hear from him 58 Whole - Bills 040257, 040258 - 4/5/04 because he seemed to be concerned about the future of the Planning Commission, and so forth. Then I read in your testimony that you're going to be speaking to the community based organizations, the Managing Director's Office, the School District in the next few months, to consider range of strategies. I'd like to see you guys work on the strategies beforehand, instead of proposing them in the next few months, after you have presented your plans.
Well, Councilman, I look forward to working with you and actually discussing this in more detail as we move forward. But I assure you that the 20- to 30-year art that some of these larger strategic plan sort of takes in is a long-range plan and a plan that can only be done incrementally. And also, I would not want to leave the impression that because we have to 59 Whole - Bills 040257, 040258 - 4/5/04 reach out and partner -- That's consensus building, is the way we do government in America. That certainly does not mean that we don't have a vision for the future and that vision is not promulgated very succinctly and very strongly. I don't know whether the Deputy Executive Director, who's been working on some of these longer-range economic development projects, might want to say a few words.
Yeah. I am interested in hearing some more about... And I have people from your staff. And I thank you for making your staff available to me. But I saw recently the downtown business district, Paul Levy, made a presentation of what the business district foresees our Center City as looking, and what could be here, what could be there. Seems as though they have... And probably -- You know, some of it probably won't be possible. But they have a vision 60 Whole - Bills 040257, 040258 - 4/5/04 of where the downtown district, what it should look like, what should be there, what should not be there. And I don't see that right now with the Planning Commission.
Well, we also have a vision. We don't necessarily have the budget that the Center City District has to promulgate that vision.
But we do have a vision. Rich, do you want to say a few word.
Yeah. Richard Albert, Deputy Executive Director, Philadelphia Planning Commission. For example, the North Delaware Plan, which is a piece of the Mayor's New River City, actually is a piece of work that the Planning Commission commissioned 61 Whole - Bills 040257, 040258 - 4/5/04 about, with the help of both the District Council people and I think Councilman Borski, to look at the future of the ten miles of riverfront north of Center City. That was a vision -- That plan was announced is a 30-year plan.
That's a good answer. That's a good answer. No; go ahead.
And what's happening now and is being subsumed into the new River City are the first sort of phases of that 30-year plan which is beginning to build a new river road, to reinforce neighborhood connections to the riverfront, to make some strategic investments in abatement and in acquisition of sites, to encourage private redevelopment of individual parcels that have come on the market. Like, for example, Philadelphia Coke site is on the market right now. It's privately owned. There's a series of private developers. I believe it's gotten 62 Whole - Bills 040257, 040258 - 4/5/04 down to three developers who are bidding on it. There would be need for some improvements when that development is ready to move forward. But still, over the long haul, it will probably be to 30 years. 8 If you recall -- You may not 9 recall -- there were a lot of people 10 talking about, you know, Baltimore's 11 central riverfront. And that plan was 12 over -- Again, it's not completed yet, and 13 it's about -- it's over 30 years old. 14 So it does take a period of time 15 between the planning piece which we do, and 16 the implementation and the final 17 realization of it. So... 18
I'm just 19 concerned about the Planning Commission not 20 diluting as being the engine of creativity, 21 when it comes to the planning of this City. 22 And you've got that mandate with the 23 Home Rule Charter. And it doesn't -- You 24 know, it seems as though if I want to open 25 up a grocery store in Center City, and I 63 Whole - Bills 040257, 040258 - 4/5/04 bring it to you, and if I can convince you, hey, that's not a bad idea, let's put a grocery store there. And it's probably something good, right? But I want to see my Planning Commission saying, you know, we should have maybe ten different type of grocery stores in the next years because of, you know, 10 X, Y reasons versus bring me a project and 11 I'll see if I can accommodate you. 12
No, no. And frankly, 13 Councilman, we appreciate that kind of 14 support. 15 I should add with regard to Center City, when the new census data came out, we took a look at the Commission's plan for Center City which was developed in 1988 by the Planning Commission. And the development that occurred, we believe, between '88 and the present time was in large part supported and sparked by that original plan. We've now updated the plan, but that plan predates even my tenure. And we hope 64 Whole - Bills 040257, 040258 - 4/5/04 to continue that sort of creative work neighborhood by neighborhood and large section of the City by large section of the City as we go on with this 20- to 30-year art. And we look forward -- I mean that quite sincerely -- to working with you and garnering your support because it's appreciated.
Thank you. I would like to ask a question regarding the Capital Program Office. Can someone explain to me why we would be funding 78 positions at a cost of $6.5 million out of the capital budget at a time when our debt capacity is minimal?
Well, I'm going to ask the Capital Program Director to come to the mike. But I would say that the Capital Program Office supports design and construction of all the Capital Program projects within the Managing Director's 65 Whole - Bills 040257, 040258 - 4/5/04 purview. So...
Ten percent of our capacity, if you think about it.
Right. We assign it to the Capital Budget because it's work that's directly for capital projects.
As I said, it's over ten percent over the amount available. How do you justify it?
Because it's work for Capital. I mean, obviously, the other option is we could -- if we ran it through the operating budget, then we'd have increased operating costs, and something else would have to come out of the operating budget.
What is the percentage over the life of the Capital Program?
I'll calculate that. 66 Whole - Bills 040257, 040258 - 4/5/04 I'll have to calculate that.
All right. When you get back with the other answers, you could provide us with that, too. Is Councilman Clark still in the room? (No response.)
Thank you, Madam Chair. My question is for Capital Programs, so could Mr. Tustin come back to the table. Thank you. We've had this conversation in the past. And the reason I've asked you to come back to the table today is to bring me and my colleagues up to speed on what I believe is a very important issue. It's our fire fighters. We prepare and equip our fire fighters at the fire ground with Scott Air Packs, to prevent them from ingesting any products of combustion, to prevent them from disease 67 Whole - Bills 040257, 040258 - 4/5/04 and other problems that they've experienced at the fire ground. But one of the issues that was brought to Capital Programs -- and I know you're doing something about it -- is when the fire apparatus, cold start inside the fire house, the products of combustion are everywhere. And I know you've undertaken a program to equip those fire houses with ventilating equipment. Could you explain where we are with that program? And understand that there might be a delay in some of those fire houses being equipped with that equipment, to prevent that diesel fumes from being ingested by the fire fighters as they depart and also arrive back to the fire house?
Sure, Councilman. I'll be happy to answer those questions. As you know, we got involved with this project last year through your office, as well as the union for the fire fighters and the 68 Whole - Bills 040257, 040258 - 4/5/04 Fire Department themselves. We started a pilot program where we looked at various types of ventilation systems, everything from total exhaust of the facility to a filtering system. And we came back last year with what we thought was the ideal solution to the problem. We involved the fire fighters union in the decisions, as well as your office. We took them out to see some facilities that were completed in Jersey that were very similar to what we want to do now. And I believe we had total buy-in from everybody on the way we should proceed with the projects. Since last year, we've got four facilities completely done and up and running. And we haven't had any negative response at all to those facilities, as far as the cleaning of the diesel fumes which were the majority concern. We have another ten fire stations right now out for bid, ready to start 69 Whole - Bills 040257, 040258 - 4/5/04 construction within the next couple months. Within the next month they'll start construction. And we have more fire stations in 6 the design stage right now. So, within the 7 next three months, we'll have another 20 8 stations, design completed, and then out 9 for bid. So we are very quickly now -- We 10 are gearing up to do as many fire stations 11 as quickly as we can. 12 In addition to the City Capital 13 money that's been made available for this, 14 there has been a $750,000 grant that we've 15 also been able to get -- the Fire 16 Department has been able to get for this 17 project. 18 So we're going to use that, as well 19 as the City funds, to try to expedite and 20 speed up the number of stations that we can do it any one time.
Why has there been... I'll use the word a lull in this program? Why in almost a year-and-a-half have there only been four? 70 Whole - Bills 040257, 040258 - 4/5/04
Well, it was the first set of stations that we were trying this new way of cleaning the air, so to speak. And it did take a little longer to do the first four, to make sure that we had the proper type of equipment, the equipment positioned in the right location within the facility, and actually get it up and running and let -- and get feedback from the Fire Department on how well it's working. And that has been done. Those stations have been completed. And with that information, we are now packaging the rest of the fire stations. We're using the first series as our prototype, so to speak. And we're now packaging the rest of the fire stations in the same manner. And we can -- Because we're duplicating a lot of that type of work, instead of taking four or five months to complete a design package, we can get ten stations designed in two to three months.
So there's no 71 Whole - Bills 040257, 040258 - 4/5/04 funding issue here. The money's there. We're ready to go. And all of the fire houses that you mentioned, the ten, the twenty-two -- I think that's the number you used --
We're not going to hear in the next budget we're up to seven.
No. Absolutely. Hopefully by this time next year we'll have as many as half of the total fire stations completed.
On the street. We have to deal with that in the fire house. My next question is --
Your time 72 Whole - Bills 040257, 040258 - 4/5/04 is up, Councilman. Please make it a very brief question.
The last point -- not question. You mentioned that the Fire Department found a $750,000 grant? I would hope that part of your process over there is to turn every rock over and look for grants. If the Fire Department hadn't found that, would you?
Councilman, we do look for every available source of funding when we do a project. Sometimes the individual departments have better access to funding sources than actually we do. There are occasions where, for instance, the Fire Department may know a grant that supports a fire type of project through a state or federal agency through their interaction with other agencies like that across the country.
Well, I would hope that would be, like, block seven on the form, that you work with every project 73 Whole - Bills 040257, 040258 - 4/5/04 that you do with the operating department, to see if there might be some grant money out there. It would be a shame to go and conduct or do a project and not take advantage of a federal, state or --
-- association grant. Thank you. Thanks, Madam President.
Welcome. The Chair recognizes Councilwoman Miller. Councilwoman Miller.
Thank you, Madam Chair. And good morning. I just wanted to get some specific information about the status of the Mallory and water tower roof.