COUNCIL OF THE CITY OF PHILADELPHIA COMMITTEE OF THE WHOLE - - - Room 400, City Hall Philadelphia, Pennsylvania Tuesday, October 27, 2009 11:20 a.m. - - - PRESENT: COUNCIL PRESIDENT ANNA C. VERNA COUNCILWOMAN JANNIE BLACKWELL COUNCILMAN DARRELL L. CLARKE COUNCILMAN FRANK DiCICCO COUNCILMAN W. WILSON GOODE, JR. COUNCILMAN BILL GREEN COUNCILMAN CURTIS JONES, JR. COUNCILMAN JACK KELLY COUNCILMAN JAMES F. KENNEY COUNCILMAN BRIAN J. O'NEILL COUNCILWOMAN MARIA QUINONES-SANCHEZ COUNCILWOMAN DONNA REED MILLER COUNCILWOMAN BLONDELL REYNOLDS BROWN COUNCILMAN FRANK RIZZO COUNCILWOMAN MARIAN B. TASCO BILL 090706 - An ordinance amending Title 2 of The Philadelphia Code, entitled "City-County Consolidation," by abolishing the Board of Revision of Taxes"... - - - 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 2
Good morning, everyone. This is a public hearing of the Committee of the Whole regarding Bill No. 090706. I would ask Mr. McPherson to please read the title of the bill. MR. McPHERSON: Bill No. 9 090706, an ordinance amending Title 2 of The Philadelphia Code, entitled "City-County Consolidation," by abolishing the Board of Revision of Taxes.
Thank you, Madam President. The reform legislation under consideration today, which will bring fundamental, necessary and lasting reform to Philadelphia's property tax system, including by separating the assessment and appeals function, was co-sponsored by 14 Councilmembers and is the work of this body. Our goal with this bill is to 3 10/27/09 - WHOLE - BILL 090706 bring accountability, professionalism and transparency to a broken assessment and appeals process. City Council has focused on ensuring that the citizens of Philadelphia will have a property tax system that they can trust, that adheres to the highest standards of professionalism and under which all citizens are treated equally. In developing this bill, we pursued a collaborative process whereby multiple Council offices made valuable contributions to this legislation. The bill before Council today was very much improved by that process. We intend to pursue a similar process going forward. We have received helpful suggestions for amendments to the bill -- many of them are technical in nature -- from the Administration, the public and other stakeholders. For instance, we agree with the suggestion from the Administration that the bill include a 4 10/27/09 - WHOLE - BILL 090706 date certain for transition of functions from the BRT to the new Office of Property Assessment and Board of Appeals. To that end, my hope for today is that Council hear from the Administration and members of the public on the draft bill. As always, we welcome this input. We are ready to work -- we are already at work preparing amendments to the bill based on the input we have received to date, and that work will continue after today's hearings. Given the other serious issues facing Council in the months ahead, including the budget hearings, which will soon be upon us, I hope to have amendments circulated to my colleagues after input from my colleagues within the next few weeks so that we can move this bill forward shortly thereafter. Thank you, Madam President.
Thank you. The Chair recognizes Councilman 5 10/27/09 - WHOLE - BILL 090706 Goode.
Thank you, Madam President. I was proud to co-sponsor this bill, and I can vote for it with or without amendments. The key is that property assessments meet industry standards for accuracy. This bill will do that with or without amendments. In fact, the legislation recommended by the Tax Reform Commission in 2003 would have accomplished that. The issue is not just one of competence, though, but one of ethics. Historically, Philadelphia's assessment inaccuracy is highly regressive, as low-income neighborhood homeowners pay more than their fair share and upper-income neighborhoods pay less than their fair share. This bill, amended or not, will not make assessments fair or equitable; just more fair and equitable. Simply moving away from a system of fractional assessments does not 6 10/27/09 - WHOLE - BILL 090706 solve the issue of fairness and equity, as long as there are those who still won't pay their fair share because of governmental intervention and/or more success in challenging their assessments based upon their economic class or status. If I have been overassessed for years and I receive a fair assessment 11 in Year 16, in fact I am owed money for 12 the last 15 years. If I have been 13 underassessed for 15 years and I receive 14 a fair assessment all the sudden, am I 15 really going to pay my fair share? Is that really fairness and equity? The assessment system was never structured to be objective. It has been rigged for years as a form of class discrimination. I hope this is a step in the right regard. Thank you.
You're welcome. Our first witness? 7 10/27/09 - WHOLE - BILL 090706 MR. McPHERSON: Rob Dubow. (Witness approached witness table.)
I know you have submitted written testimony. Does everyone have a copy of Mr. Dubow's testimony? (Yes.)
If you don't, if you'll raise your hand, we'll make sure you have a copy. Please proceed.
Good morning, Council President Verna and members of City Council. I'm Rob Dubow, Finance Director, and I'm here to testify on Bill 22 No. 090706, which amends Title 2 of The Philadelphia Code by abolishing the Board of Revision of Taxes and creating a new Office of Property Assessment and a new 8 10/27/09 - WHOLE - BILL 090706 Board of Property Assessment Appeals. Reform of our property assessment and appeals functions is needed in order to restore public confidence by creating a predictable, consistent and equitable property system that treats all taxpayers fairly. Accomplishing meaningful reform in the property assessment and appeals process will be a significant accomplishment for the City and one that is long overdue. On May 6th, Mayor Nutter and Council President Verna issued a joint statement in which they said that Council and the Administration would work together to reform, restructure or dissolve the BRT as quickly as possible. Over the course of the summer, two working groups comprised of Council and Administration staff members researched and outlined the issues and options related to the BRT. One group reviewed the BRT's Actual Value Initiative data and methodology and the other was 9 10/27/09 - WHOLE - BILL 090706 responsible for assessing governance and administration of the agency. The Data/Methodology Working Group review is ongoing. They continue to evaluate and test the BRT's Actual Value Initiative preliminary assessment results. The Governance Working Group issued two final memos on September 18th, 2009, one detailing the options and preliminary assessments by the working groups provided a framework to guide the Mayor and City Council on their collective efforts to reform the assessment system. Following review of the summer's analysis, on October 6th the Mayor articulated the principles he supported for any BRT governance legislation. He said any changes would need to address accountability, consistency and independence. Specifically, the Mayor stated that Philadelphia needs a property tax system that is accountable to the Mayor and 10 10/27/09 - WHOLE - BILL 090706 citizens, that separates the appeals and assessment functions, and for which the employees are subject to the same requirements as other employees in the executive branch. We appreciate that Council has crafted a bill responsive to these principles and look forward to continuing to work together to pass legislation this calendar year, thereby placing a question on the May 10th ballot for necessary voter approval. While the Administration supports passage of this bill, we would like to propose a number of specific amendments to it. And before I go to the next section, the way this is laid out, the Task Force had pros and cons for a series of recommendations. So I'm going to go through the Administration's proposal and then discuss what the Task Force said. The first issue is placement of the Office of Property Assessment. As 11 10/27/09 - WHOLE - BILL 090706 currently drafted, the bill does not specify where this new office is housed. It reads that the assessment office is hereby created within the executive administrative branch of City government. The Administration recommends that the bill be amended to specify that the office be placed within the Finance Department. As far as placing the assessment function in the Finance Department, the Task Force said the pros were that Finance is currently charged with the overarching responsibility for financial functions, which makes Finance a logical choice for a department in which to house real estate assessments, and that the Department already has responsibility for a number of tax-related functions, including the Tax Review Board and revenue collections.
But the group also noted negatives, however, because there could be a perceived conflict by locating the 12 10/27/09 - WHOLE - BILL 090706 assessment office in the same department whose mission includes collecting revenues and making expenditures. As the group pointed out, however, this concern could be addressed by highlighting Council's role in setting the millage rate and by including a provision that the Chief Assessor can be fired for cause only. The second issue is appointing authority for the Chief Assessor. The bill states that the Mayor appoints with Council approval. The Administration recommends that the bill be amended to provide that the Finance Director appoint the Chief Assessor to be consistent with our recommendation that the Assessor be in the Finance group. The Chief Assessor's service, the bill has it at the pleasure of the appointing authority or removal for cause only. The bill states that the Chief Assessor serves a four-year term, with removal for cause by the appointing 13 10/27/09 - WHOLE - BILL 090706 authority. It says the Mayor would put the cause in writing and a two-thirds vote of Council would be required to remove the Assessor after hearing is needed -- after a hearing is held. In accordance with our recommendation that the assessment function be housed in Finance, the Administration also recommends the bill 11 be amended to provide that the removal for cause be initiated by the Finance Director, who would state the cause in writing, with a hearing before the Mayor. The next issue is the appointing authority for the Appeals Board. The bill provides for a nominating panel comprised of seven members, one each appointed by the Mayor, Council President, the Realtors Association, the Bar Association, Housing Association of Delaware Valley, the BIA and the local Assessor's Association. Then the Mayor selects from the names submitted by the panel and Council 14 10/27/09 - WHOLE - BILL 090706 confirms. We believe this process would be too cumbersome and recommend that the bill be changed to provide the Mayor appoints with Council confirmation. We also think that the nominating panel would lessen the Mayor's and Council's responsibility for the eventual appointees. The Work Group noted the following pros with respect to Mayor appointing with Council confirmation. The executive and legislative branch would both be involved in the appointment process. A public hearing process will enable the examination of appointees' credential and help increase public confidence in the Appeals Board. The cons were, some members could be deterred by a public hearing process and there's a potential for a public perception the Board is comprised of insiders and that process would take longer. 15 10/27/09 - WHOLE - BILL 090706 The process noted some pros with respect to using a nominating panel. It's in place for some positions already and it helps spread the workload if there are a large number of absences. The cons are it would make the process take longer. The next issue is service of the Appeals Board. The bill is silent on removal. The bill recommends that -- Administration, sorry, recommends the bill be amended to provide that the Appeals Board member could be removed for cause, but only with the Mayor stating the cause in writing and Council removing after a hearing. We think removal for cause increases independence -- cause only increases the independence of the Board members. The Work Group listed pros and cons for removal for cause. It would make the Board appear independent of politics. The process would attract 16 10/27/09 - WHOLE - BILL 090706 professional board members, but an appointing authority might have the basis for removal that does not meet the "for cause" standard. And the group also looked at the pros and cons of serving at the pleasure of the appointing authority. It would create accountability for that appointing authority.
If a new appointing authority came to power, the appointing authority has the opportunity to appoint Board members without having to wait for terms to expire. But there could be a public perception of a politicized process, and the approach may deter some potential members from applying. The next is compensation of the Board members. The bill provides for annual salaries of $68,000 for the Chair, $65,000 for the secretary and $63,000 for Board members. We recommend that the bill be changed to provide for a per diem payment. 17 10/27/09 - WHOLE - BILL 090706 The next section talks about some of the pros and cons of an annual salary. It does provide budget predictability and is consistent with current practice, but it's not tied to the work performed and it does present a risk that the City will overpay if the appeals caseload is less than was anticipated. Likewise, if the caseload far exceeds prediction, the compensation may be low in relation to workload and may impede getting members to serve. For per diem compensation, the Work Group said that a pro is compensation is tied directly to work performed. It's consistent with the model used for other entities. The approach could rebut the public perception that BRT Board members are overpaid. It's easy to administer and could provide budget predictability if there was a cap set on the amount. However, on the negative, it could create an incentive to reduce the length of 18 10/27/09 - WHOLE - BILL 090706 meetings so that there were more days of service, and a caseload could far exceed prediction. A compensation cap then may make people think that the compensation is low compared to the amount of work that they're required to do. The next issue is the effective date of the transition to new structure. The bill does not give a specific date. We recommend the bill be amended to provide a very clear effective date, which would help to plan and guide the transition and provide a clear end date for the current BRT. The Administration recommends the effective date be October 1st, 2010. Thank you for considering those changes and additions. I also wanted to take a couple of minutes to talk about what's been going on at the BRT. The Administration has taken some steps to improve oversight and management since the earliest that legislation could take place is after a 19 10/27/09 - WHOLE - BILL 090706 vote in May 2010. We think these steps will help to restore confidence in the assessment function and will allow the City to move to more closely examine the assessment work of the current BRT and help pave the way for a smooth transition to a new system if voters approve the governance changes provided in this bill. As you know, on October 7th, the Mayor announced that with the cooperation of the BRT Board, an agreement had been reached which establishes the Finance Director as the Interim Executive Director of the BRT and brings the assessment function under Finance's responsibility. The agreement, detailed in a Memorandum of Understanding, will remain in effect for an initial term of six months and can be extended for a period of up to six months. The Interim Executive Director will supervise all operations of the BRT relating to real estate appraisals, 20 10/27/09 - WHOLE - BILL 090706 valuations and assessments. The Board of the BRT will retain responsibility for matters relating to appeals of real estate valuations and will continue to make all determinations in granting of exemptions and any duties performed by the Board in connection with eminent domain proceedings conducted by the Board of View. Under the agreement, the property assessment functions fall under the responsibility of the executive branch, and it gives us an opportunity to restore accountability to the public of the assessment function. We've taken a couple of steps already working with Al D'Attilio, the Director of Human Resources, to evaluate all personnel in positions in the assessment function at BRT.
This review will enable both Council and the Administration to work from an accurate understanding of the current responsibilities and activities of the property assessment function at the BRT. 21 10/27/09 - WHOLE - BILL 090706 When the review is complete, the Office of Human Resources will have fully reviewed classification and compensation characteristics, developed and conducted any necessary position examinations and sought any necessary changes to civil service regulations. As you may also be aware, on October 16th the Mayor requested a non-confidential opinion of the City Solicitor to address the status of BRT workers on the School District's payroll. Clarification of this issue will help guide the personnel and position evaluation we are currently undergoing at the BRT and in determining how the BRT is ultimately organized. In the months to come, we'll continue to work diligently to improve oversight and management, as well as property assessment operations at the BRT. We'll also continue to work with an eye towards repairing any transitional issues that we anticipate pending voter 22 10/27/09 - WHOLE - BILL 090706 approval of permanent changes to the BRT. Thank you for the opportunity to provide testimony. I'll be pleased to respond to any questions you may have.
Thank you, Mr. Dubow. Can you tell us where you are in the selection of an Interim Executive Director?
Sure. We have several candidates, a couple of whom are really promising. We're in the kind of discussion process. We hope to have someone named very soon.
Thank you. The Chair recognizes Councilman Jones.
Thank you, Madam President. I'm encouraged today that we are taking a giant step in the right direction to fix a system that is clearly broken. I am also encouraged by the fact 23 10/27/09 - WHOLE - BILL 090706 that we have so few items that we radically disagree on. I mean, this is a first and a level of cooperation that I hope goes forward. I want to focus not so much on some of the small details about when the BRT would end, those dates, even though they are important, but I want to focus in on the membership composition that you guys have kind of highlighted as one of your priority amendments. And this body took a great deal of time, a lot of discussion to try to be as broad-based and as transparent as possible in including advocacy groups that kind of represented a broad brush of what the concerns would be about this particular issue, and I notice that the Administration wants to kind of relegate that to Council and the Administration, and I wanted to get a little more rationale as to why.
Sure. Let me start by saying, I think there are a number of 24 10/27/09 - WHOLE - BILL 090706 ways this can work so that even if the bill isn't amended, I think this can still work. But I do think that the way this is laid out with the number of entities, it would be a cumbersome process that would take a while. I think you can still have openness and transparency in a process that has the Mayor making appointments and Council confirming. You can have a hearing process. You can take testimony from various groups. So I think you can still be inclusive and open. I think it would just be a smoother process.
Okay. When it comes to smooth, that's important, but getting it right is, in our opinion, more important and getting a consensus about the stakeholders who are most impacted by what we do and what this new body will do. The other thing is that as we look at individual organizations, it was, I guess, in the spirit of this that we 25 10/27/09 - WHOLE - BILL 090706 would even if, for example, one organization went out of existence, the surviving organizations could kind of name a replacement and, in so doing, kind of keep that broad-based consensus. I just don't see why expediency would be the reason why we would not want to be more inclusive in the number of organizations that could participate. And that's just my opinion. I don't expect you to --
Like I said, I think you can be inclusive in a number of ways. You can be inclusive through the hearing process, too. So you could get input from all those organizations if you had it structured with the Mayor appointment and Council approval.
My second question would be on the per diem versus the strict salary.
On the per diem, couldn't that be -- and not to say 10/27/09 - WHOLE - BILL 090706 that any of these good, hard-working individuals would ever do that. Couldn't that kind of on the top end mean a lot more money than a salary cap, if you would, by way of a straight salary?
We looked at that. I mean, we thought kind of if all they're doing is appeals, you could see a heavy workload being five months at five days a week and seven months maybe at three days a week. Even that comes up to under $40,000, which is less than the amounts that are in here. So I think that doing a per diem, you'd wind up with a lower cost.
I overheard my colleague mention the words "full valuation" and then the nightmare of kind of dealing with straightening out that process, and if the meter was running on a per diem basis, it could add up quickly, and I don't know if you thought about that, but eventually this is the easy part of this fix. 27 10/27/09 - WHOLE - BILL 090706
If you had a per diem of $200 a day, if they worked 300 days in a year, it would be $60,000. So you'd still be below a couple of the salary levels here. So I don't think it would wind up costing us more.
You're welcome. The Chair recognizes Councilman Goode.
Kevin Gillen wrote a paper for the Tax Reform Commission report in 2003 and updated it last year based upon 2007 data, but in the 2003 report there are several interesting statements. I wonder if you would comment on whether they are still true. 28 10/27/09 - WHOLE - BILL 090706 The first is, A greater level of assessment uniformity would not be revenue neutral. To offset the total decline in assessed value and thus tax revenue, the City would have to assess at higher fractions of value, increase the assessment rate, raise the property tax rate or some combination of these three.
The City would have to assess at a higher fraction of value, increase the assessment rate, raise the property tax rate or some combination of those three, because assessment uniformity would mean that those that were underassessed essentially probably would not pay their full share immediately and/or would be more successful when challenging their assessments.
Let me try to answer it this way and see whether I actually answer your question. I think 29 10/27/09 - WHOLE - BILL 090706 in terms of total taxes, it could be revenue neutral depending on where you set millage rate. For individuals, it won't be neutral. There will be some will pay more and some will pay less than they had before. If you put in some kind of buffering, it will mean that people who were paying more than they should have relatively before take a while for them --
Let me move to the second question. The comment may help you along. The City must carefully weigh the benefits of greater assessment uniformity against potential costs. If the City successfully implements a regime of more accurate property assessments, it may still be a net loser if many of these households succeed in challenging their assessments or even decide to vacate the City. Improved assessment accuracy would likely require more actives than frequent intervention by City Council to annually 30 10/27/09 - WHOLE - BILL 090706 set revenue targeted assessment and/or tax rates like the suburbs do. This is because tax values in Philadelphia exhibit greater historical volatility than have assessments. In other words, the market changes more than assessments do.
And, therefore, any immediate change would automatically cause an immediate shortfall.
I think it's very likely that millage rates would have to change frequently, clearly more often than they do now. But I think that's true. If you have -- if you move to accurate values, that you will see more need to shift millage if you want to keep the revenue level consistent.
In other words, we will be doing this every year or several times a decade?
I think that's 31 10/27/09 - WHOLE - BILL 090706 probably right if you want revenues to stay consistent, yes.
On the issue of property assessments meeting industry standards, can you tell me the difference between the legislation that was offered by the Tax Reform Commission, the Memorandum of Understanding between the BRT, the bill introduced in City Council and the amendments that are offered by the Administration? In terms of the actual assessment standards and procedures, are they all the same under all those scenarios?
Well, our amendments don't recommend anything about changing what the bill says about industry standards. I don't think the MOU does either. So I think all three of those are consistent. I'd have to go back and look at the Tax Reform 32 10/27/09 - WHOLE - BILL 090706 Commission.
Part of the question was, through the Memorandum of Understanding, do you have the power to meet industry standards now in terms of property assessments?
Last question. On the question of equalization and the fact that there have been neighborhoods based upon their income level that have been historically overassessed or underassessed, what do you think the BRT was doing in terms of that and what do you think that any new entity should do in terms of that?
I can speak to what a new entity should do. I mean, I understand from what the BRT said itself that there were differences, but I think a new entity should work to make it so that values actually reflect value, that there are not differences by neighborhood, that everything is at 100 33 10/27/09 - WHOLE - BILL 090706 percent of what its value should be.
But a hundred percent of actual assessment value does not necessarily mean that some will pay that assessment immediately. In other words, those who have been historically overassessed are more likely to pay their new full assessment, even if it's less, than those people who are historically underassessed are not necessarily going to be likely to pay their full assessment. So you still have a problem with equalization in terms of who is actually bearing the property tax burden whether people are actually paying their fair share.
As you go through the transition period, you mean, if you have buffering in a transition period? I think that's right. I think that one of the goals here is to get to equity, but as you do buffers to make sure that the sticker shock isn't too much for people, you will be -- 34 10/27/09 - WHOLE - BILL 090706
So it's a fair statement to say that it's going to take us a while to actually get to real fairness and equity?
I think you'd probably want some kind of buffer that would take at least a few years. So, yeah, I think it would. I mean, even once you get the assessments right, I think you'll want some kind of buffering process.
Thank you. The Chair recognizes Councilman Green.
Thank you, Madam President. I guess it's still morning. Good morning, Rob.
Can you 35 10/27/09 - WHOLE - BILL 090706 describe the process through which the Finance Department or you essentially became the Executive Director of the BRT, the negotiations that took place, who they were with, what happened?
Right. I can't really describe the negotiations because I wasn't part of them, but I understand there were discussions between the Mayor and the BRT that resulted in an MOU that essentially transferred authority over assessments from the BRT to me or my designee.
Has that MOU been approved by the BRT in an open and public meeting?
I don't know what process they went through. I don't know -- I know that members of the BRT signed it. I don't know what the process they went through.
Three members signed it and there are six members currently there, and I'm just 36 10/27/09 - WHOLE - BILL 090706 curious, are all of the members of the BRT in favor of this change?
Okay. Well, I would suggest that it's actually not a legal agreement until they approve it at a public meeting, and before you start exercising authority, you might want to request that they do that. Thank you, Madam President.
You're welcome. The Chair recognizes Councilwoman Brown.
Thank you, Madam President. My question centers on one particular category of employees, of your testimony where you give mention to the School District employees. Can you update us where you are at this juncture with regards to the personnel and position evaluations of those 37 10/27/09 - WHOLE - BILL 090706 employees?
Yeah. We've actually just started that process. So we're right at the beginning of that process.
I'm going to ask Al D'Attilio, the Director of Human Resources, to walk you through that. (Witness approached witness table.)
Good morning. Please identify yourself for the record.
Albert D'Attilio, Director of Human Resources for the City of Philadelphia.
If you 38 10/27/09 - WHOLE - BILL 090706 could just share with us what that process will be or what that process includes, where you are in the process.
Well, as Mr. Dubow just indicated, we have just begun the process. The process begins with employees being asked to fill out a position classification questionnaire. Basically, they outline their duties and responsibilities. We will then interview a representative sample of employees. We will have those position questionnaires reviewed by management to make sure that the responses are accurate and complete. We will conduct salary surveys. We will benchmark against what other jurisdictions do. And ultimately we will create a job classification and submit that to the Civil Service Commission for consideration.
Okay. This position classification questionnaire, is that a standard operating procedure? 39 10/27/09 - WHOLE - BILL 090706
So you've given at least four or five steps here, and Mr. Dubow mentioned that you've just started. So where are you in these steps?
We passed out the position questionnaire roughly a week ago. We have not yet received any responses.
Okay, then. Thank you for your testimony. Thank you, Madam Chair.
With respect to the employees who are currently civil 40 10/27/09 - WHOLE - BILL 090706 service employees at the BRT, is it your intention to simply continue that classification now through the period once the BRT legally approves the Memorandum of Understanding and you take charge, continue it now until we can pass this legislation and get it on the ballot and approved? And afterwards are you just going to move those classifications over to the Office of Property Assessment? I mean, what is the intention with respect to people who are already civil service?
We are in the process of evaluating those positions as well. The Department of Human Resources has been tasked under the Charter with maintaining the classification system for the civil service employees, so we are evaluating those positions with that same process in mind, and those job classifications may or may not change depending upon what we find. If employees are just being 41 10/27/09 - WHOLE - BILL 090706 transferred within their job titles from one department to another, a classification change is not needed. But if the position -- if we find that the position has changed, that the requirements are not what they should be, then we would have to go to Civil Service to change the classifications, but it wouldn't impact whether the employees worked in one department or another.
What is the Administration's intention with respect to the School District continuing to reimburse or fund the existing positions within the BRT? Do you expect that to change during the interim period prior to passage of this bill, and what is your expectation afterwards?
We don't expect that to change. I guess there are two questions. One is whether those employees are on the School District's payroll or whether they're on the City's payroll. And then the second question 42 10/27/09 - WHOLE - BILL 090706 is, regardless of where they are, who pays for them. And I think your question was about who pays for them. We don't intend to have that change. I mean, even in the School District's budget, when they assumed that the employees would come off their payroll, they then budgeted for a contract with the City. So they maintain funding, but just in a different way.
Are you aware that the Controller's Office has School District employees?
Do you believe that they should eliminate those positions also? I mean, is that essentially this is a bad thing, so we should get rid of it everywhere? 43 10/27/09 - WHOLE - BILL 090706
I don't think I said it was a bad thing, we should get rid of it. I said there were two questions. One was who pays and one was where they --
What is your intention with respect to those employees?
I don't know. We're going -- there are two things. We're looking at what they actually do, and the second is, the City Solicitor is studying the issue and going to provide a non-confidential opinion on their status.
Is it your intention to have them remain School District employees?
You don't 44 10/27/09 - WHOLE - BILL 090706 have a preferred path at this moment; is that your testimony?
I think we're trying to understand those two things to determine what path we take.
But either way, it is the Administration's position -- because there's been a lot of public clamoring for that money to be returned to the schools. Either way, it is the Administration's position that the School District will either pay for the employees or reimburse the City for the cost of those employees?
I am done. 45 10/27/09 - WHOLE - BILL 090706 Thank you, Madam Chair.
I just wanted to make sure. I didn't want to jump on your time. Thank you very much, Madam Chair. On of your matrix or dubbed matrix -- I'm not sure if it's yours or Council's -- there's an issue relative to the appointing authority for the Appeals Board, and the current bill 13 talks about the nomination of seven members appointed by the Mayor, Council President, Board of Realtors, Bar Association and various other organizations within the City that have an interest in this and that are longstanding members of the community. The Administration's recommendation is that the bill be amended to allow just the Mayor to appoint and Council to confirm. Do you think there might be some public benefit in having a 46 10/27/09 - WHOLE - BILL 090706 cross-section of the City involved in the nomination of people to serve on this Board? If we're looking to change the cultural attitude about the BRT and to have the public buy in to what we're doing, shouldn't the public be part of the process in addition to the elected body of City Council and the Mayor?
Yeah. I mean, it's a question of how they're involved. I think they can be involved in a hearing process by providing testimony, but I do think they should be involved. It's just a matter of how the nominations are done.
But it just seems that the recommendation of the Administration will not allow that to be a formal part of the process, that it will be an informal part vis-a-vis they are giving their opinion as opposed to having a memorialized part in the legislation.
Right. I mean, I understand the issue. 47 10/27/09 - WHOLE - BILL 090706
I think considering where we are in the public view of this entity, maybe we need everyone kind of rowing the boat or helping to row it so that everyone buys in to what the end product is.
I hear you. I think there are a couple of ways you could do it.
And the other thing is, going back to the School District employees and relative to political activity and all the stuff that's been circulating around all that issue, the Law Department, have they considered -- and our Solicitor is here -- recent Supreme Court ruling relative to political activity of federal employees and maybe adopting that standard citywide for our employees so we get out of this issue of who is political, who is not political? I mean, let me tell you what I think the political part of it, the big P, little P 48 10/27/09 - WHOLE - BILL 090706 issue. I mean, I think people who live in the community, who work for the City, who work for the BRT, who work for wherever, should be active in their community, and I think one of the ways that you are active in your community is by being involved in the political process. I mean, it's not just all guys with cigars in the back room making a deal. It's people in the community that have served in the community for decades that avail -- generally a lot of them for free -- of being problem-solvers in the community, community organizers, block captains. I mean, isn't that the kind of public employee we want? I mean, I don't think we should have politics in the system so that somebody can do a favor for somebody else. I get that. And that's something that we have an IG for, we have an Integrity Officer, we have a District Attorney, all those folks to take a look at that. But I think in some ways 49 10/27/09 - WHOLE - BILL 090706 cutting people off from the ability to be active in their community through a political process is something that's kind of unAmerican. And I recognize years ago how this happened and why it happened, but I think we're in a different environment now, and if the Supreme Court can make a determination that federal employees should have a modicum of ability to be involved politically -- and I guess my long question is, have you studied the ruling and do you think it applies either in this particular case to BRT employees or to our recreation center supervisors or our police officers or whoever? I just think cutting off people from politics and the political process in the good sense of the word is not something we want to advocate for. (Witness approached witness table.)
Shelley Smith, City Solicitor. Good morning. 50 10/27/09 - WHOLE - BILL 090706
First of all, I'm not going to pre-stage what the ultimate conclusion is that will be reached in the opinion. Certainly in evaluating these issues, we're evaluating all of the applicable law, any court decisions that are applicable and precedential on the issue. The political activity restrictions on City employees certainly allow City employees to engage in some level of political activity that is not overt public or partisan. That said, that, as you have acknowledged, is a long history that pre-dates the City Charter that illustrates the rationale for limiting the political activity of City employees. So all of those factors are factors that we're considering in evaluating the questions as they relate to -- 51 10/27/09 - WHOLE - BILL 090706
For example, the conduct of elections throughout the City of Philadelphia could not take place twice a year without basically volunteers, because the length of the time that folks work in a polling place for the stipend that they receive is pretty much a volunteer job. They're not partisan. They work the election table. They inspect the machine. They assist people who need voting help. And I think that's something that should be commended, not something that should be eliminated and somehow there's something wrong with doing that kind of stuff. I mean, the folks who sit in those polling places -- and I could tell you, if they didn't show up one election, we wouldn't have one. And I think that that whole system, although that needs to be tinkered with too as we move forward in the modern times and we've done that with voting machines and other things, I still think that there's something -- 52 10/27/09 - WHOLE - BILL 090706 it's not a bad thing to get up at o'clock in the morning and be at your poll and help people in the democratic process of voting. And I think somehow we've lost that in this whole discussion, and I would urge you in the course of your evaluation to take that into consideration. I mean, I don't want people doing favors for anybody, but I don't want to tell people that they shouldn't be involved in the democracy that we birthed here in Philadelphia.
We are certainly evaluating all those issues, Councilman Kenney.
While we're on that topic, the Mayor's -- I can't remember its -- Task Force or Commission 53 10/27/09 - WHOLE - BILL 090706 on Ethics has issued its preliminary report. In that report they conclude that the City's current political activity restrictions are unconstitutional under the -- so what standards are you going to try to apply to anybody given that our current standards are unconstitutional, according to the Mayor's own commission?
Certainly the fact that the Task Force has issued a report that suggests that the rules are unconstitutional isn't dispositive of the issue. I don't think you're suggesting that it is.
I'm saying that the Task Force conclusions are not dispositive of the issue. We are evaluating the question in the context of the request that has been made for an opinion as to the status of these employees. Certainly their political 54 10/27/09 - WHOLE - BILL 090706 activity is a relevant factor in evaluating the issue, and we will evaluate the issue against all of the relevant standards, including the law as the Supreme Court has interpreted it and many of the factors that Councilman Kenney identified, including the history of political activity that led to the political restrictions that exist in the Charter today.
Do you agree or disagree with the Task Force's conclusions with respect to the constitutionality of our current restrictions?
I'm not in a position to sit here today and state whether or not I agree or disagree with it. All I'm saying is that we are issuing an opinion on the question -- on 55 10/27/09 - WHOLE - BILL 090706 the issue of the status of these employees, which will include some analysis of those issues, and the fact that the Task Force has reached that conclusion is not dispositive of the issue.
Okay. We'll have separate hearings on that issue. Thank you, Madam President.
You're welcome. The Chair recognizes Councilwoman Tasco.
I forgot my question. I know the City Solicitor will offer a fair opinion based on all of the parameters that she outlined. I certainly hope that these employees are not used as the scapegoat for the problems that the BRT, as has been portrayed lately, that they are the problems that the assessments are high and all the other problems with the BRT. 56 10/27/09 - WHOLE - BILL 090706 So sometimes in those decisions that are made even by the court, the court of public opinion weighs in on the decision, and I certainly hope that the decision just because these employees happen to be -- some of them are. I don't know if all of them are. I don't know too many of them. I would hope that they are assessed at the performance on their job and what might their political involvement might have had on any impact of the decisions or operations of the BRT. I'm trying to be very careful what I say, because I don't want to be misinterpreted. But I think at one time all of us were political employees, no 19 matter where we worked, political appointees at some point, and exercised fairness and honesty in dealing with what we had to deal with. So in any case, that's all I'm going to say. Mr. Dubow, can you explain why the Administration recommends that the 57 10/27/09 - WHOLE - BILL 090706 Finance Director appoint the Chief Assessor as opposed to the Mayor with Council approval?
Yeah. We think that it kind of belongs within a specific department as opposed to kind of freestanding, and we think Finance makes sense because we have some similar functions, like the Tax Review Board, for example. So we think it's more -- it makes sense if it goes somewhere, for it to go with us and that it should be in some specific -- should report to somewhere in the Administration.
Okay. Why would they be exempt from civil service? 58 10/27/09 - WHOLE - BILL 090706
I think in terms of the flexibility and finding the right person with the right qualifications, being exempt from civil service would help.
You're saying that people who might qualify would not want to participate in the civil service process?
Can you explain why the Administration believes that a nominating panel for the Appeals Board would lessen the Mayor's and City Council's responsibility when, according to this bill, the Mayor ultimately appoints and City Council confirms the Appeals Board?
Yeah. I think it would lessen Council and the Mayor's responsibility because the names would be coming from somewhere else. So they wouldn't -- the Mayor and Council wouldn't be determining the universe from 59 10/27/09 - WHOLE - BILL 090706 which the names could be selected.
But the organizations that we've recommended in the bill represent a broad spectrum of organizations in this business and would have, to me, a good sense of who some of the appointees might be based on their involvement in that arena.
Yeah. Like I said to Councilman Jones, I think there are different ways to do this that will work. So, I mean, I think if using an appointing panel, that process works. We just thought the bill would be a little stronger if you had the Mayor making the nomination with Council approval, but we do understand it can work either way.
Well, the Mayor would get recommendations from various venues. He's not going to know all the people in this field. Why not allow this Board to make those recommendations from people that they vet and who they know? 60 10/27/09 - WHOLE - BILL 090706
I think it can work either way. If that's the way Council decides, I think we'd be fine with that.
Okay. We had a nominating panel which is a part of the Charter where the School Board prior to the SRC take over. The School Board appointees were recommended by a panel to the Mayor and the Council for appointment. So that process didn't seem to be cumbersome, and of course the public had input in making those recommendations. So it seems to me it makes it a little more transparent, since we are all concerned about transparency here. In your testimony, you state that the Administration supports a per diem payment for members of the Appeals Board. In this regard, would the Administration support a total annual per diem payment that was annually capped at the salary level? You talked about caps in part of your testimony. 61 10/27/09 - WHOLE - BILL 090706
Okay. Let me ask you a question about the assessment process just on this full valuation. Where are we with that and are we going to accept the program as submitted by the BRT or are you looking at doing another program?
We have been looking at what the BRT did, and I think there are still a number of issues with it. I don't think that the way it is now is ready to be used, so we wouldn't accept that. So I think there's still work that needs to be done on it.
Well, we are actually working with the BRT on it, being the Budget Director is working with 62 10/27/09 - WHOLE - BILL 090706 the BRT on that issue. He can actually -- I mean, I can ask him to give you some more detail if you'd like on where we are in that process.
I'd like to know, because people are asking me when will they get this new assessment and I don't have an answer for them. Plus the fact will the system that's presented will be one that's different from what was presented to us before. (Witness approached witness table.)
Good afternoon, Madam Chair, members. Steve Agostini, Budget Director for the City of Philadelphia. As Mr. Dubow said, there are a number of issues that we have encountered and identified with respect to the assessment process that BRT has been working to implement, which has come to be known as the Actual Value Initiative. Very succinctly, the issues 63 10/27/09 - WHOLE - BILL 090706 are, there are some pretty significant data problems where there are a number of either missing residential units that are not incorporated currently in the sort of extensive database for all properties in the City. A number of the properties have significant errors in terms of the description of the property, the zoning, the use, which then makes the development of any kind of proper assessment for that very difficult. In addition to the data problems, there are very significant issues, I think, with respect to the modeling that need to be at least reviewed. Many appraisal entities in the United States use a computer-aided type of appraisal process where there's an underlying statistical model that's used based on sales over the prior five- or six-year period. That model that's currently being tested by the BRT I think has a number of issues, and we're trying to delve into them. The issues have to 64 10/27/09 - WHOLE - BILL 090706 do with the kind of variables they're using to develop the model, some of the underlying data issues that I mentioned a moment ago, as well as whether the actual values that are being calculated are the appropriate values given where we are in the marketplace today. So succinctly, there's some data problems, there's some modeling problems, there are issues that we need to address in both of them. I think that the timeframe to get that done is probably somewhere in the six months to a year period to address the modeling. The data problems are much more significant and may take a longer period of time. That may take a couple of years to get to a point where we have an accurate data set for our properties in the City where we believe there's an integrity to that. That I think will take a little longer. It's conceivable that we could fix some of these things in the next 65 10/27/09 - WHOLE - BILL 090706 three to six months, but it will be very difficult to do that. So I think it would be, in my opinion, a timeframe that contemplates a year to months of fixing these issues 7 is probably an appropriate timeframe. 8
You know, 9 I'm not familiar with the process that 10 was used or the company that was used to 11 set up this whole program, but the BRT, 12 who are they working with? Are they 13 working with a company that they 14 contracted with or do they have a 15 different company? What's with that? 16
The BRT engaged 17 three different consultants to assist 18 them. One is a recognized expert in assessments throughout the United States, two are local. One is a professor at Temple, one is a professor at Wharton. Actually, Kevin Gillen, who I think someone made mention of earlier. I think it was Councilmember Goode. They were engaged to provide some of the 66 10/27/09 - WHOLE - BILL 090706 underpinnings for these models, the statistical models. This expert, national expert, was used to provide sort of a constant oversight of the process. I've talked to all three of them at length. I just think that at a minimum, we probably -- the City probably needs to bring in another expert to at least review, if not revise, the model to address some of the issues that I think are significant, because at the end, the BRT relied on models that it developed as opposed to purchasing the services of a contractor or an economist, if you will, to do the modeling. They did the modeling themselves. And I think that before we were to move forward with that, there are a lot of things that we need to review and feel comfortable with, and right now I don't think they're in a place where we should proceed with them. At least that would be my recommendation, that we need to review them very carefully. 67 10/27/09 - WHOLE - BILL 090706
You're welcome. The Chair recognizes Councilwoman Blackwell.
Thank you, Madam President. I'll only ask two questions at this point, and one is, I see that this panel picks a board, but my question is, it appears that there's only one taxpayer or one homeowner on this panel, and is that something -- one residential homeowner on it, and is that something that we all agree with? It seems to me that on all of this, we should have people who pay the freight. People who pick this group and people who will be making decisions certainly should be residential homeowners, as well as businesspeople and business types. So I bring that up and ask you to respond to that. 68 10/27/09 - WHOLE - BILL 090706 And my second question is, on , (d)(ii), could you explain that to us in layman's terms, what that section means, what (ii) means?
First, on your first comment I guess on membership of the Board, one of the requirements is that everyone who is on the Board be a City resident. So everybody would be paying the freight. So I think in that way, that covers it. And it also by laying out some expertise, I think it will, first of all, have people who are on the Board have that level of expertise that will help them make informed decisions and will give the public more confidence in what they're doing. So I think that makes sense. In (d)(ii), what that's saying is, there are kind of common measurements of how consistent your assessments are, and you want to make sure that if you have two houses, that they're assessed in the same way. That's really just getting 69 10/27/09 - WHOLE - BILL 090706 at kind of statistical analysis to give you comfort that that's happening. And that's very important. You really need to have that in an assessment system to make sure that people can have faith in it and think that it's fair.
I'll go to my -- I don't know -- I guess we're a long way from having faith in anything, because, you know, this is a question mode. So we'll try to keep our mind open and see where this goes. But on , (d)(ii), could you explain that?
Yeah. I'm sorry. That's what I was trying to explain, but I don't think I did it well.
It lays out a number of ways of testing whether the assessments that you're doing meet statistical tests so that you know that they are consistent across properties. 70 10/27/09 - WHOLE - BILL 090706 And that's something, as we talked about earlier, that we haven't been able -- we have not achieved in assessments in the past. So it's important that we be able to do that, and it's important that those standards are set in that we know that they're being followed. So to us, that seemed like a very important part of the bill.
So if we required that of the current Board, would our problems then go away?
Well, I don't think so. I think you still have some inherent problems if you have, for example, the assessment function and the appeals function together. I think there's a perceived conflict there. You need to really separate those two functions from each other. You don't want the people who are doing the assessments also hearing your appeals.
But one part of them, the way they are even 71 10/27/09 - WHOLE - BILL 090706 physically located, where the assessors or evaluators go out in the street and they come back and they work with the assistants who have information, in order to have a whole new process, you'd have to have a whole new way these people operate. You'd have to create more than rules. You'd have to have a whole new modus operandi, because the way -- because the current system in any form wouldn't work with these rules. It's like we're talking about totally separate things. The way they work together, the assessors go out and assistants go out at times, and they come back and they do the records and confer back and forth and people do appeals. Everybody is interrelated, and I don't know that making a rule to change that would make it better, and I still don't -- and I don't know how you do this. Is it your plan to restructure the whole operation as it currently 72 10/27/09 - WHOLE - BILL 090706 exists where people sit, what they do? You've got a lot of detail to work out if you want to make these kinds of new rules.
I think there are a lot of details that have to be worked out in making sure that these new rules were followed. I think, though -- I don't -- I mean, I think in terms of who works together, other than the appeals function being separate from the assessment function, I think you'd still have or you could have, depending on where your analysis takes you, the same people working with the same people. I don't think that necessarily has to be completely different. But, for example, this requires -- the bill requires certain certifications of employees. So you would need some training to make sure that they met their requirements of the certification and you'd need to make sure they got certified. So that would be a 73 10/27/09 - WHOLE - BILL 090706 change from where we are now.
But we have tests for the real property evaluators. They have to take tests if they want to move up. When people appeal their increases, then they have to go back to these same people, or maybe they appeal in five areas, and the assistants go back to the evaluators and they talk about whoever saw the property, they talk about what they need to do, they work out and maybe they compromise. All of those things happen now. It seems to me -- I guess what I'm saying is that it seems to me that the people who work there don't have issues with how they work. It is we who don't see it, who sit on the outside and say what should happen in a total vacuum and in a total unaware way of what they do and how they do it, and I don't know that we can technically come up with these rules without taking in mind how it all operates. All of us agree that we have 74 10/27/09 - WHOLE - BILL 090706 good people who work there, and I don't know that what we're doing is improving it or in any way even works in concert with how they operate. I don't know how that -- I don't know how any of this happens.
I take a couple of things there. I think what even the BRT has said is that the assessments we have now are not accurate and they are not equal across properties. So the system as it is now isn't fair and --
But we know that. That is why they were talking about changing the Board up top. I don't know -- we read things that say we want to change the Board, then we want to change the departments, then we want to change what they do, all of this. This isn't just about changing how it's run. This is changing everything, and it just doesn't seem realistic. You know, I mean, some people have left, and poor Ricky that we all 75 10/27/09 - WHOLE - BILL 090706 know got so sick, he couldn't -- he was already sick. He left, although it's a shame how he left. But I just don't know. If we talk about how it's run, that's one level, but we're dealing with every level of how it's run and who does what, which is unrelated to the real world that we live in and that these people work in. We have good workers. It's not them. It's the system.
Yeah. I don't think -- and obviously the Administration didn't draft the bill, but I don't think that anything in the bill is meant to imply that the people who are working at the BRT, the evaluators, are the problem. I think it's really trying to set out standards that need to be met. I don't -- and I think that's actually a good thing. If you want to make sure that people understand how the process works and believe that it's fair, I think it's good to have standards that everyone 76 10/27/09 - WHOLE - BILL 090706 needs to meet.
Madam President, my last -- because I know Councilwoman Tasco has a question. This is my last statement on the issue. And, that is, that I believe that change should be for improvement. I don't believe even if there's public outcry, that we change to change. If it's not better, we wait until we are sure we change it for the better. And as always, we're against full tax valuation. Have been and will be, no matter how this discussion is and where it goes. Thank you.
You're welcome. The Chair recognizes Councilman DiCicco. COUNCILMAN DiCICCO: Thank you, Madam Chair, and good afternoon. I think it's important that we put on the record today the absence of any of the BRT Board members, who were 77 10/27/09 - WHOLE - BILL 090706 invited to this hearing by the key sponsor of this legislation, Councilman Green. And I think it's also important that we just go back a little bit in time when earlier this year when we -- in their budget proceeding hearings, when the Chairperson, along with several other BRT Board members, did appear in front of this Council, and I posed the question as to when she expected that the full value system would be in place. If memory serves me correct, she said it would be done sometime in the spring. And if memory serves me correct again, I think I said, Well, I'll believe it when I see it, because I've been hearing about this new system that will be in place for probably the last three, four, maybe even more years than that. Not to be here today I think is very insulting to the citizens of this City of Philadelphia. And I say that because I don't want to look back and talk about all the things that we know 78 10/27/09 - WHOLE - BILL 090706 are wrong, because that's why we're here today, is to try to figure out legislation that will improve the system going forward. But my question is, what happens between now and the time we have a final bill that we all agree on? We don't know what that bill will be. It will probably be a lot of the meat that's in here today, but I'm sure there will be some changes that will have to be made in order for us to agree on a final bill. They're not here to answer any of those questions. During the summer, I wrote the Chairperson a letter when many of my constituents had received new assessments in the mail, as I'm sure that a number of my colleagues, your constituents, have received similar types of increases.
You got that? COUNCILMAN DiCICCO: Well, I did and a number of my constituents, a 79 10/27/09 - WHOLE - BILL 090706 vast majority of those -- 15,000 I believe reassessment notices were sent out -- had received increases as high as 600 percent. And I asked the Chairperson in my letter if she would respond to me as to what procedures they were going to follow going forward, and I also asked that they would refrain from sending any additional assessments out until such time we had the opportunity to discuss the current system and where we are going forward. I don't know if anybody else has received any assessments since that time. I suspect there have been a few. I think the other problem that I'm faced with today or we're faced with today by the fact that they're not here is that the only comments I have heard from the BRT or any of its Board members have been through the media. And that, again, is not being fair to the taxpayers of the City of Philadelphia, or any of us for that matter. And I think that one of the 80 10/27/09 - WHOLE - BILL 090706 reasons I'm bringing this up is, although I'm a co-sponsor of the bill and I fully intend to continue to work with the sponsor and my colleagues, is that we're very silent on the matter by which new Board members will be selected. I, for one, have always believed -- and are more convinced today seeing that they did not take the time or have the courtesy to come in here -- that current Board members should be prohibited from being reappointed to the Board in the future, no matter how that Board takes shape. So I just wanted that to be on the record. And we talk about politics and people who are committee people or ward leaders who work over there. We're never going to remove that entirely. The Board of Judges makes the selection for the current Board members. Those Board members lobby judges, have used excuses as to why they are no longer on the bench, because they may have voted for a pay raise for judges and used that as an 81 10/27/09 - WHOLE - BILL 090706 excuse to get the sympathy of the Board of Judges to get themselves appointed. I mean, we're never going to be able to eliminate that completely. But, again, I just want to reemphasize my disappointment in the Board members and none of those Board members having the opportunity to be here today to be heard or for us to ask them questions. And there are a few of those Board members that are my friends, and I've told them personally that I would be one who would be pushing for a prohibition from any current Board members from being reappointed in the future. Thank you, Madam President.
You're welcome. The Chair recognizes Councilman Jones.
Thank you, Madam President. A couple of quick questions, and I think Councilwoman Blackwell 82 10/27/09 - WHOLE - BILL 090706 struggled to try to get an answer to it, and I'm going to try it one more time. Just simply put, have we done a process review as to how appeals are done and the time it takes to do them and what the number of them were thus far last year maybe?
We have not done that. I know that the number of appeals this year is under 20,000.
So we estimate that there are 20,000 appeals. Do we know how long it takes to process an appeal?
No? All right. So these are worthwhile things 83 10/27/09 - WHOLE - BILL 090706 that we want to at least evaluate so that we can kind of get a handle on so that we can know if there are 200,000 properties that we need to get through, that we can do a time management estimate on what it's going to take to do that. That's number one. The second thing, in light of the fact that we've just gone through an arduous budget process, we're going to go through another one again, what the fiscal impact of those appeals were net loss to City coffers. Do you know that?
Yeah, I do. I don't have it with me. It wasn't a giant number. There weren't a lot of appeals last year, because there weren't a lot of new assessments, and it will be the same this year, because there haven't been a lot of appeals and, again, because there weren't a large amount of assessments.
And then is there a timetable for staff evaluations and civil service evaluations? If we 84 10/27/09 - WHOLE - BILL 090706 know what the task is going to be and we know -- and I agree with Councilwoman Tasco that we don't want the current employees to be the scapegoat for whatever inefficiencies process that we have, but going forward, how do we move them into a secure position where they can do their jobs and know their jobs and have some system by which to be evaluated on?
What's the timetable for that kind of discussion? Has there been an evaluation of the classification of jobs within the complement of employees?
The Office of Human Resources is starting that process right now. We distributed questionnaires to all the employees, and I think that process will take -- it will take several months. It's not a short process. But we've just started that, so we are in the process of doing that. 85 10/27/09 - WHOLE - BILL 090706
Because I think what the spirit of Councilwoman Blackwell's comments are is that this is the beginning of a long process of fixing this, but each one of those subcomponents is important to begin now so that at some point we actually fix the real thing that we came to fix, which is the dreaded full valuation that Councilwoman Blackwell had a definite opinion about. But at some point, we have to address it and deal with the inequities that are out there, but we can never get to that if we don't fix these other systems.
Thank you, Madam Chair. Mr. Dubow, I just want to be 86 10/27/09 - WHOLE - BILL 090706 crystal clear about this. The BRT employees who are currently compensated by the School District, could you tell me -- or at least I think I heard you right, that presently if these employees are still required, even going after your process and whatnot, is it your opinion that the School District will continue to compensate these employees? Even if they are transferred to a City department, the City would be reimbursed for these employees?
Yes. It's slightly different from them compensating those employees. They would either compensate them or the City would -- the General Fund would, and the School District would reimburse us. One of those two models, yes.
All right. They would be compensated from the General Fund?
But the School District would then reimburse us. 87 10/27/09 - WHOLE - BILL 090706
And if the School District had decided that it would be a line item?
Yeah. The way the School District laid it out in their budget was for the first quarter of the year, they showed these positions being on their payroll, and then for the rest of the year, they showed having a contract with the City to pay us for those employees.
Would they be eligible then to slash the contractor, slash the numbers?
In other words, they could change the whole thing, which means that we would not be compensated and these employees would 88 10/27/09 - WHOLE - BILL 090706 probably be lost.
Well, I mean, we'd then be in a position of deciding whether we thought that we wanted to keep those employees and how we would pay for them.
Well, I think we'd probably enter into some discussions with the School District about it.
I just want to go back to earlier questioning from Councilman Jones about the members of the Board. Regardless if we pay them per diem or we pay them an annual salary, are they under contract? By that, they're not employees of the City?
If they were paid per diem, would they be part-time employees, which would they not receive health benefits?
I'm going to let Al 89 10/27/09 - WHOLE - BILL 090706 D'Attilio answer that. I'm going to let the Human Resources people answer that since they're professionals at it.
I just want to know if they were paid annually, would they be employees, which would entitle them to health benefits. (Witness approached witness table.)
I think that if they are paid annually on a salary, they would be entitled to benefits.
They would be. If they were per diem, I would have to research how other per diem Board members are paid. I do not believe they would be entitled to benefits.
They would be, in other words, a part-time basis and part-time employees would not?
That's my belief right now. I haven't researched 90 10/27/09 - WHOLE - BILL 090706 that for you, but that's my belief.
Okay. I just wanted to make clear of that. Thank you. Thank you, Madam Chair.
As it relates to benefits of just the annual salary, the current BRT members, do they get any benefits or pension or any of that now?
I think they do, but we'll make sure and get back to you. I'm not a hundred percent sure.
So in addition to the set salary, you may believe that they also receive other 91 10/27/09 - WHOLE - BILL 090706 benefits?
So the package is much more than 68 or 63 thousand dollars?
Right, but I agree with Mr. D'Attilio, we need to make sure that that's right, so we'll get back to you on that.
The Chair recognizes Councilman Rizzo for a point of information.
Thank you. Just to follow up on both of my colleagues there, during this process are we looking at automation computerization to see if the number of School District employees is going to be required going forward? What analysis of the process is going to be undertaken to see exactly what the staffing levels are? 92 10/27/09 - WHOLE - BILL 090706
Well, certainly we are going to discuss the staffing levels with the management of the current BRT. We are also looking at staffing levels in similar jurisdictions throughout the country, and that's part of the analysis that my department will be undertaking in the next few months.
Correct me if I'm wrong. I'm understanding that computerization and some of the modern techniques that are used to do this work leave a little bit to be desired over there.
We are -- one of the other things that we're doing is having them work directly with our Chief Technology Officer on looking at their systems and how we can move them forward.
Without that, I wouldn't really think that we've done a good job at reevaluating this operation. Thank you, Madam President. 93 10/27/09 - WHOLE - BILL 090706
You're welcome. Rob, I'm just a little curious. We've been talking about reevaluation for a couple years now. Can you tell us what it has cost from when we first started talking about it until now? We've talked about consultants, we've talked about computers. I'd like to know what has it cost the City heretofore to address the problems that we have had. (Witness approached witness table.)
Steve, I knew you would have the answer. That's why I asked.
Madam Chair, members, I wish I did. I don't know what the answer to that is, and I think it's a very fair question, and perhaps what we should do in the next month or so is try to put that together for you.
Would you say it's in the vicinity of 7 94 10/27/09 - WHOLE - BILL 090706 million, 8 million, million? 3
Well, Madam 4 Chair, if you were to combine some of the computer projects like the Computer-Aided Mass Appraisal, CAMA -- there's a data component of that as well -- those projects themselves were -- I think the CAMA was 7 million. There were a couple of others that were in that range. We're talking in the millions, and that does not include consultant time or staff time. So that would be a fair statement.
So spending all the millions that we have, we still perceive all of this as a problem.
How many more millions do you think would address the problem?
Well, Madam Chair, what we're trying to do right now is make sure that the computer elements; 95 10/27/09 - WHOLE - BILL 090706 most notably, the data capture and sort of the unified database for property, is done and done well in the next few months at significantly less than the millions that you have observed have been spent. In addition, I think that there is a way to do the modeling for the calculation of new assessments at significantly less than millions. But we probably should come back with some sense of what that would cost to do properly.
Thank you very much. The Chair recognizes Councilman Green.
Thank you, Madam Chair. I have a question for the City Solicitor. (Witness approached witness table.)
The Finance Director mentioned a Memorandum of Understanding with the BRT, which I'd 96 10/27/09 - WHOLE - BILL 090706 assume your office was involved in drafting or working with in some way. I guess it would be my understanding of state law and even under the rules of the bylaws and everything of the BRT, that until that Memorandum of Understanding is approved at a public meeting of the BRT, it is not actually effective. And I know process is very important to this Administration and I just wondered if you had given that advice to the BRT or you don't believe that that step would be required.
I am obviously not going to speak to the question of advice that may or may not have been given to the BRT. We haven't been asked either for an opinion as to the procedure that they employed in -- been signing or affirming the agreement. I think there is a question under state law as to whether or not it's the kind of personnel matter that is subject to the Sunshine requirements, but, again, we haven't been 97 10/27/09 - WHOLE - BILL 090706 asked to render an opinion.
Thank you. The Chair recognizes Councilman O'Neill.
Thank you, Madam President. I thank my colleagues Kelly and Tasco for answering and getting partial but not complete answers to my first question, which was the whole issue of what are we really paying people now and what we would really be paying people under the new proposed model in the bill 23 if they are full-time salaried employees receiving a 38 percent -- I'm still working on you with the other -- all of 98 10/27/09 - WHOLE - BILL 090706 our departments think their budget is 38 percent less than it actually is, and I'm sure it's a ten-minute exercise at the Finance Department, but it hasn't happened yet to tack that money on. But you're going to give us a complete answer, but --
-- I think the answer is going to be they're considered full-time employees and they get full-time benefits and pension and health and all that.
If the whole Board, except for the Chairman, is per diem that we'll save. That's assuming a quarter million dollars in costs for the per diem. So that's pretty 99 10/27/09 - WHOLE - BILL 090706 high. The other thing I wanted to know was -- and this is my only other question -- is the Mayor's position on School District employees throughout the City. I know because of this issue, the School District employees at the Board of Revision are under scrutiny and it's the subject of a lot of these questions, but I know Councilman Green asked the questions about the Controller's Office and any other place, and I think this record is not complete until we know that what you have put in today gives us information like are they full time, part time, what's it cost, what are the benefits, and also is this an Administration position on School District employees who are in other departments or are the Board of Revision of Taxes employees -- because of all the places that I would think you would hold out as not wanting to be political would be the auditors. And so I just want to 100 10/27/09 - WHOLE - BILL 090706 see if we have a consistent position or it's an exception to that. So if you could put that on the list, I really want this record to show what the Administration's position is on School District employees overall.
Yes. The Chair recognizes Councilman Green for a point of information.
And in particular as you render that opinion, I'm curious about the effect of declaring someone a City employee under previous testimony by the Personnel Director. We just were told that if someone is a City employee and they get a salary, they're entitled to pensions and health and all that other stuff. What is the legal effect not just of saying that they're a City employee, but what other impact does that have. 101 10/27/09 - WHOLE - BILL 090706 Also, last year during budget testimony I asked the Commerce Department for a list of all City employees that were paid by PIDC. Would this opinion affect PIDC-paid employees and other -- which I have not received yet -- and other employees? So this could have profound impacts throughout government and I'd like to know the answer as it applies to everybody.
We actually recognize that the answer to the question about School District-paid employees at the BRT will have implications beyond just those employees and that's part of our analysis.
Councilwoman Tasco, do you have any other questions? 102 10/27/09 - WHOLE - BILL 090706
We talked earlier about the Chief Assessor being exempt from civil service. If these employees from the School District come over to the City side and they're performing the functions for the Assessor's Office, because it seems that's where they would go since the new BRT Board is just a review board, and the Appeals Board, it seems to me that those employees would probably end up in your office with the Chief Assessor.
Well, it would be a separate office, like the Revenue Department reports to the Finance Director.
So why can't they be exempt? Aren't there other exempt employees in your office?
Well, I think because -- if I get this wrong, either the HR Director or the City Solicitor can correct me. I think it's because the work that they do is similar to other 103 10/27/09 - WHOLE - BILL 090706 civil service work, so I think they would be doing the same work as civil service employees.
A secretary in the Mayor's Office does secretarial work that's done in other offices that are civil service, but they are exempt.
Mr. D'Attilio can amplify this, but I can just tell you generally that there are specific provisions that relate to executive secretary functions that don't necessarily -- like secretaries in the Mayor's Office, for example, that wouldn't necessarily -- that distinguish them from a secretary who performs otherwise similar duties in civil service, and that's why those positions are permitted to be exempt. But what the Finance Director described is generally correct, that to the extent that employees who are exempt now on the School District payroll at the BRT 104 10/27/09 - WHOLE - BILL 090706 perform functions that are identical to civil service functions in the BRT, if they are brought into the government, we have to consider whether or not it's appropriate for them to have civil service titles.
You gave me the chart and all that and I don't remember any of that, but are you saying that there are other employees at the BRT now who perform the same services that are performed by the employees at the School District who are civil service? Is that what you're saying?
No. I think it's if -- and we're doing a questionnaire to find this out. It's a question of whether what they do is similar to what other employees in City government do, not necessarily just at the BRT.
I don't know if there's another assessment office in the City other than this, and they're the only ones doing that job related to 105 10/27/09 - WHOLE - BILL 090706 assessments.
I'm not sure that -- and this is one of the reasons that we're trying to examine what the -- if we're talking about the School District-paid employees at the BRT, one of the reasons we're trying to figure out what exactly they do is to figure out what exactly they do so we can figure out whether it is, for example, assessment related. It's my understanding, from the very limited information that I have, that much of what many of those employees are doing is performing clerical functions. If that's the case, then they may not specifically be assessment related. That being said, there are civil service positions in the BRT now, and so we have to figure out how what those employees do fits with not only what's going on at the BRT, but also in general positions in City government -- 106 10/27/09 - WHOLE - BILL 090706 other positions in City government that are covered by civil service as it now stands.
Well, if they are working for the BRT and they may be doing clerical work, you can't separate them out and say they're not doing work that's related to the BRT. You said you're not sure if they're doing work --
Assessment related as opposed to strictly clerical work that's, in essence, fungible.
Well, the clerical work would be associated with the assessment work that's going in there, on in the office. So if I'm working for an assessor and he's passing on work to me -- and I'm making this very simplistic. I'm just a very simplistic lady. I just want to know what the deal is. It's just these people have gotten a real bad shot. They got a real bad -- just like, oh, God, they're the worst 107 10/27/09 - WHOLE - BILL 090706 people in the world because they work for the School District and they are political. Give me a break. So I just want to know, if they're doing work associated with the Assessor's Office, then they have skills related to that office that no one else has, because there's no other office.
I think it's important, as the Finance Director said, that we figure out what the employees do, how it relates to the existing civil service system, how it relates, if at all, specifically to the BRT and make an evaluation once we have all those facts, and that's what we're attempting to do.
I mean, we're here because we're here, but it just seems to me that it's just bad to be political, but we work in a political environment. Give me a break. Thank you.
Did you want to respond to the Councilwoman's 108 10/27/09 - WHOLE - BILL 090706 question?
I did. I thought maybe I could help explain the difference. We have approximately 1,100 civil service job classifications in the City for approximately 24,000 employees. We have employees in the same classification in different departments who perform similar but different work based on their departmental structure. So a Clerk Typist II in the Police Department will be doing different work, will be supporting the Police Department functions, while a Clerk Typist II in Revenue will be performing Revenue Department functions. The type of work is still clerical. They're assisting in their departmental function. So it's quite possible that we may have a classification that is appropriate for the work that's currently being performed by employees paid by the School District in the BRT within our 109 10/27/09 - WHOLE - BILL 090706 civil service classification system. Does that make it clearer?
I just know when I was in the City Commissioner's Office -- I have to add this -- when they wanted somebody, they got them. Okay?
Thank you, Madam President. The Board of Revision has probably -- we're going to hear salary 110 10/27/09 - WHOLE - BILL 090706 plus 38 percent approximately in benefits added to that. There's also the Board of View, and I believe the bill is silent to the Board of View, but so is the Mayor's testimony, the Administration's testimony, because if you go -- if you follow -- I mean, there's no reason for the bill to have anything in it, because the bill is talking about salaried employees. But when you go to per diem, it really changes the dynamic of the Board of View and members of the Board of Revision of Taxes being also members of the Board of View. Will the Administration give us their position on how they think the Board of View should -- I mean, I can't imagine they're having per diem people from the -- seven per diem or six of the seven being per diem people from the new Appeals Board joining two people who with benefits will be making $70,000 a year for those things. So if you could --
-- get back to us on that, I'd appreciate it. And I think the per diem would be a lot less for the Board of View than for the Board of Revision of Taxes based on some things we've read. In getting to the question of, as we are hearing, we're going to hear for sure whether the Board of Revision of Taxes and Board of View members get not just a salary but full-time benefits. In other words, full-time employee status, the pension system, they get full-time health benefits, the same as any other employee in the City. Could you get back to us -- I'm certainly not going to ask you or Mr. D'Attilio now to tell us, but any other positions in the City where we pay benefits as a full-time status employee where the position isn't full time. Again, it's though you're singling out the -- I don't know if we have any others or if we have a hundred others or 112 10/27/09 - WHOLE - BILL 090706 more throughout the City where there isn't the normal workday involved.
Councilwoman Brown, I know we have a number of witnesses that would like to testify. I would suggest to my colleagues that we try to be as brief as possible. Thank you. Councilwoman Brown.
Thank you, Madam Chair. My question was actually a quick follow-up to Councilwoman Tasco's observations. Could we ask the Human Resource professional/personnel to please come back to the witness table. (Witness approached witness table.)
Thank you very much. Early on, I asked you questions about the process, and you stated that 113 10/27/09 - WHOLE - BILL 090706 the first step in that process was the distribution of position clarification questionnaires, correct?
So if we're to follow Councilwoman Tasco's concern, those questionnaires, once you get them back, will be reviewed against other similarly described positions in government as well? When you said that you're going to -- they will be reviewed by management, which is the next step.
So shall we conclude from that that there may be other positions in government where the tasks and duties are similar to those of the School District employees?
I think that's what we're trying to understand. That's why we're going through this process, to see 114 10/27/09 - WHOLE - BILL 090706 whether that's the case.
Are there any other questions from members of the Committee? (No response.)
Thank you. Our next witness? MR. McPHERSON: Our next panel consists of Paul Levy and Zack Stalberg. (Witnesses approached witness table.)
Good afternoon. Please identify yourself for 115 10/27/09 - WHOLE - BILL 090706 the record and proceed with your testimony.
My name is Paul Levy. I have copies of my testimony here on the table and I'll try to be very brief in delivering it. The first point I simply want to make is, having served as a member of the Mayor's Task Force on Tax Policy, we're very supportive of this effort in Council since this is key to getting the assessments correct. And I want to compliment Councilman Green in particular and other members of Council who took the lead on this. But I want to specifically speak as the President of the Center City District, because for over 18 years, we have been assessing property in Center City, over 5,000 properties now, using data directly from the Board of Revision of Taxes and my comments will be based on that. I should note that 12 other special services districts in the City 116 10/27/09 - WHOLE - BILL 090706 also rely on that data. So for us, this is 75 to 100 percent of our revenue, so it is as important to us as it is for the School District. But let me zero in on one very specific recommendation. Based on our experience -- I'm at the bottom now of in my testimony. Based on our experience working with the Board of Revision of Taxes' assessments, the Center City District is offering a suggested amendment to this bill. As it is currently worded, Paragraph 2-203, Subsection (3) of the ordinance would give the new Board of Appeals the responsibility to determine the amount of a property qualifying for an exemption or an abatement. That power is presently part of the assessment function, and we recommend that it remain there as a duty of the new Office of Property Assessment. In determining an exemption or abatement, the Office of Property Assessment should first 117 10/27/09 - WHOLE - BILL 090706 determine the full taxable value of improvements; that is, the pre-abatement value, and show them in its property tax database and then show separately the value of any exemption or abatement in a separate column. By placing the responsibility for both aspects of this assessment function at the OPA, it will give either party, the taxpayer or the City of Philadelphia, then the right to appeal to the Board of Property Tax Assessment Appeals and Review. Doing it this way I suggest is more consistent with the general pattern and intention of the ordinance to separate the assessment function from the review function. Based on a review by our attorney, we believe that the City can do this without any additional state approval, because the responsibility for granting an exception or an abatement under state law lies with the appropriate assessment agency, which is what we believe the new OPA would be. 118 10/27/09 - WHOLE - BILL 090706 I should note that Councilman Green's office has indicated they're supportive of the intent of this amendment. The final thing I want to say is simply that while so much focus has been on the personality and the jobs of people involved in this, I do want to highlight a more basic problem, and you raised this before, Council President, the need for state-of-the-art computer systems and databases that multiple departments that deal with real estate must deal with. The Department of Revenue, the Department of Records, the Law Department, Licenses and Inspections, this new Property Assessment Office need to all be working with the same database and they are not. So simply changing a department's name or putting a smart, capable person in charge is not sufficient if staff must still deal with antiquated computer systems and fragmented information. Funding the 119 10/27/09 - WHOLE - BILL 090706 recommendation of upgraded technology is one of the recommendations we made in the Tax Commission. I will not read the entire section from that. I'll simply conclude to say, today Council is taking an important step in separating the assessment function from the appeal function.
The Center City District is very supportive of that, but let's make sure that the people who must implement this are working with computer systems not from the 1980s, but appropriate to the 21st century. Thank you very much for the opportunity to be here.
Thank you, and thank you for your patience. Are there any questions from members of the Committee? (No response.)
Good afternoon. 120 10/27/09 - WHOLE - BILL 090706 I'm Zack Stalberg, President of the Committee of Seventy, a non-partisan, non-profit group that's interested in better government. I want to say clearly that we thank the -- this is Ellen Mattleman Kaplan, who is the Vice-President of the Committee of Seventy and in charge of policy. We very clearly -- I'll try to be brief here. We clearly support this bill. I want to thank the members of Council who have had a hand in it, particularly Councilman Green, but anyone who has co-sponsored it or had an effect in shaping it. I particularly want to thank you for the timing of the bill. I think we wouldn't have had an agreement to separate the assessment function from the appeals function if this bill wasn't about to be introduced. Just a few quick points. One is that -- one is on salaries. Under the current formula, the lowest paid member 121 10/27/09 - WHOLE - BILL 090706 of this new Board would be paid more than half what the lowest paid member of City Council is paid. That seems not right to us, and we'd favor a per diem arrangement, perhaps with a cap, given the point that Councilman Jones raised. We favor the selection process that's in the bill. As Councilman Kenney pointed out, it seems more inclusive. I'd hope that there would be a requirement that the names that were produced by the nominating panel and sent to the Mayor be made public so that the whole process is completely transparent. We favor the notion of putting all of the School District employees on the City payroll so that everyone is playing by the same rules, the same political restrictions and the same ethics restrictions. Looking forward to other legislation that I'm sure will be discussed, we will probably favor easing the political -- the rules on political 122 10/27/09 - WHOLE - BILL 090706 restrictions. But bottom line is that in this case, there needs to be a clear determination of exactly how many employees need to be in this new office, what the cost should be, and they should all have to play by the same rules. So I'm hoping that the bill is amended to deal with that, if possible. It certainly makes sense to deal with the Board of View at this time and probably a per diem compensation for the Board of View. Right now it seems like they're awfully highly paid for a very small amount of work. And we favor the same selection process for the Board of View that this bill envisions for the new Appeals Board. Finally, and this is slightly outside of the scope of the bill, but it appears that there will be at least a year between this point and the point in which a new process begins to fully take over, and I'd urge Council to hold periodic hearings with the Board of 123 10/27/09 - WHOLE - BILL 090706 Revision of Taxes, the current Board of Revision of Taxes, and the Administration to monitor this process so that the public is guaranteed some periodic public reports of how the transition is taking place. There are many issues related to that. As Councilman DiCicco pointed out and as the letter from the current BRT members seems to indicate, they're not wildly interested in showing up in public and explaining what they're doing. I think that is an insult to the public, as Councilman DiCicco said. And I believe the only way that we'll get a regular report on how the Administration is moving on this and how the BRT is moving on this is if Council, perhaps using its subpoena powers, Council holds a periodic hearing to explain all this. That's it. I thank you for the opportunity to testify.
Thank you very much. The Chair recognizes 124 10/27/09 - WHOLE - BILL 090706 Councilwoman Brown.
Mr. Zack Stalberg, could you please provide for us, if you will, the compensation of the Board of the Committee of Seventy?
Of the Executive Committee, what percentage are female, what number are female.
Frankly, I couldn't give that to you off the top of my head. It was originally, at the point that I took over the Committee of Seventy, a heavily male, a heavily white Board and Executive Committee. At this stage, it's becoming more and more diverse. The entire Board is in the neighborhood of 60 members, the Executive 125 10/27/09 - WHOLE - BILL 090706 Committee about 21. I can provide you with the actual statistics.
Of the 5 members of the Executive Committee, what 6 number or percentage of them are African 7 American? 8
Again, I would 9 have to go back and do an analysis of 10 that. But we've been striving to make 11 the Committee of Seventy more and more 12 diverse. 13
What 18 number or percentage of them are 19 Philadelphia residents? 20
Let's walk through the 21. Daniel Fitzpatrick would not be female, African American or Latino. 126 10/27/09 - WHOLE - BILL 090706 John McKeever?
So the real numbers are five women, if I'm correct, 15 white males and one African American female -- no; one African American man.
I'll trust your 129 10/27/09 - WHOLE - BILL 090706 count here.
So the record shows that there are no African American women and no Latinos. Does that look like Philadelphia?
It does not look like Philadelphia, which is why we're trying to make the Board and the Executive Committee more and more diverse. That said, the Committee of Seventy works in the region, is doing next week a significant program in New Jersey on Election Day. So it's a regional group and it's much closer to representing the demographics of the region than of the City.
And that's stipulated in your, some might call that, mission statement? This is the first time I'm actually hearing -- and thank you for the update -- that it is a regional organization, not a Philadelphia-based look-see entity that 130 10/27/09 - WHOLE - BILL 090706 is interested in, quote, clean government, fair elections and informed citizens. It is a regional organization?
Yes, trying to become more and more regional, frankly, in line with just about all the other civic and cultural groups in town trying to represent the region more than just the City.
In what ways has the vision or mission of the agency changed under your leadership?
It was primarily focused on elections for a long period of time. It was originally begun in 1904 or so as a group focused on corruption in City Hall and the -- especially how that wave of immigrants that came in at the beginning of the 20th century was being handled. Over time, it became an elections-focused group. In recent years, it's become more interested in ethics issues and was a major defender of the campaign finance law, for instance, 131 10/27/09 - WHOLE - BILL 090706 which Councilman Goode proposed. And more recently than that, interested in making government work better in reform issues about how efficient government is. Most recent big piece of work that we did was a report called "Tackling True Reform," in which the BRT was mentioned. I'm striving to get this back to the point of the hearing.
Okay. Well, we use the hearings as opportunity to gather any and all information that we can from testifiers. So you will get back to Madam President on the composition and makeup of the 38 Board members?
Well, I have the names here. The composition would be helpful. 132 10/27/09 - WHOLE - BILL 090706
Lastly, you spoke that you're in the process of seeking to help the Board be more diverse so that it does include women of color.
Executive Committee. And which would include Asian, Latino and African American. Share with us briefly, if you're at liberty to do that, what that process is.
Generally speaking, there's a nominating committee that seeks out new members and tries to interest them in the work of the group and tries to eventually bring them on to the Executive Committee or the Board.
So there are possibly members of the current Board of Directors who may be elevated, if you will, to the Executive Committee? Because I am able to identify one woman of color, not knowing how long she's been there, who may be suitable or have earned 133 10/27/09 - WHOLE - BILL 090706 a bright stripes to be elevated to Executive Committee.
Yeah. I would have to read our bylaws, which I haven't done in quite some time, but there are certain positions on the Executive Committee that are guaranteed by the bylaws, such as the heads of certain subcommittees. But, generally speaking, the members of the Executive Committee can be elevated from the Board or just moved in from outside.
Okay. And then, finally, when it comes to the reports that the Committee of Seventy distributes, what is that process? How does that happen? Staff collect information, do the research, hire consultants and then pass it up the line, or does the Board drive down what actions, what reports they want to see happen?
Usually it's the staff initiating a report and doing the 134 10/27/09 - WHOLE - BILL 090706 work and someone -- some set of people from the Board who might be vetting it to make sure that it's fair or represents the position of the group in general.
And in the process of the prospectives and viewpoints of the BRT, what process was used?
Pretty much that process. In this case, the "Tackling True Reform," which Ellen wrote, was produced by the staff and then vetted, if I recall correctly, by the co-chairs of the Policy Committee, Marilyn Kutler, who used to be a City Solicitor, and Dave Franceski.
Councilwoman, we also have of the Committee of Seventy four separate --
Excuse me, please. Please identify yourself for the record.
I'm Ellen Mattleman Kaplan. I'm 135 10/27/09 - WHOLE - BILL 090706 Vice-President and Policy Director of the Committee of Seventy.
We have a policy committee that has four separate subcommittees. One deals with ethics, one deals with elections, one deals with civic education, the other one deals with government reform. We have been discussing reforms at the Board of Revision of Taxes for at least six months, if not longer, and all of the recommendations that are in our testimony today came up through the government reform subcommittee. We discussed them. Then we discuss them at the Board level. We discuss them at the Executive Committee level.
So if that's been the last six months, was that before or after the Inquirer report?
Actually, the Committee of Seventy has 136 10/27/09 - WHOLE - BILL 090706 talked about reforming the BRT -- I think Zack found seven times over the last how many years?
Over the last several decades, actually. And we've testified here before on this issue. It was -- that's to take nothing away from the Inquirer series. I think the City would not have been galvanized to action if people hadn't really engaged in that series. So that's what moved us in the latest version.
There would be many who would agree with the fact that but for the Philadelphia Inquirer, it put up close and in your face why we as leadership, at the leadership level and us as the legislative body and the Mayor's Office, needed to fix what all of us view to be a broken, unfair system. Thank you for your testimony.
If I could, you and I have a good relationship, and if 137 10/27/09 - WHOLE - BILL 090706 you have names for the Board, I'd love to hear them, because we're interested in more and more good folks.
I will enthusiastically step up to that offer. The Urban League of Philadelphia and Leadership, Inc. is in the business of identifying emerging leaders who want to participate at a policy level, and I'm sure Majority Leader Councilwoman Tasco and I could both offer that up. The Urban League of Philadelphia actually is in the business of training African American emerging leaders so that they can move into positions of or be invited to positions of leadership and responsibility where they care to make a difference in the future of this city. So I will certainly take you up on that offer.
The ethics rules would probably say no, but I thank 138 10/27/09 - WHOLE - BILL 090706 you for the offer. Thank you, Madam President.
What is the criteria for membership on the Board of the Committee of Seventy?
I don't believe it's formally stated. Generally speaking, there are democrats and republicans. There are people who live in the City, who don't live in the City. The thing that folks have in common is they have an interest in public life in the Philadelphia area and affecting public life in Philadelphia. As Ellen said, some of them are interested in ethics and some of them are interested in elections and so forth. They all have a different interest, but they, generally 139 10/27/09 - WHOLE - BILL 090706 speaking, they're accomplished in their particular professional roles and interested in having an effect on public life.
And you talk about that -- you stated that you are a regional organization and you're becoming more regional. How will Philadelphia fit in that whole picture of being a regional entity? Does that dilute the participation of Philadelphians on your committee?
No, I don't think so. Probably our historic orientation is always to focus primarily on City Hall and what happens here, and to be quite frank, we're finding that it's not all that easy to move outside of Philadelphia. Culturally there's a resistance to that in the counties and in New Jersey. So it will be a gradual shift, but in the end, I hope we're providing especially Election Day service throughout the region. 140 10/27/09 - WHOLE - BILL 090706
Is the Committee of Seventy knowledgeable about the lawsuit going on in Montgomery County as to whether or not employees should be political or not political, and do you have a position on that? Has your Board taken a position?
We haven't taken a position on the lawsuit, no, but as I indicated, I think generally -- well, we haven't gotten to the issue in the City. I think generally there's an interest in easing the restrictions on City workers in terms of political behavior.
So if that issue was here in the City of Philadelphia, you would weigh in on that very publicly. Do you see yourself weighing in on that issue in Montgomery County in a public way as you all do in Philadelphia?
That's hard to say. I'm not sure that -- as I say, we're still a little City centric, and 141 10/27/09 - WHOLE - BILL 090706 whether we're ready or not to weigh in on a county on that issue, it's probably too early to say. But particularly as legislation comes our way or as Councilman Green suggested, the Mayor's Task Force on Ethics is likely to comment on that, we will be likely having a position on that that reflects what I just said.
Well, I'm interested in how you will weigh in on the political environment and the legislative environment in the counties, particularly if your Board has a number of members from outside of Philadelphia and what is their focus on good governance in their own back door, their backyards.
Right. Well, as I say, it's to have an effect, I think we're going to have to move deliberately in those areas. And because there are a number of lawyers on the Board of the Committee of Seventy, there's also a 142 10/27/09 - WHOLE - BILL 090706 tendency not to take a public position on a lawsuit unless we're directly involved in it. So I'm not sure whether a position on that is imminent, but in time, I hope we have a position on the major issues in the counties. And as you know, it's a little easier for Philadelphians to be accepted or for a Philadelphia group, I should say, to be accepted in some counties rather than others.
But they're all accepted in Philadelphia. All those people on your Board are from outside of Philadelphia and they're weighing in on the politics and the activities in the Philadelphia region. Why should they have any more say in Philadelphia than in the counties where they live?
Well, I agree with you. I hope to take the group in that direction. But almost to a person, I believe they work in the City and many 143 10/27/09 - WHOLE - BILL 090706 of them are involved in other civic activities in the City regardless of where they live.
I think that all of this is -- it goes to fairness and in terms of what issues that you take on, how you take them on and is it just a certain group or certain environment in Philadelphia that you want to weigh in on, and there are other environments that you don't weigh in on. And so the fairness of it raises a problem for me. The likelihood of Gerry Sizemore, who is a committee person and a community activist for the last 40 years in Philadelphia, what is the likelihood of her coming on your Board? She's not a lawyer. She's a housewife. She's a mother, grandmother who is raising her grandson, but very involved in my community in terms of recreation, church and has the pulse of what people think in my ward. What is the likelihood of her 144 10/27/09 - WHOLE - BILL 090706 being on your Board to give her opinion on what people think in the community?
Right. I'd love to talk to her about it, and I'll give you a call and you can get us together.
Madam President, two quick follow-ups, which were a segue from Councilwoman Tasco's question. I've served on boards for the last years in my career and in many 18 instances, there are financial duties, 19 financial obligations in terms of raising 20 money and/or dues. Are there any 21 financial dues for the Committee of 22 Seventy for its Executive Committee or 23 Directors? 24
There is a 25 minimum obligation of $2,500, which the 145 10/27/09 - WHOLE - BILL 090706 individual needs to either donate or raise.
That's what I'm accustomed to, having served on many boards. Compensation, is there compensation for the Executive Committee or Board of Directors?
Lastly, a comment and something to think about. This past Saturday my colleagues Councilman Bill Green, Councilwoman Marian Tasco and Councilman Brian O'Neill and I were asked to speak before the Philadelphia Bar Association, and one of the questions that was raised was the issue of regionalism, and the last time I heard regionalism discussed in a comprehensive way was in 1996 when I 146 10/27/09 - WHOLE - BILL 090706 actually ran for office and lost. And so I put that up as food for thought, because the only one issue where I've ever seen any possibility of us thinking regionally is around arts and culture. But recognizing and now hearing that your Board has a regional focus, that may or may not present a possibility for us to think more for discussion and dialogue about opportunities to think and act regionally since we know there are many in the suburbs who benefit enormously from Philadelphia's rich cluster of arts and cultural institutions, and to the extent that there could be mutual -- not obligation, but weight for all of us to carry keeping that real, that then I think moves the needle and puts the discussion back on this thing called regionalism.
Yeah, I agree with you. Certainly the whole regional movement had a little bit more momentum before the economic crisis, and I hope 147 10/27/09 - WHOLE - BILL 090706 that it's possible for us in the sort of political and government world or in other worlds to try to get that momentum moving again.
Councilwoman, something you might be interested in, the Committee of Seventy is partnering with an organization called Avencia to produce a website that will talk about redistricting efforts throughout the Greater Philadelphia region, and it's a website that will allow you to put in your address and to see the different areas in the region and what might be the implications for redistricting after the 2010 census. I'd be happy to send you that website, because I think it's really fascinating and something that will become more and more of interest to you folks when you head into the redistricting process.
I will look forward to that. I ask that you forward that to the Chair. Thank you 148 10/27/09 - WHOLE - BILL 090706 very much. Thank you, Madam President.
We're hoping that it can make sure that everyone gets paid during the whole redistricting fight in a year or two.
Did the Committee of Seventy just issue a report calling for the elimination of some of our row offices in Philadelphia?
Since you are a regional organization, have you decided that all of the row offices in the surrounding areas should be eliminated also since they are all county offices and as the same as Philadelphia?
That position hasn't been taken yet, although it's 149 10/27/09 - WHOLE - BILL 090706 definitely worth a close look elsewhere. The issue began in Philadelphia when Mayor Nutter raised it as a possibility. That was followed by our report, and I think a report from PICA is in the works on the same subject.
And that's all well and good, but at the same time, why should Philadelphia be any different from the surrounding counties who have the same row offices that we have that are mandated by the state?
I'd love to do it. As with any group with limited resource, including this body, we have to pick our shots, and the --
But why are you picking Philadelphia and you're a regional organization? All of the shots are at us, and that is unfair.
I mean, you know, you put your -- not you. The organization sets itself up as a good 150 10/27/09 - WHOLE - BILL 090706 government organization, but they're only taking shots at Philadelphia. Where are the shots in the surrounding counties, particularly with all these members who live outside of the City in their counties? Let them also look. As you look at Philadelphia in comparison to what you're asking us to do, what are you asking them to do?
I will certainly take that message on back to the Board and hopefully --
But I have to raise those issues, because they trouble us all, especially me. Thank you.
Thank you. Are there any other questions from members of the Committee? 151 10/27/09 - WHOLE - BILL 090706 (No response.)
Our next witness? MR. McPHERSON: Our next panel consists of representatives from the Philadelphia Bar Association, the Greater Philadelphia Association of Realtors, the Building Industry Association, the Housing Association of Delaware Valley and the Southeast Chapter of the Assessors Association of Pennsylvania. (Witnesses approached witness table.)
My name is Sayde 152 10/27/09 - WHOLE - BILL 090706 Joy Ladov. I am the Chancellor of the Philadelphia Bar Association and I am delighted to be before City Council today to offer support for what will hopefully be the newest and best entity that the City of Philadelphia can offer in lieu of the BRT. We received a letter from Councilman Green at the end of last week advising us that it is the hope that -- it is his hope that the Philadelphia Bar Association will participate in the nominating process for individuals to the committee. We would be absolutely delighted to do so. And we feel as a Bar Association that we are in a particularly unique position to be able to offer insight and guidance. We have a tremendous real property section 21 comprised of lawyers throughout the City who are familiar with both residential and commercial real estate from the top to bottom, from the inside to out. So we are excited about this. 153 10/27/09 - WHOLE - BILL 090706 We are honored to be a part of this process, and we look forward to working with Council to make this the best committee ever. Thank you, Madam President.
Thank you very much. Good afternoon. Please identify yourself for the record.
Good afternoon, Madam Chair. My name is Al Perry. I'm the President of the Greater Philadelphia Association of Realtors. We're a trade organization of over 2,000 members. We strongly support Bill No. 090706, and we applaud those members of City Council who authored and sponsored the legislation. We too received a letter from Councilman Green, and we thank Councilman Green for our inclusion and the other members of City Council for our inclusion as well on the opportunity to be on the nominating panel for this new Board of Property Tax Assessment Appeals. We 154 10/27/09 - WHOLE - BILL 090706 welcome that challenge and that opportunity. We agree that the new agency should include individuals whose profession and areas of expertise is real estate. We would like to consider and -- we'd like City Council to consider an amendment that would also broaden the credentials to include two realtor representatives, one with commercial and one with residential influence. We have the tools and expertise to assist in that process as well. We deal with day to day the flaws in our current and existing system, and we applaud members of City Council for addressing that. And we thank City Council for including in the dialogues to create a new fair and equitable real property tax system. Thank you for your continued support in the matter.
Thank you. You've been extremely patient, and we appreciate it. 155 10/27/09 - WHOLE - BILL 090706 The Chair recognizes Councilman Green.
Thank you. I don't have any questions. I thank you for coming to testify and your support for the bill, and, yes, thank you for your patience. But I do want to note for the record as we were sitting around trying to figure out a way to take the Board of Judges out of it but have a fair process of appointing the Board of Appeals, Councilwoman Tasco suggested we use the procedure, which I think she mentioned was used in the School District or used to be used in the School District, where there's a nominating panel. And so it was her idea to come up with a nominating panel, and everybody had suggestions, and we're glad you're willing to participate. Thank you.
Madam 156 10/27/09 - WHOLE - BILL 090706 Chair, one question. Thank you both very much. In conferring and commiserating with the sponsor of the bill, Councilmembers were careful to be as inclusive as possible of professionals who live and breathe this issue all the time, and the sponsor of the bill could be most accurate, but I thought we actually included a representative from your industry. Did we not, Councilman Bill 13 Green? Did we not include a representative from the industry of realtors in the compensation of this bill?
I may be able to provide some clarity. I think I understand. No, we are definitely included and appreciate being included in the nominating panel, and when reviewing the credentials of the people who would be nominated, we thought that those credentials could also include realtors 157 10/27/09 - WHOLE - BILL 090706 who have commercial and residential expertise as well. Just a suggestion for an amendment.
Are there any other questions or comments of the witnesses before us? (No response.)
Thank you, Madam President. MR. McPHERSON: Our next panel consists of Ken Metzner, Daryl LaFontaine and William Kilroy. (Witnesses approached witness table.)
Good 158 10/27/09 - WHOLE - BILL 090706 afternoon. Welcome. Please identify yourself for the record and proceed with your testimony.
Good afternoon. I am Reverend Ken Metzner, a resident of the 500 block of Kimball Street. I am an ordained interfaith minister and the Executive Director of a not-for-profit dance company and movement arts center on South 9th Street, as well as a recovering corporate attorney. I am here today, however, solely in my capacity as an aggrieved taxpayer. I am one of the 15,000 property owners who about eight weeks ago received a notice of proposed tax increase from the BRT, a notice that nearly tripled the taxes on our home from $1,470 to $4,865. Receipt of that notice set me off on a course not only of neighborhood activism, something in which I had never engaged, but also one of intense research that has laid bare for me the BRT's well-documented history of lawlessness. 159 10/27/09 - WHOLE - BILL 090706 This disturbing history, coupled with the BRT's reckless issuance of these latest property assessments, compel me as a minister, as a lawyer and as a citizen to speak out. Before I do that, however, I must say that I am inspired by Councilman DiCicco's earlier comment today when he noted the absence of any Board member of the BRT. I would like to note for the record the absence of the vast majority of City Council members. In fact, as I look around the room, I see present only Councilwoman Brown, Councilman O'Neill, Councilman Rizzo, Councilwoman Tasco, Councilwoman Quinones-Sanchez and Councilman Green, other than, of course, yourself, Madam President. The proposed legislation, I hope, will begin to create the environment for the radical changes that are necessary to address the current and long-lived illegal system of property assessments. As an attorney, I do not 160 10/27/09 - WHOLE - BILL 090706 lightly use the label "illegal," yet I come before you today and say illegal quite deliberately, because, in my opinion, there is no doubt that the acts and omissions of the BRT over the course of many years constitute a pervasive pattern of unlawful conduct that has been tolerated, if not actively supported, by other City government departments and bodies. Much journalistic ink has been spilled in the last six months decrying the broken, unfair and inaccurate BRT system of property assessments, but little attention has been focused on its undeniable illegality, the historic root of the unlawful practices and the possible reasons why such a system has been tolerated. I submit to you that exploration of those issues as part of a process that is complementary to the consideration of remedial legislation like the pending bill is critical. Why? So that we do not continue to make the 161 10/27/09 - WHOLE - BILL 090706 same mistakes that have been made in the past. I certainly am not advocating an exercise in finger-pointing, polarizing attacks or witch hunts, but rather a balanced exploration aimed at identifying and understanding important lessons to be learned for Philadelphia's future, our future. For far too long, the BRT has been permitted to illegally mismanage a key resource of our city, its real property base. The BRT's dereliction of its duties has directly contributed to the decline of our communities, whether it's the spread of abandoned lots and urban blight, the decline in our schools in terms of insufficient funding, and our overall economy in terms of insufficient property tax revenues, flight by young families with children and, of course, the migration of businesses and jobs. It is imperative, therefore, that we acknowledge and understand the 162 10/27/09 - WHOLE - BILL 090706 profound roots of these destructive practices, our respective roles in their perpetuation and our collective responsibility for their remediation. Members of Council have heard from various sources over many years how the BRT's assessment practices are unlawful. I would like to take just a few moments to highlight for the public's benefit some of the reasons why that is demonstrably so.
At the most basic operational level, the BRT routinely ignores requirements imposed under Pennsylvania statutes. I have outlined in my written testimony at least eight serious derelictions and violations of state statutes. I will not repeat them now. I respectively refer Council to my written testimony. S. Constitutions. The Pennsylvania Constitution's uniformity clause requires that property taxes be applied uniformly upon similar types of property, with each member of the same group of taxpayers bearing an equal tax burden. With respect to our block of Kimball Street, for example, the BRT systematically undervalues properties similar to our home, thereby penalizing us as compared to our neighbors. That, of course, is impermissible under the uniformity clause. The BRT's uniformity problems, however, are much bigger than those in evidence on Kimball Street. They are citywide. These statistics that the courts have said determine uniformity as measured in Philadelphia, whether calculated by independent experts or by Pennsylvania's State Tax Equalization Board, clearly show that the BRT's assessments are non-uniform across 164 10/27/09 - WHOLE - BILL 090706 Philadelphia and are, therefore, unconstitutional. It is clear that City Council and other government leaders are aware of this. What is less talked about, however, are what this means in terms of practicality. The lack of uniformity means that vast portions of Philadelphia are paying a far greater share of property taxes than is permitted under the law. This is particularly true for the poorest areas of the City, such as Olney, Mayfair, Kingsessing and Girard Estates, just to name a few. The regressive nature of our property tax system has been known to the BRT and to City leaders for years. 5 percent of the City's property owners to new upward assessments that, of course, are plagued with the same gross legal deficiencies that afflict its prior assessments. Clearly, the BRT has come to believe that it is above the law. It is, therefore, appropriate to implement the measures called for in the pending bill. As I see, however, there are at least three limitations we need to be mindful of with regard to the legislation. First, that it is merely a first step in the process of addressing the issues. Much work remains to be done. 166 10/27/09 - WHOLE - BILL 090706 Two, that it does nothing to help the thousands of people who today are victims of the ongoing illegal assessment practices of the BRT. And, three, that it does not speak to the question of redress for the devastation that the decades of illegal assessment and tax practices have visited on our city, in particular on the poorest areas. I submit that we cannot and must not ignore the extensive past and ongoing violations of the law. Though a discussion of those matters is beyond the scope of today's testimony, I urge City Council, the Mayor and my fellow citizens to give much-needed attention to the subject of appropriate remedial measures. I would like to speak today briefly, however, to the first limitation; namely, that the legislation is but one part of the necessary fix. Mere structural change, even of the magnitude called for in this bill, is 167 10/27/09 - WHOLE - BILL 090706 no guarantee that the underlying practices that created the unacceptable environment and the culture that supported it will evolve. To ensure that they do, we must get to the root of the problem by asking and courageously exploring the answers to some very tough questions, chief among which is how and why did we get here, and what can we do to ensure that we don't end up here again. This question is particularly important in light of Philadelphia's history. Nearly 30 years ago we were in a practically identical situation when court involvement became necessary to force the BRT into addressing what were then widespread inequities in the property assessment practices. Of course I'm referring to the litigation known as Coleman versus Green.
Some lessons apparently take a very long time to learn. We might discover through a diligent inquiry that the current 168 10/27/09 - WHOLE - BILL 090706 problems are merely a function of not having adequate technology to collect, manage and analyze critical data. I recently heard that many City departments are using computer technology that is 7 to 20 years old. If that is so, do we 8 now have sufficient resources dedicated 9 to the acquisition, maintenance and 10 updating of the necessary systems and 11 software? 12 We might also discover through 13 this process that the illegal practices 14 result merely from poor training and 15 supervision. If so, what is being done to address that now? Are we, for example, asking current BRT employees or qualified outside consultants to identify the training and tools that they believe are essential to carrying out their jobs? Or we might discover through this process that this illegal and broken system evolved the way it did and has endured because certain influential interests have benefited from it. As 169 10/27/09 - WHOLE - BILL 090706 uncomfortable a line of inquiry as that may appear to be, it is an important one to consider for the sake of thoroughness and the restoration of integrity. And if the inquiry is handled in an appropriate, non-partisan way, its findings should be of great service to the community. In conclusion, this course-correcting legislation is an important development in the right direction and much work remains to be done. To sweep the most critical issues under the rug or even to permit them to be lost in the haze of pending legislation would squander an opportunity to learn from this experience and to begin to consider appropriate remediation for decades of unlawful assessment practices. May this be but the first step in the necessary healing process for our city. Thank you.
Thank you very much. 170 10/27/09 - WHOLE - BILL 090706 Are there any questions from members of the Committee of this witness? (No response.)
Councilwoman Verna, ladies and gentlemen of the Council and all in attendance, I must disclose I am an employee, civil servant of BRT. I am a Property Evaluator II, but please know I am not here in an official capacity. I am here as a student of politics, as per my degree with Temple University, and I am here as a taxpayer of the City of Philadelphia. Our concern for the proposed --
Excuse me. I don't mean to interrupt you. I believe the stenographer would like you to repeat your name. She didn't hear you.
William Joseph Kilroy. I'm here to express my concerns 171 10/27/09 - WHOLE - BILL 090706 for the proposed referendum which is designed to give more power to the executive branch of the government over the presently independent City tax agency. The Commonwealth of Pennsylvania, in conjunction with the City Charter, has created a check and balance system designed to protect the taxpayers of this first class city from any one branch of government getting control over the property tax agency and, may I add, independent tax agency. I'm afraid that if the executive branch of the government's power is increased, the burden of property taxes, in conjunction with the highest wage tax and sales tax in the state, will result in further erosion of our tax-paying population. The newspaper suggested that the present tax agency is broken and dysfunctional. If this is the truth, then I ask, why does the County of Philadelphia have the lowest property tax base out of the five-county area? The 172 10/27/09 - WHOLE - BILL 090706 property tax agency is the only entity that truly provides tax relief. Do the people understand that placing the property assessors under the Finance Department gives direct control to the Mayor's Office? Do the people understand this? Do the citizens understand the repercussions of giving executive and legislative power of appointment over the seven-member Board, which is presently appointed by a majority of judges of the Court of Common Pleas for a term of six years? Can we rely on our newspapers and academics to educate our citizens on their options or do we take advantage of lack of civic knowledge, as we did when we dissolved the Fairmount Park Commission, a commission which was greatly responsible for creating and maintaining the largest municipal park in the country, providing quality of air, providing quality of water and providing quality of life, which is now in jeopardy of shrinking, as 173 10/27/09 - WHOLE - BILL 090706 illustrated by a bill which was submitted to Council for residential development of the parkland the very same week the Park Commission was dissolved. I suggest that we think hard and long before we open Pandora's box, which once opened is not easily closed. I say please, Council, be aware of conflict politics, which is designed to grab and consolidate power. Thank you so much.
Thank you. Any questions or comments from members of the Committee of the witnesses? (No response.)
Thank you again for your patience. Our next witness? MR. McPHERSON: Our next panel consists of Rene Goodwin and Jeff Rush. (Witnesses approached witness table.) 174 10/27/09 - WHOLE - BILL 090706
Good afternoon. Please identify yourself for the record.
Good afternoon, Madam Chair. My name is Jeff Rush. I'm President of Queen Village Neighbors Association. I'm also a long-term resident and business owner in the City of Philadelphia. I want to thank the author of the bill and members of the Committee who support the legislation. I want to say that the neighborhood groups have been meeting individually and collectively now since late summer and have expressed concerns, grave concerns, about the inherent inequities with the current system of assessments and appeals. In mid October, the following two-part resolution was endorsed by representatives from several 1st District neighborhoods. The communities of Queen Village, Pennsport, East Passyunk Crossing, Washington Square West and 175 10/27/09 - WHOLE - BILL 090706 River's Edge strongly supports legislation to reform or otherwise dismantle the BRT and looks forward to public hearings in City Council in order to participate in deliberations as to how best to put years of abuse and miscalculation by the current failed process of determining market values for tax purposes behind us. None of our civics, Councilman Green, got an invitation to participate in the process, but we're looking forward to hearing from you. We'll wait for our letter. You have undertaken this task, and we appreciate and support your efforts to effect a total restructuring of the system. This is a vital first step in reforming the property tax assessment and appeals process. On October 23rd, the Mayor's Task Force presented its recommendations for future tax policy to Mayor Nutter. The Task Force has proposed shifting a 176 10/27/09 - WHOLE - BILL 090706 greater portion of taxes to property owners. However, they acknowledge this shift will result in a precipitous and roll and tax increase on the City's middle class. As evidenced in public hearings sponsored by Mayor Nutter earlier this year, middle-class taxpayers citywide accept the need to pay their fair share of the tax load, but by no 11 means have written the City a blank check. To address the ballooning tax load, the tax Task Force recommended a state homestead tax reduction, built-in caps and other means to buffer or lessen the burden of these new taxes. This is most assuredly a step in the right direction, but the reality is, according to the tax Task Force report and testimony given by Paul Levy here today, the necessary technology to ensure fair and accurate assessments will not be in place before 2012. I want to say that Councilman 177 10/27/09 - WHOLE - BILL 090706 DiCicco alluded to the unfairness of continued assessments or continuing to make assessments given the fact that these assessments are based on bad data. The second part of that resolution that I mentioned in the beginning was, further, on behalf of the residents of the aforementioned communities, the respective Boards of these associations call on City officials to rescind all planned and actual tax increases for 2010 and immediately enact a moratorium on new real estate tax assessments by the BRT or its successor unless or until the process for determining market values has been made demonstratively fair, accurate and removed from political contamination. We strongly urge City Council to immediately apply this just and correct remedy in order to limit the damage done by decades of unprofessional and unfair tax assessments by the very agency you seek today to abolish. 178 10/27/09 - WHOLE - BILL 090706 Thank you.
Thank you very much. Good afternoon. Please identify yourself.
Good afternoon, Madam Chair. My name is Rene Goodwin. I am a lifetime resident of Pennsport and a member of the Pennsport Civic Association. I always value the opportunity to come here before you and before the members of Council. I value that and take it not for granted. The bill that is being considered today has taken a great deal of work on the part of many to, one, bring focus to the issues and inadequacies of the current system and also to craft the legislation in an attempt to improve the process and the structure. I would like to bring attention to a few issues for your consideration. That the process must be fair 179 10/27/09 - WHOLE - BILL 090706 and accurate is something on which all would seem to agree, but how best to achieve that is indeed a challenge. To be accurate, there must be adequate resources in place. At startup, the resources may have to be augmented until the process is securely and effectively in place. To do otherwise would allow the same inequities to continue only under the guise of improvement. Fairness is another matter. To me, fairness means that homeowners may pay their fair share, but not so much that they are forced to be moved from their homes. This is not a statement made for the sake of drama. It is the situation that I, like many others, find myself in. For if the proposed assessment figures I have seen are instituted, my husband and I can no 22 longer live in our home. When we purchased our home, we did as all home buyers do. We had to qualify according to loan-to-value ratio 180 10/27/09 - WHOLE - BILL 090706 and income-to-debt ratio. It took much financial planning and sacrifice for us to purchase our home and do the huge amount of repairs required on an old house. Because we wanted to stay in the neighborhood in which I grew up, we now have debts we will most likely not pay off in our lifetime, but we'll do our best. There is not a lender on the planet that would have approved us for an 80 percent loan based on the proposed market value. If the proposed figures are applied, we'll be gone long before the end of the debt or long before the end of our lives. Is this fair? Fairness also means that some sort of consideration should be given to those who invested their lives and their life savings in a home and in a community. If a newbie comes in and buys a newly constructed home, they are given incentives, and that's okay, while those of us who have maintained the community 181 10/27/09 - WHOLE - BILL 090706 and paid their fair share all along are penalized with an increase in taxes that may well be unaffordable. Don't penalize those of us who have been the bedrock of this city. The uniformity clause of the Pennsylvania Constitution says, in essence, that like things must be taxed alike. Where that becomes a challenge is in those neighborhoods, particularly along the waterfront, that were built during the colonial era. During that time, builders did not build tracked homes. Instead, someone purchased a piece of land and built a house on it. Then someone else built another home, a totally different home on the land they purchased. As time passed, the often times mostly wooden houses needed to be demolished as they were no longer structurally sound and left behind lots of vacant lots. So here comes the dilemma: On some blocks in my neighborhood and others 182 10/27/09 - WHOLE - BILL 090706 you have a vast disparity in the age and type of structure. On my block, for example, the oldest house dates back to the late 18th century and the newest is not yet completed. Of 29 single-family homes on my block, 12, or nearly 50 percent, are tax abated. One cannot assume that all properties in these kinds of settings have the same value. They must be individually and carefully appraised based on many features, and it must be done by skilled personnel.
Section 2-202, Paragraph 2, which addresses the compensation of the Board of Appeals, states that at least one of the remaining members shall be a homeowner and/or commercial property owner within the City of Philadelphia. 6 percent came from single-family properties. This 183 10/27/09 - WHOLE - BILL 090706 clearly indicates to me there needs to be inclusion of homeowners on the Board. The education of the public will need to be a major component in the new system. More than information on a website will be necessary. As an example, Section 2-205, which deals with the powers and duties of a Chief Assessment Officer, Paragraph 2, Subsection (d)(ii) reads, "Set standards for property assessments that shall include, at a minimum, an acceptable limit on the deviation of the Common Level Ratio from the Pre-Determined Ratio, an acceptable limit on the Coefficient of Dispersion, and an acceptable range from the Price-Related Differential," et cetera. My point, I realize that no one would absolutely ever consider that as part of an informational process, but clearly, this has to be presented in a way that people understand. I suspect that even someone who has a Master's in 184 10/27/09 - WHOLE - BILL 090706 English may not fully understand what that's saying. Why not provide training or briefing sessions to staff of civic associations to help explain the new process, particularly as it relates to appeals. There are also a number of housing agencies and housing counseling programs as well who I'm sure would be willing to do the job. And, finally, there are the intangibles, those things that are most difficult to quantify, things like struggling to keep and maintain your home, not looking at it as merely an investment but is where you live your life, where you moved when you got married, where your children grew up, where you stayed when the neighborhood was struggling as much as you were, but it was, after all, your home. Don't underestimate the value of a person's life commitment to a community. " They want to place more burden on things that don't move, like real estate. Maybe real estate can't move, but homeowners can, and if you don't do this carefully and with respect, they'll have to. Thank you.
Thank you very much. The Chair recognizes Councilman Green.
Thank you very much for coming in and testifying, and we do appreciate your patience, as the President said. I do want to note that Councilwoman Sanchez and I agree with your statements with respect to the Tax Reform Commission report and a bunch of other things, and we on City Council are going to try to do what we did with this bill and work collaboratively and come up with -- produce tax reforms that 186 10/27/09 - WHOLE - BILL 090706 will eliminate the disincentive to doing business and living in the City of Philadelphia, as our tax laws currently do. So we are working on that, and I just want to let you know that that report will land with a thud, as far as I'm concerned, here in City Council.
Thank you. Thank you very much. MR. McPHERSON: Our last panel consists of Helen Gym, Joshua Vincent and Christine Balka. (Witnesses approached witness table.)
My name is Helen Gym, G-Y-M, Philadelphia public school parent, and I'm here with Michael Churchill from Public Interest Law Center of Philadelphia, who will go right after me. 187 10/27/09 - WHOLE - BILL 090706 First of all, I want to thank City Council for holding these hearings and I also want to thank City Council and the Mayor for their recognition and efforts to reform the Bureau of Revision of Taxes. I'm here to testify about something that isn't quite in this current legislation, and it's about the role of the 80 or some School District employees of the Bureau of Revision of Taxes who are on the School District payroll. As you know, this issue and use of School District money is not a new one. Every year this issue has come up about whether the School District should be funding the BRT employees. But what makes things different this year is, not only has the District made itself clear, but the SRC, the Mayor, parent and advocacy groups and community members have also made it clear that the time of this system is now over, and that the need is paramount to take the BRT 188 10/27/09 - WHOLE - BILL 090706 employees off the School District payroll immediately and ensure that the full amount of the four and a half million dollars is fully used for children and educational needs. And there are a couple of reasons why this is essential at this time. Number one, the School District this year must close a $200 million shortfall and has made clear that they intend to take 4 million of that money out of discretionary school budgets, which is a very serious concern. That is money that is used for teachers and librarians, for field trips, for books and supplies. So there has never been a more obvious time when the cost of these employees are a direct sacrifice to our children. Four and a half million dollars for these employees would cover the amount that would be eliminated from the School District for the discretionary spending that will come out of schools. The second reason why it's 189 10/27/09 - WHOLE - BILL 090706 important to consider this issue is that we would ask this Council to investigate whether there is any other school district in the Commonwealth of Pennsylvania that actually does this practice. We were encouraged to hear Councilwoman Tasco say that she believes that Philadelphia should be treated like other counties, and we would like to see that happen as well. We would like to see the School District treated like other counties and that the City perhaps operate like every other county in this Commonwealth that does not require the School District to pay any sort of fee or any sort of amount or put any employees on its payroll for property tax assessments, which is the function of government. The third reason why we encourage City Council to take a strong stand on this issue is because we strongly believe that school funds are for kids. It's beyond whatever the 190 10/27/09 - WHOLE - BILL 090706 politics are, but it's also that we have 84 petitions that hopefully are in your mailboxes from average people all over the City who, in the last hours, sent 6 in their concerns about why they want 7 this money put back onto the School 8 District, and many of them are 9 Philadelphia public school parents. The 10 vast majority of them are parents. A 11 number of them are teachers. Some of 12 them are librarians. And the concern is 13 clear. m. for children in dangerous 21 neighborhoods. 22 Another person wrote in, It is 23 unbelievable that our schools have 24 suffered with inadequate books, teachers, too large classrooms, rundown facilities 191 10/27/09 - WHOLE - BILL 090706 and all the other evils of public education, while other individuals have received remuneration for doing unprofessional jobs. School funds should not be used for anything else except directly for our students and schools that desperately need any funding they can get. Another person wrote, Who is progressive reform and who wants the machine?
We will find out, and we hope and pray that this money is used to better our children's schools. Whether or not you agree with the entire tenor of the statements, the feeling from Philadelphia -- for those of us who are deeply concerned, and I know that City Council is deeply concerned about public school education -- is that this system needs to end and, frankly, that this money needs to go to our children and can be used best for our kids. To the statement made by 192 10/27/09 - WHOLE - BILL 090706 Mr. Dubow that there should be fees that are charged, again, our concern is is that the State of Pennsylvania, the Commonwealth of Pennsylvania has done an extraordinary job in the last two years under a new education funding formula to dramatically boost the amount of money that goes into public schools. What we need to see is the City do the same. And, unfortunately, what we see is that the City in its loss around property tax funding has actually gone backwards on its ability to improve the funding for the public schools. I don't think it's intentional by any group in here, but the fact of the matter is is that the City's money is declining in terms of investment and the state has dramatically spiked its investment, and what we don't want to see is that local funding or things like this become any sort of barrier to the appropriate funding of our public schools. And what we need to see is that the City becomes a leader and recognizes 193 10/27/09 - WHOLE - BILL 090706 the fact that the money that we use for our schools needs to go to our children and that other issues can be put aside. They're complicated, I understand that, but that this is an essential issue. Again, these are the dozens of petitions that people have sent just in the last hours to your offices about 10 this issue. And if there are any 11 questions, we're happy to answer. 12
13 Excuse me. Councilman Green, did you 14 want to be recognized now? 15
Yes, Madam 16 President. Thank you. 17 I want to thank you, Helen, for 18 your passion and hard work in this area. 19 I just want to note for the record that 20 the Administration has said that they 21 intend fully to get $4.2 million from the 22 School District one way or the other 23 whether or not these are City employees. 24 And although Helen alluded to it, I just wanted to make that clear for 194 10/27/09 - WHOLE - BILL 090706 the record that that was Rob Dubow's testimony earlier today. But I appreciate your hard work in this area. Thank you.
Thank you, Madam President. My comments go to the same point mentioned by Councilman Bill Green. Rob Dubow did stipulate that, and I need to ask, did you have the opportunity to be here when the Director of Human Resources spoke to the process they need to follow internally so that they do what we don't want them to do, and, that is, to rush to the goal? All of us agree that the goal is what it should be, but they have an internal process that they want to honor. Were you privy to that testimony?
I did hear some of that. So I would like Mike Churchill to address the concern around Rob Dubow's 195 10/27/09 - WHOLE - BILL 090706 comments about whether there will be the requirement that the School District pay for that service. But I do want to add that we too at the School District and as parents are very anxious about what the School District is saying about closing the shortfall by taking out $4 million from our public schools before the current year ends. So this is something that is impending, it's not clear, there's not a whole lot of clarity around it. We certainly want to talk to the Council Education Committee about it, and we will be actively doing that, but please understand also that this is something that is very clear and urgent for public school children, families, teachers and principals at the schools, that this is also impending and so it is very difficult for the schools to be told to wait and see. And I think that in terms of what happens to our children needs to kind of let that -- I understand that there are complications around the 196 10/27/09 - WHOLE - BILL 090706 overall system of it, and I respect Council's need to make sure that that's done really well, but I sort of feel that in terms of the school needs, that perhaps that could be addressed through the City and not have the School District and our kids pay for the longevity.
Good afternoon. My name is Michael Churchill. I'm at the Public Interest Law Center of Philadelphia. I'm delighted to be here. I just want to address a narrow piece of this problem, which is to make it clear that the state statutes under which the assessment process is conducted requires that the cost of the assessment process be borne by the county and not by the school districts. And this is uniform across the state. As Helen Gym said earlier, there is not a single other school district in the State of Pennsylvania that pays for the assessment process. The state statute says that in 197 10/27/09 - WHOLE - BILL 090706 November the County Board of Assessment and the Board of Revision of Taxes in the first class counties shall provide the assessment list to the School District. It doesn't say, and shall demand a fee. They shall get the assessment list. Furthermore, the statute says all salaries necessary for the proper expenses of the Board shall be paid out of the treasury of the county, not from the School District's. There is, frankly -- it would be an ultravirus for the School District to pay a fee for getting something that the statute says they shall get free. So I don't think, frankly, that his proposal earlier today, that if we don't get payment for the employees, we will get a fee for the service, somehow or other can possibly hold up. I think what is important for City Council, which is going to be faced with the problem of finding the expenditures for this money process, 198 10/27/09 - WHOLE - BILL 090706 nevertheless establish clearly that this will be a city-county function, not a School District function as you go forward. Frankly, many of the advocates in the City concerned with School District spending for this rather than for instructional practices have decided that this is a very excellent process that City Council is going through to devise a new system and are willing to give the process time. But I don't think you should expect that they are going to say and just turn or roll over and say, Well, we don't care if you put this in a different form, we will continue to pay for it. So it's really important, I think, that Council set the proper terms for compliance with the state law so that we don't have to have the foolish expenditures for litigation that would otherwise ensue.
Point of information. 199 10/27/09 - WHOLE - BILL 090706
Thank you, Madam Chair. Just a couple of points. Bensalem School District reimburses its county for the collection of taxes and fees. I'm certain there are others in the State of Pennsylvania. Secondly, the arrangement -- and I'm not arguing the merits of it one way or not, but you're putting your opinion on the record and I just want to correct the record. This is a voluntary arrangement with the School District. Under the City Charter we are allowed to work together. Shared service arrangements are specifically authorized, and essentially that is the arrangement. It's completely voluntary, and I'd like -- I love the passion you have for the schools, but, I mean, the money that's coming from the state isn't making it into the classroom, 200 10/27/09 - WHOLE - BILL 090706 and that's far more money than $4 million. Let's put our energy there. Finally, which libraries would you like us to close to pay for this? Thank you.
Well, let me, if I may, address those, at least two of the concerns. The Bensalem situation which you described is for the collection of taxes, is a completely different subject under the state statutes. Tax collection is a different matter from tax assessment. They're not done by the same bodies. And consequently, that doesn't change the facts as I understand them, which is that assessment is not to be paid for. Secondly, you raised the issue of the voluntary agreement. Unfortunately, I don't believe -- when you read that section in the Charter that allows for cooperation, it describes a number of services for which that can -- those agreements can be made. Tax 201 10/27/09 - WHOLE - BILL 090706 assessment is not amongst that list, and, frankly, I think the question would be whether in fact it would be proper for the School District to enter into a voluntary agreement to pay for something that the law says they get free.
Point of information. Thank you. Just for the record once again, if the City enters into a new arrangement with the School District, it can certainly be for tax collection. I mean, the agreement can be characterized however the City and the School District would like. So I certainly hope that your litigation and energy and advocacy for the kids is not wasted on this issue, because there are so many more important issues facing the School District than this, and all the City has to do is get reimbursed for tax collection, is what you just testified for, rather than the assessment function. And that's 202 10/27/09 - WHOLE - BILL 090706 functionally what we're doing now, the services we provide with respect to the legal department collecting the taxes and all the collections, judgments, going to court, all that stuff, sending out the bills. So we can be reimbursed for collections. So let's not waste a lot of energy on this. Thank you.
Well, in response, I guess I would ask that City Council consider in addition to your asking to what extent we need to see things as a priority, that the City of Philadelphia needs to see improvement in its local funding as a priority, and right now it's not. It's just frankly not. School District funding for the City of Philadelphia is at its lowest point since the Street Administration, and that's a disappointment. I think that has a lot to do with some amount about the -- with the situation around the recession, but, frankly, we feel also that City 203 10/27/09 - WHOLE - BILL 090706 Council -- and what we don't want the BRT to become and the insistence upon getting its money for the BRT no matter what and through whatever channels and through whatever kinds of technical ways that you can get around what we believe to be responsible school funds is, we don't want the BRT to become another example of the City evading its responsibilities to not only maintain funding levels for schools, but to, frankly, come up and map out a more progressive and expansive and deeper investment in our public schools. So part of the frustration is that it's hard because every single example that we want to talk about is sort of like, Well, maybe you don't need to spend your time on that. So it's like tax abatements. Do we need to spend a lot of time on that. It's the Parking Authority. Do we really need to spend a lot of time on that. It's the red light camera money. Do we really need to spend a lot of time on that. It's property tax 204 10/27/09 - WHOLE - BILL 090706 assessment. How much money can we get at fair assessment. That obviously is a top priority. People recognize it, but not necessarily through the school funding end. And we are saying that the BRT at some point, it can't be all the time telling us over and over and over again, Find something else. Could you find something else that might be a better use of your time. And, frankly, I don't think it's fair to pose which libraries will you close versus the School District money that goes there. I don't know that that's a clear choice that's happening. However, I do feel that there is a clear impending thing that is happening to schools around the $4 million that the School District may be seeking from each and every individual school, divided over all the schools. That's a very serious issue. That's something that a lot of schools are going to feel. That's something that's going to happen directly 205 10/27/09 - WHOLE - BILL 090706 to our children's classrooms. And I know that City Council, this Council as much as any other, if not more, has really been very vocal and active and supportive of public schools. That is just phenomenal for us, and I think it's so important that what we need to hear is just some amount of acknowledgment and recognition of concern around public school funding, a need to seriously invest in long-term strategies, and that we don't parcel off, Well, this is yours, but this is not yours, this is okay to talk about, this is not okay for you guys to talk about, and that we need to see something. So I still think, frankly, that -- and maybe once these petitions are in your office, that you'll feel a little more clearly. This is not so much of an abstract issue for people. I think that a lot of parents really -- it's not something like they don't really care about. I was shocked that this many 206 10/27/09 - WHOLE - BILL 090706 petitions came across our desk within hours of asking people to write in to their Councilpeople to do it. So I do hope you'll take a look at it. I hope you'll take a look at the zip codes, that they come from all around the City. I hope you'll take a look at the comments, and that really people aren't talking about anything disparaging about any City agency or any kind of thing, and very little has anything to do with Council.
It's really about saying 14 somebody needs to stand up and say this 15 has got to be a school funding priority. 16 And I know you said it in many different 17 contexts, but I think this is one of the 18 very few examples where people can be 19 super concrete, like I will sacrifice 20 this for the children of this city. And 21 that's a very powerful statement that 22 we're sort of waiting to hear. 23
Let me just add 24 one other point. I agree entirely with you, Councilman Green, that in the end 207 10/27/09 - WHOLE - BILL 090706 it's the question of what the overall mix is. There's plenty of opportunities for City Council and School District to divide the overall cost and sharing, and this Council and the School District have worked well together on many of those items. But I think it's worthwhile remembering that historically this was never a School District expense. It was one that actually was borne by the City of Philadelphia until they ran into a problem of how are we going to make sure that these particular employees, set of employees, could continue to operate safe from some of the strictures of the civil service requirements. And consequently, the School District took on those expenses at the request of the City. And now that those reasons for preserving those jobs apart from the Civil Service Code is going to disappear. It seems to me that the whole question of whether that particular piece of the expenditure should be continued to be borne by the 208 10/27/09 - WHOLE - BILL 090706 School District needs to be reconsidered, and it provides an opportunity for -- as you're considering all of the pieces of the expenditure pie to say, should that now go back as being and letting the School District do what they did originally, which is recapture those funds and use them for instructional purposes instead of for the purposes that the City asked the School District to absorb for it.
Thank you, Madam Chair. I have tremendous respect for you, Mr. Churchill, and I just -- facts are important, as you know as an attorney, and so I don't want our record to be inaccurate. Basically, with respect to the BRT and how the School District started paying for it, this actually dates back to the '20s, '30s or '40s. It pre-dates 209 10/27/09 - WHOLE - BILL 090706 the new Charter. It pre-dates the time that there were political activity restrictions. And that historical fact has made it possible for them to continue political activity, but it was not put in place for the nefarious reasons that you suggest, as a matter of fact. Also, state allocation to schools was 171 million short of planned. The School Finance Director, Mike Masch, said that the property tax is up, and that allows the school to have a balanced budget for the first time in seven years. Four million dollars is one-seventh of one percent of the school budget, and when asked by Chairman Archie at a recent SRC meeting whether or not this $4 million impacted the education of kids at all, he said that there was no impact. "None" was his answer. So just all that should be on the record. And I agree with Helen, and I look forward to working with you on all the other things you mentioned, and I 210 10/27/09 - WHOLE - BILL 090706 don't want this one issue to stand in the way of what will hopefully be a very productive relationship, fighting for schools, for kids, for more funding from the City. So thank you again.
Well, thank you. Again, I want to make it clear, I didn't use the word "nefarious." I don't think that that would be the appropriate word to describe what I said. It seemed to be perfectly proper that that could have been done to manage the personnel problem that previously existed. My understanding of the history is slightly different than yours as to when those provisions were first made, and I'll have to review them and we'll confer about it. On the one matter, though, I must say, again, as much as I respect Mr. Masch, I didn't hear anyone who understood how what he said could be possible, nor did I hear -- and there isn't, I think, an advocate in the City 211 10/27/09 - WHOLE - BILL 090706 that believes that if they got $4 million back in this process, that it would not indeed be able to improve the instructional practices. And, frankly, it's one of those matters that I hope that we will have an opportunity to talk to them further about.
And I hope you know that also should the $4 million go back into our schools, we would certainly fight to ensure that that money wouldn't be taken out of discretionary spending, could be used to buy 50 librarians for schools that no longer have one, reduce class size by a third in first-grade classrooms across the City, that there are concrete numbers that we can use with the 4 million. You know that we'll be all over the School District to make sure that that happens. So I do hope, though, that $4 million isn't seen as some kind of puff thing, because we fought around the School District for far less, because we 212 10/27/09 - WHOLE - BILL 090706 thought it was important, because it makes a statement beyond the amount of money and because money does make a difference no matter what the amount is, and it adds up over time. Dr. Ackerman was also here in Council testifying last spring that the total amount of money that she had devoted toward 2014 would be $70 million over the next five years. So $4 million in that context is a huge amount of money, and it's not to say that in the context of a $3 billion budget, people want to -- it's hard to decide what becomes a priority, but I do think that if you take a look at some of the petitions that do come across, that people do feel like it's an important issue, and maybe it's perhaps as important an issue for its symbolism as it is about the actual dollars of it, but it's still something that resonates with a lot of people. So thank you very much, 213 10/27/09 - WHOLE - BILL 090706 Councilman, and you're absolutely right, there will be a lot of collaboration with Council.
Good afternoon. Kindly identify yourself for the record.
Good afternoon, Madam President. I'm Joshua Vincent. I represent Henry George Foundation. We're based in 413 South 10th Street. I'm speaking in favor of the bill. And this bill reminds me of the French Revolution when the leaders proclaimed it the year zero. And that's what we need. We need an absolute restart. When we think about the overassessment and, therefore, the over high tax bills that poor and working-class neighborhoods have had to pay for decades, it's outrageous. We've had tax bill by ambush. Councilman DiCicco just left. I remember in 2003 District and District 2 were heavily hammered by 214 10/27/09 - WHOLE - BILL 090706 assessments that came out of nowhere, even in declining neighborhoods. We've been working with localities and states with implementation of laws and practices that establish alternative forms of real property taxation, specifically land value taxation. We've been doing it since 1926. And you have my prepared testimony, so I'm just going to hit for consideration to the Council and others my core points and some core principles. It's inevitable that the City of Philadelphia like the School District will become more reliant on the real property tax in the near future. So in order to fix the systemic problems that face our schools, social services and infrastructure, reliable property valuations are a mandatory tool to ensure fairness, transparency and stability of revenue. The property tax provides that, and this legislation is necessary. I've been speaking in front of 215 10/27/09 - WHOLE - BILL 090706 Council for about ten years on this subject and I always go back and encourage people to look to the State of Maryland as a mechanism for appeals. There's a three-tier system of property tax appeals, and I hope that that can be incorporated into the final form. We would also suggest a few more additions to the bill that we think would help transparency and fairness, number one being a Taxpayers' Bill of Rights. The Commonwealth of Maryland provides both in statute and administratively a Taxpayers' Bill of Rights so that they know how to go through the appeals process. And when you do bring in this year zero of full valuation -- and short time is possible -- taxpayers will need that resource. I would make the length of sales and property tax information available to ten years instead of five years, which we saw in the bill, simply 216 10/27/09 - WHOLE - BILL 090706 because when you go to sites like Zillow or Property Shark or when you look at the Case-Shiller House Index, they look at trends that go back ten years, and we think that that would be important. It would help the taxpayer. Finally, when it comes to the appeals end of this, we would urge a stronger residential homeowner presence on the Board of Appeals. An overreliance on non-residential stakeholders and Board members may lead to the common tendency of undervaluation of non-residential properties and misallocation of land values into building values for the purposes of commercial depreciation. That's a trend that is battled all across the country. Finally under assessments, an independent Board, not beholden to the revenue process, is long overdue and welcomed. We'll have greater transparency and fairness. It will make Philadelphia also one of the few counties 217 10/27/09 - WHOLE - BILL 090706 in the Commonwealth that follows the law, possibly avoiding the inevitably of expensive legal action by aggrieved taxpayers. Modern assessment techniques make annual valuation, indeed even real-time valuation, a reality with far less monetary outlay than in years before. Clark County, Nevada and Washoe County, Nevada update their assessment base on a daily basis. If they can do it, we can do it. Coupled with an efficient appeals process, the tendency of non-residential property values to decline after revaluation can be ameliorated by an honest assessment process, as well as honest valuation of land in the land allocation between land and buildings.
Again, this is a very progressive, very forthright piece of legislation and the Council is to be congratulated for starting the year zero. 218 10/27/09 - WHOLE - BILL 090706 Thank you.
Thank you very much. Good afternoon. Thank you for your patience. Please identify yourself for the record.
Thank you. My name is Sheila Simmons. I'm the Education Director for Public Citizens for Children and Youth. My colleague, Christine Balka, had to step out, so I'm going to provide the testimony. PCCY works to improve the lives and life chances of children in the Philadelphia area by improving their access to quality education, healthcare, childcare, child welfare and juvenile justice services, and I want to thank you for the opportunity to testify on Bill 21 No. 090706 today. PCCY urges City Council to support this and all attempts to professionalize the City's property tax system. Greater accountability and 219 10/27/09 - WHOLE - BILL 090706 confidence in the system are essential pre-conditions for moving to an Actual Value Initiative, which PCCY favors, for its ability to generate much-needed tax revenue to support the services - health centers, recreational opportunities, libraries, schools that children and families increasingly rely on. While we favor this bill, we believe it should explicitly remove 80 BRT employees from the School District of Philadelphia's payroll. These employees cost the School District more than $4 million a year. At a time when the District is forced to scale back educational programs that are in great demand, including space in alternative schools, a reengagement center for high school dropouts and school-based behavioral health programs, at a time when we are delaying the implementation of our key components of the School District's strategic plan and at a time when the School District faces a $180 220 10/27/09 - WHOLE - BILL 090706 million projected deficit, the loss of this $4 million is very concerning. As the School District strives to meet its ambitious goals for 2014 and the City works to realize the goals the Mayor outlined when he took office, these employees are in limbo, accountable to neither the District nor the City for working to improve the lives of children and families here. Rather, their presence on the School District payroll is an anachronistic reminder of the City that you, the Mayor and voters have expressed a desire to leave behind, not an inspiration for the kind of city we want to create for our children and the future. PCCY urges you to support the proposed bill, while amending it to remove BRT employees from the School District's payroll. Thank you. And I'm happy to say, I was not here earlier for Mr. Dubow's comments about the $4 221 10/27/09 - WHOLE - BILL 090706 million, but I did just hear the exchange, and I have worked closely with Helen Gym and with Mr. Churchill, and I do support their view that the assessments is a cost that should not be borne by the School District but instead by the county.
Thank you very much. Are there any questions of the witnesses? (No response.)
Thank you again. MR. McPHERSON: I would like to identify that written testimony has been submitted by the Board of Revision of Taxes Chairwoman Charlesretta Meade and by the Greater Philadelphia Chamber of Commerce President Robert Wonderling, and I have no other individuals to testify.
Do we have anyone else that would like to testify? 222 10/27/09 - WHOLE - BILL 090706 (No response.)
Seeing no one, I thank everyone for their patience, and the Committee will stand in recess until the call of the Chair. Thank you very much. (Committee of the Whole adjourned at 2:50 p.m.) - - - 223 CERTIFICATE I HEREBY CERTIFY that the proceedings, evidence and objections are contained fully and accurately in the stenographic notes taken by me upon the foregoing matter on October 27, 2009, and that this is a true and correct transcript of same. ______________________________ MICHELE L. MURPHY RPR-Notary Public (The foregoing certification of this transcript does not apply to any reproduction of the same by any means, unless under the direct control and/or supervision of the certifying reporter.)