COUNCIL OF THE CITY OF PHILADELPHIA COMMITTEE ON APPROPRIATIONS - - - Room 400, City Hall Philadelphia, Pennsylvania Thursday, December 3, 2009 9:30 a.m. - - - PRESENT: COUNCILWOMAN JOAN L. KRAJEWSKI, CHAIR COUNCILMAN DARRELL L. CLARKE COUNCILMAN FRANK DiCICCO COUNCILMAN W. WILSON GOODE, JR. COUNCILMAN BRIAN J. O'NEILL COUNCILWOMAN MARIA QUINONES-SANCHEZ COUNCILWOMAN DONNA REED MILLER COUNCILMAN FRANK RIZZO BILL 090831 - An ordinance authorizing transfers in appropriations for Fiscal Year 2010 from the Grants Revenue Fund... BILL 090736 - An ordinance authorizing transfers in appropriations for Fiscal Year 2010 within the Grants Revenue Fund... BILL 090738 - An ordinance authorizing transfers in appropriations for Fiscal Year 2009 within the Water Fund... - - - 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. The Committee on Appropriations is about to begin. Will the Clerk please read the title of the bill.
Bill No. 090736, an ordinance authorizing transfers in appropriations for Fiscal Year 2010 within the Grants Revenue Fund from the Director of Finance - Federal Stimulus Funding to certain or all City offices, departments, boards and commissions; and Bill No. 090738, an ordinance 15 authorizing transfers in appropriations for Fiscal Year 2009 within the Water Fund from certain or all City offices, departments, boards and commissions to certain or all City offices, departments, boards and commissions; and Bill No. 090831, an ordinance 22 authorizing transfers in appropriations for Fiscal Year 2010 from the Grants Revenue Fund, the Director of Finance - Provision for other grants to the General 3 12/3/09 - APPROPRIATIONS - BILL 090831, etc. Fund, the Department of Revenue and the Grants Revenue Fund, the Department of Revenue.
Is there anyone from the Administration? (Witness approached witness table.)
Good morning, Councilmember. Steve Agostini, Budget Director for the City of Philadelphia, also serving as the Recovery Officer for the City.
Could you give us the testimony on Bill No. 18 090831 first.
I am happy to do that. It will be the same testimony that I read on the 19th. So would you like me to read that into the record?
Oh, tax amnesty. 4 12/3/09 - APPROPRIATIONS - BILL 090831, etc. That would be the esteemed Revenue Commissioner.
Good morning. COMMISSIONER RICHARDSON: Good morning, Councilwoman Krajewski. Keith J. Richardson, the Revenue Commissioner. Good morning, Councilwoman Krajewski and members of the Appropriations Committee. Keith J. Richardson is my name. I'm here today to present testimony in support of Bill No. 17 090831, which is proposed to authorize the General Fund and the Grants Revenue Fund appropriations for the Revenue Department for Fiscal Year 2010. The proposed ordinance will transfer from the Grants Revenue Fund to the General Fund 250,000 in Class 100 to support personal services, 2.2 million in Class 200 to support the purchase of services, and 5 12/3/09 - APPROPRIATIONS - BILL 090831, etc. 150,000 in Class 300 and 400 to support materials, supplies and equipment. I am also asking to transfer to the Grants Revenue Fund $10 million in Class 200 to support the purchase of services. The total amount requested is $12.6 million. The additional funding is needed to support the Administration of a proposed tax amnesty program which, if approved, will commence on May 3, 2010. The City needs $10 million to obtain a consultant firm to perform various tax amnesty functions. These functions will include analysis of delinquent accounts, administering the outgoing communications by mail and by telephone, establishing a customer service call center to handle large call volume, collecting of all payments and providing the City with detailed reporting of amnesty activity. It is necessary to also reimburse the consultant for collection services provided on behalf of the City of Philadelphia. 6 12/3/09 - APPROPRIATIONS - BILL 090831, etc. I am asking for 2.2 million to be used to pay for programming that may be necessary to implement the amnesty program requirements and for the securing of a consultant to provide advertising services. During the amnesty period, existing information technology infrastructure will need to be retooled to allow for penalty and interest changes and waivers, as well as other payment processing changes. A successful tax amnesty program must be well publicized. As a result, the City will have to secure an advertising firm to develop and execute a coordinated advertising and public relations service campaign targeted to all eligible tax delinquents as defined by the City's tax amnesty program. The campaign is expected to educate taxpayers on the existence of the tax amnesty program and motivate delinquent taxpayers to participate and take advantage of the program. Advertising will occur through print 7 12/3/09 - APPROPRIATIONS - BILL 090831, etc. media, radio and Internet and also on television. In addition, the $250,000 increase in Class 100 will be used to hire additional part-time staff to assist with the increased workload. The requested 150,000 increase in Class 300/400 will be used to purchase paper, supplies and equipment needed to support operations during the amnesty program. I'm requesting suspension of the rules at the next session of Council so the bill will be read. Thank you for the opportunity to testify today. I'm happy to answer any questions.
Thank you, Commissioner. Could you provide the Committee with a conservative estimate of how much this revenue will generate for the City. COMMISSIONER RICHARDSON: Right now we can conservatively say we're thinking $25 to $30 million could be collected through the amnesty program. 8 12/3/09 - APPROPRIATIONS - BILL 090831, etc.
The additional part-time staff to be hired, would they be assigned to Revenue or would they be responsible for hiring the part-time staff? COMMISSIONER RICHARDSON: No. 8 These folks will work for Revenue. The consultant firm would hire their own staff.
So, Commissioner, you're basically saying that if half of the to 30 million 16 would have come in anyway eventually, 17 we're spending 12,600,000 to break even? 18 COMMISSIONER RICHARDSON: 19 Potentially you could be spending that 20 money. Again, the $10 million is on a 21 contingency basis fee that you pay the 22 consultant firm. So, again, we set it at 23 that target amount because I'm hoping 24 that we will exceed what we anticipate 25 collecting by leaps and bounds, as you've 9 12/3/09 - APPROPRIATIONS - BILL 090831, etc. seen other states do in the last year or so.
What does "contingency" mean in that? COMMISSIONER RICHARDSON: What it means, the collection agency will get paid on what they collect for us. So they may be getting a certain percentage fee and we may set target amounts. If they bring in million, we may pay them 13 X amount in fee. If they collect over 30 14 million, you may pay them X amount in a 15 fee. 16
So the 10 17 million is not 10 million out the door? 18 COMMISSIONER RICHARDSON: No, 19 it's not. It's Grants Revenue. It's not 20 out the door.
Thank you, 10 12/3/09 - APPROPRIATIONS - BILL 090831, etc. Madam Chair. Good morning, Mr. Richardson. COMMISSIONER RICHARDSON: Good morning, sir.
Mr. Richardson, with respect to the consulting company that will provide the services as it relates to collection of taxes, don't we currently have an external company doing the tax collections for us? COMMISSIONER RICHARDSON: Yes. We currently do use a couple different firms for real estate and looking out at business taxes. However, again, we believe that we should have this out for bid for other firms who have had experience on doing the amnesty over the last couple of years as well besides the firms we have, and they can bid competitively as well.
So from a dollars and cents perspective, because we are experiencing some fiscal restraint at 11 12/3/09 - APPROPRIATIONS - BILL 090831, etc. the time, wouldn't it make more sense to just amend the existing contracts for the collection agencies that we have to provide this additional service as opposed to going out through this process again? COMMISSIONER RICHARDSON: Right now we'll say probably not. Again --
Why not? You said "probably not." Why not? COMMISSIONER RICHARDSON: We're looking to have firms to potentially come in who have experience running amnesty programs. The agencies we have right now have not run amnesty programs. Again, they will have the opportunity to bid on this when it goes out.
But you don't think that in all probability that the companies that currently have contracts on tax collections will probably not get these contracts -- COMMISSIONER RICHARDSON: I don't know. 12 12/3/09 - APPROPRIATIONS - BILL 090831, etc.
-- based on their inexperience, as you've just said? COMMISSIONER RICHARDSON: Inexperience on amnesty, but, again, they're very good at collections.
I understand. I understand. I mean, tax collections are tax collections, and at the end of the day, these people won the bids. And I'm not a proponent of any of the companies, but if they won the tax collection bids from earlier NOFAs or RFPs, I would think that they will probably more likely win the tax amnesty. COMMISSIONER RICHARDSON: It's very possible, but you got to understand --
So it's just simply a policy matter. It's not that the likelihood that these people can't do the work. I mean, you're saying that they don't have experience doing this, and, frankly speaking, I don't know who does, because we've never done it. 13 12/3/09 - APPROPRIATIONS - BILL 090831, etc. COMMISSIONER RICHARDSON: There are numerous companies that have experience with doing amnesty programs. Again, the agencies that we use are more than willing to submit their proposal. They may win. I don't know. I'm not here to choose anybody particularly. I want the best candidate to help us raise additional revenues for the City of Philadelphia.
Okay. Actually, my other question was similar to Councilman O'Neill's, but you've clarified that with respect to the $12 million. Okay. I'm fine. Thank you, Madam Chair.
Thank you. Commissioner, according to the City Controller's report, Alan Butkovitz, he calculated that 100 million could be collected during the tax amnesty program. He gave that report, I believe, to all Council. Why is there a $70 million 14 12/3/09 - APPROPRIATIONS - BILL 090831, etc. difference between his numbers and yours? COMMISSIONER RICHARDSON: Well, one, we looked at the numbers and did an analysis. Two, I think he's basing it off of the -- June 30th, 2009 the whole receivables was 999 million. So he's basing it off of percent potentially 9 that we could collect. Again, you have 10 to realize that if we do an amnesty program, you're going to waive off the records all the penalty that is owed to the City and you're going to take off 50 percent of the interest that is owed. So now you're bringing it down to about $660 million of outstanding delinquency. Also, you have to realize all the businesses and individuals that are on the books with the City of Philadelphia, a lot of the businesses could be defunct, no longer around, so we may not be able to collect after them. So that's why we're looking at that number to 30. 25 Again, we looked at other major 15 12/3/09 - APPROPRIATIONS - BILL 090831, etc. cities; for example, like Phoenix. They did an amnesty program and collected only $4 million. The City of Los Angeles did 17.9, and New York City back in 2004 only did $40 million. There's a city that has probably five or six times the receivables that the City of Philadelphia has. Again, I think a lot of folks are looking at what New Jersey did at $700 million or more. I think in Philadelphia it's going to benefit the same thing. Again, the state, for example, like New Jersey has a lot of international businesses that have their operations there, and, again, a state like New Jersey has about 40 taxes. We are not that big. We are not a state, and to be realistic, that is not a realistic number. Hopefully we can get a hundred million. That would be great, but I wouldn't say we would.
Thank you. 16 12/3/09 - APPROPRIATIONS - BILL 090831, etc. Councilwoman Sanchez.
Thank you, Commissioner. I want to thank you for all the work you've done around collections. I know that we have been working over the last two years around some of these collection issues and increasing our collection activities. What is your expected drop-off? Because one of the issues as we discussed this in the budget in 2008 and 2009 with the Finance Director, there was concern around amnesty and the drop-off afterwards. So what is your projected drop-off post the collection? COMMISSIONER RICHARDSON: I can't really tell you what our projected drop-off is. We don't know yet. I can say right now unfortunately because the word "amnesty" is out there in the community, practitioners are telling their businesses that they work with not to pay the City now. So we will lose some revenue. I can't tell the 17 12/3/09 - APPROPRIATIONS - BILL 090831, etc. projection of what it would be today, nor can I tell you what it would be after amnesty is in place.
Where are we in terms of our current collections? Because I know that part of the work in the beginning of this year was ramping up some of our discovery work and some other stuff. Where are we in line now and what does this money represent in terms of percentage of our projected that was authorized in our budget? COMMISSIONER RICHARDSON: Right now our numbers are not at projections as we've anticipated. Again, with the additional revenue, I think it would help out with some of the issues that are helping to help cover the budget, again, with projections of a net of $25 to $30 million. Again, we will continue to work on the collections of individuals that are not delinquent on various programs 18 12/3/09 - APPROPRIATIONS - BILL 090831, etc. that we have. For example, discovery, last year we brought in 1,848 new businesses or registered --
Eighteen hundred and forty-eight? COMMISSIONER RICHARDSON: New taxpayers to the City of Philadelphia.
One of the things that Councilman Clarke was talking about is how are we going to operationalize this as it relates to the contracts. So explain to me, if I'm a current collection agency on an account, you bring a new provider in, what does that do? Are they going to be allowed to move that account from the current agency to this new agency, assuming there's a new agency that -- COMMISSIONER RICHARDSON: Yes. All cases can be moved to the agency.
So it would all be portable? COMMISSIONER RICHARDSON: Yes.
How does 19 12/3/09 - APPROPRIATIONS - BILL 090831, etc. that impact our current agreements, legal agreements, with the current operators? COMMISSIONER RICHARDSON: With the contracts that the Law Department has with agencies, they do have the right to pull the cases at any time.
At any time. So our contracts allow us to pull those? COMMISSIONER RICHARDSON: Yes, ma'am.
What's the timeline on this? Assuming we authorize this by the end of the year, what's your timeline? COMMISSIONER RICHARDSON: My timeline would be to anticipate this starting for May 3rd of 2010 running until about June 18th. Again, we want to run our program as parallel with the Commonwealth of Pennsylvania that will be starting about April 26th and running into the middle of June as well. So for one, practitioners, the accounting and 20 12/3/09 - APPROPRIATIONS - BILL 090831, etc. the legal community, would advise their clients, Look, take care of the state and the city at the same time.
And you feel these allocations that you have now will be suffice for you to do the marketing campaign and all of that to make this successful? COMMISSIONER RICHARDSON: Yes.
Okay. Thank you very much. COMMISSIONER RICHARDSON: You're welcome.
Thank you, Commissioner. COMMISSIONER RICHARDSON: Thank you, Chairman Krajewski. You have a good day.
Someone from the Administration on Bills 090736 and 090738. 21 12/3/09 - APPROPRIATIONS - BILL 090831, etc. (Witness approached witness table.)
Good morning. Steve Agostini, Budget Director and Recovery Officer. On the bills before you that you heard some testimony on on the 19th, I would ask that you move these bills. The bill with respect to the Recovery would allow us to actually have appropriations for the purposes of spending dollars that have been provided to us by the federal government in the American Recovery and Reinvestment Act. The number before you is approximately $52 million and would allow us to begin getting dollars out the door. So I would respectfully ask that you pass that out and also suspend the rules so that first reading could happen today. On the second bill with respect to our end-of-year transfer ordinances, 22 12/3/09 - APPROPRIATIONS - BILL 090831, etc. that would allow us to clean up our accounts for the end of year for Fiscal Year '09, which ended June 30th, and reconcile a number of accounts so that we could close our financial books for the year and finish our reporting and financial audit for the year. And, again, on those items, I would ask you to respectfully suspend the rules so that first reading could happen this afternoon as well.
I'd like to ask you a couple of questions about the stimulus-related portion of this testimony. First, again, I want to commend you for doing a good job on the Recovery Act process. 23 12/3/09 - APPROPRIATIONS - BILL 090831, etc.
I understand that our designee, Councilman Jones, has been working very diligently along with your team, and we hope to move this as quickly as possible.
He's been extremely helpful. So thank you for suggesting that.
I told you so. I just want to ask a question about this Merchants Fund. This came up earlier actually in a conversation outside of the Council Chambers, and I see the response, but it's not very detailed, and, interestingly enough, a couple of days after our hearing on the Merchants Fund, I went to a community meeting in Brewerytown and the Merchants Fund came up in the meeting, and the tone of the discussion about it was not very pleasurable. There were some concerns by that particular organization they were 24 12/3/09 - APPROPRIATIONS - BILL 090831, etc. denied or they actually weren't allowed, from their perspective, to apply for a grant that was being administered by the Merchants Fund, and they asked me about it, and I didn't know a whole lot, because we had just learned about it in the earlier testimony. I'd like to get a sense of, first of all -- and it kind of lays out to some degree why we use the Merchants Fund, but this is an external organization that, from our perspective, is not really accountable obviously to Council, and we're talking about tax dollars. So the decision on using the Merchants Fund, the level of use of the Merchants Fund, who makes the decisions. Is it PIDC? Is it Commerce and the Merchants Fund just administers the fund? Can you kind of walk me through all of that. (Witness approached witness table.)
Councilmember, 25 12/3/09 - APPROPRIATIONS - BILL 090831, etc. I'm going to defer to Mr. Frishkoff to my left here to answer that.
Good morning. My name is Andrew Frishkoff, Director of Neighborhood Economic Development for the Commerce Department. In administering the proceeds from the Cultural and Commercial Corridor Bond funds, one of the line items in the enabling legislation was for business support grants, and one of the intended uses was to provide grants to businesses for fitting out space for either new businesses or businesses expanding in existing spaces to grow their business. These were capital-eligible grants, and at the time of the legislation in 2006 and moving forward, it was Commerce's intent that we would administer the program. As you're aware, the trustee, Pennsylvania Authority for Industrial Development, would be involved and PIDC in terms of disbursing funds, but it would be administered by the Commerce 12/3/09 - APPROPRIATIONS - BILL 090831, etc. Department. As we had indicated I believe in the memo recently, we had concerns about being able to meet the full deadline, which is this month, the end of this month, 2009, for spending the tax-exempt portion --
Excuse me, Mr. Frishkoff. Hold on a second. Folks, we're having difficulty hearing.
Quite all right. We had concerns about making sure that we would be able to spend the full 85 percent required by the Internal Revenue Service for those tax-exempt portions of the bond proceeds, and these fit-out grants were intended to be part of the tax-exempt portion. And this 27 12/3/09 - APPROPRIATIONS - BILL 090831, etc. occurred particularly then when we started to enter into budget concerns and weren't sure that we had the staff capacity anymore to be able to administer that ourselves in a timely fashion. So we identified the Merchants Fund, which is, as you've suggested, a completely independent organization. It has been in existence for more than 150 years, providing relief to merchants in the City of Philadelphia and was the only entity that we had identified that had experience and capacity to provide grants, not loans but grants, to neighborhood businesses, existing staff capacity, existing expertise, existing programs in place to be able to do that. We made the determination to grant funds to the Merchants Fund in order to ensure that those funds would be considered spent by the Internal Revenue Service, and in return, their grant agreement spells out the terms and conditions for them making grants to 28 12/3/09 - APPROPRIATIONS - BILL 090831, etc. businesses in our neighborhood commercial corridors. The ultimate decision in that grant agreement is the Merchants Fund. That is because it is a grant rather than a contract for services between us and the Merchants Fund. But we at Commerce have the ability to provide commentary. We took responsibility in equal parts in trying to make sure that we got word out to neighborhood businesses, and we put a requirement into the grant agreement that a neighborhood business would at least have to have a community sponsor to be able to apply. We did not want nuisance businesses or businesses that would be working against the community's interest to be able to apply. So that was built in to the grant agreement. We did a round in the spring --
Before you go, sorry to cut you off. When PCDC was in its full form, didn't PCDC provide assistance to businesses? 29 12/3/09 - APPROPRIATIONS - BILL 090831, etc.
Our bond counsel made the determination that due to the IRS regulations, we could not grant the money either to PIDC or to PCDC and have the funds considered spent, because they are or were in part controlled by the City. So that had been our first hope, again, going back to 2006 when we were first working on the legislation, but it was determined that was not possible for us to do it that way.
The Merchants Fund, in terms of the history of the Merchants Fund, you said they were around for 150 years. Frankly, I never heard of them, but that doesn't mean anything. Who are they?
They are a non-profit organization with a Board of Directors. There is no City representation on their Board. They are a completely independent non-profit organization. We were looking -- 30 12/3/09 - APPROPRIATIONS - BILL 090831, etc.
Let me ask you this, because I don't want to belabor this, because I know we have a lot of business today. Can you get, through the Chair, information on the Merchants Fund, membership, where they're located, a summary of the history of the Merchants Fund, some of the grants or loans, as you said earlier, that have been disbursed throughout their history and the most recent history, because we just -- the issue is, we just don't know. Maybe they do great work and we just don't know, and then, as I say, I'm in a community meeting and somebody says, Well, they wouldn't even let us apply. I'm like, Well, who are they not to let a community organization -- it's the Brewerytown CDC, which you're very familiar with -- apply for money from a fund that comes out of tax dollars. So if you could just, through the Chair, get us all the information.
Absolutely. We 31 12/3/09 - APPROPRIATIONS - BILL 090831, etc. will also share the terms of the grant agreement with the Merchants Fund as well.
Thank you, Madam Chair. Mr. Dow, could you approach the witness table? (Witness approached witness table.)
Good morning, Mr. Dow. Please identify yourself for the record. 32 12/3/09 - APPROPRIATIONS - BILL 090831, etc.
Good morning. My name is Kevin Dow. I'm the Chief Operating Officer for the Commerce Department.
Thank you. At the November 19th hearing, there were two primary informational requests from me, which you have addressed in responses in writing. I would like you to put them on the record, and I may have a few questions about those responses. The first was regarding the dollar threshold requiring Economic Opportunity Plans for stimulus projects related to Councilman Clarke's legislation and the issue of a broader pool of certified firms relating to OEO's strategic plan and how that might be implemented in a way that would open up opportunities for stimulus projects.
And I appreciate the Council's flexibility, particularly the sponsors of the bill, in regards to 33 12/3/09 - APPROPRIATIONS - BILL 090831, etc. threshold for City contracts. We've had conversations and legislation being amended to include a $250,000 threshold. So what that means is that only contracts that are stimulus related through the City of $250,000 or greater will have an Economic Opportunity Plan attached to them. We've also discussed that we would do, in Commerce through our partners and community stakeholders, that we would market to all of the minority firms in the City of Philadelphia to ensure that they knew and were aware of all of the opportunities that are available through the stimulus contracts and possible opportunities for contracts in that regard, as well as not only for the 250 and above but for 250,000 below.
Simply put, for the record, every stimulus project that goes through the City that is $250,000 or more will require an Economic Opportunity Plan? 34 12/3/09 - APPROPRIATIONS - BILL 090831, etc.
Thank you. With regard to the pool of certified firms that will be eligible for stimulus projects?
We discussed that once we finalize some agreements -- and what we're doing is working with additional entities for certifying of minority firms. So what we anticipate doing is broadening the pool of certifying entities that we work with. As you well are aware, right now we accept as a reciprocal nature governmental entities as well as a number of private entities, like the Minority Supplier Diversity Council. We are going to adjust and revise the regulations around the certification process to allow firms who have those certifications to come in and present them to us as our certification process. We anticipate doing and implementing that in the beginning of January 2010 and using that 35 12/3/09 - APPROPRIATIONS - BILL 090831, etc. as a way in which we could broaden the scope -- excuse me; broaden the field of certified firms within the City's registered list so that we can then increase the participation rates going forward.
So the effective date for the new certification process is January 2010?
And that information will go out to those firms that might be eligible under other certifications. The only other question I have is with regard to prime contractors or those people who may be looking to contract with subcontractors that are disadvantaged businesses, how will they access the broader pool?
How would they get themselves -- any contractor, if they have a certification from -- let's say it could be Minority Supplier Diversity 36 12/3/09 - APPROPRIATIONS - BILL 090831, etc. Council, and we're still working those details out, but let's just say for the moment, or it could be, let's just say for the moment, the State of Delaware. If they have those two or any one of those certifications, either one, as examples, they would be able to come in to us, present that certification to us, their documentation that they are certified from those entities, and we would accept that for our own certification as for the length of time for which they are also certified there.
My question is not related to the disadvantaged firms but related to those firms that might want to utilize the products and services of disadvantaged firms, and how do they become informed if there is a broader pool beyond those 1,200 that are already certified by OEO.
There were a number of different ways, and this will -- the pool -- our success rate will get better 37 12/3/09 - APPROPRIATIONS - BILL 090831, etc. and increase over time. So we will do outreach sessions, as we have continually done. When we have significant projects, we'll do outreach sessions with both primes and subs to bring them together. We also will do more marketing as we go into the 2010 year, calendar year 2010. We'll begin to market the additional opportunities for certification to large and smaller firms. We will also reach out to larger firms. Some of the construction companies have their own qualified construction firms. We will reach out to them, as we're doing now, but be a little bit more aggressive with that, to say to them, Let us have that list or share our information with the list so that they understand that if they have these other certifications, that their certification process is much easier now. And then simply put, through the contracting process that we are now more intimately involved, when a contract goes out, we will be putting ranges 38 12/3/09 - APPROPRIATIONS - BILL 090831, etc. there. The prime who is looking to fulfill that contract, as they are now required, will be looking to get firms, and that list will be gradually getting larger.
And I guess simply put, you will make those prime contractors aware that they're not limited to just those 1,200 firms that are certified, but that there is a broader pool that is potentially available?
I wanted to ask for the record around the Merchants Fund. Was that a no-bid contract?
Or a 39 12/3/09 - APPROPRIATIONS - BILL 090831, etc. no-bid contract?
I'm going to ask my technical expert, Andy Frishkoff, to come back up here to answer that question. (Witness approached witness table.)
Thanks. It was a grant agreement between PAID and the Merchants Fund, at our direction. It was no bid. We did due diligence to determine that it was a -- that they were the only eligible applicant to provide that set of services and have that capacity. We did not put that out to bid.
The first round was for 500,000, of which 25,000 was for administrative costs, 475,000 was for grants to businesses. And those are also the terms for the second round that is currently underway. So the Merchants Fund total benefit would have been 40 12/3/09 - APPROPRIATIONS - BILL 090831, etc. 50,000.
Okay. I wanted you just to put that on the record, that it was a no-bid contract, and I'm sure we'll review it. I wanted -- that's all for you guys. I wanted to kind of go on the record with Steve. Obviously this is a time-sensitive matter on the appropriations of this bill as it relates to stimulus funding, but I wanted to make sure that this, by no means, means that we are approving the projects since we have not seen all of the projects related to the stimulus and how they will be spent by district or even throughout the City, other than the report that was submitted during our stimulus hearings, which had some indications around what are some of the overarching program objectives. So I wanted to ask you, how do you intend to get back to us around the 41 12/3/09 - APPROPRIATIONS - BILL 090831, etc. specific projects that will be originated from the stimulus money?
Well, Councilmember, Councilmembers, please keep in mind that I also have a reporting requirement to the federal government and that on January 10th, I will have to report to the federal government the expenditure of the dollars that we have received and have expended by project, explaining what the dollars were for, who either sub-recipients were, where the vendors were to those sub-recipients as those projects come online. If it's Council's desire, I'm happy to come back with a list of those projects that we are planning to spend dollars on. What I would ask is that if we're going to do that, that we do that either on a regular sort of basis, on a monthly basis when we come back with what are likely to be monthly requests for appropriations, so that we can keep the dollars flowing out the door in order to 42 12/3/09 - APPROPRIATIONS - BILL 090831, etc. meet the requirements of the grants as well as the desire of Council.
I understand that, and we don't want to hold it up, and that's why I'm asking that you figure out and obviously Councilman Jones as our representative, as you look at this, figure out a mechanism by which you're going to report. What I don't want to have is an appropriations hearing where that's the first time we're hearing around some of these expenditures.
So you figure it out, but for the record, I wanted --
Thank you, 43 12/3/09 - APPROPRIATIONS - BILL 090831, etc. Madam Chair. One quick follow-up question. On the information on the Merchants Fund, can you also include the IRS regulation that prohibits a quasi-government agency from dispensing those funds?
Thank you. Are there any other questions? (No response.)
Thank you. That concludes our public hearing. Now we will go into our public meeting. Councilman Clarke, Bill 090831.
Thank you, Madam Chair. I move that Bill 090831 be reported out of Committee with a favorable recommendation and a request for rules suspension as to allow reading at the next session of Council. 44 12/3/09 - APPROPRIATIONS - BILL 090831, etc. (Duly seconded.)
Therefore, Bill 090831 will be reported out of this committee with a favorable recommendation with a suspension of rules so as to permit first reading at the next session of Council. Councilman Clarke for the purpose of Bill 090736.
Thank you, Madam Chair. I move that Bill 090736 be reported out of committee with a favorable recommendation and a request for rules suspension to allow the reading at the next session of Council. (Duly seconded.)
All those in favor? 45 12/3/09 - APPROPRIATIONS - BILL 090831, etc. (Aye.)
Therefore, 090736 will be reported out of this committee with a favorable recommendation and the rules of Council be suspended so as to permit first reading at the next session of Council. Councilman Clarke, 090738.
Madam Chair, I move that Bill 090738 be reported out of committee with a favorable recommendation and a request for rules suspension as to allow reading at the next session of Council. (Duly seconded.)
Opposed? (No response.) 46 12/3/09 - APPROPRIATIONS - BILL 090831, etc.
Therefore, Bill 090738 will be reported out of this committee with a favorable recommendation and the rules of Council be suspended so as to permit first reading at the next session of Council. Thank you all very much. That ends our Committee on Appropriations. (Committee on Appropriations concluded at 10:10 a.m.) - - - 47 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 December 3, 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.)