If7 everybody will adopt this policy.8 Sometimes you can over-think things. I9 mean, at one point we did have a policy10 and then we got into the aggressive11 property disposition issue and then12 everybody kind of established their own13 criteria, I think, 10, 15 years ago.14 All right. Well, I'm not going15 to ask you when you think we'll be there,16 because I'm sure you don't have an17 answer, but at some point we still have18 challenges with these appraisals.19
All right.22 Okay.23 Thank you, Madam President.24 COUNCIL PRESIDENT VERNA:25 82 4/12/11 - WHOLE - BILL 1101371 You're welcome.2 The Chair recognizes Councilman3 Jones.4
Thank you,5 Madam President.6 Still good morning. How are7 you?8 COMMISSIONER SCHLOTTERBECK:9 Good morning. I'm good. Thanks.10
I have,11 along with my colleagues, introduced Bill12 No. 110143 and corresponding Resolution13 100848, which deals with the concept of14 cost-benefit analysis as it relates to15 contracting out. In light of that, I16 want to ask a couple of questions.17 At the height of your18 department, how many employees did you19 have and what were some of their20 functions?21 COMMISSIONER SCHLOTTERBECK: I22 just looked at Charlie McPherson. I23 wanted him to go back in time with me.24 I would say it could have been25 83 4/12/11 - WHOLE - BILL 1101371 as high as a couple of thousand at one2 point. It was really high initially. In3 the '50s and '60s it started to dwindle.4
You weren't5 around then, so -- okay. So --6 COMMISSIONER SCHLOTTERBECK: I7 was around, but I wasn't working.8
I want to9 clearly say that for the record.10 But during those times, what11 were some of the functions by way of12 Public Property?13 COMMISSIONER SCHLOTTERBECK:14 Public Property at that time then would15 have included Historical Commission, Art16 Commission, Labor Standards, Fleet. In17 other words, there was a lot of spinoff18 over the years.19
So "spinoff"20 meaning went to other departments?21 COMMISSIONER SCHLOTTERBECK:22 Decentralization.23 COUNCILMAN JONES:24 Decentralization. But what about the25 84 4/12/11 - WHOLE - BILL 1101371 function of property management,2 construction, repair? Focus in on that3 aspect of your duties. What was that4 unit's complement of employees at its5 height, rough guess?6 COMMISSIONER SCHLOTTERBECK:7 I --8
What about9 under your time?10 COMMISSIONER SCHLOTTERBECK: I11 actually did have it at one time. In my12 time? I've always pretty much been at13 the end of the -- do you have any14 numbers? I have it somewhere.15
So could you16 describe was -- would you describe some17 of the maintenance and construction18 functions that were under you? Like I19 know you put up stages.20 COMMISSIONER SCHLOTTERBECK:21 One of the things that happened once I22 became Facilities Director before23 Commissioner, two things that were spun24 off as part of decentralization was the25 85 4/12/11 - WHOLE - BILL 1101371 maintenance of Police and Fire2 facilities. They actually had small3 units in each of those operations. We4 took those back. They're now back in5 Public Property. The staffing was6 transferred and funding. Basically the7 responsibilities to operate, maintain and8 improve facilities has always stayed with9 the Department of Public Property.10
And how many11 facilities are we talking about? What is12 that universe?13 COMMISSIONER SCHLOTTERBECK: We14 had 150.15
And that16 includes recreation departments?17 COMMISSIONER SCHLOTTERBECK:18 No.19
So23 Recreation had its own maintenance24 facility?25 86 4/12/11 - WHOLE - BILL 1101371 COMMISSIONER SCHLOTTERBECK:2 Recreation, Fairmount Park always3 maintained, libraries always on their4 own.5
So between6 those two functions for the City, we're7 talking about a large contingent of folk,8 and over time you've reduced down in your9 department to what?10 COMMISSIONER SCHLOTTERBECK:11 There's 129 people in my department.12
For 15013 facilities? Which do not include14 Recreation Department facilities,15 libraries and the like?16 COMMISSIONER SCHLOTTERBECK:17 Correct.18 DEPUTY COMMISSIONER PALANTINO:19 Councilman Jones, this is Deputy20 Commissioner Joe Palantino. I can give21 you some stats of what you're looking at.22
I would23 appreciate giving that to the Chair.24 DEPUTY COMMISSIONER PALANTINO:25 87 4/12/11 - WHOLE - BILL 1101371 Oh, okay.2
And sharing3 it with Council.4 DEPUTY COMMISSIONER PALANTINO:5 Okay.6
I get to7 that to say cost-benefit analysis. Over8 time how much of those internal9 activities have been subcontracted or10 contracted out?11 COMMISSIONER SCHLOTTERBECK: So12 at the beginning of the Rendell13 Administration, the first contracting14 initiative which affected civil servants15 was the custodial privatization of City16 Hall. When the Municipal Services17 Building was closed down and rehabbed,18 there's contract maintenance over there.19 That's the triplex. Every one of those20 buildings privately contracted for those21 services. So we've had that happen.22 That's about it. And then we have23 internal contracts to support our staff,24 certifications of fire systems,25 88 4/12/11 - WHOLE - BILL 1101371 elevators, pest controls. We don't, nor2 did we ever, do it all. We always had3 supplemental contracts.4
So typically5 when a Police Department's bathroom goes6 out of whack, smaller jobs, do you still7 do those?8 COMMISSIONER SCHLOTTERBECK:9 Yes, we do.10
At what11 point is the threshold where you consider12 contracting out, and what analysis drives13 you towards that?14 COMMISSIONER SCHLOTTERBECK: So15 basically I actually had this16 conversation preparing for this very17 hearing, and the answer that I gave --18 and it is the best answer I can give --19 is that depending on what the situation20 is. So if we're in a crisis mode, we're21 responding to an emergency, it's22 affecting the police officers' abilities23 to perform their job and I don't have a24 plumber around, I'm going to have to go25 89 4/12/11 - WHOLE - BILL 1101371 to a contractor. But if we can plan and2 we can foresee, we take the smaller jobs3 with our Construction Unit and we do them4 in-house.5
What's the6 size of your Construction Unit?7 COMMISSIONER SCHLOTTERBECK:8 Six people.9
Six people10 for how many buildings?11 COMMISSIONER SCHLOTTERBECK:12 It's -- we -- yes, it's not enough. We13 would like to have more.14
Okay. I had15 to drag that out of you. For the record,16 the Administration listening, she did not17 do that of our own free will to say that.18 What I want to go to is, is it19 safe to say that there was a point in20 time in government where we considered21 doing these type of maintenance on22 recreation centers, which are not your23 department, I got that, libraries, Police24 and Fire facilities internally more than25 90 4/12/11 - WHOLE - BILL 1101371 externally for smaller jobs? We did it2 in-house?3 COMMISSIONER SCHLOTTERBECK:4 Well, actually we still do do it. To the5 extent that we can and we have the6 resources and I have contracts in place7 to buy materials, we still do it. We8 haven't abandoned the idea of doing it.9 We just --10
My question11 becomes, what I'm getting to is, at what12 point does the City, not just you -- and13 I know you have to work within the14 construct of what management says that is15 above you -- do we analyze that we at16 some point took a left turn and said that17 subcontracting to the private sector was18 good? And "good" meant cost effective,19 "good" meant efficient, "good" meant20 those kinds of buzz words. But where is21 the supporting data that has analyzed22 that over time to make that a true23 statement, to verify the fact that we are24 saving money to do that? I don't think25 91 4/12/11 - WHOLE - BILL 1101371 we've done that, and that's what this2 bill calls for. And I don't know how3 you're going to answer that, but...4 COMMISSIONER SCHLOTTERBECK:5 Well, actually we do do it.6
Tell me how7 you do it.8 COMMISSIONER SCHLOTTERBECK:9 Because we know the union wage out there10 for certain things. It's not -- I mean,11 there are standards. We're both members12 of BOMA. We do analyze that. Joe has13 spent time looking at things like that14 because --15
So there is16 a formula that you can present to this17 Council?18 COMMISSIONER SCHLOTTERBECK: I19 wouldn't call it a formula. I would call20 it basically that we do have that21 discussion in my department. If we do22 this in-house, how does it help the23 Capital Project team, what can we take24 away from them. If we go to the police25 92 4/12/11 - WHOLE - BILL 1101371 station and work on a small renovation2 inside, what does that do. We do -- Joe3 has numbers. We can send it. I wouldn't4 want to represent it that it's every5 Monday morning we sit and go through this6 kind of a dialogue, but we do do it.7
I know in8 the private-private sector there is a9 concept called dumping, and what that10 does is basically, generically speaking,11 is that they do a thing and put product12 on a market and usually undervalue it,13 sell it cheap, until they drive away the14 competition, and then at that point, they15 begin to steadily increase price.16 Monopolies do it in order to recoup what17 they did to drive away their competition.18 Over time when we start talking19 about the cost of an ink pen to the cost20 of new construction, people tend to drive21 prices up. Having a procurement22 background in another life, there was the23 concept that it is easy to put another24 20, 25, 30 percent on City jobs because25 93 4/12/11 - WHOLE - BILL 1101371 of issues they say of slow pay. No2 problem from you, but from our3 departments, our treasury departments.4 They build that cost in.5 I think it's time with our6 budget choices that we're making to take7 a look and revisit whether or not it's8 better to hire an extra person in your9 department or extra ten people to do a10 specific category and type of work versus11 automatically subcontracting or12 contracting it out. I'm from Missouri13 today. Show me. And I'm going to ask14 that through this bill and this15 resolution that we take a look at and16 revisit that.17 If indeed what you or other18 departments suggest is true, that it is19 cheaper to do it that way, so be it. But20 if not, we're going to have to take a21 look at whether or not we're being penny22 wise, yet pound foolish. And that's my23 driving point in this.24 I'm going to yield and then I'm25 94 4/12/11 - WHOLE - BILL 1101371 going to come back for some more2 questions. If my colleagues have none,3 I'll pick back up.4
Thank5 you.6 The Chair recognizes Councilman7 Green.8
Thank you,9 Madam Chair.10 In last year's budget hearings,11 you and the Budget Office made a strong12 case for investing in a new five-person13 maintenance assessment team that would,14 quote -- and this was written in a letter15 to President Verna on 4/29/10 --16 identify, coordinate and prioritize all17 infrastructure, capital and maintenance18 issues, end quote. We supported this19 initiative and did not include it in the20 list of proposed budget cuts.21 The detail indicates that the22 five positions were not filled and are23 not included in the proposed FY12 budget.24 How is the Department pursuing this work25 95 4/12/11 - WHOLE - BILL 1101371 without the team?2 COMMISSIONER SCHLOTTERBECK:3 There is a correction that we have to do4 to the budget. There is the funding for5 two assessment people. Not five, but6 two. We are working with -- the whole7 shift in thinking was, we wanted to be8 able to have the job order/work order9 complement. We wanted to be able to have10 some technology. We wanted to be able to11 take these people, get them off the12 ground running.13 So we have every intention of14 hiring two.15
And that's16 not in the budget yet?17 COMMISSIONER SCHLOTTERBECK:18 The funding is still there. We have19 to -- we're going to hire them probably20 in the summer.21 DEPUTY COMMISSIONER KNAPPICK:22 Councilman, Deputy Commissioner Gary23 Knappick.24 We've looked at that. Really25 96 4/12/11 - WHOLE - BILL 1101371 the driver on proceeding with asset2 management is the technology. We've been3 working with the Department of Technology4 to try to identify when we can, within5 their prioritization, fit us in to6 procure that technology.7 Secondly, I think because of8 the magnitude of --9
Sir, when10 you talk about technology, is that a job11 order entry system or is that --12 DEPUTY COMMISSIONER KNAPPICK:13 No. The job --14
-- a15 facilities management technology?16 DEPUTY COMMISSIONER KNAPPICK:17 Asset management technology. The job18 order contracting technology we'll be19 bringing now. We have that working.20
So we've21 discussed asset management technology and22 the fact that there's commercial23 off-the-shelf software available for24 property management --25 97 4/12/11 - WHOLE - BILL 1101371 DEPUTY COMMISSIONER KNAPPICK:2 That's correct.3
-- at4 previous budget hearings. Have we5 considered simply issuing an RFP for6 software companies to come and present?7 DEPUTY COMMISSIONER KNAPPICK:8 I believe that's being considered by the9 Department of Technology right now within10 their prioritization of the things that11 they have to do. It's certainly --12 they're certainly out there and13 available.14
I mean,15 private companies use commercial16 off-the-shelf software to manage all17 their properties, including costs,18 maintenance needs, et cetera, all the19 time.20 DEPUTY COMMISSIONER KNAPPICK:21 That's correct, Councilman.22
And we don't23 yet?24 DEPUTY COMMISSIONER KNAPPICK:25 98 4/12/11 - WHOLE - BILL 1101371 Not yet, sir.2
If I could just3 add one thing to that response. As Gary4 said, this is part of the prioritization5 process, and we also want to make sure6 that if there's an asset management7 system that benefits Public Property,8 that it also could benefit some other9 departments in the City as well, so that10 the investment is the right one for the11 entire City. But that will be part of12 the prioritization process that we will13 get information to you on in the next few14 weeks.15
So when you16 say it's part of the process, you mean it17 hasn't been decided where it is within18 the priorities of DOT or planned, I19 assume -- would this be capital spending?20
Right. This21 would be capital spending. So it would22 be part of the $121 million capital23 spend. So the prioritization process is24 looking at all of the technology needs25 99 4/12/11 - WHOLE - BILL 1101371 across the City and seeing what's2 available to be funded with the $1213 million. So this is something that we4 feel obviously is important, but it needs5 to be looked at as part of the overall6 what are the technology needs of the7 City, and that's what the prioritization8 process is, and that's what we'll be9 getting information to you on. I think10 we talked about it on the capital side.11
Thank you.12 In his budget address, the Mayor said,13 quote, We'll find new savings by creating14 a task force to examine all City15 facilities and assets, determining where16 we can consolidate and which ones we no17 longer need.18 There wasn't any reference to19 the task force in the Capital Program20 document or testimony or in your21 testimony. What role is the Department22 of Public Property going to play in the23 work of the task force?24 COMMISSIONER SCHLOTTERBECK: I25 100 4/12/11 - WHOLE - BILL 1101371 actually participated in a meeting that2 the Mayor chaired, and we have submitted3 information as requested by the Managing4 Director, and I'm anticipating another5 meeting. They were asking for detailed6 leasing information and things like that,7 so we gave it to them, and I'm8 anticipating that he'll be chairing9 another meeting. So we are playing an10 important role.11
So in12 response to my question about leases13 outside the City and outside our14 buildings and other things, an answer15 could have been that's one of the things16 the task force is going to look at and17 make recommendations on?18 COMMISSIONER SCHLOTTERBECK:19 Yes, they will. Yes.20
You21 testified that the Department is working22 with DOT to develop a capital asset23 management model.24 COMMISSIONER SCHLOTTERBECK:25 101 4/12/11 - WHOLE - BILL 1101371 Yes.2
Sorry. I3 sort of asked that question.4 Last year -- we have -- I have5 a bunch of questions about unfilled6 positions. You don't have many, but you7 don't have a vacancy allowance either,8 and so I'm wondering from a fiscal9 standpoint, this indicates that all10 budgeted positions will be filled the11 entire fiscal year, and that doesn't seem12 realistic or likely.13 COMMISSIONER SCHLOTTERBECK:14 Well, every department has some form of15 attrition. Sometimes we know it's coming16 and a lot of times we don't. And my17 department is one of the ones that often18 I don't.19
So what's20 your usual attrition rate?21 COMMISSIONER SCHLOTTERBECK: I22 don't know that I know that off the top23 of my head.24
If you could25 102 4/12/11 - WHOLE - BILL 1101371 provide that to the Chair.2 COMMISSIONER SCHLOTTERBECK:3 Sure.4
Do you have5 tests and lists -- do you have lists6 available for every position that --7 COMMISSIONER SCHLOTTERBECK:8 Yes.9
-- could10 come vacant this year?11 COMMISSIONER SCHLOTTERBECK:12 Yes. Well, I don't know about every13 position. Often what I do when I know14 that something is becoming vacant, I make15 sure it's the right position, and16 sometimes the delay in filling is a17 direct result of my decision, that maybe18 I really don't need another architect or19 maybe I don't need another plumber, but I20 really need some more HVAC mechanics. So21 sometimes you have to make those tough22 decisions.23
That's24 great. I guess my point is, there should25 103 4/12/11 - WHOLE - BILL 1101371 be some vacancy allowance in your budget,2 shouldn't there? Because the way the3 budget is presented, every position is4 filled for the entire 12 months of the5 fiscal year.6 COMMISSIONER SCHLOTTERBECK: We7 do know that people will be leaving.8 There is some automatic built-in9 contingency.10
Well,11 every -- I don't want to say "every," but12 the departments we've looked at so far13 have all had something called vacancy14 allowance, which is subtracted from Class15 100, taking into account the usual16 attrition vacancy rate of four percent17 roughly for most departments and the18 current vacancies in the departments sort19 of as the normalized norm. Your20 department doesn't have that. So if you21 could please provide the Chair what you22 think the vacancy rate will be for your23 department or what you think should be24 the appropriate vacancy allowance for25 104 4/12/11 - WHOLE - BILL 1101371 your department so that we can build that2 into the budget, I would appreciate it.3 COMMISSIONER SCHLOTTERBECK:4 Okay.5
Thank8 you.9 The Chair recognizes Councilman10 Rizzo.11
Thanks,12 Madam Chair.13 Commissioner, we had this14 conversation, but sometimes things fall15 between the cracks and especially in16 government where you rent a piece of17 equipment and you expect to rent it for a18 month and you wind up putting it off to19 the side and paying for it for six20 months, eight months. It leads me to21 something that every time I drive by --22 and I'm not sure it's still there because23 I haven't been by this week. My luck, it24 would have been removed yesterday.25 105 4/12/11 - WHOLE - BILL 1101371 At the Fire headquarters,2 there's a rental generator that's been3 there for months and months and months.4 Why don't we, if we need a generator, put5 a generator in? I imagine that's not a6 cheap ticket, and I just out of curiosity7 would appreciate somebody providing to8 the Chair how long it's been there, how9 much we pay monthly for that generator.10 I think there's two of them, matter of11 fact.12 So could somebody and I13 can't -- we can't expect you to pull all14 this stuff out of the air.15 COMMISSIONER SCHLOTTERBECK: We16 can submit it.17
But can18 somebody just tell me about this19 generator? I understand it was there for20 renovations. That was the word that was21 used.22 DEPUTY COMMISSIONER KNAPPICK:23 Councilman, that was part of a full-load24 generator project that we've undertaken25 106 4/12/11 - WHOLE - BILL 1101371 around the City for emergency facilities.2 The situation at the Fire Administration3 building was such that the generators4 that were there could not provide full5 service to the facility. In other words,6 the air conditioning system, et cetera,7 would go in the event of a big emergency.8 So we brought in the new9 generators, sized them up, and there was10 a paralleling gear, because there were11 two generators, that were supposed to12 work in sequence and come online as they13 were needed. Pretty sophisticated piece14 of equipment. And unfortunately there15 was a leak that happened in the patio,16 which just happened to be right over the17 paralleling gear, which created a18 problem, which extended our need for19 those generators on the site. So that20 was -- those generators were there21 temporarily to service the facility in22 the event that there was a problem and to23 be able to make power transfers during24 testing.25 107 4/12/11 - WHOLE - BILL 1101371
No need to2 send me that info. That's the kind of3 answer, straight problem, we understand4 things don't happen perfectly all the5 time. But I can imagine that we'd like6 to get rid of that rental equipment as7 quickly as possible.8 DEPUTY COMMISSIONER KNAPPICK:9 It is -- the generators are working.10 They've been commissioned, and that has11 been removed.12
Good. Those13 generators are gone?14 DEPUTY COMMISSIONER KNAPPICK:15 Yes.16
How long17 ago?18 COMMISSIONER SCHLOTTERBECK:19 Yesterday.20
Now you know21 why she's Commissioner.22 DEPUTY COMMISSIONER KNAPPICK:23 I know. All the time.24
Thanks.25 108 4/12/11 - WHOLE - BILL 1101371 Thanks, Madam Chair.2 COUNCIL PRESIDENT VERNA:3 You're welcome.4 The Chair recognizes Councilman5 Jones.6
Thank you,7 Madam President.8 Just an update on how we're9 doing with publicly owned property that10 we deal with with SEPTA. How are we11 doing on the renovations of those12 stations? Can you give us an insight to13 that and the concourse work or the study?14 Not exactly work.15 COMMISSIONER SCHLOTTERBECK: I16 really -- I'm not prepared to answer17 questions about SEPTA station18 renovations. That would be probably more19 appropriately addressed to them when they20 get here, Councilman. But the concourse,21 we're still in the partnership with SEPTA22 and Center City District.23
You've given24 me a briefing. I just wanted to know25 109 4/12/11 - WHOLE - BILL 1101371 have we gotten any further on that study2 as to what we can do down in the3 concourse?4 COMMISSIONER SCHLOTTERBECK:5 Actually, we did -- we are still working6 on that. We don't have a timeframe.7 Andrew was up speaking to questions that8 were brought up from Councilman Green.9 So, yes, we are still working on it.10
Okay. So11 SEPTA might be able to give us an update12 on that.13 Do you do work out of the Water14 Fund at all?15 COMMISSIONER SCHLOTTERBECK:16 Well, we're funded for in our rent17 account. So, yeah, we do -- it's their18 money, but it's in our budget. They pay19 their own rent and their own -- they pay20 their way.21
Do you do22 renovations for them?23 COMMISSIONER SCHLOTTERBECK: We24 coordinate the work through the25 110 4/12/11 - WHOLE - BILL 1101371 management firm for them, yes.2
What does3 that mean? Is that a contract?4 COMMISSIONER SCHLOTTERBECK:5 They're funding -- it gets funded through6 the rent account. So they're doing some7 renovations right now. John had talked8 about it earlier.9
What type of10 renovations are there?11 COMMISSIONER SCHLOTTERBECK:12 They're hiring more people, so they need13 additional space and they're going to14 upgrade areas that are in need of it.15 That lease has been in place since 1981.16
What do I17 see, 67 space planning projects? Is that18 what you're talking about, and who owns19 that facility?20 COMMISSIONER SCHLOTTERBECK:21 Girard.22 DEPUTY COMMISSIONER HERZINS:23 Girard Trust, Councilman.24
Can you25 111 4/12/11 - WHOLE - BILL 1101371 speak in the mike?2 DEPUTY COMMISSIONER HERZINS:3 Councilman, Girard Trust owns 1101 Market4 Street building.5
And how much6 is the total cost of the renovations?7 DEPUTY COMMISSIONER HERZINS:8 We're still actually in the stages of9 drafting an RFP to see for the design10 work.11
Are we12 talking work stations?13 DEPUTY COMMISSIONER HERZINS:14 Yes.15
Isn't that16 the kind of work that kind of we could17 have done in-house? Was it too large?18 DEPUTY COMMISSIONER HERZINS:19 All the furniture in the system -- in the20 building on those floors are almost 3021 years old. So they're all going to have22 to be replaced. And the type of systems23 that were used at the time no longer24 conform to our space standard. And we25 112 4/12/11 - WHOLE - BILL 1101371 don't do work in rented buildings.2
Public3 Property doesn't?4 DEPUTY COMMISSIONER HERZINS:5 Right.6
So all of7 our rental space is done through8 contracting out?9 DEPUTY COMMISSIONER HERZINS:10 It's done through the lease.11
Through the12 lease, okay.13 Where are we with -- well, I'll14 yield on that.15 Thank you, Madam President.16 COUNCIL PRESIDENT VERNA:17 You're welcome.18 Are there any other questions19 from members of the Committee?20 (No response.)21
Thank22 you very much.23 COMMISSIONER SCHLOTTERBECK:24 You're welcome.25 113 4/12/11 - WHOLE - BILL 1101371
Let2 me tell you something, I congratulate all3 of you.4 COMMISSIONER SCHLOTTERBECK:5 Thank you.6
I7 just remember when Public Property had8 ample amount of employees to do the job.9 I don't know how you're managing, but10 whatever you're doing, let me say11 congratulations.12 COMMISSIONER SCHLOTTERBECK:13 Well, I mean, these guys do a great job14 and the staff. We're just a bunch of15 dedicated folks, to be perfectly honest,16 and we do the best we can.17 COUNCIL PRESIDENT VERNA:18 That's quite obvious.19 COMMISSIONER SCHLOTTERBECK:20 Thank you.21 COUNCIL PRESIDENT VERNA:22 You're welcome.23 MR. McPHERSON: Fleet24 Management.25 114 4/12/11 - WHOLE - BILL 1101371 (Witnesses approached witness2 table.)3
Good4 morning. As usual, you've been extremely5 patient. Thank you.6
Thank you so much.7 COUNCIL PRESIDENT VERNA:8 Please identify yourself for the record9 and proceed with your testimony.10
12 Good morning, President Verna13 and distinguished members of City14 Council. 16 Thank you for the opportunity to present17 testimony in support of the FY 201218 Operating Budget request for the Office19 of Fleet Management. 25 115 4/12/11 - WHOLE - BILL 1101371 The breakdown of the funding is2 as follows: $15,824,382 in Class 100;3 $9,364,396 in Class 200; and $28,463,2114 in Class 300 and 400. Class 200 funding5 has increased by a net of $3,256,000, an6 increase of $3,500,000 for the lease7 payment of vehicle financing and a8 reduction of 244,000 in vehicle washing9 and heavy equipment repairs. 14 Mission statement: OFM is15 responsible for the centralized16 formulation, coordination and execution17 of policies concerning the acquisition,18 assignment, utilization and maintenance19 of all City-owned vehicles. OFM's goal20 is to increase availability, improve21 safety and ensure reliable and safe22 vehicles. 4 Department efficiencies:5 Vehicle availability: OFM explains its6 mission as consistently providing safe7 and reliable vehicles and equipment to8 operating departments. 14 Fleet auction and revenue15 generation: In FY 2011, OFM has16 continued the strategy of Internet17 auctions for vehicle relinquishment and18 to generate revenue. Internet auctions19 attract a large amount of potential20 customers and thus increase auction21 revenue. 2 Fleet Vehicle Inventory Control3 System, our FVICS: In 2010, OFM4 developed a customized computer program5 addressing the quality and quantity of6 vehicle repairs. 9 Departmental accomplishments:10 Cost savings: In FY 2004, OFM advocated11 to substitute the more fuel-efficient V612 engine Chevy Impala to replace the use of13 the Ford Crown Victoria V8 engine for14 radio patrol cars. 17 The average purchase price of a Chevy18 Impala was 6,000 less than the average19 price of a Ford Crown Victoria. 3 In today's market price, the FY 2011, the4 City's savings in fuel cost would be5 $2,800,000. 9417 per gallon. 23 Environmental initiatives: OFM24 is committed to supporting the25 119 4/12/11 - WHOLE - BILL 1101371 Administration's environmental2 initiatives. 5 OFM's 2012 bio-diesel fuel target is6 1,080,000 gallons. Currently, OFM7 operates five active bio-diesel fuel8 facilities, and more than 36 percent of9 the City's diesel fuel consumption is now10 five percent bio-diesel. Since FY 2008,11 the City's bio-diesel program increments12 cost has been funded by the Pennsylvania13 Department of Environmental Protection,14 which will continue in FY 2012. As part15 of its environmental initiatives, OFM16 added two more hybrids this year. The17 number of gas and electric hybrid18 vehicles in the City's fleet is now 10619 vehicles. 22 Vehicle financing: Let me take23 this opportunity to thank City Council24 and the Administration for enabling and25 120 4/12/11 - WHOLE - BILL 1101371 approving our Vehicle Lease Purchase2 Program. 6 Through the Lease Purchase Program, OFM7 will acquire approximately 95 vehicles8 and equipment for the Streets Department9 at an estimated cost of $14,561,500,10 approximately 36 vehicles and pieces of11 equipment for the Fire Department at an12 estimated cost of $12,900,000. The13 average life cycle of this equipment and14 vehicles is more than ten years. 22 Fuel Utilization Management23 Environmental System, our FUMES,24 Modernization Program: OFM is now25 121 4/12/11 - WHOLE - BILL 1101371 upgrading the existing 16-year-old FUMES2 technology. This system will enhance3 fuel security. 14 New initiatives for FY 2012:15 High school internship program: Working16 within the existing budget, OFM will17 bring back the high school internship18 program, which allows extending OFM's19 support to the Administration's20 educational initiatives and after-school21 programs. This will also enhance good22 public relations. 2 Electric cars: OFM is now3 studying avenues for the introduction of4 electric cars.
OFM believes that the5 environmental friendly and fuel-efficient6 electric cars will enhance the7 Administration's environmental8 commitment. Recently OFM administered a9 demonstration of the electric car, the10 new Chevy Volt, for City Council and11 other City members. 14 Participation in economic15 opportunity: The Department is committed16 to supporting the Administration's goal17 of 25 percent minority, woman and18 disabled-owned business participation in19 City contracting. 24 This concludes my testimony. 3
Thank4 you. May I just say on my behalf -- and5 I'm sure that all of my colleagues feel6 the same way -- I think you and your7 department do a fantastic job, and I8 wanted to publicly thank you.9
Thank you very10 much, President Verna.11 COUNCIL PRESIDENT VERNA:12 You're welcome.13
We have a14 wonderful staff of people, very15 dedicated, hard-working department, and I16 appreciate all their help and dedication.17
Well,18 with someone like you, I'm sure they feel19 like family.20
Yes. Thank you.21 COUNCIL PRESIDENT VERNA:22 That's how things get accomplished.23 What vehicles will you be24 replacing in Fiscal 2012 and how do you25 124 4/12/11 - WHOLE - BILL 1101371 determine when a vehicle needs to be2 replaced?3
There's different4 types of vehicles. We have a leasing, as5 we just said, vehicle leasing. We're6 going to replace 20 pumpers, 12 medics,7 four ladders --8
This is the Lease11 Purchasing Program that's going to go12 into effect.13
In '12? Well, we16 have 100 police vehicles that we're going17 to replace, some pickup trucks for the18 Streets Department, emergency patrol19 wagons, unmarked police vehicles, plus we20 have this $28 million initiative for21 leasing, which we're going to purchase22 street compactors, I believe it's 6023 compactors, sweepers, mechanical24 sweepers, road tractors, dump trucks,25 125 4/12/11 - WHOLE - BILL 1101371 bucket trucks. As I said earlier, medic2 units, pumpers, ladders, ADA capacity for3 buses for the Recreation Department.4 COUNCIL PRESIDENT VERNA:5 Mr. Muller, on of your budget6 detail, it reflects a saving in regular7 overtime of $458,537. Can you tell us8 how you plan on achieving these savings?9
I'm going to turn10 that over to K. Wilson, my Administrative11 Services Director to my right.12
Good afternoon,16 Madam President and all the members of17 the City Council. My name is K. Wilson,18 Administrative Service Director for19 Office of Fleet Management.20 Our strategy to reduce the21 overtime is mainly because we needed to22 hire more employees on board. Mainly23 because I remember that in FY10, Council24 President, you mention that reducing25 126 4/12/11 - WHOLE - BILL 1101371 overtime and bringing more people into2 board is a good idea. We tried in FY113 to do the same, but due to some reasons,4 we could not bring more people into5 board. But in FY12, we're targeting to6 bring additional employees to the7 department by reducing the overtime.8
Right now we are16 identifying only six, because since our17 target for FY12 is 283 positions General18 Fund, so in General Fund, we are19 identifying six positions.20
So do21 I understand you to say you'll have a22 full complement of employees?23
Do I2 understand you to say that you will have3 a full complement of employees when you4 hire the six?5
Very7 well. That's good to hear.8 Councilman Greenlee.9
First, I14 join the Council President and her praise15 of what you and your department are16 doing.17
Just two20 quick questions. One on the -- it's21 really good news about the fixed fuel22 price. Is that something you've been23 doing before or is this a new initiative?24
We did it in the25 128 4/12/11 - WHOLE - BILL 1101371 past a couple times, and just recently we2 were looking to do it again, but the3 gentleman that we spoke to at Sunoco has4 since retired. He was our inside track5 guy. So right now gas is -- fuel is just6 crazy.7
It's just10 ludicrous, but we're going to try. We're11 still trying to see if we could lock in12 again.13
Okay.14 And on the Internet auction issue, it15 seems like that's going pretty well too,16 right?17
When do19 they have those auctions and how do you20 advertise? How do people know about it?21
It's roughly every22 month. You just go online at23 govdeals.com with Procurement. But I24 believe there's another vendor that's25 129 4/12/11 - WHOLE - BILL 1101371 going to take over starting July 1st.2 That's all done through the Internet3 auction.4 We're having people coming up5 from Alabama, from Florida. It's6 amazing. And it gives everybody a fair7 chance. Not like before where I could8 talk to you and you let me get this9 vehicle and I'll let you get the next10 one. Now everything is right online and11 you get a chance to bid just like12 everybody else.13 COUNCILMAN GREENLEE:14 Transparent, like everybody wants to talk15 about, right?16
Thank22 you, Madam President.23 COUNCIL PRESIDENT VERNA:24 You're welcome.25 130 4/12/11 - WHOLE - BILL 1101371 The Chair recognizes Councilman2 Rizzo.3
Thank you,4 Madam Chair.5 Again, I echo the good work6 that you do, and matter of fact, I've7 talked to some other municipalities8 around the country. I gave them your9 idea about that purchase of fuel, and10 they thanked me on numerous occasions.11 So you were ahead of the game there.12 The other thing that I want to13 mention is that during this terrible14 weather that we had this winter, that15 Fleet Management really stepped up. And16 I've talked to again all the operating17 departments that just said without your18 crew, they would have really, really been19 in big trouble. A lot of people don't20 realize what you do when it's the worst21 conditions that we can be experiencing.22 So, again, thanks for all you do, and23 you've got a great group of people that24 you work with and feel very close to all25 131 4/12/11 - WHOLE - BILL 1101371 of you. Thanks.2
Thank you. Like I3 said, we're just one cog in the wheel and4 we all work together with the Streets5 Commissioner and my Deputy, Chris Cocci,6 and all the guys. To tell you the truth,7 with all the snow we had, I was amazed.8 I kept saying, Chris, these numbers, they9 can't be right.10 He said, Jim, we're doing11 really good. And I'm just really12 thankful to the people that work for me.13 They're dedicated and do a great job.14
That's a18 good thing. Thanks a lot.19 Thanks, Madam Chair.20
Thank you,23 Madam President.24 Good afternoon, Mr. Muller.25 132 4/12/11 - WHOLE - BILL 1101371
First, I3 congratulate your department on its4 record of business diversity. Your5 numbers look very good. I want to ask a6 couple other contracting questions.7 From your testimony it appears8 that your largest contract is for the9 Vehicle Lease Purchase Program, or what10 is your largest contract expected to be11 for Fiscal Year '12?12
Our largest13 contract for FY12 should be the fuel14 contract, which right now is with the15 Superior Plus Energy.16
Yes. Initially it23 is for one year and after three one-year24 renewal.25 133 4/12/11 - WHOLE - BILL 1101371
Can you9 describe the contract requirements10 briefly?11
And the firm14 that holds the contract, is it a15 certified disadvantaged business?16
At this point we17 are not aware of all that, but our18 department is coming to work with OEO and19 Procurement Department to make sure that20 those portions are upheld.21
I'm saying22 is the firm that holds the contract now,23 is it a certified disadvantaged business?24
Does it do2 any subcontracting with disadvantaged3 businesses?4
Was there a6 participation goal in the RFP for7 disadvantaged businesses?8
It is not written9 in the bid, but as I mentioned, we will10 work with the Procurement and the OEO to11 make sure that necessary portion will be12 included.13
So it was14 not put in the bid; it was not put in the15 contract?16
Okay. Has18 there ever been a participation goal for19 this work for disadvantaged businesses?20
Are there23 subcontracting opportunities within the24 contract?25 135 4/12/11 - WHOLE - BILL 1101371
At present there5 is no subcontract for the fuel delivery.6 That is what I mean.7
I understood12 what you said, that you're going to work13 with the Office of Economic Opportunity14 to create a goal. The question is not15 what the goal should be. The question16 is, you're procuring the service. You17 know what the service is.18
You put it20 out to bid. Someone has the contract,21 whether it's a renewable contract or not.22 Either there are opportunities within23 that contract for businesses owned by24 women and people of color or there are25 136 4/12/11 - WHOLE - BILL 1101371 not, and either you identify them or you2 don't. And if they exist and you don't3 identify them, then that's a problem. If4 you identify them, then they should go5 within the RFP and then you should have6 responses, and you'll see what response7 you get in terms of opportunities that8 will be offered to disadvantaged9 businesses. And then if you select a10 firm that has set a goal and you put it11 in that contract, you hold it to them.12 And then guess what? The next year you13 don't renew the contract unless they've14 met that goal and can explain why they15 haven't met that goal, and then you still16 look for more opportunities. That's the17 way we do this. Not we've never seen18 opportunities there before, so we're not19 going to pursue them. But it's actually20 your job not just to get it cost21 effective, but to make sure we're getting22 total economic benefit from it. It's a23 $20 million contract, right?24
Once this thing2 goes out again, that will be included in3 the RFP.4
Okay. Is5 the firm currently in compliance with the6 City's living wage and benefits standard?7
At this point we8 are not aware of all that, and going9 forward we will evaluate each contract10 and certainly we intend to comply with11 the procedure.12
So the firm13 will be required to be in compliance with14 the City's living wage and benefits15 standard for Fiscal Year '12?16
Thank you,23 Madam Chair.24 There's a line item for parking25 138 4/12/11 - WHOLE - BILL 1101371 charges in the budget. What is that? Is2 that off-street parking?3
Last year5 you testified that the Office of Fleet6 Management took over the off-street7 parking program for City cars and, quote,8 plans to bid out the contract for9 competitive pricing, which will help save10 substantial amounts in coming years, end11 quote.12 In a follow-up letter to the13 Council President on April 15th, 2010,14 you noted that Fleet planned to bid the15 contract in early Calendar Year 2010 and16 expects to save at least 10 to 15 percent17 of the current-year obligation.18 Based on the budget presented,19 the line item went down $7,000, not 10 to20 15 percent, which would be $70,000 to21 $105,000. Can you explain what's22 happened, did you bid out the contract,23 et cetera?24
The Department's25 139 4/12/11 - WHOLE - BILL 1101371 intention was to bid out that parking2 contract. We brought the specification3 in FY10, the end of FY10, and we sent out4 that bid specification to Procurement,5 and they are evaluating that. And there6 was a problem with bidding those contract7 out because the available opportunity out8 there is very specific. Right now we9 realized that. We have agreed with many10 of the parking facilities, and the11 Managing Director's Office is working now12 to consider that and to save more money13 in future.14
Not right now.17 Mainly because if we bid out -- we try to18 do that, and by the time, some of the19 parking facilities came to us to renew20 their contract. So their intention was21 to increase the parking cost. So we know22 that once we bid out, the price going to23 be up. So the Department is right now24 negotiating with those facilities. We25 140 4/12/11 - WHOLE - BILL 1101371 explain that our budget constraints, and2 we are now working with the Managing3 Director's Office to get a good deal with4 all of the parking garages so that we can5 move on.6
I don't7 understand why we would prefer8 negotiation to bidding it out. I9 recognize that people may have to walk an10 extra block or two, but there are within11 City Hall, within the three or four-block12 radius of City Hall, many, many, many13 parking garages. If you go down to 12th,14 you've got all of that. If you go up to15 17th, 18th, I mean --16
We're using all17 those lots that you're specifically18 talking about. We're also looking to19 meet with the Parking Authority, because20 we're paying the full rate of the Parking21 Authority, and we're looking to meet with22 them to find out if we can get a23 discounted price, because we're going to24 be there every day. So that's what we're25 141 4/12/11 - WHOLE - BILL 1101371 working on, and it's not completed as we2 had stated last year. We're still3 working on that process.4
Are we5 paying the Parking Authority daily rate6 at the garages they own or monthly rate?7
I can clarify8 that, Councilman. Right now with the9 Parking Authority, we are paying a10 monthly rate as low as $80. If we bid11 out, definitely that price going to be12 up. We believe that. Because these13 parking facilities came to us and they14 want to increase the parking rate right15 now, but we negotiated with them, and16 right now that is staying in $80 per17 parking spot for 136 parking space. And18 we have also 103 parking space for $14019 per month. So if we are giving an option20 to them, bid out or let these limited21 facilities there, that price going to be22 going up.23
How many24 cars are in parking lots?25 142 4/12/11 - WHOLE - BILL 1101371
We have 4332 monthly permit and we have 41 daily3 permit. A total of 474.4
That is why our12 Administration is trying to work with13 MDO's office to reduce the cost and also14 evaluating again the eligible parking15 list to reduce the cost of parking.16
How much do17 we get in rent for the Love Park parking18 garage?19
I have no idea.20 That would be Public Property. I guess21 they could tell you. I don't know22 offhand. That's not --23
If you24 could -- if the Budget Office could just25 143 4/12/11 - WHOLE - BILL 1101371 provide the Chair with information on how2 much we receive for rent for the parking3 garages we own, because it seems to me we4 have -- we own spaces in that amount.5
Thanks.11 Thank you, Madam Chair.12 COUNCIL PRESIDENT VERNA:13 You're welcome.14 Are there any other members15 that would like to be recognized?16 (No response.)17 COUNCIL PRESIDENT VERNA:18 Seeing no one, thank you so very much.19
The21 Committee will stand in recess until22 1:30.23 (Short recess.)24
Good25 144 4/12/11 - WHOLE - BILL 1101371 afternoon. This is a continued public2 hearing of the Committee of the Whole.3 The first department to testify will be4 the Streets Department.5 I would ask the Commissioner6 and her staff to please come to the7 witness table, identify yourself for the8 record and proceed with your testimony.9 (Witnesses approached witness10 table.)11
Good12 afternoon. 17 COMMISSIONER TOLSON: Good18 afternoon, Mrs. 19 To Council President Verna and20 members of City Council, good afternoon21 to you. 2 Highlights of the budget3 proposal: We request a General Fund4 appropriation of over $120 million and an5 all funds appropriation of over $1676 million. With full funding of our Fiscal7 2012 request, the Department will8 maintain core services that support our9 mission of clean and safe streets. 16 The Streets Department remains17 committed to supporting the18 Administration's goal of 25 percent19 minority, woman and disabled-owned20 business participation in City21 contracting. 24 Our largest division,25 146 4/12/11 - WHOLE - BILL 1101371 Sanitation, manages the City's municipal2 solid waste plan and develops and3 implements strategies to improve trash4 and recycling collection. 12 Some of our most exciting13 successes have come in the area of14 recycling, where we have seen an increase15 in diversion to over 18 percent for the16 first two quarters of Fiscal '11 and an17 increase of 13 percent in recycling18 tonnage collected for the same period as19 compared with Fiscal 2010. With a new20 contract for recycling, processing and21 current marketing conditions, we expect22 to realize several million dollars in23 revenue for this fiscal year as compared24 to just $120,000 in Fiscal 2010. 554 for trash. We realized a net savings of5 over $120 for every ton diverted from the6 waste stream. Recycling is green in more7 ways than one. 14 Last year we introduced an15 exciting new technology to address litter16 in Center City, the solar-powered litter17 compactor, also known as Bigbelly. The18 overwhelming success of the Bigbellys has19 reduced litter, reduced collection costs20 by $875,000 and introduces the public to21 recycling to lead us to -- I'm sorry;22 introduce the public to recycling for23 litter at the curbside on corridors24 citywide. The City of Philadelphia now25 148 4/12/11 - WHOLE - BILL 1101371 holds the distinction of having the2 largest deployment of Bigbellys in the3 country. 16 November 2010 saw the reopening17 of the South Street Bridge, the largest18 public works project ever managed by the19 Streets Department. This important20 connector between Center City and West21 Philadelphia opened on budget and six22 weeks ahead of schedule. 15 The Department will complete16 conversion of all traffic signals from17 incandescent bulbs to energy-efficient18 LEDs in early summer of 2012. This19 conversion reduces both the electric and20 maintenance costs for the system. S. 4 Over the last two winter5 seasons, the City has seen snow totals6 well over 100 inches, an unprecedented7 amount for our area. Though we all8 experienced delays because of the timing9 and nature of the storms, the City was10 able to maintain operations, and11 businesses were able to continue to serve12 their customers. This would not have13 been possible without the support of14 nearly 400 employees from a host of15 operating departments. This supplemental16 staff allows us to avoid the use of17 contractors, except during those few18 large storms that exceed the combined19 capacity of the Streets Department and20 supporting agencies. I would like to21 thank the citizens for their patience,22 City Council for your support and, most23 of all, the men and women of the Streets24 Department, Park and Recreation25 151 4/12/11 - WHOLE - BILL 1101371 Department, the Water Department, License2 and Inspections, Public Property, Fleet3 Management, Prisons, Revenue, the Mayor's4 Office, 3-1-1, CLIP and the Managing5 Director's Office. 8 I am also pleased to announce9 that the Administration has dedicated an10 additional $4 million to our budget11 specifically for snow operations. 16 In conclusion, the Streets17 Department and its employees continue to18 rigorously pursue our mission of clean19 and safe streets.
21 Our Fiscal 2012 request is 1,783, nearly22 450 positions fewer, a 20 percent23 reduction of our workforce. However,24 during that same period, we have expanded25 152 4/12/11 - WHOLE - BILL 1101371 services, including the addition of2 residential snow operations and weekly3 single-stream recycling. We continue to4 consistently deliver services in an5 effective and cost-efficient manner that6 directly impacts the quality of life for7 all City constituents. 14
Thank15 you, Commissioner.16 You are requesting an increase17 of $12.8 million in the Grants Revenue18 Fund, $8.4 million in Class 200 and 4.119 in Classes 300 and 400. How will these20 funds be used and what contracts will be21 let?22 COMMISSIONER TOLSON: Deputy23 Commissioner Michael Zaccagni will give24 you the details for each of those25 153 4/12/11 - WHOLE - BILL 1101371 spending variances.2 DEPUTY COMMISSIONER ZACCAGNI:3 The Grants account funding are for grants4 that we anticipate -- the Grant funding5 is for grants that we anticipate in the6 Transportation Division, and Deputy7 Commissioner Buckley can certainly talk8 to those. What we also see in the9 additions are the additional monies for10 the snow contracts and also for11 additional monies needed for increases in12 the 205 for disposal.13