And you have20 identified the subcontracting21 opportunities as what?22 COMMISSIONER NEUKRUG: We'll23 have to get back to you with that24 information. It's available. I just25 271 4/12/11 - WHOLE - BILL 1101371 don't have it in front of me.2
How do you3 know you're pushing the goals if you4 don't know what the subcontract5 opportunities are?6 COMMISSIONER NEUKRUG: Well, I7 do not know. My staff certainly knows,8 because they've been working very9 diligently on this project, but --10
You made the11 statement that you're pushing the goals.12
We have13 Ms. Angela Dowd-Burton who is trying to14 help you out here.15 COMMISSIONER NEUKRUG: Okay.16
Good17 afternoon, Councilman Goode. My name is18 Angela Dowd-Burton, Executive Director,19 Office of Economic Opportunity.20 The goals for the Venice Island21 project fall into three areas, portions22 of the general contracting piece, the23 HVAC -- that's heating, air conditioning,24 ventilation -- the plumbing component and25 272 4/12/11 - WHOLE - BILL 1101371 the electrical as well. And the goals2 were reached basically looking at the3 number of companies in our registry that4 have the capability to perform those5 components of the capital project.6 Right now we're looking at7 capacity, of course, of the size of the8 contracts and we are working with the9 contractors to see if those goals, which10 are aggressive, are realistic as well.11
Okay. Ms.12 Dowd-Burton, while you're sitting there,13 I have to take this opportunity. The14 Water Department actually didn't put15 goals within their written testimony, did16 they?17
They actually22 had two parts of their testimony. One23 was submitted as a written testimony, a24 narrative, and they also had a schedule25 273 4/12/11 - WHOLE - BILL 1101371 that they attached to the document.2 COUNCILMAN GOODE:3 Commissioner --4
No. We were7 given written testimony. Most8 departments absolutely include those9 goals within their written testimony.10 They included it at the beginning of the11 testimony when they talk about how their12 budget is broken down or they include it13 at the end of the testimony. It's been14 fairly consistent. Why wasn't it in the15 written testimony?16 COMMISSIONER NEUKRUG: The17 paperwork was prepared and was submitted,18 but I assume that somewhere along the19 line, the two attachments were not put20 together. It's as simple as that. And I21 have a copy of it here in front of me and22 was not aware that it was not part of the23 testimony that was prepared.24
I'll accept25 274 4/12/11 - WHOLE - BILL 1101371 that.2 What's the largest contract3 that you are awarding this year?4 COMMISSIONER NEUKRUG: That we5 awarded this year? It's relief sewer in6 State Road, $49 million project, again7 public works, and it had participation of8 12.4 percent.9
Was that the10 goal in the RFP?11 COMMISSIONER NEUKRUG: No. The12 goal in the RFP I don't have in front of13 me.14 Twenty-five percent.15
And the goal16 within the contract is?17 COMMISSIONER NEUKRUG: I'm18 sorry?19
And the goal20 within the contract is?21 COMMISSIONER NEUKRUG: Is 12.422 percent.23
Okay. How24 do you reconcile that?25 275 4/12/11 - WHOLE - BILL 1101371 COMMISSIONER NEUKRUG: That2 was -- again, it was a public works bid,3 low bid.4
Are you5 serious? Is that your serious answer,6 that it came in at whatever and so you7 consider that to be a responsible bid?8 Were there 25 percent in contracting9 opportunities identified within the10 project or not?11 COMMISSIONER NEUKRUG: Is there12 somebody here who worked more closely13 with this?14
Good afternoon.15 Brian Mohl, Capital Program Manager,16 Water Department.17 The project on State Road was a18 large box sewer. The --19
My question20 was, you put out an RFP. You identified21 subcontracting opportunities. You set a22 goal of 25 percent. Why did you set a23 goal of 25 percent if the opportunity did24 not exist?25 276 4/12/11 - WHOLE - BILL 1101371
They did their10 good-faith effort by soliciting minority11 firms in accordance with the OEO.12
Then you16 said they did their good-faith effort.17 Those are two separate things.18
The contractor has24 to show us why they can't reach those25 277 4/12/11 - WHOLE - BILL 1101371 goals, and they solicit minority firms in2 those areas and actually all areas of3 where they think that they can --4
In the areas where12 they think that they can perform those13 tasks, if the contractor proves or shows14 that either a contractor or a sub does15 not exist in those areas or any of the16 areas where he can't do the work or can't17 do it cheaper --18
Available, exist.21 Available, exist, basically the same22 thing.23
They're not24 the same thing. If you identify 2525 278 4/12/11 - WHOLE - BILL 1101371 percent in opportunities and then you end2 up with 12 percent in the contract --3
-- the issue5 is, 25 percent could exist in terms of6 opportunity and then there may only be 127 percent availability, which I still don't8 buy.9 Ms. Dowd-Burton, I don't need10 any assistance right now.11 So what did the contractor tell12 you he did?13
But you say19 the contractor established for you that20 25 percent of a $49 million contract was21 not available, that only 12 percent of a22 $49 million contract was available?23
But you25 279 4/12/11 - WHOLE - BILL 1101371 don't remember why?2
Go to your4 second largest contract. What is that?5 COMMISSIONER NEUKRUG: The6 second largest contract is BRC.7
Speak8 louder, please.9 COMMISSIONER NEUKRUG: Is BRC,10 our Biosolids Recycling Center.11
And that is12 a for-profit?13 COMMISSIONER NEUKRUG: That is14 a for-profit operating contract for15 interim operations of the facility,16 design of the facility, construction of a17 new pelletizing facility and long-term18 operations.19
For how20 much?21 COMMISSIONER NEUKRUG: Well,22 the total, which is a 20-year contract,23 is $58 million.24
Okay.25 280 4/12/11 - WHOLE - BILL 1101371 COMMISSIONER NEUKRUG: But for2 the current fiscal year, it's a much3 smaller amount.4
So it's a5 20-year contract?6 COMMISSIONER NEUKRUG: It's a7 20-year contract.8
That did not9 have to come to City Council?10 COMMISSIONER NEUKRUG: Yes, it11 did. It did. And it has a total12 participation of 32 percent.13
Okay. How14 many years has the firm held the15 contract? How old is the contract?16 COMMISSIONER NEUKRUG: The17 contract is two years old -- three.18
What was the19 goal identified in the RFP?20 COMMISSIONER NEUKRUG: Fifty,21 5-0.22
So the goal23 identified within the contract was 5024 percent?25 281 4/12/11 - WHOLE - BILL 1101371 COMMISSIONER NEUKRUG: That's2 what I'm hearing from my staff, yes.3
And the4 goal --5 COMMISSIONER NEUKRUG: I don't6 think that's right.7
I think there8 is some confusion between what was in the9 actual bid or RFP and what the actual10 contract document stipulates. I will say11 that this project even though it has been12 in place prior to my coming to OEO, it13 includes equity participation and --14 COUNCILMAN GOODE:15 Ms. Dowd-Burton?16
What was the25 282 4/12/11 - WHOLE - BILL 1101371 goal in the RFP?2 COMMISSIONER NEUKRUG: I'm3 looking at a piece of paper here that4 gives me that there are five different5 phases and each phase has a different6 goal.7
Was there an8 overall goal in the RFP?9 COMMISSIONER NEUKRUG: The10 overall goal -- I'd say no. For11 example --12
Was there a13 total contract dollar amount?14 COMMISSIONER NEUKRUG: I think15 we don't have the answers for you and16 we'll have to get back to you.17
No. We're18 going to stay here.19 COMMISSIONER NEUKRUG: Okay.20
What's the21 total contract amount?22 COMMISSIONER NEUKRUG: The23 total contract amount is $58 million.24
What was the25 283 4/12/11 - WHOLE - BILL 1101371 total DBE goal?2 COMMISSIONER NEUKRUG: Well, as3 I said, there are different pieces to4 this. There's an interim operations5 goal. That's a 16 million point 6 --6 because it's broken up into five7 different phases.8
I'll wait9 while you do the math, and then tell me10 what the total DBE goal is.11
Hello, Councilman.12 My name is Jim Bolno. I've been involved13 with the privatization project at the BRC14 since its inception and --15
I'll have to check18 what the RFP goal is. However, I know19 that --20
I know what we've23 been achieving. I'm not sure what the24 goal is. I do know we have been25 284 4/12/11 - WHOLE - BILL 1101371 exceeding our goal.2
Okay. I'll have to5 double-check that. I think our goal was6 50 percent and we have been achieving7 about 75 percent in the first three years8 of the contract. This is considered a9 great success story by the Office of --10
What11 percentage of the contract has been12 implemented?13
A hundred percent18 of the contract is implemented. It is a19 23-year contract.20
Then the24 entire contract has not been implemented.25 285 4/12/11 - WHOLE - BILL 1101371
Okay. Excuse me.2 I didn't understand what you were saying.3 But we are in the third year of a 23-year4 contract and we are surpassing by, I5 believe, about 25 percent the goals that6 were established.7
I asked you8 a specific question. I asked you what9 percentage of the 23 years worth of work10 has been done in the three years. What11 percentage of total contract dollars, of12 the 23 years in contract dollars, has13 been spent in the first three years.14 Because if you want to tell me you're15 achieving 75 percent on two percent of16 the contract or five percent of the17 contract or ten percent of the contract,18 we're still going to be here for a long19 time.20 DEPUTY COMMISSIONER McCARTY:21 If I may, Councilman. Debra McCarty.22 I'm the Deputy Commissioner of23 Operations.24 It's a phased contract.25 286 4/12/11 - WHOLE - BILL 1101371
I get that.2 DEPUTY COMMISSIONER McCARTY:3 So the first three to five years, the4 contractor is operating the facility, the5 de-watering facility and --6
How much7 does the contractor get paid for the8 first three years?9 DEPUTY COMMISSIONER McCARTY:10 Well, the first -- the interim fee for11 Fiscal '09 was 21,813 -- $21,813,824;12 Fiscal '10 was $20,792,641; and Fiscal13 '11 is estimated to be 22,593,167. So14 during the first three to five years, the15 contractor is also building the16 heat-drying facility.17
My question18 is, what percentage of those contract19 dollars have gone to disadvantaged20 businesses?21 DEPUTY COMMISSIONER McCARTY:22 What phase?23
Over the24 last three years.25 287 4/12/11 - WHOLE - BILL 1101371 DEPUTY COMMISSIONER McCARTY:2 That is -- so that's been about 753 percent. Yeah, 75 percent for the4 last -- this phase that we're in now.5
Explain6 that.7 DEPUTY COMMISSIONER McCARTY:8 I'm sorry. What?9
Explain10 that.11 DEPUTY COMMISSIONER McCARTY:12 The contractor is responsible for13 operating the facility, the de-watering14 facility, and land applying -- or moving15 the sludge, the de-watered sludge, out of16 that facility. So the contractor is --17 75 percent of the contract is being18 spent -- a large portion of it is to move19 the material off site and dispose of it.20
Which21 disadvantaged businesses got the work and22 how much did you pay them?23 DEPUTY COMMISSIONER McCARTY:24 Well, we have a contract with Synagro and25 288 4/12/11 - WHOLE - BILL 1101371 they have the contract with these2 vendors.3
And which4 disadvantaged contractors got the work5 with Synagro and how much did Synagro pay6 them?7
I told you10 you're not. You're going to give me that11 information now.12 DEPUTY COMMISSIONER McCARTY:13 We'll work on getting that for you. We14 don't have --15
You don't16 know because you're not tracking it.17 DEPUTY COMMISSIONER McCARTY:18 Not off the top of our heads, sir.19
Well, did20 you bring the information with you?21 DEPUTY COMMISSIONER McCARTY:22 Possibly.23
Okay. We'll24 wait.25 289 4/12/11 - WHOLE - BILL 1101371 (Pause.)2 COMMISSIONER NEUKRUG:3 Councilman, I'm sorry to report that we4 don't have that information in this room.5
So you have6 contracts for tens of millions of dollars7 that you're letting. You claim you have8 participation goals. You put out RFPs9 that may go out at 25 percent and the10 contract comes back at 12, another RFP11 that goes out at 50 percent and the12 contract turns out to be 32 percent.13 You know these questions are14 going to be asked. There's no excuse for15 not actually bringing the information16 with you. My guess is, you don't have17 the information. My guess is, Synagro18 didn't give you the information, and19 whatever they reported to you, they don't20 think that you're going to hold them21 responsible. But since it's a 23-year22 contract, we're going to discuss this23 every year that I'm here, and you're not24 just going to get back to me with25 290 4/12/11 - WHOLE - BILL 1101371 information, you're coming back with the2 information.3 COMMISSIONER NEUKRUG: And,4 Councilman, respectfully I appreciate5 what you're saying. In many ways you're6 absolutely correct, more information7 should have been brought here. I did not8 know that --9
And you're10 coming here with the information.11 COMMISSIONER NEUKRUG: Just so12 you know, I'm with you. I get where13 you're trying to head, and I agree with14 you and I agree with the policy, and15 we'll do everything we can to make sure16 that we live up to your expectations on17 the policy.18
Thank you21 very much.22 The Chair recognizes23 Councilwoman Blackwell.24
I did25 291 4/12/11 - WHOLE - BILL 1101371 have a question, but it can wait until2 they return. Thank you.3
All right.7 Thank you very much.8 COMMISSIONER NEUKRUG: Thank9 you.10 MR. McPHERSON: The next11 department is the Division of Aviation.12 (Witnesses approached witness13 table.)14
Thank you18 for coming. Would you please state your19 name for the record and begin your20 testimony.21 Could we ask those who are22 leaving to leave quietly, please. Thank23 you.24
Good afternoon,25 292 4/12/11 - WHOLE - BILL 1101371 Madam Chair and other members of City2 Council. My name is Mark Gale. I'm the3 Chief Executive Officer at Philadelphia4 International Airport and I'm here to5 provide testimony to you today on behalf6 of Division of Aviation's FY 20127 Operating Budget.8 I believe you have a copy of my9 full testimony. Would it be permissible,10 Madam Chair, to read an abbreviated11 version just highlighting the testimony?12
15 Philadelphia International16 Airport is one of the largest economic17 engines in Pennsylvania, generating over18 $14 billion annually for the regional19 economy. 5 The state of the airline6 industry has improved since last year,7 and while challenges and uncertainties8 still remain, there is a strong sense of9 optimism and signs of recovery. 3 percent only, but recent12 activity shows a much more positive13 trend. A snapshot of the most recent six14 months shows an increase of 4 percent15 over last year. Airline consolidation16 practices continue to change the17 landscape of the airline industry. S. 5 To meet both current and future6 demands, the Airport is moving forward7 with facilities improvements and8 modification programs. 13 From power ports to pet ports,14 PHL has repeatedly been recognized for15 enhancing the traveler's experience and16 overall customer service. Examples17 include the Airport's arts and18 exhibitions program, the cell phone lot,19 free WiFi for all passengers every day20 all day and power passenger ports to21 charge cell phones and laptops free of22 charge. Also, in partnership with Albert23 Einstein Health Care Network, ten24 airlines and the Transportation Security25 295 4/12/11 - WHOLE - BILL 1101371 Administration, the Airport has initiated2 a program that allows children affected3 with autism to become more familiar with4 the sites and sounds of travel before5 taking a real trip on an airplane. S. 10 A key customer service aspect11 continues to be the quality of our12 concession program. 1 million square feet5 terminal complex and 2,400-acre PHL site,6 as well as our Northeast Philadelphia7 Airport. 10 Philadelphia International11 Airport is committed to diversity and12 inclusion. 17 Again, just anecdotally,18 yesterday, Madam Chair, the Airport held19 an Economic Opportunity Forum down at the20 Airport at the Airport Marriott attended21 by over 350 representatives from over 20022 firms, and of those 200 firms, over 7023 percent of those firms were DBE firms24 that came looking for future25 297 4/12/11 - WHOLE - BILL 1101371 opportunities at the Airport. 4 In addition, the Airport5 continues to provide the City's Office of6 Economic Opportunity outreach seminars7 and is advancing the Administration's8 goal of 25 percent minority, women and9 disabled-owned business participation in10 City contracting. 6 percent. 22 Department of Transportation23 Disadvantaged Business Enterprise24 Program. 3 In addition to promoting and4 monitoring DBE participation in the5 professional service and public works,6 the Airport focuses on minority, female7 and disabled participation in PHL's8 concession program. 16 Federal regulations established17 the Airport Concession Disadvantaged18 Business Enterprise Program in 2005. 13 In addition, the Airport's14 current Public Venue Recycling Program is15 on target to recycle over 300 tons of16 materials annually. 22 Air quality initiatives23 continue to benefit under the FAA's24 Voluntary Airport Low Emissions Program,25 300 4/12/11 - WHOLE - BILL 1101371 which has provided over $14 million in2 grant awards. 6 One of the most significant7 events in PHL's recent history occurred8 in December of 2010. A ten-year planning9 process and an extensive seven-year10 environmental review process culminated11 with the FAA issuing its record of12 decision approving the Airport's Capacity13 Enhancement Program. Receipt of this14 final document enables the Airport to15 proceed with the next steps required to16 expand and make critically needed17 improvements to ensure the Philadelphia18 International Airport is strategically19 positioned to meet future air service20 demands, enhance competition in a very21 global competitive market and maintain22 the region's economic vitality. 810 million passengers in 2010. In 2030,11 less than 20 years from now, passengers12 at the Airport are forecasted to rise to13 more than 52 million and 760,000 takeoff14 and landings.
The Capacity Enhancement15 Program is truly vital to ensuring the16 Philadelphia International Airport is17 strategically positioned to effectively18 handle this anticipated growth, as well19 as attract additional air service,20 especially new international21 destinations. 24 The CEP will create over25 302 4/12/11 - WHOLE - BILL 1101371 100,000 jobs during the 12-year2 construction period as the Airport3 expands. 10 The Airport is targeting 25 to11 35 percent DBE participation on a $612 billion program. 13 In moving forward, the Airport14 will be presenting to City Council later15 this spring a request to extend the16 current use and lease agreement with our17 airlines. That four-year agreement,18 which was effective July 1st, 200719 governing the airlines' rates and charges20 for operating at PHL, will expire this21 June 30th. 5 I thank you for the opportunity6 to testify in front of you today on our7 FY12 Operating Budget. I and senior8 Airport managers will be happy to answer9 any questions. With me to my right is10 Mr. Caleb Gaines. He is our Director of11 Compliance at the Airport. 15
Thank you16 very much. Very nice testimony. We have17 Councilman Kenney who has some questions.18
Thank you,19 Madam Chair.20 Mr. Gale, I just want to21 compliment you. I think that you and22 your staff run a terrific airport. I23 know a lot of times there are issues24 relative to delays and other things that25 305 4/12/11 - WHOLE - BILL 1101371 are beyond your control, weather related,2 FAA related, but I do believe you've3 done, since you've been there, done a4 tremendous job.5
I'm going8 to go into an area that is not going to9 be that pleasant, and I want you to10 understand that it's nothing to do with11 my opinion of how you run this airport or12 the job that your people do.13 On Friday -- and I do -- let me14 preface it by saying I do listen to your15 testimony relative to the CEP, and I16 understand the importance of all that.17 On Friday last week, Councilman18 Jones and I had promised previously to go19 out to Tinicum. Councilman Jones had a20 family situation and was not able to be21 there, but his Chief of Staff, Al Spivey,22 was there, and we spent three hours in23 that community. Generally, Tinicum to me24 was something I drove by on the way to 9525 306 4/12/11 - WHOLE - BILL 1101371 to go deeper into Delaware County or to2 go to the Airport, and I can tell you,3 even in light of your comments relative4 to the importance of the CEP, that's a5 real viable, decent, blue-color,6 tax-paying, hard-working community, and7 it's not a blighted area with empty8 houses and things falling down. There9 are people there who have lived and10 improved their properties and take pride11 in their homes and they have -- matter of12 fact, their grade school, which they were13 nice enough to take us on a tour of, was14 one, I think, 200 in the nation that are15 Blue Ribbon schools.16 It's beyond my imagination that17 I could ever participate in casting a18 vote either in the Finance Committee or19 on the floor of this Council that would20 take 80 of those properties away from21 those folks and take 20 of their22 businesses away. There are 4,500 people23 who live in the community daily, and24 every day during the week Monday through25 307 4/12/11 - WHOLE - BILL 1101371 Friday, there are 20,000 people in that2 community doing work and making a living3 and paying taxes.4 Now, while I recognize the5 importance of progress, I don't know how6 we rationalize what we're going to do7 there, what the plan is there. The8 movement of UPS, which is part of this9 Plan A, to me -- in private conversations10 with folks, they're not all that thrilled11 about the move. They're scheduled to be12 moved into what I view as an13 environmental area that may have all14 kinds of problems. They're going to be15 constrained in their ability to expand,16 and basically we're going to take 8017 houses for a setback for a runway.18 And the other issue, frankly,19 is that if we continue to move in this20 direction, we could lose the Airport. I21 mean, we understand that there is enough22 of a rumble or rumbling within the23 republican-controlled House and Senate24 and the republican Governor's Office that25 308 4/12/11 - WHOLE - BILL 1101371 if we continue to go in this direction,2 we could lose our Airport by way of3 Parking Authority, by way of the port,4 and I don't want to see any of that5 happen.6 Now, the bonds that are7 necessary to do this overall project, is8 it all for the runway or is it various9 parts and pieces of improvement there?10 Could you explain?11
I will, Councilman.12 And, first, thank you for your comments.13 I do want to clear up at least one14 misunderstanding, if you will, in terms15 of the approach for the Airport with16 respect to the community and the17 sensitivity of what's at stake here.18 We at the Airport have never19 downplayed the seriousness that we have20 homes that we have proposed to21 voluntarily acquire and that people live22 in those homes and some of them have23 lived in there for generations. It's not24 an easy thing. At the same time, we're25 309 4/12/11 - WHOLE - BILL 1101371 trying to balance the future needs of2 this entire region and put Philadelphia3 into a position where it can compete with4 our neighbors to the north in Newark,5 which we've discussed before, that6 unfortunately do a much better job in7 terms of getting across the globe than we8 do, and to our south in Washington Dulles9 area. We want those travelers to come10 through our airport. We want the11 businesses that a global airport will12 attract here, and certainly the jobs that13 are created and the economic growth that14 goes along with an airport expansion15 project like that has been repeated in16 not only in this house but outside. So I17 want --18
Have the19 Airport representatives met with and20 spent that kind of time with the people21 that we spent with last Friday?22
Because24 I've asked that question. I said has25 310 4/12/11 - WHOLE - BILL 1101371 anybody from the Airport kind of done2 this tour and talked to these people and3 looked at these homes, and they said no.4 So I wanted to know what you felt the5 engagement of the Airport was.6
We have spent a lot7 of time in the Township. Again, I'm a8 20-plus year employee at the Airport.9 I've had countless meetings in Tinicum10 Township over the past two decades, and I11 think our relationship could have been12 classified as better or sometimes worse13 at others, and I think that this14 unfortunately may fall into the situation15 where it's not as good as we would like16 it to be.17 As recently as last month,18 knowing that we were trying to continue19 to work things out not only with Tinicum20 Township but Delaware County and the21 Interboro School District, who they have22 sued us in order to stop expansion of the23 Airport and that currently resides in24 federal court, we have never shied away25 311 4/12/11 - WHOLE - BILL 1101371 from opportunities to try to seek some2 type of resolution or settlement in order3 to move forward with this. I asked for4 our attorney to reach out to their5 attorneys to offer to meet, and we6 unfortunately received an answer back7 that they were not interested in meeting.8 We have continued an open-door9 policy with respect to that, and we10 continue to try to search out ways that11 would meet the needs of not only being12 able to relocate UPS, keep those jobs and13 that tax revenue in Delaware County for14 their purposes, provide for the new15 runway that will set Philadelphia up not16 for next year or five years or ten years17 from now but literally for 20, 30, 4018 years, long-range planning to put19 Philadelphia in the proper place, but yet20 at the same time, what can we do that21 wouldn't necessarily require the22 acquisition of the homes and the23 businesses.24 Unfortunately, it's a finite25 312 4/12/11 - WHOLE - BILL 1101371 parcel there, and UPS, you've stated,2 they've been good about talking to us.3 They understand the long-range need for4 this, but they also want to have a5 long-range need here at Philadelphia6 themselves. So we've been working with7 them to try to accommodate a replacement8 facility for UPS. They sit on over 2009 acres of land right now, and even on our10 best efforts, trying to accomplish a11 relocation of UPS and provide for future12 growth for the Airport, international13 terminal growth, cargo growth, it14 requires everybody to take something15 much, much less, and we're not really16 sure that the much, much less is going to17 work for UPS in this case here.18
The issue19 of revenue replacement, I mean, the 8020 homes alone, there's no -- where is the21 potential to replace that revenue for22 their township, which goes to pay for23 their schools and public services when24 it's now a runway or a setback for a25 313 4/12/11 - WHOLE - BILL 1101371 runway and not a tax ratable?2
I think we've always3 been open to discussions about how we4 might come to some type of an agreement5 to replace lost revenue in terms of6 moving forward with the Airport. The7 Airport had an agreement with Tinicum8 Township and the taxing authorities for9 ten years, which expired in 2007. That10 was a settlement agreement that was done11 in order to provide for the land12 necessary to build the new international13 terminal, something that I think has been14 wonderful for this entire region and has15 permitted U.S. Airways to grow its16 gateway.17
PILOTs are illegal,20 Councilman. We're not allowed to use the21 term "payments in lieu of taxes."22
So what's2 the issue relative to 2007 when the3 payments stop? Is that the end of the4 agreement?5
Since 2007, they've10 been -- my predecessor, Charlie Isdell,11 actually was involved in discussions.12 They go back that far. Unfortunately, I13 think that the Airport and the Township14 in particular reached an impasse whereby15 it is the basis for a lawsuit right now.16 And I don't want to get too far into the17 litigation with my attorney here, but I18 think that we've always been open to try19 to settle the differences between the20 Township, the County and the School21 District to provide for the appropriate22 replacement of revenues that they may23 lose, but yet balance the needs of the24 region and the Airport in order to grow.25 315 4/12/11 - WHOLE - BILL 1101371
But what2 you're telling me is that the plan that's3 currently on the table is the only4 iteration that's possibly done? I5 understand there's 29 different6 iterations of this expansion of the7 Airport. We whittled it down to three,8 and now there's a recommending of one,9 and that's the only one that's possible?10
That only one that's11 possible or the preferred alternative of12 the three that were boiled down to,13 Councilman --14
The 29 in the20 Airport's Master Plan was really a very,21 very unconstrained approach. It had22 runways going in all different23 directions. It really had no limits, no24 boundaries. When you start to apply25 316 4/12/11 - WHOLE - BILL 1101371 boundaries and criteria, that you might2 not be able to move I-95, you're not3 going to be able to move the John Heinz4 Wildlife Refuge, you're not going to be5 able to move the river, there are two6 huge bridges, the Platt Bridge and the7 Girard Point Bridge, which represent8 obstructions to aircraft arriving, all9 that criteria whittled those types of10 different concepts down. There was one11 concept that we thought had a lot of12 merit, but the FAA took it out for safety13 considerations, which would have changed14 the direction of the runways, but it15 would have had airplanes flying over the16 John Heinz Wildlife Refuge, which for17 safety considerations they took that out.18 So the three alternatives that19 were finally put -- that the FAA20 reviewed, the no-built alternative, do21 nothing, and the two alternatives,22 Alternative A and Alternative B, both23 alternatives called for a new runway in24 the location that UPS currently resides,25 317 4/12/11 - WHOLE - BILL 1101371 and both alternatives called for the2 relocation of UPS over into the northwest3 corner of the Airport.4
Well, the original7 boiling down was done by the Airport with8 its master planning consultants. Then9 that review was picked up by the FAA and10 analyzed over the last eight years.11
But that12 was not a public process, the boiling13 down of 29 to three?14
I think it was not15 necessarily a matter of public process,16 but in Master Plan committees -- as far17 back as 2002, Councilman, the Airport18 Master Plan committees that were set up19 that had different types of20 representation on it, some of them were21 technical in nature, some of them were22 airlines, some of them were different23 stakeholders, there was stakeholder24 representation from the Township. We had25 318 4/12/11 - WHOLE - BILL 1101371 at least two Tinicum Township2 Commissioners that sat on our committees3 as far back as 2002 when these plans were4 discussed.5
Has the EPA6 been involved in any of this planning or7 any of this boiling down to three?8 Because the area that I saw which is9 proposed to be the UPS location seems to10 me to be kind of an environmentally11 important area. I mean, it's not the12 John Heinz Wildlife Center, but it's13 certainly land that seems to be wooded14 and green. Are there any --15
Yeah. It's18 the end of the street, at the end of that19 one street where it backs up against this20 wooded area.21
Notwithstanding pure22 acreage, in order to do the Airport's23 Capacity Enhancement Program as laid out24 through the documents, there are some25 319 4/12/11 - WHOLE - BILL 1101371 1,130 acres of land that need to be2 acquired or readjusted in some form or3 fashion. The residential property4 accounts for less than one percent of5 that, or about 7.7 acres of land. But6 it's still a very, very important 7.77 acres, particularly if you live in one of8 those homes.9 The area that's behind the10 homes is undeveloped property right now,11 which is commercially available and --12
The13 original question was, did the EPA have14 any input or express any opinion relative15 to where -- relative to the location of16 the UPS --17
-- and the19 filling in of the river to accommodate20 the runway? And EPA has signed off on21 both?22
Councilman, as part23 of the environmental impact statement24 process, in 2002 the Airport's project25 320 4/12/11 - WHOLE - BILL 1101371 was one of 13 projects named by then2 Secretary Mineta as a high infrastructure3 or high priority infrastructure project.4 We were the only airport project on that5 original list of 13.6 In July of 2003, the notice of7 intent was filed in order to move that8 environmental process forward. As part9 of that package, being the first airport,10 we were named under a Presidential11 Executive Order for environmental12 streamlining, and what that meant was, in13 order to streamline the process, given14 its high value and priority and15 importance not just to Philadelphia but16 to the entire national airspace system,17 some 17 regulatory agencies, including18 the EPA, signed on and were part of the19 review process, working side by side with20 the FAA and a multitude of consultants21 over the last eight years.22
And that23 includes the filling in of the portion of24 the river that's needed for the runway?25 321 4/12/11 - WHOLE - BILL 1101371
So there's3 no -- I mean, we lost the food center at4 the Navy Yard for two brown eagles. So5 you're telling me that there's no6 wildlife issues, fish issues, riverbed7 issues? Everything can be --8
No, I'm not telling9 you that at all, Councilman. I'm saying10 that in the record of decision, we are11 still required to, as we move forward, to12 follow all federal, state, local13 environmental permitting and other14 procedures, so --15
So we don't16 know at this point whether we can17 proceed?18
I think we'll hit19 issues along the way, but I think there's20 been sufficient study. We know, for21 example, that there are a number of22 wetlands that will be impacted as part of23 this process. That was identified. We24 will not be able to move forward with the25 322 4/12/11 - WHOLE - BILL 1101371 project until such time as we mitigate2 and provide replacement wetland3 opportunities.4 In addition, the fill that goes5 in for the river, the 23 and a half6 acres, we have to accommodate for that.7 We have to replace wetlands and waterways8 in order to accommodate those things.9 This isn't something that is10 blessed and everybody has reviewed it and11 they're going to walk away from the12 table. This still is an effort that's13 going to require ongoing looks from the14 Pennsylvania DEP, the EPA and many other15 agencies.16
Let me just17 finish with the political potential.18 And, again, if you feel that you're not19 qualified to discuss the political20 potential, I understand. But the anger21 within the Legislature in that area I22 believe is sufficient to potentially move23 something that would take it away from24 us. What does that do to your plans? I25 323 4/12/11 - WHOLE - BILL 1101371 mean, what does the advent of an2 authority potentially, heavy Governor,3 heavy Legislature do to the Capacity4 Enhancement Plan if in fact we no longer5 can direct our own airport?6
I don't know if I7 can answer your question in full,8 Councilman. I think that over the last9 decade-plus, there have been a variety of10 bills that have been put forth in the11 State House to speak to some type of12 either governance change of the Airport,13 put it in with other airports around.14 I'm not really sure whether or not that15 authority exists for the state to fully16 do that. Maybe it does. I think that's17 for legal minds to figure out in this18 case here.19 What I would say is that20 regardless of what happens with the21 governance of the Airport, the problems22 will remain the same. The congestion and23 the chronic congestion and delay issues24 will still be there regardless of whether25 324 4/12/11 - WHOLE - BILL 1101371 the City of Philadelphia is running the2 Airport or somebody else.3
Well, I can4 tell you that when those other ideas were5 floated, there were other people in the6 Legislature at the time that had the7 capacity and the tenure and the ability8 to fight them off. They're not there9 anymore. I mean, there's -- what10 happened to State Representative Evans11 happened, that was the last of our real12 leverage there.13 So I would just caution you14 from my experience that they take what15 they want to take when they want to take16 it, and this is a reason that they will17 utilize to take it.18 Now, you talked about19 congestion. I wanted to know if you20 could rank for me the reasons -- the21 following reasons why for congestion and22 delays at the Airport. Could you give me23 the number one reason why there's24 congestion at the Airport?25 325 4/12/11 - WHOLE - BILL 1101371
I think it changes2 frequently, Councilman. The number one3 reason for delay at the Airport typically4 ends up in bad weather conditions,5 Philadelphia International Airport does6 not have the ability to run the type of7 approaches that eight out of the top ten8 airports in the country currently have9 the ability to do. The two that don't10 have the ability to do that, one of them11 is Philadelphia. The second one is Las12 Vegas. The other ten all have the13 ability to run dual simultaneous14 independent approaches into their15 facility.16
So it's got17 less to do -- it's got more to do with18 that than it has to do with the fact that19 the airspace that's available between New20 York and Washington is constrained in bad21 weather. So that whole anecdote about22 having the FAA pull airspace from us to23 accommodate JFK, Newark and Dulles is not24 accurate?25 326 4/12/11 - WHOLE - BILL 1101371
The FAA has2 admitted, Councilman, that airspace3 changes need to occur as well as4 on-the-ground changes. Our runways, our5 two primary runways, are spaced too close6 together in order to allow those type of7 operations to continue.8 Having said that, I put it this9 way: We can do all the changes on the10 ground that we might want to do, but if11 we don't work side by side with the FAA12 in terms of airspace changes, in terms of13 implementing new technology that come14 about as part of what you've heard is15 NextGen, then I don't think we will have16 accomplished very much. Likewise, the17 FAA can do all the airspace improvements18 that they want, including NextGen, but if19 we don't do the improvements that are20 necessary on the ground, we won't21 accomplish anything that way either. It22 has to be something that goes hand in23 hand and something that we've talked very24 frankly with the FAA, and they've25 327 4/12/11 - WHOLE - BILL 1101371 committed that they will be working with2 us over the next ten years as the runway3 would be developed.4
Well, just5 in closing, I just want to reiterate my6 position that I am very uncomfortable7 with doing anything in an omnibus type of8 bond request that would include the9 taking of these homes and businesses. I10 would be happy to vote for something that11 would get the other work started at the12 Airport, because I think we need the jobs13 and we need the opportunity there to14 improve our facilities, but I just want15 to give you a heads-up that at least from16 this particular member, what I saw there17 Friday makes it very difficult for me to18 cast a vote to take those people's homes.19
Councilman, I remain20 committed to not only trying to work21 things out with the Township and the22 County on the appropriate path forward, I23 remain committed to try to answer all24 your questions and make you more25 328 4/12/11 - WHOLE - BILL 1101371 comfortable with the situation.2 You asked an earlier question3 that I didn't get a chance to answer,4 which was when we talk about a5 multi-billion-dollar expansion plan, is6 it all toward the runway. No, it's not.7 Probably less than half of the total plan8 goes to the runway and the runway9 extensions that are proposed. The other10 half go towards improvements, such as an11 automated people mover system that you12 find today in Dallas and Detroit, new13 terminal buildings, new cargo facilities14 so that we can actually compete better15 with the likes of JFK instead of shipping16 it up the Turnpike and --17
So all of those20 things, Councilman, are part of that21 larger package.22
But I do23 believe if it comes all in one, there may24 be a problem.25 329 4/12/11 - WHOLE - BILL 1101371
Thank you9 very much.10 The Chair recognizes Councilman11 Goode.12
Thank you,13 Madam Chair.14 Good afternoon, Mr. Gale.15
Mr. Gale, I18 just finished having a conversation with19 the Water Department about two contracts,20 one which was roughly 50 million, the21 other one was roughly 60 million, which22 is about one percent or less than this23 expansion project. What we found in the24 process was that they issued one RFP for25 330 4/12/11 - WHOLE - BILL 1101371 25 percent, 25 percent participation,2 then only had 12 percent participation in3 the contract. For another RFP, they4 cited 50 percent participation rate and5 then in the actual contract, it was only6 32 percent.7 In both your participation rate8 for expansion project and for your9 department during the fiscal year, you10 use the 32 percent figure. Where did11 that 32 percent figure come from and why12 are those figures the same for both13 department within one year and expansion14 project? In other words, why should I15 believe the 32 percent number is real and16 what does it really represent?17
If I might,18 Councilman. Cal Gaines, my Director for19 Compliance, who not only is highly20 familiar with the DBE program, but the21 federal side of DBE program and how it22 changes back and forth between the two,23 as well as our airport concession24 program, which has a totally different25 331 4/12/11 - WHOLE - BILL 1101371 disadvantaged business program, I think2 is prepared to answer the question of how3 those numbers came about.4
Would you9 identify yourself for the record, please.10
I'm sorry. My11 name is Caleb Gaines. I'm the Director12 of Compliance for the Airport.13
The question14 is simply where did the 32 percent figure15 come from.16
The 32 percent was17 a projection of what we believe for FY1218 we would be able to achieve. That was19 based upon what the goal was, what we20 achieved the last time, plus what the21 federal dollars would be. When we add in22 the federal dollars to the FY goal, we23 believe in everything that it will exceed24 the 32 percent.25 332 4/12/11 - WHOLE - BILL 1101371
What does2 the 32 goal for the Airport expansion3 represent?4
That represents in5 everything the overall goal of what we6 believe and everything based upon what7 the expenditures will be that we will be8 able to achieve that particular 329 percent. We want to keep that goal to be10 consistent.11
That does12 not tell me what the 32 percent goal13 represents in terms of real14 opportunities.15
That goal is --16 the opportunities would be construction17 management. It would also be accounting18 opportunities, we think graphic design19 opportunities. There's also design20 opportunities as well as a part of that.21
I get that22 it's a $6 billion project. I believe23 actually the range -- I've been using 3224 percent. The range is actually 25 to 3525 333 4/12/11 - WHOLE - BILL 1101371 percent. It represents $1.5 billion or2 $2 billion. The issue is, how real is3 that for disadvantaged businesses? And4 even if you put out an RFP at one5 percentage level, what are you going to6 do to ensure that? And the further7 question is more specifically -- and I8 know that you are well versed in both the9 federal program, transportation program,10 and the City program. Part of what we've11 been trying to do with economic12 opportunity plans and we passed an13 ordinance a couple years ago, it wasn't14 originally being implemented. Recently15 I've had the conversation about making16 sure that certain provisions are17 implemented regarding whenever someone18 submits an economic opportunity plan,19 they have to submit their diversity track20 record.21 So my question is, to what22 extent in terms -- when you go out to bid23 these things and when you award these24 contracts, to what extent are you holding25 334 4/12/11 - WHOLE - BILL 1101371 contractors responsible from the very2 beginning of telling you what they've3 achieved in the past?4
Well, what we're5 going to be doing is, we will be6 monitoring those contracts. We have7 monthly meetings to track project by8 project to make sure --9
My question10 was, what are you doing to make sure that11 these potentially prime contractors give12 you their diversity track records within13 the RFP process and within the contract14 award process to make sure they've15 actually practiced diversity in the past16 before you assume they're going to be17 able to do it now?18 When I was talking to the Water19 Department a few moments ago, they said20 that the contractor told them that even21 though there's a 25 percent goal, only 1222 percent was attainable. The question I23 would ask the Water Department if I24 brought them up again is, what has that25 335 4/12/11 - WHOLE - BILL 1101371 contractor achieved in the past. Maybe2 the contractor couldn't find3 subcontractors because the subcontractor4 isn't good at finding subcontractors, and5 so maybe that contractor should not have6 received that award, or maybe there7 should have been more due diligence in8 the beginning by the department to make9 sure that the contractors that are even10 being invited to bid have to tell you11 what their diversity track records are so12 that you know they're serious in that13 regard.14
That's a very good15 point you raise, Councilman Goode. I16 think what we would have to do with these17 particular contractors and everything is18 do our homework and go back and review19 their participation, their records and20 what they've done, and then we can use21 that in terms of evaluating whether or22 not a contract should be awarded to that23 particular firm. If they have not24 achieved significant participation with25 336 4/12/11 - WHOLE - BILL 1101371 minorities and women in the past, then we2 should not be dealing with them. They3 should not get a contract. But we have4 to go back and to review their record.5
Because if I6 was upset about a $50 million contract or7 a $60 million contract, you know I'm8 going to be upset about a $6 billion9 project and in terms of whether we've10 been inviting people to bid who don't11 practice diversity or never practice12 diversity or not willing to prove it.13
Councilman, if I can17 add just one point on the back side of18 that. The outreach forum that I spoke19 about in my testimony that we held20 yesterday at the Airport with over 20021 firms, 75 percent of them were DBEs.22 Many, if not all, were local firms here.23 The contract that we have out24 on the street now, the request for25 337 4/12/11 - WHOLE - BILL 1101371 qualifications for program management2 services to actually start to put the3 administrative legs under the CEP, I've4 met with all of the firms that intend to5 prime on that, and they know that I am6 dead serious when I said, before everyone7 left the office, You need to make sure8 that you not only meet these goals, but9 you do every attempt to exceed these10 goals, and that was reiterated yesterday11 and it's going to be reiterated again and12 again and again in additional future13 outreach forums, in addition to the14 monitoring piece that Cal has talked15 about. And when qualifications are16 submitted, we're going to be taking a17 look to see how they've competed in the18 past.19
That makes20 it even easier. If you believe you know21 who the potential prime contractors are,22 you can directly request from them what23 their diversity track records are and you24 can forward that information through the25 338 4/12/11 - WHOLE - BILL 1101371 Chair.2 Thank you, Madam Chair.3