COUNCIL OF THE CITY OF PHILADELPHIA COMMITTEE ON LAW AND GOVERNMENT - - - Room 400, City Hall Philadelphia, Pennsylvania Wednesday, March 3, 2010 10:25 a.m. - - - PRESENT: COUNCILMAN WILLIAM GREENLEE, CHAIR COUNCILMAN FRANK DiCICCO COUNCILMAN W. WILSON GOODE, JR. COUNCILMAN CURTIS JONES, JR. COUNCILMAN JACK KELLY BILL 090519 - An ordinance providing for the submission to the qualified electors of the City of Philadelphia of the proposal set forth in a Resolution approved by Council proposing an amendment of the Philadelphia Home Rule Charter confirming Council's power to enact ordinances that (i) require City contractors and recipients of City financial assistance to submit and comply with economic opportunity plans... RESOLUTION 090529 - Resolution proposing an amendment to the Philadelphia Home Rule Charter confirming Council's power to enact ordinances that (i) require City contractors and recipients of City financial assistance to submit and comply with economic opportunity plans... - - - 2
Good morning, everyone. Sorry for the delay. For the record, this is the Committee on Law and Government. We do have a quorum with myself, Councilman Goode, Councilman DiCicco and Councilman Kelly. Ms. O'Connell, will you please read both the bill and the resolution 10 before us today, please.
An ordinance 12 providing for the submission to qualified electors of the City of Philadelphia of the proposal set forth in a Resolution 15 approved by Council proposing an amendment of the Philadelphia Home Rule Charter confirming Council's power to enact ordinances that require City contractors and recipients of City financial assistance to submit and comply with economic opportunity plans addressing the participation of disadvantaged business enterprises and workforce diversity, and that provide remedies for violations, including 3 3/3/10 - LAW & GOV'T - BILL 090519, etc. debarment from doing business with the City or receiving City financial assistance for a specified period of time; and authorizing Council to specify procedures for such debarments by conferring powers and duties on existing City agencies, including Council, or by creating new agencies for such purposes; and authorizing the appropriate officers to publish notice and to make arrangements for the special election. Resolution proposing an amendment to the Philadelphia Home Rule Charter confirming Council's power to enact ordinances that require City contractors and recipients of City financial assistance to submit and comply with economic opportunity plans addressing the participation of disadvantaged business enterprises and workforce diversity, and that provide remedies for violations, including debarment from doing business with the City or receiving City financial 4 3/3/10 - LAW & GOV'T - BILL 090519, etc. assistance for a specified period of time; and authorizing the Council to specify procedures for such debarments by conferring powers and duties on existing City agencies, including Council, or by creating new agencies for such purposes; and providing for the submission of the amendment of the electors of Philadelphia.
Thank you, and for the record, that's Bill No. 13 090519 and Resolution No. 090529. Any comment by members of the Committee? (No response.)
Just for the record, we have testimony from Clarence Armbrister, Chief of Staff of the Mayor, and that testimony will be made part of the record. I believe we only have one witness. Mr. Crawley, are you ready to go? (Witness approached witness 5 3/3/10 - LAW & GOV'T - BILL 090519, etc. table.)
I have to sneak this one in there. You know that high school we went to, being late you have to serve JUG. So you know. Sorry. I had to sneak that one in there. Good morning.
Please identify yourself for the record and proceed.
My name is Bruce Crawley. I'm a business owner in the City of Philadelphia. I'm President of Millennium 3 Management, Inc. As an African American business owner here in the City, I want to emphatically express my support for City Council Bill 090519 and for the inclusion of the proposed Home Rule Charter amendment as an addition to the ballot 6 3/3/10 - LAW & GOV'T - BILL 090519, etc. for the Primary Election scheduled on May 18th, 2010. As I stated for the record before Council Committee on September 24th last year, I am supportive of any reasonable effort to finally bring substantive and fair levels of inclusion for African American, Hispanic, Asian and white female firms and employees of those firms and others on contracts let by the City of Philadelphia, and that applies to contracts let to both for-profit and not-for-profit entities. I do appreciate having been invited to share my perspective with Council over the years on business-related issues, but I must admit that I continue to be confused about the reluctance of this City's government and private sector to recognize just how significant a role minority contract and employment exclusion have played in the ongoing deterioration of Philadelphia's comparative economic advantage. 7 3/3/10 - LAW & GOV'T - BILL 090519, etc. It's almost as if the entire City, public officials, private-sector leaders, economic watchdogs and even its media outlets, have all agreed to ignore the critical race and gender-related factors that are contributing to Philadelphia's increasingly precarious economic condition. About a year ago, the Census Bureau informed us that one in four Philadelphians lives at or below the poverty level. percent. For Pennsylvania, the numbers from Kaiser look no better. percent. To make matters even worse, in the midst of what now seems to be a never-ending great recession, the Census 3/3/10 - LAW & GOV'T - BILL 090519, etc. 6 percent. 9 for white females. That establishes the fact that the Philadelphia unemployment rate is not only worse than the historically high national average, but also significantly worse than the unemployment rate in the other four Southeast Pennsylvania counties. 2 percent. Is this all coincidental? 9 3/3/10 - LAW & GOV'T - BILL 090519, etc. Maybe not. 6 percent comprised of African Americans, Hispanics and Asians. This compares to Philadelphia's minority population of 61 percent. On the strength of those numbers, we absolutely cannot afford to be as oblivious to issues of minority unemployment and poverty as our neighbors can afford to be. We simply don't have that luxury. This is not a matter of set-asides. This cannot be dismissed as an affirmative action ploy. It's simply an opportunity for us to recognize finally that we cannot ever expect to have a more viable economy, a lower poverty rate, a lower unemployment rate or a nationally competitive entrepreneurial and business climate in Philadelphia until we begin to take meaningful and accountable steps to 10 3/3/10 - LAW & GOV'T - BILL 090519, etc. include the people who happen to live here in the jobs that are created and the contracts that we let, in both the public and private sectors. And that 61 percent number I mentioned, when we include white women, that number bumps up to about 81 percent of the City's overall population. I'll go way out on a limb now and volunteer that there has never been an economy anywhere in the history of the world that has managed to be successful while keeping 81 percent of its people on the sidelines. That being said, I reiterate that I am strongly in favor of this additional mechanism to ensure that we finally move toward a reasonable regionally and nationally competitive economic profile here in Philadelphia. I would also remind you that this should not be considered extreme or pioneering legislation if you compare it to that which exists on the national 11 3/3/10 - LAW & GOV'T - BILL 090519, etc. level.
Other cities and states around the country are far ahead of us in that regard, including the City of Chicago and the State of Oregon. In places such as Oregon, they are so cognizant of the importance of this issue that they have already codified the ways in which debarment would be done. For a first non-compliance, there's a 90-day debarment. For a second violation, it's up to one year, and for a third violation, a prime and a subcontractor can be debarred for up to five years. I'm also concerned about compliance monitoring, and I've found that in places such as Oregon and in other places, they have had experience with specifically designed forms that must be completed monthly and annually by both the prime and subcontractor and submitted to contracts compliance officials. It doesn't sound very 12 3/3/10 - LAW & GOV'T - BILL 090519, etc. complicated, but it does sound as though they all take this very seriously. In my opinion and in the opinion of thousands of black, Hispanic, Asian and white female business owners, it's time for Philadelphia to do the same, and we applaud City Council for taking this initiative. It's time that 81 percent of the City's population to have an opportunity to vote in its own economic interest and to help Philadelphians' own economy become nationally competitive once again.
Thank you for your testimony and thank you for your 13 3/3/10 - LAW & GOV'T - BILL 090519, etc. testimony on the companion piece of legislation from the fall, 090520, which was unanimously approved by City Council and signed into law by the Mayor, but we believe this next step is actually necessary, and I'm glad you're here to support it. I just have a few questions for the record. Do you believe that City Council should have the authority to legislate on the issue of economic opportunity?
Have the authority to legislate on the issue of economic opportunity.
And do you believe that there should be an independent agency for economic opportunity enforcement? Do you think that will be necessary long term? 14 3/3/10 - LAW & GOV'T - BILL 090519, etc.
You know, I don't know if you need an independent agency. I do know that you need dedicated resources. I don't think you can do it with whatever exists currently. I mean, even when we look at what happens in these other jurisdictions, they have simplified the process by having forms already made up so that every month, the contractor and the subcontractor submit whether the payment has been done, whether they continue to participate. But somebody, some dedicated group of people is looking at that information and processing it, and they don't have to wait until the end of the year or two years later until there's some kind of disparity study done when the horse is already out of the barn. This is happening in realtime, and we need that. I don't know whether that's a separate agency or whether it's just a department of an existing function.
Okay. And I 15 3/3/10 - LAW & GOV'T - BILL 090519, etc. agree we may not need a separate agency under the Home Rule Charter. This amendment actually confirms our power to do what we did last fall and to amend and allows Council to have a permanent role in this process of enforcement. So, lastly, do you believe that the Home Rule Charter should be amended to confirm Council's authority and to address enforcement issues?
Should be amended to confirm Council's authority and to address enforcement issues?
Thank you, 16 3/3/10 - LAW & GOV'T - BILL 090519, etc. Mr. Chairman. Mr. Crawley, who does the oversight now as far as awarding contracts to make sure that they're including --
I'm not sure. I think that in years past, MBEC was supposed to play some role in that, and they used outside consultants to facilitate that for them. GPUAC had a role in that, and there may have been others, but I think it was the specific dedicated responsibility of MBEC to compile the reports and to give that information back.
Are you familiar with the criteria that they would use in awarding these contracts?
Yes. In other words, are they competitive, are they qualified, whatever.
I believe that there was an appropriate amount of due 17 3/3/10 - LAW & GOV'T - BILL 090519, etc. diligence done in preparing the RFPs. The only question I have about the RFPs is that when you know you're looking at a group of business owners, African American, Hispanic, Asian, white females in the main, that tend to have smaller operations, that tend to be smaller and less capitalized, that don't have an ability to bid on an overall contract at $50 million, you know that going in, because there are abundant data that tell you what their respective sizes of minority firms and large firms are. When the RFPs are put together -- that's a part of whether the contract is done in an appropriate way -- if the contract is put together in such a way that the bid invites people who have a minimum experience and capability of bidding at and 50 and 75 million dollars, then 22 you are de facto eliminating those people 23 who could come in with smaller minority 24 businesses to participate. 25 So I think that's the major 18 3/3/10 - LAW & GOV'T - BILL 090519, etc. issue. I think other than that, I mean, the qualifications of the firms have been clear. The only issue about ensuring that people are qualified to compete is whether they are truly minority-owned firms.
The issue of fronts, the issue of having firms that are minority in name only.
That's a very good point, because I was in the purchasing field in my prior life.
And I'm very, very familiar. We had federal contracts and we had to -- we were always under pressure to provide at least a percentage to minority-owned businesses, and you'd be surprised of the people that came in, white established and whatnot, 19 3/3/10 - LAW & GOV'T - BILL 090519, etc. and they come in and say, Oh, no, we have a subsidiary, we have this, we have that, and it just consisted of his wife and someone else being --
-- about whether the contracts are put together in an appropriate way.
Mr. Crawley, just on that point, would you say that the oversight of that has improved at all as far as that front issue or is that still a pretty serious problem, in your opinion?
I think it's a 20 3/3/10 - LAW & GOV'T - BILL 090519, etc. very serious issue. I think that on major construction contracts, major construction projects that have taken place in the City over the past five to ten years, you see it every single day. I mean, there's a utilization of firms that are listed on the final report as having been minority participants as if they were self-performing work, as if they were doing the contract, as if they were doing construction, but in fact, what they are are firms that have been strategically used to make a purchase of some goods or service -- and you know, Councilman Kelly, how that works -- they make a purchase of some goods or services and then the prime contractor re-buys it from them, and then the total value of that purchase is listed as a minority participation. It could be a $10 million pass-through, for which the minority firm gets a nominal fee, but when you look at the report, it shows $10 million in additional minority work having been 21 3/3/10 - LAW & GOV'T - BILL 090519, etc. done. That has not been stopped. It is happening every day right now.
Got you. A little bit of a shell game going on. I note for the record that Councilman Jones, who is not a member of the Committee, is also here and he would like to ask a question. Councilman Jones.
Thank you, Mr. Chairman. Thank you for coming in, Mr. Crawley. I just wanted you to note, I have my African American Chamber pin on for this occasion, knowing you were going to testify --
-- being a founding member, as you are. I would be interested in gauging your response to the appointment of Angela Dowd-Burton yesterday by the Mayor to run OEO. I mean, having history with her, just give me your perspective 22 3/3/10 - LAW & GOV'T - BILL 090519, etc. on that.
Well, I would hope that Angela Dowd-Burton does a credible job. She's been out of this sector for a good while, as you know, working in the pharmaceutical industry, but she certainly on paper has the qualifications. I guess, as I've said before, the person who sits in that job is only going to be as effective as the Administration allows it to be, allows that person to be, and if they have been given a charge and if they are held accountable, if their continued employment is dependent on producing a result, then they will do a good job. If not, if there's weak oversight from the top of the Administration, from the very top of the Administration, if that person is not held accountable, then pretty soon they find their level and they get paid and nothing happens, and we've had that for far too many people. 23 3/3/10 - LAW & GOV'T - BILL 090519, etc. I think there have been, from time to time, good people in those jobs. What we are lacking is top level, top-down commitment to ensure that these things happen.
I agree there have been some good people in those jobs. I won't elaborate on that at all, but I do agree with you on that.
Yeah, I know. We won't make the distinction here today. I understand that the philosophy of OEO has moved away from certifications internally, and I believe some of those resources will probably be put on an emphasis -- I'm hoping -- to be on compliance, true compliance, getting out in the field, boots on the ground on the construction sites and in the workplaces to determine whether that participation is real and substantial, 24 3/3/10 - LAW & GOV'T - BILL 090519, etc. and I'd be interested in hearing your view on that.
Well, you know, I'm just concerned that -- I see that they're out of the certification business, and well they should be given the track record for MBEC over the years in having extended periods for certifications that make it impossible for those firms to participate, creating great disappointment and business failure. So I'm glad that they're out of that business, and there are certainly ample other agencies that do certifications that can be utilized by the City procurement process. The issue, though, is whether the OEO has enough boots to put on the ground. I mean, from what I understand, the staff has been cut. There aren't as many people there as there once was. So if you're expecting them to be all out like the storm troopers checking on the viability of contracts, I 25 3/3/10 - LAW & GOV'T - BILL 090519, etc. think the staff has been -- you know, I guess they're not different from other City departments and divisions, but certainly I understand that they have a lesser staff than they used to, and I don't know how they're going to be deployed. They got a lot of work to do.
I followed your comments. I follow all of your comments all the time. I'm one of your fans. But I also noted that you have expressed some disappointment at the federal level, and I will translate that into the stimulus program here. If you could give three recommendations going forward on what we can do better to be more inclusive, to have more diversity and to actually get some jobs at the level of inner city folk that are underserved by way of employment, what would they be?
Well, I mean, assuming that the people in City government have some say and people in 3/3/10 - LAW & GOV'T - BILL 090519, etc. the State government have some say about how those dollars get expended, and assuming that we're going to have an appropriately managed inclusion effort, which, quite frankly, they've never had at the Commonwealth level. They've never had an appropriate inclusion program at the Commonwealth level. I've heard the Governor say years past, in recent years, that he brought the minority participation up from two percent to ten percent. I think he includes in that white female. And so minorities, other than white females, have gotten the short end of the stick with Commonwealth contracts. So I'm not entirely surprised that there hasn't been minority inclusion in a more substantive way in stimulus if the Commonwealth has a lot to say about how those dollars get allocated for contracts. If the City then has some role to play in all of that, if the City has 27 3/3/10 - LAW & GOV'T - BILL 090519, etc. an effective minority inclusion and white female inclusion program, then it shouldn't matter. I mean, I think the issue is that people are debating and fighting whether or not local governments have the authority to override that which has been put in place by the federal government. The federal government has simply said for construction projects, for one, that there have to be PLAs in place, but they haven't said anything specifically about minority inclusion. And so, you know, using that as an excuse and a copout, I think some state governments, some municipalities are not moving as aggressively as they should. If you consider them contracts, if you understand that your contracts have more than a fiscal accountability, also have an economic development accountability to your voters and to your residents, then you'll just incorporate that in everything else that's done. I mean, I see people thinking, 28 3/3/10 - LAW & GOV'T - BILL 090519, etc. Well, we got to do these contracts here and stimulus is something else. Well, you know, regardless of the backsliding and slowness on the part of the federal government and the lack of interest on the part of the state government, if there are stimulus dollars available for Philadelphia to allocate, they should be done in the same way that we want to more aggressively do all local contracting. And if we don't do local contracting, if we don't increase our ability to nurture minority and other small firms, boost entrepreneurship, create jobs, because that's where the jobs are being created, we're going to have even worse unemployment numbers than we already have, and we're already among the worst in the country.
I agree with you a hundred percent in this respect, that when I was head of MBEC, the first place I went to to visit to see the gold standard was Atlanta, and I had a 29 3/3/10 - LAW & GOV'T - BILL 090519, etc. gentleman by the name of Rodney Straw, Mr. Chairman, who ran their program and I asked him to give me all of the contracts, all of the laws, all of the things germane to how they were so successful in inclusion, and he laughed at me. He laughed at me. He said, It's not the laws. It's not the regs. It's political will. It's the guy at the top saying that we're going to do business in an open and transparent manner and give everybody a bite at the apple so that that prosperity of government is spread around. I'm optimistic, and I've been accused of being an eternal optimist. I'm optimistic about Angela's appointment. I'm optimistic from what I hear in the public, but behind closed doors about this Mayor's intention to make it real here. And always the proof is in the pudding and the numbers don't lie. The math is the math, and at the end of the day, we'll see. 30 3/3/10 - LAW & GOV'T - BILL 090519, etc. Thank you, Mr. Chairman, for allowing me input.
Thank you, Councilman. Any other questions, comments? (No response.)
Anyone else here to testify on this bill or resolution? (No response.)
Seeing none, that concludes the hearing of the Committee. We'll now go into our public meeting, and the Chair recognizes Councilman Goode regarding Bill No. 21 090519.
Thank you, Mr. Chairman. There is an amendment which is contained within the Committee packets, which is simply a technical 31 3/3/10 - LAW & GOV'T - BILL 090519, etc. amendment which changes the year in which this legislation will be passed from 2009 to 2010. So I move the amendment to Bill 5 No. 090519 be approved. (Duly seconded.)
It's been moved and seconded. All in favor please say aye. (Aye.)
The motion carries. The amendment to the bill is approved. Once again, the Chair recognizes Councilman Goode.
Thank you, Mr. Chairman. I move that Bill No. 20 090519, as amended, be reported out of Committee with a favorable recommendation and the rules of Council be suspended so as to permit first reading at our next Council session. (Duly seconded.) 32 3/3/10 - LAW & GOV'T - BILL 090519, etc.
It's moved and seconded. All in favor say aye. (Aye.)
Hearing none, the motion carries and Bill No. 10 090519, as amended, is reported out of this Committee with a favorable recommendation, with the suspension of the rules to allow for first reading at our next session of Council. Once again, Councilman Goode regarding Resolution 090529.
Thank you, Mr. Chairman. I move that Resolution No. 19 090529 be reported out of Committee with a favorable recommendation. (Duly seconded.)
Moved and seconded. All in favor please say aye. (Aye.) 33 3/3/10 - LAW & GOV'T - BILL 090519, etc.
Hearing none, the motion carries and Resolution 6 090529 has been approved by this Committee. There being no further business before the Committee, that concludes our activities for today. Thank you very much. (Committee on Law and Government concluded at 10:50 a.m.) - - - 34 CERTIFICATE I HEREBY CERTIFY that the proceedings, evidence and objections are contained fully and accurately in the stenographic notes taken by me upon the foregoing matter on March 3, 2010, and that this is a true and correct transcript of same. ______________________________ MICHELE L. MURPHY RPR-Notary Public (The foregoing certification of this transcript does not apply to any reproduction of the same by any means, unless under the direct control and/or supervision of the certifying reporter.)