That came about20 as a result of the kind of coordinated21 effort between the public workforce22 system and in this case the Commerce23 Department.24
Well, that25 76 9/7/11 - COMMERCE - RES. 1100201 is an excellent example, and we would be2 thrilled for that type of tangible -- the3 dialogue is good and healthy, but it4 means nothing if there is no outcome that5 you can look, feel and touch.6 So we would continue to7 encourage that. The only sector I did8 not hear in that mix of organizations you9 mentioned are the chambers, the African10 American Chamber, Hispanic Chamber. I11 don't want to misstate --12
Women's13 Chamber.14 COUNCILWOMAN BROWN:15 Unfortunately, I don't think we have16 that, Councilman Jones.17
Along, of20 course, with the Greater Philadelphia21 Chamber. But there may be --22
We have chamber23 representation. I just didn't mention24 it. We have chamber representation on25 77 9/7/11 - COMMERCE - RES. 1100201 the Board, the Philadelphia Chamber of2 Commerce. We have representatives from3 the Hispanic Chamber of Commerce as well.4
I'm not sure if6 we have anybody from the African American7 Chamber of Commerce. I'm not sure.8
Thank you,14 Mr. Chairman.15 I apologize, I got a little bit16 distracted by the Chairman promoting17 another issue very important to the18 workforce in Philadelphia while19 Councilwoman Quinones-Sanchez was20 speaking, asking you some questions, and21 so I'm not sure she touched this. I22 don't think she did, but what was your23 budget prior to the stimulus? What was24 the budget of the combined PWDC and WIB25 78 9/7/11 - COMMERCE - RES. 1100201 prior to the --2
One hundred10 million. Eighty million dollars of that11 was TANF all in, and about another $2012 million on the WIA side.13
And so the14 big reduction from -- the essentially 5015 million reduction from pre-stimulus16 funding is not a lack of federal funds17 but is a lack of state funds?18
And how many25 79 9/7/11 - COMMERCE - RES. 1100201 employees were there in both2 organizations prior to the stimulus?3
On the PWDC side4 we had 160, and at the WIB I think we had5 total of about 20.6
And how many11 are you going to have with only $5012 million? What is the total number of13 employees that you'll have now?14
Well, as of15 today, we have 119 on the PWDC side, and16 on the WIB side I think we're down to17 about nine.18
With a 5024 percent drop in funding?25 80 9/7/11 - COMMERCE - RES. 1100201
Correct. I can2 just -- I just want to manage the3 Committee's expectations around earlier4 discussions about conversations that5 we're having with the state. There could6 likely be more.7
Well, I'll8 get to that in a second, but so I just9 wanted to understand sort of whether or10 not the reduction in staff has been11 commensurate with the reduction in12 dollars. Obviously if they don't reduce13 50 percent if you have a 50 percent14 reduction, there's fewer dollars15 available to actually go to corporations16 to train people, as Councilman Goode17 suggests, or other things, right? We're18 spending it on administration and not19 getting people trained.20
Yeah. There is a21 direct relationship between the amount of22 investment that we have administratively,23 from the state administratively, and the24 demand that we have to serve. So as the25 81 9/7/11 - COMMERCE - RES. 1100201 demand shrinks, then the administrative2 overhead shrinks.3
Well, on the EARN10 side, the demand on the EARN side is11 defined as people who receive cash12 assistance from the state.13
But the14 demand doesn't decrease; we just have15 less money to give out?16
No. You're20 absolutely right. I mean, there's still21 a question of the 10,000 clients,22 where do --23
I mean, in24 theory, the demand should be increased25 82 9/7/11 - COMMERCE - RES. 1100201 compared to pre-stimulus because the2 economy is in far worse shape, we have3 far higher employment, et cetera.4
So I'm7 wondering when you described the mission8 of PWDC versus WIB, it seemed to me that9 the mission of PWDC is almost entirely10 administrative and the mission of WIB,11 the way you described it, was sort of the12 policy arm.13
It seems to15 me to be an extraordinary number of16 people on the administrative side of the17 house of workforce development and I'm18 just wondering why you need that kind of19 staff to manage inflows and outflows of20 dollars. I understand you said you have21 to monitor contracts and other stuff, but22 I'm just wondering what kind of systems23 you have in place to eliminate24 unnecessary workflow processes and allow25 83 9/7/11 - COMMERCE - RES. 1100201 more of this to be sort of online or2 computer driven rather than paper based.3
Well, let me just4 talk a little bit more about the role5 that PWDC plays. I mean, it's one thing6 to characterize it as administrative.7 That's a broad brush. That's my8 language. I used it. But let me just9 talk a little bit more about what we do10 in the capacity of the administrative11 role.12 We monitor the system to make13 sure that there is compliance, that there14 is no fraud, that there is no theft at15 the local level. So that when we do the16 contracting that we do -- and we do17 roughly several hundred, close to about18 500 contracts in the course of a year.19
Five hundred20 contracts with training organizations or21 with employers?22
With a host of23 employers, training providers, EARN24 providers, the whole host of --25 84 9/7/11 - COMMERCE - RES. 1100201
Number of6 contracts and amount of dollars for each7 of those categories you mentioned,8 contracts with employers, as Councilman9 Goode suggested, versus contracts with10 training providers versus contracts with11 the EARN people.12
The EARN, we have13 nine EARN providers, and the contracts14 with the EARN providers range from $315 to -- $2 to $3 million. We contract with16 PYN, Philadelphia Youth Network. That's17 a fairly large contract that we do with18 those guys. If I'm not mistaken, that19 contract on an annual basis, about $1020 million on an annual basis out of the 50.21 We contract with a host of smaller22 job-specific skills training providers.23 I don't have that number right offhand,24 Councilman.25 85 9/7/11 - COMMERCE - RES. 1100201
To do what,6 Councilwoman Blondell Reynolds Brown is7 asking me and I'm redirecting the8 question at you.9
To provide the10 employment and training services for a11 host of programs that they operate, in12 concert with the School District and some13 of the other things that we've talked14 about. And they get other privately15 raised dollars as well, but that's what16 they contract with us to do.17
I don't want18 to waste the -- if you could provide the19 answers to all of those questions I just20 asked in terms of the dollars, how21 they're spent in each organization,22 especially if PYN is going to get23 one-fifth of now what's available for all24 workforce development dollars. We have a25 86 9/7/11 - COMMERCE - RES. 1100201 serious -- obviously training our youth2 and employing our youth is very3 important, but there are a lot of adults4 who need work skills who have families to5 support, and I question whether, without6 knowing more, and I look forward to7 getting your information, whether or not8 that makes sense given that we're taking9 that spending from 10 percent of the10 total to 20 percent of the total now with11 the reduction in dollars.12 So just provide information13 about where all the money goes, the14 percentage of contracts, who gets the ten15 largest contracts in each category and16 how much money that is and then also in17 the aggregate that money.18 I'm just wondering -- and this19 is sort of along the line of Councilman20 Jones' questions and Councilman Goode's21 questions about existing employers. Do22 you know how many jobs we lose every23 decade, net jobs?24
Every3 decade. The City of Philadelphia loses4 40,000 to 50,000 jobs every decade. They5 have since the '50s. That's 4,000 or6 5,000 net jobs a year. People are7 creating new jobs in the City, like the8 example Councilman Jones mentioned, but9 for every new job, we have lost jobs that10 are in excess of those new jobs, and it11 seems to me that the lowest hanging fruit12 for the City of Philadelphia in terms of13 its workforce is to keep the jobs we14 already have. And based on a response to15 an earlier question that was asked, which16 was how many companies that are here know17 you exist, you said not enough, the18 number one thing you can do to get people19 employed is to keep the jobs that are20 here, make workforce dollars available to21 companies that are still here that are22 struggling to stay here because of our23 tax burden and other things and help them24 develop training programs that have them25 88 9/7/11 - COMMERCE - RES. 1100201 want to stay in the City of Philadelphia2 rather than leave.3 We're losing potentially 4004 manufacturing jobs from Sunoco -- 1,5005 jobs from Sunoco if they close down those6 plants. Sunoco pays net income tax to7 the City of Philadelphia based on those8 1,500 employees and all of that property,9 even though they lose money in the10 refinery operations because of our sales11 factor apportionment formula, they've12 paid $30 million to the City of13 Philadelphia while they're losing money.14 So that's something we can deal with, but15 making it easier for companies like that16 to train new employees, making it less17 expensive for them to do business here is18 something you guys can do that can have a19 real impact, and I'd like -- I don't want20 you to answer the question now, but the21 next time -- I'm sure Councilman Goode22 will have you back -- the next time23 you're before us, I would like a thought24 from you about how you can engage25 89 9/7/11 - COMMERCE - RES. 1100201 existing companies in the City of2 Philadelphia and have a plan to let them3 know that you want to help them get new4 employees on board and pay for them. I5 think that's the biggest bang we could6 get for your dollar based on sort of7 everything I've heard here today.8 So I'm hopeful that the9 combination of your organizations will10 meet the goals you have. I'd also like11 you to present to the Chair what the12 deliverables will be for the combined13 organization in terms of actual goals,14 how you define the outcomes that we15 should expect for $50 million, and16 present that in writing to the Chair so17 that when you come back in a year or two18 years, we can take a look at what you19 said you'd accomplish with the dollars20 available compared to what is delivered.21 I have one final question and,22 that is, are you combining the workforce23 dollars that are not available currently24 within PWDC and WIB into your25 90 9/7/11 - COMMERCE - RES. 1100201 organization or are the other workforce2 dollars -- and there's lots of people who3 get workforce dollars in the City that4 are not PWDC or WIB. Are you combining5 them into your new organization or are6 they still going to have scattershot7 workforce dollars that are not integrated8 into a unified strategy?9
We're not10 combining them. That's the purview of11 the funders, but what we are doing as a12 result of this is aligning our strategies13 with them.14
So what are15 you doing with MOCS, which I think gets16 $8 million and dollars that could be used17 for workforce development?18
MOCS is a part of19 our internal structure that we assemble20 when we come together to talk about how21 we plan to implement the system.22
They're part of25 91 9/7/11 - COMMERCE - RES. 1100201 the PWDC structure as it stands right2 now, and I fully anticipate them3 continuing that role.4
Okay.5 Because it seems to me they waste -- is6 their budget part of the 50 million7 you're mentioning?8
Well, that's10 what I'm talking about. They spend a lot11 of money on strategies that aren't at all12 related to any of the good ideas that13 we've been talking about here today.14
And what16 you're saying is that spending, that17 strategy, will not be part of your18 bailiwick. So that there's still a lot19 of dollars out there that are being20 spent, in my view, wasted on things that21 don't create jobs that are called22 workforce dollars.23
Yeah. Well, I24 can tell you that it is our goal to try25 92 9/7/11 - COMMERCE - RES. 1100201 to rein in and align as much of that as2 we can within the purview of our sphere3 of influence, either through our4 organization, our Boards, or through the5 Mayor's Office of the City of6 Philadelphia.7
Well, I8 think that has to be done. I hope this9 is going to be an effective10 consolidation. I don't think it is if it11 doesn't include the other workforce12 dollars and organizations that are out13 there so that there can be one14 coordinated, unified strategy that can15 then be held accountable by this body and16 others.17 If I have a criticism of the18 Administration, it's all sizzle, no19 steak, and here we are coming up with a20 new name, combining two new21 organizations. We had a CTO. Now we22 have a CIO. Now we have a Director of23 Innovation, but nothing has changed in24 the way that operates. We've had three25 93 9/7/11 - COMMERCE - RES. 1100201 new titles, three new press conferences.2 I just want to see you be on a path so3 that I'm not able to say that about you4 next year.5 Thank you very much.6
I guess8 there are no other questions from members9 of the Committee. Are there any other10 witnesses to testify?11 (No response.)12
Thank you13 very much. This is a very good start.14 We look forward to continuing these15 hearings. Also as Councilwoman Sanchez16 suggested, probably some informal17 meetings with the Committee and/or the18 full Council, but as you see, Council is19 very interested in this issue and looks20 forward to working with you.21
Thank you.25 94 9/7/11 - COMMERCE - RES. 1100201 (Committee on Commerce and2 Economic Development recessed at 11:453 a.m.)4 - - -5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 95 1 CERTIFICATE2 I HEREBY CERTIFY that the3 proceedings, evidence and objections are4 contained fully and accurately in the5 stenographic notes taken by me upon the6 foregoing matter on September 7, 2011, and7 that this is a true and correct transcript of8 same.9 10 11 12 13 --------------------14 MICHELE L. MURPHY15 RPR-Notary Public16 17 18 19 (The foregoing certification of this20 transcript does not apply to any reproduction21 of the same by any means, unless under the22 direct control and/or supervision of the23 certifying reporter.)24 25