COUNCIL OF THE CITY OF PHILADELPHIA PUBLIC HEARING AND PUBLIC MEETING BEFORE THE COMMITTEE OF THE WHOLE Operating Budget - - - Room 400, City Hall Philadelphia, Pennsylvania February, 14, 2000 9:35 a.m. - - - BILL 000003 - An ordinance to adopt a Capital Program for the six Fiscal Years 2001-2006 inclusive. BILL 000004 - An ordinance to adopt a Fiscal 2001 Capital Budget. BILL 000005 - An ordinance adopting the Operating Budget for Fiscal Year 2001. PRESENT: COUNCIL PRESIDENT ANNA C. VERNA, Chair COUNCILWOMAN JANNIE L. BLACKWELL COUNCILWOMAN BLONDELL REYNOLDS BROWN COUNCILMAN DARRELL L. CLARKE COUNCILMAN DAVID COHEN COUNCILMAN FRANK J. DICICCO COUNCILMAN W. WILSON GOODE, JR. COUNCILMAN JAMES F. KENNEY COUNCILWOMAN JOAN L. KRAJEWSKI COUNCILMAN W. THACHER LONGSTRETH COUNCILMAN RICHARD T. MARIANO COUNCILWOMAN DONNA REED MILLER COUNCILMAN MICHAEL A. NUTTER COUNCILMAN BRIAN J. O'NEILL COUNCILWOMAN MARIAN B. TASCO - - - VINCENT VARALLO ASSOCIATES, INC. Registered Professional Reporters Eleven Penn Center, Suite 600 Philadelphia, PA 19103 (215) 561-2220 249 12/14/00 - WHOLE - Operating Budget - 05 I N D E X Stephanie Franklin-Suber . . . . . . . . . . . 3 Mayor's Chief of Staff Linda Orfanelli, Acting Director of Finance. . 40 Vince Jannetti, Secretary. . . . . . . . . . . 47 Sinking Fund Commission Robert Dubow, Acting Budget Director . . . . . 51 Nancy Kammerdeiner, Revenue Commissioner . . . 53 Karen Yancy, Deputy City Treasurer . . . . . . 63 Paula Weiss, Deputy Ombudsman. . . . . . . . . 82 Tax Lien Sale James Roundtree, Director. . . . . . . . . . . 95 Minority Enterprise Council Joseph Perrello. . . . . . . . . . . . . . . . 105 Deputy Director of Finance, Risk Management Jane Lewis, Deputy City Solicitor. . . . . . . 120 250 12/14/00 - WHOLE - Operating Budget - 05 P R O C E E D I N G S
Good morning, everyone. This is the continued public hearing on the Operating Budget, Bill No. 005, and I would ask Mr. McPherson to again read the title of that bill.
Bill No. 000005, an ordinance adopting the Operating Budget for Fiscal Year 2001.
Thank you. May I ask that whoever's testifying approach the witness table, please. (Witnesses come forward.)
Good morning. Council President Verna. My name is Stephanie Franklin-Suber. I'm Chief of Staff. Before I begin my formal testimony, I would ask your permission to extend an invitation to Members of the Committee.
Thank you. Mayor Street has asked me to extend an 251 12/14/00 - WHOLE - Operating Budget - 05 invitation to all Members of the Committee to join him for lunch today in Room 225 for an informal briefing on the status of the Eagles practice facility.
Thank you. It will be at noon, Room 225. Lunch will be 9 served and the Mayor will bring you up to speed in 10 answering any additional questions that you may 11 have with regard to the transaction. 12 Madam President, should I proceed?
Thank you. Good morning. Thank you for this opportunity to provide testimony regarding the Fiscal Year 2001 Operating Budget for the Office of the Mayor. The good news is that my testimony will be very, very brief. Essentially, the proposed budget for the Mayor's Office is a carry-forward budget. We are still in the process of formulating and finalizing our staffing plans and our organizational structure, so we anticipate that we may need to return to City Council if budgetary 252 12/14/00 - WHOLE - Operating Budget - 05 changes are necessary to support our new structure, operational structure. At this point, the total amount requested for the Mayor's Office from the General Fund for Fiscal Year 2001 is $2,492,176. This is an increase of $51,739 from Fiscal Year 2000 estimated obligations. Of this amount, $2,292,176 is for employee compensation, purchases of services materials, supplies, and equipment. The largest portion of this amount, the Class 100 Budget, includes $1,879,969 for 46 positions and represents an increase of $51,739. And that basically covers the annualized costs of negotiated wage increases for Fiscal Year 2000. The remaining portion of the General Fund, $200,000, is for the City Scholarship Program. This is an existing scholarship program that we will continue. It's for Philadelphia students who attend classes at area colleges and universities. You will be hearing directly from the Mayor's Office of Community Services and the Office of Labor Relations on their Fiscal Year 253 12/14/00 - WHOLE - Operating Budget - 05 2001 Operating Budgets later in the hearings. We greatly appreciate City Council's support during this transaction period. And as I stated previously, we are still in the process of formulating our staffing plans and organizational structure. This concludes my testimony, and I would be delighted to answer any questions you may have.
Thank you. The Chair recognizes Councilman Cohen.
Could you outline generally the structure that you're seeking to arrive at in the Mayor's Office? I mean, how would it differ in concept from in the last administration? I know you've stated that you're in the process, but could you give us a general idea.
Well, I can give you a very concrete example. There are several areas within the Mayor's Office that we are 254 12/14/00 - WHOLE - Operating Budget - 05 developing. For example, we have administration, we have constituent services and correspondence, we have communications, we have the Chief of Staff's Office, and we have scheduling and advance. Within each of those areas, we are evaluating our staffing needs. Fundamentally, the Mayor's Office functions to support the needs of the particular mayor. And as you might imagine, Mayor Rendell and Mayor Street have different operational and management styles, their agendas are different. And so we are building out the office to support and complement the needs of the Mayor, and also just being, I think, a bit clearer in terms of the functional areas. In the Communications Office, for example, many of you may recall that under the prior administration, the bulk of that function was handled by Deputy Mayor for Communications Kevin Feeley. At certain points in time, he had maybe one press secretary. In getting feedback from him and doing research during the transition, it -- it, you know, it was not feasible to respond to the volume of media inquiries, and so we are 255 12/14/00 - WHOLE - Operating Budget - 05 exploring ways that, from a cost effective standpoint, we can increase the staffing to allow us to be more responsive and, frankly, to work better in coordination with the departments to get accurate information and to disseminate it to the media in a timely fashion. So the idea is to make sure that we put into place -- we're not there yet, but to put into the place of kind of staffing levels and procedures and protocols to enable to us function as efficiently as possible, with a great deal of reliance on technology, and making sure that we are networking and can communicate efficiently within the office.
Is there going to be, for example, as many deputy mayors, or is the concept going to be different?
The concept is going to be different. We do not envision even using the title of "Deputy Mayor."
The Chair 256 12/14/00 - WHOLE - Operating Budget - 05 recognizes Councilman Kenney.
Thank you, Madam President. Madam Suber, of the 46 positions that are listed in the Mayor's Office, are any of them deputy managing directors? And are we going to utilize deputy managing directors in a way in which we have them assigned to duties and functions of the Mayor's Office? And if we have or if we are, how many of them are there, and what is the aggregate amount of their salary, and how many positions does that represent?
The list of positions you have currently is a preliminary one; we're still going through the review of all of the positions and their functions. There are some new positions that we've already created that are reflected in this, but it is absolutely going to change.
I mean, in the past -- and maybe I'm mistaken -- but in the past, I believe that other administrations, including the Rendell Administration, had utilized the ability to appoint what they called "deputy managing 257 12/14/00 - WHOLE - Operating Budget - 05 directors" normally at higher salary rates than perhaps the deputy mayors or people working in the Mayor's Office had been earning, but they are actually functionary as directly to the Mayor and to the Mayor's Chief of Staff as opposed to the traditional managing director role. I mean, are there -- so are the 46 positions right here, even though it may change, are any of them designated as deputy managing directors?
Are there any current deputy managing directors that are working directly for the Mayor or directly for you?
For example, I'll give you an example. In the last administration, former Deputy Richard Zappile was designated as "the Gun Czar."
I don't know if he still is or he isn't, but I understand he may be a deputy managing director as opposed to a deputy 258 12/14/00 - WHOLE - Operating Budget - 05 mayor.
Right. He is not. It is my understanding he's at PHA.
Correct. The only position that I can think of right now that has not been thoroughly evaluated that may exist is the Deputy Mayor for Management and Productivity, which is Linda Berkowitz's position. We are still going through, as I said, the overall review of various positions from a functional standpoint. So I -- to my knowledge, there are no deputy mayors currently that are in the Mayor's Office, apart from Linda Berkowitz. There might be one or two others. We do not estimate continuing to use the title "Deputy Mayor" or even "Deputy Managing Director." I mean, we're moving in a different direction in terms of the Administration. I can't -- from a legal standpoint, there may be people that are appointed Deputy Managing Director, but they would not hold that 259 12/14/00 - WHOLE - Operating Budget - 05 title. One example of that would be Estelle Richman's position. She is Director of Social Services, but in terms of her Charter appointment, she is a deputy managing director. She reports to the Managing Director and is housed in the Managing Director's Office, and her functional responsibilities are oversight and supervision of a variety of different departments.
Well, I guess, then, what I would request -- and I know you're still in period of transaction -- would be a list of deputy managing directors, their names, their salaries, and what their duties are.
Certainly. We have not gone through and reviewed the deputy-- the Managing Director's Office, and I think when the Managing Director testifies tomorrow, he will also be clear with you that his testimony is preliminary. We're still reviewing all of those offices.
Can I ask a question. Do we anticipate that this preliminary review that you guys are going through now would be completed prior to our final passage of this 260 12/14/00 - WHOLE - Operating Budget - 05 budget?
I -- I really don't know. I mean, we're -- there are a number of positions that we are evaluating. The focus has been on the cabinet-level positions, the commissioner-level positions. We are starting to get into each of the offices, and so I can't tell you that we will be finished with that review. It's going to be an ongoing process.
But we would anticipate that those positions that are either acting or unfilled today throughout the government would be filled prior to our final passage of the budget for next year?
I actually -- I can't answer that today. We have a Transition Team meeting tomorrow where we'll get a report on the status of all of this, and I would be able to get back to you and give you a better sense of what we anticipate the timing to be.
Thank you. 261 12/14/00 - WHOLE - Operating Budget - 05 The Chair recognizes Councilwoman Brown.
Good morning. Thank you, Madam President. Good morning.
My question was really a comment regarding the City Scholarship Program.
The good news is that, based on the information you've provided, the funding for that has remained stable at $200,000 over the last several years.
The bad news, of course, is that college tuition costs are going through the roof, really growing faster than inflation. And it would be important at some juncture for the Administration to reexamine the funding to for the Scholarship Program to at least respond to what's happening with college tuition rates. And then let me seize the moment to say 262 12/14/00 - WHOLE - Operating Budget - 05 thank you. I did get information, my first five days here, on the City Scholarship Program, so I'll be paying particular attention over the next several years to see if, indeed, the Administration is attempting to increase the funding for that and respond to the college going rates.
We will certainly evaluate that. It was very easy to make the decision. This was a program we wanted to keep, and we wanted to make sure that we moved forward with it at least at its current level, and we will go through an evaluation process to see how we might be able to expand it.
Thank you. The Chair recognizes Councilman Clarke.
Thank you, Madam Chair. Good morning, Miss Franklin-Suber.
I actually have questions along the lines of Councilman Kenney that I want to ask with maybe a little more 263 12/14/00 - WHOLE - Operating Budget - 05 specificity. As it relates to the last paragraph when you talked about finalizing the organizational structure, is it a sense that -- although I understand you won't have it final yet, is it a sense that the change in the budget would be considerable? I mean, is there any possibility of that?
It is difficult for me to even predict that, and let me try to give you another example of why. Mayor Street has expanded his cabinet, so we have a Secretary of Education, who will have some staffing needs. We have a Secretary of Strategic Planning and Initiatives, who will also have certain staffing needs. We have a Secretary of External Affairs, we have a Secretary of Agencies and Authorities. And so, first and foremost, we don't have all of the individuals in place. And as they come into government, we are in the process of assessing their role and responsibility and potential staffing needs, and whether or not they would be within the Mayor's Office budget or separate budget treatment. And so it's a little 264 12/14/00 - WHOLE - Operating Budget - 05 difficult at this point to estimate where we may end up. We will certainly do everything possible to make it cost-effective and efficient, but I don't have a sense of the number yet.
Thank you. That kind of led to my next question with respect to the deputy mayors, and I understand at one time, the last administration had upwards of deputy 11 mayors? 12
And when I 14 initially saw the way you were -- this administration was structuring its government, I kind of thought that these secretaries -- the Secretary of Strategic Planning and the Secretary of Education and so on and so forth -- kind of were going to replace the deputy mayors. Is that how that --
Well, there certainly were quite a number of deputy mayors. I think the difference is that you will have fewer secretaries. They are cabinet-level positions, and they will have significant responsibility. 265 12/14/00 - WHOLE - Operating Budget - 05 The majority of deputy mayors, I believe at this point, are no longer with the Administration, so we do see a difference, a significant difference between the secretary position and the deputy mayor position, which is why they are not referred to as "deputy mayors."
The difference is in terms of position within government; they are cabinet-level.
And the staffing of the former deputy mayors, did they have staff?
Some of them did have staff, some of them did not. There were a number of them. Some of them had more significant responsibilities than others. The majority of them are no longer with the government.
Thank you, 266 12/14/00 - WHOLE - Operating Budget - 05 Madam President. On -14, on Line 8-14 -- I mean -- I'm sorry, the line is 234 on that page, 8-14, and the -- I'm sorry.
I'm rushing it along. That's all right, I got to wait till you get to that department, sorry. I'll -- I think I'm rushing too fast. We're not ready for that department, so I'll pass. I was in the wrong section, Madam President, I pass.
How many cabinet-level positions do you anticipate having?
In addition to the Charter-created cabinet positions of --
Managing Director, City Solicitor, Finance Director, Commerce Director, Mayor Street has on his cabinet Chief of 267 12/14/00 - WHOLE - Operating Budget - 05 Staff, Secretary of Strategic Planning and Initiatives, Secretary of Education, Secretary of External Affairs, and Secretary of Agencies and Authorities.
That position has not been filled, but the function would be to better coordinate and monitor the City's interaction with all of the various quasi- agencies, organizations, nonprofits that we fund and that actually promote the City in a variety of different ways, whether it's, you know. . . Some of it will be under Commerce, like, you know, "Welcome America" and that kind of thing. But there are other agencies and organizations that the Street Administration would just like to have a better understanding and appreciation of what exactly they're doing, particularly if there's a financial impact to the City, and we are funding them. 268 12/14/00 - WHOLE - Operating Budget - 05 So it's intended to be a position that provides for better interaction with monitoring coordination among those agencies. Many of them are independent legal entities, so we can't legally supervise them. But to the extent that we are funding them, we can better monitor what they are doing with the dollars that flow to them.
In addition to funding them, isn't it a fact that all of their boards are appointed by the Mayor?
I think, generally speaking, the Mayor -- you know, depending on the organization you're referring to, we tend to have appointments. There are some boards that we may have a majority, there's some boards where we may have one representative, and I think it varies, depending on the board agency or entity that you're referring to. But we generally have some degree of representation, that is correct.
In the last administration, there was -- I don't know what the 269 12/14/00 - WHOLE - Operating Budget - 05 title was, but it was equivalent to what I would now regard as the Secretary of Transportation, someone working just on transportation.
That was the Deputy Mayor for Transportation, correct.
Is there going to be that emphasis in this administration on transportation?
There will certainly be an emphasis on transportation. The position, the title of the position, and the position itself, we have not made a decision yet, but there certainly will be an emphasis on transportation. It could be that it's part of Commerce, it could remain its independent office. We have not made that decision yet.
The Secretary of Education, how does that differ from the Superintendent of Schools?
The Secretary of Education sits on the Mayor's Cabinet, and her responsibility is to be the Administration's representative on education issues, so the Secretary of Education deals directly with the 270 12/14/00 - WHOLE - Operating Budget - 05 School Board, the Superintendent, but has independent responsibilities. It is not the superintendent. It's intended to be the administration's representative on education issues. The Secretary of Education will work closely with the Governor's Secretary of Education. So on all education-related related issues from a policy standpoint, from an operational standpoint, given the significance and magnitude of the issues confronting the City with regard to public education, it is a cabinet-level position.
Is there any position which reports directly to the Mayor, other than your position?
All of the cabinet officials have direct access to the Mayor.
Well, I'm not sure that was the answer to the question I asked. They all have access, but do they report regularly to the Mayor? Would the Mayor be their direct supervisor, or would you be their direct supervisor? 271 12/14/00 - WHOLE - Operating Budget - 05
The Mayor is the direct supervisor, and we have regular cabinet meetings.
The Mayor convenes regular cabinet meetings. He meets with the members of his cabinet on a regular basis.
We meet as a cabinet at this point in time, and we are going through discussions now -- we do not have all of the cabinet positions filled, first of all. And while appointments have been made, not everyone's in place, not everyone's in their office. Some of the cabinet members have been working. There are going to be many times where they work very closely with me, there are going to be many times when they work very closely with the Mayor. We are going through all of the those communications and staffing issues now. But as a cabinet-level official, you report to the Mayor.
Do they have direct 272 12/14/00 - WHOLE - Operating Budget - 05 reporting responsibilities also to you?
It's hard to cross-examine a lawyer, especially a skilled lawyer such as yourself. I'm trying to find out, to whom do they basically report?
I'd be happy to give you a copy of the job description for Chief of Staff, because when I met with the Mayor, ti was actually a job description that was developed by the Transition Team. My responsibility as Chief of Staff is to support the members of the cabinet, to coordinate communications. There are going to be many times where they do deal directly with me on issues as compared to the Mayor, but if you -- the organizational chart that was unveiled by the Mayor and announced publicly, cabinet-level officials report to the Mayor. Does that mean that they don't interface with me and interact with me? No, it 273 12/14/00 - WHOLE - Operating Budget - 05 does not mean that, and there are going to be many times where I work very closely with them.
Question on behalf of Councilwoman Krajewski as well as myself.
What does that person do? Who is it and what does that person do?
George Burrell has been appointed to the position of Secretary of External Affairs. He has not yet come into government; I believe his start date is tomorrow. And I believe the idea is that this individual is on the Mayor's Cabinet and has primary responsibility for promoting the City's agenda at the federal level, the state level, and at the local level, working very closely, of course, with 274 12/14/00 - WHOLE - Operating Budget - 05 the Chief of Staff's office and the Mayor's Office, and Communications. So, for example, when we had our meeting with the Governor on Friday, Secretary of External Affairs George Burrell and Secretary of Education Debra Kahn went along with us.
Does that mean that he will be, in effect, the chief lobbyist? I'm just trying to fit him in within the description of jobs that we're familiar with.
Well, I think that that's part of the problem. If you're trying to draw a correlation, I think we are doing some things differently. I don't know that I would characterize it as lobbyist. It certainly is someone that is going to make sure that in terms of the Administration's agenda, the City's agenda, and Harrisburg, for example, that we do what we need to do in dealing with members of the General Assembly, coordinating and working closely with the Governor's Office. So it really is -- it probably is a more expanded function than existed previously. 275 12/14/00 - WHOLE - Operating Budget - 05 He will monitor and oversee and supervise any lobbying contract that we enter into. We have not yet entered into any contracts.
Well, will, for example, will anyone working for the City be permitted to work for any other -- for a client? I assume if they're working for the City, the people we're talking about at the cabinet-level will be employees of the City?
They will be employees of the City, and everyone will be required to adhere to all of the applicable ethical and legal requirements in terms of what they can and cannot do.
Well, help me on that. Does that mean that Mr. Burrell, for example, who, as I understand now, has many clients, does that mean he will not have any private clients during the time he works for the City?
He would have to sever his financial relationship with his existing employer, just like any other member of the Administration. So he can't -- I mean, he's 276 12/14/00 - WHOLE - Operating Budget - 05 subject to the Charter requirements and the state ethics requirement in terms of the extent to which you can have a financial interest and the extent to which you can engage in activities above and beyond your work for the City, so there isn't going to be anything different.
Well, could you define what that is? Instead of saying that's what he'll have --
I can't -- I can't at the moment. I can assure you, however, that in terms of what he is going to do and what he is going to be permitted to do, we are working with the City of Philadelphia Law Department, absolutely.
If there's something in particular that you have a concern about and I can try then to respond more specifically, I would --
Well, the question I ask is, will he or any other cabinet member be permitted to have any client at the time they are working for the City? 277 12/14/00 - WHOLE - Operating Budget - 05
The answer is no, all right. Would they be permitted -- I'm concerned -- I am concerned by the relationship that David L. Cohen had with the previous administration. There seemed to be something even that went beyond what we talk about the swinging door at the federal level between, say, generals and those who manufacture for the Pentagon. Will -- I just find it difficult to understand the relationship when a private attorney representing private clients doing business with the City also appears to be simultaneously representing the City, and I find the role confusing. And I'm wondering whether your administration is dealing with that situation to kind of avoid any appearance of an impropriety or of a mixed-up relationship so that one doesn't know whether the person is a City official or is a private practitioner.
I can assure you that Mayor Street is very, very sensitive to that issue. That's one of the reasons why there is an 278 12/14/00 - WHOLE - Operating Budget - 05 extensive review of potential candidates for positions, to make sure that the individual coming into government is going to comply with all of the ethical and other legal requirements. So we're very sensitive to that.
Is the Administration thinking of making any ethical studies with respect to things like accepting campaign contributions when there is no campaign in effect or dealing with -- dealing with those general questions that seem so troublesome nationwide today, where there's so much attention being given to the questions of the relationships of money and government? Is there any attention being paid in that area?
Well, I can say to you that, generally speaking, the Administration is very sensitive to the issue. I can't say to you that we've had any discussion of actually conducting a study. We have a new acting City Solicitor that will be coming on board. The Law Department will continue to provide advice and counsel to the 279 12/14/00 - WHOLE - Operating Budget - 05 Administration on ethics issue, and certainly with my vantage point, having served as former City Solicitor, and a number of the members of the Cabinet are also attorneys, we're going to be concerned about potential appearances of impropriety and ethical issues and ethical considerations, and are going to make sure that we do everything possible to make sure that the citizens of Philadelphia have confidence in the Administration.
Well, I raise the question very specifically with reference to the chart that appeared in the Daily News, I think, within the last week of some approximate 50 contributors who contributed each $10,000, and one may have contributed more, I believe, with whole hosts of attorneys in the City from the major law firms all giving $10,000. I think from a sense of propriety and impropriety, I think that has been a very disturbing issue. It's as if dues are being paid, set at the $10,000 figure for membership in some kind of a society or something. I think -- I think it would be very 280 12/14/00 - WHOLE - Operating Budget - 05 good if the Administration were to pay a lot of attention to that area and give consideration as to what can be done to remove any sense of impropriety that something like that article might have proposed. And particularly for the law profession, of which you and I and others in the Council are part, I think the appearance is very unfortunate. Thank you, Madam President.
You're welcome. The Chair recognizes Councilman Goode.
Thank you, Madam President. Good morning, Mrs. Franklin-Suber.
In the preliminary organizational chart, the position of Housing Director is no longer a cabinet-level position but appears to fall under the Commerce Director, which I think is actually a brilliant move as a final recommendation. My question is, is that a consulting recommendation, is that a Transition Team 281 12/14/00 - WHOLE - Operating Budget - 05 recommendation, and is it a final recommendation?
The organizational chart came out of the transition process. There was an extensive amount of work done, and it is my understanding that there were some experts on organization that were brought in to consult with the Transition Team and the transition cochairs. There is a recognition, however, that the organizational chart is our blueprint as we actually get into governing. You know, to the extent there are things that work or don't work, it still continues to be a work in process. We've already made a couple of adjustments, nothing that we consider to be significant or major. Once a number of the high-level positions are filled, there will probably be some additional changes and enhancements to the structure.
So you do anticipate that the Housing Director will not be a cabinet-level position but will --
That is correct, that is correct. It is not a cabinet-level position. 282 12/14/00 - WHOLE - Operating Budget - 05
You're welcome. The Chair recognizes Councilman Kenney.
Thank you, Madam Chair. Madam Suber, just one request and one question.
Sorry, Madam Franklin-Suber, I'm sorry. I didn't mean to -- I had no idea -- I didn't mean any slight at all, please. Madam Franklin-Suber, does there exist and can we get specific written job descriptions for all of the newly created positions of the secretary level, external affairs, education, agency authorities? I mean, is there something in writing so we could see what it is, like a mission statement or a job description? 283 12/14/00 - WHOLE - Operating Budget - 05
I would be happy to see if those exist. The one that I know that I've seen is the one that describes the Chief of Staff's position.
Right. Shouldn't they exist, though, before the position is created?
That was part of the transition process, and I did not participate in the transition process.
So if they exist, I'm sure we'd be happy to provide them to you.
And if they don't exist, could we get them created at least so we can --
I think what's happening here is that we're basing a lot of our questions on the last administration and our historical experience. 284 12/14/00 - WHOLE - Operating Budget - 05
You're telling me, and I understand, that things are changing and evolving differently. I think we would be on a better track of understanding what it is people are supposed to be doing if we could see it in writing.
Okay. Secondly, I just want to move a minute to the City Scholarship City Program. Now, there's two scholarship programs: one's the Mayor's Scholarship Program and one is the City Scholarship Program.
The City Scholarship Program deals with, as I understand it, with universities and colleges outside of the University of Pennsylvania, to the exclusion of the University of Pennsylvania.
Okay. And there is a process that was established rating students and determining financial aid and all of those types of things that went on before the selection of 285 12/14/00 - WHOLE - Operating Budget - 05 these City scholarship recipients. Do we anticipate any of that changing in the way of process? Or is that maybe way too early? I guess to --
And the same question I would have with the Mayor's Scholarship, 'cause my understanding with the Mayor's Scholarships dealing with Penn, what they do is, they determine the child's abilities and test scores and other things.
But they also plug in the financial aid issue so that it's not a full four-year scholarship in the aggregate. It may be what the child's parents can afford to pay and then supplement it to get that kid through the University of Pennsylvania.
And what I'd like to do is make a request that we get some information on whether -- if that program's going to change at all in its structure. 286 12/14/00 - WHOLE - Operating Budget - 05
'Cause I think it's worked very well. It was very difficult to understand in the beginning for many people, but I think it really does work as fairly as possible and does, on the Mayor's Scholarship Program, expand to as many students as possible.
As opposed to giving one perhaps maybe moderately wealthy student a four-year full scholarship at Penn, what it does is allows that one four-year scholarship to maybe help three or four different kids.
Okay, so if there's any changes in that, I'd appreciate knowing about it. Thank you.
Are there any other questions? (No further questions.)
Thank you. 287 12/14/00 - WHOLE - Operating Budget - 05 The next department to be heard is the Finance Department.
Council President Verna, before I conclude my testimony, in the event there were Members of Council that arrived after my announcement, I wanted to extend again to all Members on Council, on behalf of Mayor Street, an invitation to join him for lunch today at 10 noon in Room 225, City Hall. Lunch will be served 11 and the Mayor will bring you up to speed on the 12 status of the conceptual agreement with the Eagles and the Phillies relating to the practice facility. Thank you.
Okay, thank you. The Department of Finance. (Department of Finance witnesses come forward.)
Good morning. Please identify yourself for the record and proceed with your testimony.
Good morning, President Verna and members of City Council. I am Linda 288 12/14/00 - WHOLE - Operating Budget - 05 Orfanelli, acting Director of Finance, and I am pleased to come before you today to present the Finance's Department's proposed 2001 budget. With me today is Rob Dubow, Budget Director; Deputy Mayor Dominic Cermele; and Risk Manager and Deputy Finance Director Joe Perrello. Other members of the staff are here to answer any of your questions. I will focus on the requested finance budget for Fiscal Year 2001 and the status of those initiatives undertaken by the finance group over the past year. The Office of the Director of Finance's Fiscal 2001 budget proposal for all funds totals $816.4 million. The General Fund budget request is $626.5 million. The largest component of the budget is employee benefits, which is budgeted as $568.6 million. Of this, $509 million is from the General Fund, where an increase of 3.8 percent has been budgeted over the Fiscal 2000 current projections. Other large elements of the finance budget include Legal Services, witness fees, hero awards, the Community College subsidy, refunds for 289 12/14/00 - WHOLE - Operating Budget - 05 overpayments of City fees, tax, taxes and indemnities. The Administration proposing to provide the Community College with a $1.5 million increase for Fiscal Year 2001. The Office of the Director of Finance's proposed direct appropriation General Fund budget for Fiscal Year 2001 is $17.5 million, a decrease of $7.2 million from the current projection for Fiscal Year 2000. Overall this budget anticipates 190 full-time General Fund positions. The Accounting Bureau has installed a computer-based payment system designed to pay vendors within 35 calendar days of our receipt of an accurate invoice once assigned contract is in place. Today, all City departments are on the new system. In the fall of '96, when the program began, a random sample of payments showed an average payment time of 68 days. Payments using the accounts payable system now average 35 days from the date the invoice was received. The Treasurer's Office anticipates that in Fiscal Year 2001, it will participate in the sale tax and revenue anticipation notes, general obligation bonds, and water and waste-water bonds. 290 12/14/00 - WHOLE - Operating Budget - 05 Among other things, the Procurement Department is working on procuring new electronic voting machines, in accordance with the November 3, 1998 Philadelphia referendum. As you know, the million necessary for the purchase is included 7 in the Fiscal Year 2001 Capital Budget. 8 The processes and systems for 9 collecting taxes in the Revenue Department 10 continues to be enhanced. One contributing factor 11 to the increased collections has been the state 12 legislation mandating the withholding of City wage 13 tax for Philadelphia residents who work outside 14 the City. Last year, the City paid $166 million 15 into the Pension Plan. In January '99, the City 16 closed on a $1.2 billion pension obligation bond. 17 The bond issuance is projected to save the General 18 Fund a total of $704 million through Fiscal Year 19 2019. 20 Despite continuing legal challenges, 21 the Minority Business Enterprise Council continues to ensure that businesses owned by minorities, women, disabled, and disadvantaged entrepreneurs are given equal access to business opportunities with the City. For example, the Airport 291 12/14/00 - WHOLE - Operating Budget - 05 Concession Program is a national model for disadvantaged business participation. The Accounting Bureau will place the City's annual financial report on the Internet for the third conceptive year. In a normal year, the City receives as many as 500 requests for copies of the report. By having report on the Internet, we save the cost of printing and mailing, and our financial data is more readily available. Thank you for the opportunity to provide this testimony. We are happy to answer your questions.
Thank you. Miss Orfanelli, you state in your testimony that your proposed direct appropriation General Fund Budget for FY 2001 is $17,550,000, a decrease of $7.2 million from the current projection for FY 2000. Please explain what these decreases are and why you're proposing the decreases.
The decreases are made up two components. The largest one is a $5 million decrease in contributions, which is a Class 500 item, and that decrease is due to the 292 12/14/00 - WHOLE - Operating Budget - 05 fact that we have a large contribution in Fiscal Year 2000 for the RNC, for the Republican National Convention, and we will not have that in 2001. The other large component of that is $2.5 million, which is a decrease in money going over to the Capital Fund Projects Fund. We had a two-year program of taking in certain revenues into the Operating -- into the General Fund, which was then transferred over to the Capital Fund, and that program has ended.
Is the City now paying its vendors in a timely manner? And if so, how many days from receipt of the invoices has this resulted in noticeable savings to the City as vendors no longer need to factor the cost of money 293 12/14/00 - WHOLE - Operating Budget - 05 into their bids?
As you -- as I stated in my testimony, we are paying more quickly, and we are paying in 35 days. Whether we're saving money or not, which was one of the objectives of doing this process, I believe, is really a question that we have to address to the Procurement Commissioner and request that an analysis be done. We actually have to have a comparison done between what bidders are bidding for certain items now as opposed to what they bid in the last few years. It is so new that it was not possible to collect that data to make the analysis yet, and I believe, going forward, we will be able to do that.
Thank you. You make a reference in your statement to the City's debt policy. Please explain, what is the City's debt policy? And how does the cost of the Veterans Stadium repairs and the voting machines fall within the City' debt policy?
I'm going to call someone up from the Treasurer's Office so that you 294 12/14/00 - WHOLE - Operating Budget - 05 can get the information that you need.
Excuse me -- from the Sinking Fund. (Witness comes forward.)
I'm Vince Jannetti. Secretary of the Sinking Fund Commission. Could you restate the question, please.
Certainly. Miss Orfanelli made reference in her statement to the City's debt policy, and I asked that that be explained. And how does the cost of both the Veterans Stadium repairs and the voting machines fall within the City's debt policy?
The City's debt policy is a document that we did like three years ago that accumulated all of the debt of the City that's funded by the General Fund, so all the secondary debt -- leasing and the revenue general obligation bonds -- is all put together in one 295 12/14/00 - WHOLE - Operating Budget - 05 document so that we can see what we're really paying. The cost of the voting machines and the stadiums would just be another cost. You know, it's not really a related thing. I mean, it's related but not related.
Well, the debt policy is all the debt that we have outstanding, okay? It's the --