So he's your first deputy, and obviously if you're not here or even when you are here, this is a high-level person?
And at what point did you become aware that he had not fulfilled his responsibility under the residency requirement?
An inquiry was made to the IG, who investigated. The IG 59 2/28/06 - WHOLE - BILL 060003, ETC. investigated and submitted a report to the Mayor's Office and myself just recently.
Let me better understand this issue again, at least according to the news account. There was a proposal to pay for his Master's degree?
The City has a program for advanced education opportunities for high-performing individuals. Michael submitted a request. It was approved. Upon notification of non-residency, that was pulled and no payments have been made.
It's -- I don't know. It's a higher education program. It's run out of the Human Resources Department. We've had -- 60 2/28/06 - WHOLE - BILL 060003, ETC.
It depends on the program and how it's related to the job. There's a whole process that you go through for approval.
Do you happen to know how many people have gone through this program?
We've had one other individual that has gone through the program and submitted for reimbursement. 61 2/28/06 - WHOLE - BILL 060003, ETC.
So it's been reported that he has admitted, apparently at least to the Chief of Staff, the Mayor's Chief of Staff, that he does not live in the City and apparently for the last at least two years, maybe going on three, has been functioning in violation of the residency requirement.
I can't speak to the length of time. Mr. Dean has submitted his resignation and has -- because I am going out for surgery, we've asked him to stay on until the end of April to transition a smooth operation until such time as I can replace the position.
Well, I mean, is he the only person who can head up the Mayor's Office of Information Services?
Well, he is the person that I have been training and grooming to act in my stead when I am away from the office. No organization 62 2/28/06 - WHOLE - BILL 060003, ETC. runs on one individual and --
Yes. But, yes, he plays a vital role in my organization and will need to be replaced.
Well, do you think this sends an appropriate or inappropriate message to the rest of the public employees that upon either admitting it or confirming it or acknowledging it that you are functioning in violation of our residency requirement, that the person is allowed to stay because they are so critical to the operation as opposed to firing him?
The options were weighed. The Mayor has a strong position on the residency requirement. Michael immediately resigned and was, as I say, by the Administration asked because of extenuating circumstances, the number of high-profile projects that we have going on in MOIS, to stay so that I could do an 63 2/28/06 - WHOLE - BILL 060003, ETC. orderly transition, as I'm going out for surgery within ten days.
Let me ask this question, and obviously wishing nothing on anyone, but life has its various interesting circumstances. I mean, suppose, God forbid, something were to happen to him. Are you telling me that MOIS would not be able to function? You obviously need to take care of your own personal medical situation. I mean, you'd do something.
In normal circumstances, one of the other of us would be here, and in this case, both of us will be out, and it was a decision that we made for operational continuity to ask him to stay for a limited time.
Well, let me ask this question: Since it appears that there's some element of fraud involved, is the money that he's been paid going to be repaid to the City?
His income from 64 2/28/06 - WHOLE - BILL 060003, ETC. services rendered? No. There's no --
Services rendered? He's an extremely talented and capable IT person.
I'm not questioning his talent. I'm asking about operating within the parameters.
We pay our employees for the work that they perform. He is being paid.
And there's a process and procedure for extending a waiver?
So I guess 65 2/28/06 - WHOLE - BILL 060003, ETC. lastly and then I'll come back, and I appreciate, Madam President. He's staying until when?
Now, this is my last question on this, I think. In a private sector situation, if something happens it seems today with virtually any high-level employee but certainly someone in the IT area, if they are let go, if they are fired, if something inappropriate happens, isn't it generally the experience that virtually the person is probably walked off the premises that day?
It's conjecture. It depends on the nature of the issue. If we've had security violations or so forth, then you would do something to that effect.
Even without security violations, if the person is either no longer employed or has done something in violation of the 66 2/28/06 - WHOLE - BILL 060003, ETC. rules of the organization, primarily for security purposes, wouldn't you want to deny access to systems by that individual?
When an employee leaves, their systems are shut down and access is denied. We are not asking Michael to leave until the end of April, and at such time, all of his passwords and everything else will be disabled.
Okay. So you're fully comfortable with the whole situation?
Well, I can't say that I'm comfortable with the situation, because I had high hopes for Michael and his abilities and I wish this had not occurred, but certainly I have no 20 hesitation about his qualifications, nor his ability to function until such time as I can get back or get a replacement.
Okay. Last question. Upon the agreement to pay for the advanced degree, did you have any 67 2/28/06 - WHOLE - BILL 060003, ETC. understanding or agreement with regard to how long the individual was going to stay in City government? Is there any requirement that if we pay for your education, you have to stay for some amount of time?
Yes. As a part of the program, not a special indication for any individual, it's a two-year commitment to stay after the end of the program.
Okay. So I guess in that situation, obviously that's for services rendered, but also as an enhancement for that individual's future. He apparently was quoted in a periodical in December indicating that he expected to be, I guess, running an organization in about five years and planned to transition from government into general management maybe as a chief operating officer. Would that have been your expectation?
That's not unusual 68 2/28/06 - WHOLE - BILL 060003, ETC. for highly talented IT individuals to move to gain further compensation and -- so that's highly plausible in a five-year plan.
Shortly after the City government has paid for an MBA?
Again, the commitment was for two years, and who will know what the economy will be like at that time and whether that would have been pursued or not.
So it's two for the studies, you have to stay two more. So that fits in with the five-year plan.
Okay. All 69 2/28/06 - WHOLE - BILL 060003, ETC. right. I'll come back. Thank you, Madam Chair.
Thank you. The Chair recognizes Councilman Kenney.
Thank you, Madam President. I wasn't intending on going on the line of questioning where Councilman Nutter was, but just out of curiosity, I recognize there's a six-month allowance for non-City residents to move into the City. Where did the ability to authorize an additional six months come from? Was it an administrative board decision or resolution or the Law Department said it was okay? Where did the extra six months come from?
The Mayor himself or is there a document or a policy statement or a resolution that was 70 2/28/06 - WHOLE - BILL 060003, ETC. passed by the ad board that said, We'll give you another six months, or did the Mayor just say, I'll give you another six months?
Did you receive anything in writing from the Administration saying, This process was followed and he has an additional six months?
I can't expect you to give it to me verbatim, but what did it say? I mean, can you paraphrase it?
I would have to go -- it laid out the circumstances and asked for the request for the additional six months. It was signed and approved.
My request to the Mayor's Office signed by Joyce Wilkerson, his Chief of Staff.
So you're not aware of any ad board action or City 72 2/28/06 - WHOLE - BILL 060003, ETC. Solicitor opinion or anything?
I do not know the action that she took. We would have to go back and ask that question.
Madam President, I would request that perhaps you write or we send a memo to the Chief of Staff and ask exactly what process was followed in this particular case. And the reason why it's a little bit -- I'm somewhat ambivalent about this issue, because I know we're looking for talented people and we try to recruit as best we can from many areas of the country, and I understand. I go back to the frustration I had with getting a waiver for people to apply for a job who were non-residents of the City without waiting a year, becoming a resident and waiting a year to apply for a job as a police officer. I mean, it seems on one hand that's too much of a burden to bear, that we can't recruit nationally for every job in the City of Philadelphia 73 2/28/06 - WHOLE - BILL 060003, ETC. unless a person is a resident of the City for a year, but we can willy-nilly give waivers away whenever we want to give them away to whoever we want to give them away without any process. So I don't want to pile on on this, because Councilman Nutter certainly raised it and I was following a line of questioning, but it is unbelievably frustrating to me to try to change the culture of the City and its ability to attract good employees by simply waiving the pre-employment application requirement for a year when we can give a guy living in Delaware County six months, take another six months, go get an MBA, whatever you want to do. Because once the educational issue was raised, all Councilpeople on this end were kind of curious as to they never heard of that program before. I guess it's kind of like an executive level non-resident gear-up program or something. I don't know where that came from or how we apply 74 2/28/06 - WHOLE - BILL 060003, ETC. for it, but it's certainly interesting.
I don't mind following the rules, but it seems like the rules can change when they want to get changed.
If I may, as far as his education, did we pay for that?
It's a two-year 75 2/28/06 - WHOLE - BILL 060003, ETC. program.
It was the two-year program to be paid as the semesters were taken.
I'm glad we picked a residential university. It would be nice. Send him to Yale or something. On another issue, Council President Verna asked a question in your detail budget about requesting positions, and you had made a statement in your answer that they're currently contract positions and they're being made permanent. What's the economic benefit of making them permanent employees? Isn't the wealth of IT people in the private sector such, and both quality and quantity, that contracting employees may be cheaper in the long run for the 76 2/28/06 - WHOLE - BILL 060003, ETC. taxpayers as opposed to full benefits and pension contributions and permanent employees?
The positions were regular full-time positions, that we asked for a budget transfer to do contract in the interim while we were doing the process to fill them. These would not be new positions filled permanently as contractors. We do look at and do an analysis on the cost. High-skilled IT talent in the contracting environment today has shot up exponentially and the cost -- one of the reasons that we looked at bringing, instead of keeping them on as contractor, bringing them into full time is that cost element.
So your testimony is that it's more expensive to hire contract employees than it is permanent?
It depends on the skill set that you're looking for. 77 2/28/06 - WHOLE - BILL 060003, ETC.
Is the quality of employees technically about equal the people we're hiring permanently? Are they in the same ballpark technically with contract employees?
It would vary. I mean, we certainly always look to bring in the most skilled people that we can within the pay ranges that we can pay.
But in general, there's no rule of thumb relative to contracted employees, the pool of talent in the private sector contractors as opposed to full-time public servants?
There is by far, depending on how much you're willing to pay, a stronger pool on the contracting side. It's the hourly wage, and it depends on the position itself. 78 2/28/06 - WHOLE - BILL 060003, ETC.
Let me just move to just a real general question about WiFi. My understanding of the whole concept of WiFi is the ability to bring Internet service and Internet experience and access to people of lesser means relative to the private sector provision; is that correct?
Are you in a position now to be able to determine -- and I think I know the answer, but I'd like it for the record -- as to who the private sector competition with WiFi would be?
There are obviously DSL and cable, are the primary competition to WiFi.
That's correct. However, they're very different in that they're not a mobile solution and 79 2/28/06 - WHOLE - BILL 060003, ETC. that's --
Both DSL and cable are fixed wireless. They are a device that's located and connected to a modem in your home.
Could you have a modem in a public space with either one of those two companies?
No. It would be a different technology. For example, with DSL, you have to add in a technology called EVDO that gives you wireless. It's a cellular wireless versus a WiFi wireless.
So when WiFi is up and running, which product of the two major competitors would they be in competition with?
Well, the marketplace that we're gearing towards are those that have no connectivity today and those that are doing dial-up over a 80 2/28/06 - WHOLE - BILL 060003, ETC. telephone line, which are neither DSL nor cable. So our goal is to get our percentage up from 58 percent up to 80 over five years and to place as many as 10,000 computers into our low-income households that don't have the tools to be able to do that connectivity and then have affordable WiFi access for those individuals.
What do you anticipate being -- and, again, I'm not going to hold you to a number, but what would you anticipate being the variance between the private sector product in percentage and the WiFi product?
Monthly payments. There's going to be a monthly payment on WiFi, right?
We're going to minimize the monthly payment as much as possible. What do you anticipate at this point the percentage variance 81 2/28/06 - WHOLE - BILL 060003, ETC. between the lowest level private sector product and the WiFi product once it's online?
It will be on the DSL probably to 30 percent and on the 10 cable 50 percent less. 11
And, again, 12 as this rolls out and as time goes on, 13 maybe those issues will change, but your 14 considered position right now is 30 and 15 50 percent difference? 16
20 You're welcome. 21 The Chair recognizes 22 Councilwoman Brown. 23
Thank you, 24 Madam President. 25 Good afternoon. 82 2/28/06 - WHOLE - BILL 060003, ETC.
I, too, was a lot struck by the lack of no 5 discussion of Wireless Philadelphia in your testimony, and while we recognize it is a separate 501(c)(3) now, I'm anxious to get somewhat of an update, which would in many ways be a follow-up to the briefings we had last June, which I thought were a beginning point for getting Councilmembers somewhat up to speed about what it is and where we're headed. So one of the questions is, now that a number of other cities have taken off with this, Boston, Chicago and others, where are we with regards to the proposal itself? What are the remaining steps that we need to get to before this becomes a reality?
We're finalizing the details on all of the components. It's very complex contracts. We hope to transmit imminently, within this week or 83 2/28/06 - WHOLE - BILL 060003, ETC. next week, to City Council for introduction and hearing. Once City Council has approved on the Street Light Use Agreement and the management agreement between the City and Wireless Philadelphia, we'll be prepared to start construction and have the entire City covered within months of signing of 10 those agreements or approval by City 11 Council. 12
Where is the proposal with regards to two issues that were raised six months ago? One, an assurance that students of all types, public, private and parochial, will have access and opportunity to this unprecedented initiative?
We have continued to work with the community through our pilot neighborhoods, both in North Square, Olney and in West Philadelphia in the Politan Saunders area with the public schools, the archdiocese and the charter schools. We've included interworking 84 2/28/06 - WHOLE - BILL 060003, ETC. with the computer technology centers with the community development corporations in those neighborhoods. We're doing outreach to our faith-based organizations, our minority chambers. So it's a very inclusive program and highly supported by all of the educational organizations.
So there's an assurance on the user end. On the implementation or the actual input of that wiring, what assurances are in place for MBE, WBE participation?
As a part of the request for proposal that was issued last spring, there were minimum requirements as a part of the companies that responded to that. The company that we eventually selected, EarthLink, has committed to exceed the percentages in that proposal, and their business partners are committed to diversity and have won awards in this field as well. So they have met and exceeded all the requirements that were 85 2/28/06 - WHOLE - BILL 060003, ETC. placed as a part of the contract.
And that's what we know on paper. Do they have a track record of having demonstrated commitment in other cities where they have this kind of enterprise?
Well, one of their business partners is Motorola, and they have been recognized nationally for their commitment and award. I'd have to get back to you with specific cities and instances, as we are the first major city in the United States to deploy this technology. And so the other cities, I believe Anaheim and -- I would need to get you the names of the smaller communities that they've done.
Okay. What kind of assurances are in place to regulate pornographic and violent material?
There is security 86 2/28/06 - WHOLE - BILL 060003, ETC. and privacy protection built in at multiple layers within the network, both at the network level. We required 5 different layers of security. At the 6 Internet service provider, we are 7 requiring that they provide privacy spam 8 blocker, that parents have an option to 9 opt in for parental control of those 10 types of issues. 11 So we're building it in, and 12 then we also as a part of our training 13 programs will have handouts and classes 14 to help parents understand what their 15 responsibility is. 16 So you protect at the network 17 level, you protect at the Internet service provider, which is the interface with the end-user and the company, and then you help the parents understand what they can do to protect at their home with their children at the individual desktop.
Okay. Let me just revisit this issue of MBE and WBE, and we do that because we know of 87 2/28/06 - WHOLE - BILL 060003, ETC. too many instances here in Council where you have commitment, which you listen to what people say, and then ultimately you have to watch what happens.
Too many times there's been a disconnect in what we read and what the verbal commitment is and what happens at the end result. So what I'm hearing you say is, A, EarthLink has a track record with records to meeting MBE, WBE goals?
And you'll get back to us with instances in other municipalities where they've done that?
You also mentioned that there are a number of formal relationships with faith-based, community-based, et cetera. Will they then become partners, if you will, when it comes to the teaching and training once it's up and running? Because 88 2/28/06 - WHOLE - BILL 060003, ETC. formality matters once you get to the stage where you have to actually ensure that parents get the information so that pornographic and violent material, et cetera, meets a red light. So will there be formal partnerships in place between EarthLink and the number of worlds that you've just mentioned to make sure that the end product we're talking about happens?
Well, the relationship will be with Wireless Philadelphia and our community supporters, whether they're schools, faith-based organizations, chambers, business districts. And then as a part of our contract, EarthLink has certain security requirements they must meet as a part of their proof of concept, that they can do everything they say they can do, as well as the agreements with the Internet service providers that are providing that end-user connectivity to the Internet that they provide. 89 2/28/06 - WHOLE - BILL 060003, ETC. EarthLink has been rated the top in that field for the last three years by J.D. Powers. And so that is all being built in. So there's multiple layers, but the interface with the community is at the Wireless Philadelphia. The technical interface and the ability to block parental controls is at the contract level with EarthLink and Wireless Philadelphia.
It's a lot to get my arms around. Follow-up on Councilman Jim Kenney's question. Were local providers approached to participate or be possible partners with the Wireless Philadelphia? Meaning EarthLink has won the prize, so was there a process where local companies in our area had the opportunity?
Absolutely. We wrote the RFP so that the companies, any company, could come and respond, and that opportunity was provided to our local DSL 90 2/28/06 - WHOLE - BILL 060003, ETC. and cable companies. They chose not to submit a proposal. We did receive 4 proposals, and eight of those were for 5 turnkey and three of those were alternate 6 proposals where the companies actually 7 would put up their own money to build the 8 network, and we ultimately selected 9 EarthLink, who will fund, build and 10 manage that network in partnership with 11 Motorola and Tropos Equipment. 12
Two final questions. Does the fact still remain that at the end of the day Philadelphia taxpayers will in no way, shape or form be obligated, responsible for any mishap or misstep that happens with this contract?
Absolutely. There is no City taxpayer dollars involved in this project.
And then, finally, are you at liberty to say what the remaining stumbling blocks might be with regards to the documents ultimately 91 2/28/06 - WHOLE - BILL 060003, ETC. being sent to President Verna, to the City Council?
It's a matter of timing. The contracts are finalized, and it's just getting it through the process and getting it transmitted.
You're welcome. The Chair recognizes Councilman Rizzo.
Thank you, Madam President. I hate to jump on to the existing issue that was reported in the media today, but I have a question. An employee at this level obviously has a lot of access to various systems based on that level employee's position, correct? 92 2/28/06 - WHOLE - BILL 060003, ETC.
I know I wouldn't feel comfortable knowing that I have an employee that submitted a resignation to you that has access to this degree. I'm not suggesting that some action could be taken by that employee to create -- there's going to be obviously a lot of stress in the next period of days. Is there a way that that employee could, if this employee does stay after today's conversation, to minimize the possibility of that access so in the event on a stressful day this employee doesn't come to work and disrupt the entire City network?
Yes. There is a full background check done on all City employees and --
I don't want to be cute here. I'm talking about this one that we're talking about today. In other words, you've got an employee 93 2/28/06 - WHOLE - BILL 060003, ETC. that's been identified as living outside of the City. You're not going to be available. This employee is staying in our employ. Who knows what the mental state of that person is going to be for the next month. Comes to work one morning and has access -- you just said a person of that level has access to our City network to be able to do whatever could be done. I mean, do you really feel comfortable having a person with that access that you don't know what the condition of that person could be in the next month? Isn't there a way to restrict -- if you need the guy, you need the guy, but don't you think you should limit your exposure and do whatever is possible to lessen what I just described?
Yes. Mr. Dean does not program. He doesn't go into the applications. We have the capability to track, which we will do. If there's any indication that -- 94 2/28/06 - WHOLE - BILL 060003, ETC.
At his position he does not program. We have staff that does the programming. But we also have the capability, which we will exercise, to be able to track to see if he goes into any applications on a daily basis. Should there be any violation or concern, we would immediately shut that access off.
Isn't that kind of late? You're telling me that Mr. Dean -- and I didn't want to mention names, but you made me do that. Why couldn't you limit our exposure? I don't want you to be quoted in the paper that we should have done that. I feel sorry that this has developed, but it's his own fault. The situation is this: You're telling me that Mr. Dean, if he wanted to get into our applications, even though I understand he's got more groupies that do 95 2/28/06 - WHOLE - BILL 060003, ETC. that, you're telling me that he does not have the knowledge or the ability to get into any of these systems?
No, sir. That's not what I said. I said at his level, it is not the type of action, but we do have the ability to track and will exercise that, and if there's any indication, all access --
After the trouble is created and you then find out about it, what good is it? In other words, Mr. Dean, you're telling me now for the record, does have the ability to access almost any area of our system if he chose to, not on a daily basis would a man of his level do the work or normally have access. Certainly you have a lot of employees that would do that for him. But if he wanted today to go into our system and, I'll use a word, sabotage it, 96 2/28/06 - WHOLE - BILL 060003, ETC. create a problem under some circumstance, he could do that.
It would be difficult, and we have protections in place. We don't allow people to go into production applications and make changes. So all of those are in place to prevent that type of activity.
He's the number two man and he has not -- now you're telling me something different than you told me a minute ago. You said yes, he did. Now you're telling me you have checks and balances. Could you just answer the question? Could this gentleman under a stressful situation create a situation for our City?
All right. My next question, we had a conversation many months ago about a project called OCEAN, and you brought up the name Oracle today. I know this has been a very 97 2/28/06 - WHOLE - BILL 060003, ETC. expensive licensing situation, where we started off creating a new water bill and it turned into -- I don't want to use the word, but it's been a boondoggle, and you've been kind of brought in to rescue this very expensive project. I haven't heard much more about it. So could you explain for the record what Project OCEAN is and the problems that you've inherited and what you've done so far? Because I believe it's close to $20 million has been spent on this program that has not yet been put into effect because of some issues with the vendor.
So would you explain what Project OCEAN is for the record, please?
Project OCEAN is an application to replace the water billing revenue collections -- I'm sorry; Water Revenue billing system and add a collections module to the system. We are 98 2/28/06 - WHOLE - BILL 060003, ETC. in the process of negotiations. It's not appropriate at this time to discuss those in public.
Wait a minute. This Project OCEAN has been on the drawing board for how many years now?
How much money have we spent on Project OCEAN with licensing and other expenses in-house and with vendors?
We have no 16 billing system. I'm not asking you to talk about anything that's confidential. Just tell us for the record what's occurred for almost three years at a cost of $18 million and we have no billing system. Just explain for the record. I've been very patient with this issue, because I've had lots of conversations about it and I don't know if we're any further ahead. I know there 99 2/28/06 - WHOLE - BILL 060003, ETC. were some fixed costs with the licensing, but could you explain to the record what has gone wrong with Project OCEAN and how you were drawn into it? Because I believe that the sponsorship of the initial project left City employee and it went nowhere and just spent a lot of money, and then the vendor apparently backed out or suggested that they were not going to be involved with the project anymore. Eighteen million dollars is a lot of money. So if you could further elaborate. Honestly, I think there's a lot you can talk about that's not privileged.
Project OCEAN is a part of what we call an Enterprise Resource Management Plan, ERP, and it would eventually replace all of the financials. We went through an RFP selection whereby we selected the Oracle E-Business Suite as a part of that. We purchased the license for those products, 100 2/28/06 - WHOLE - BILL 060003, ETC. and we selected the Water Revenue billing and collection as the first module within the suite of businesses. It is a commercially viable product that has been in the industry. The Water Revenue billing system is a new -- has quite a bit of customization involved. It's a very complex system. It has multiple departments, the Water, Revenue, Water Revenue Bureau, Finance Department, involved in this. We've had a number of sponsors from the departments that have come and left the City and has changed hands. Oracle was also hired to bring in to do the customization, and as a part of that, they delivered code to us. We have gone through their code issues. We are in the negotiation process and continue in that process at this time.
But more to the point, you rejected some of the work that was presented to you, and Oracle has stopped providing a service to the City 101 2/28/06 - WHOLE - BILL 060003, ETC. of Philadelphia, at least when we last spoke; is that correct?
That's correct. We continue to own the licenses, but that particular model we stopped during the summer while we did the evaluation of the code delivered to talk about corrective actions that needed to occur.
So after $18 million, we have no Project OCEAN, and I understand that you're not able to talk about where you are now. I don't understand why you're not, but we have a project that's, from what I hear, closer to million that hopefully we'll get 17 accomplished some day. 18