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Committee Hearing, April 15, 2010

Philadelphia City Council Committee HearingsApr 15, 2010

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COUNCIL OF THE CITY OF PHILADELPHIA COMMITTEE OF THE WHOLE - - - Room 400, City Hall Philadelphia, Pennsylvania Thursday, April 15, 2010 9:50 a.m. - - - PRESENT: COUNCIL PRESIDENT ANNA C. VERNA COUNCILWOMAN JANNIE BLACKWELL COUNCILMAN DARRELL L. CLARKE COUNCILMAN FRANK DiCICCO COUNCILMAN W. WILSON GOODE, JR. COUNCILMAN BILL GREEN COUNCILMAN WILLIAM GREENLEE COUNCILMAN CURTIS JONES, JR. COUNCILMAN JACK KELLY COUNCILMAN JAMES F. KENNEY COUNCILMAN BRIAN J. O'NEILL COUNCILWOMAN MARIA QUINONES-SANCHEZ COUNCILWOMAN DONNA REED MILLER COUNCILWOMAN BLONDELL REYNOLDS BROWN COUNCILMAN FRANK RIZZO COUNCILWOMAN MARIAN B. TASCO BILL 100212 - An ordinance amending Section 20-304, entitled "Compensation for Members of Boards, Commissions, Committees and Councils," by revising the compensation for members of the Board of Revision of Taxes, under certain terms and conditions. - - - 2

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Mr. Armbrister

Sorry. And I'm here to testify in support of Bill No. 100212, which would reduce the salaries of members of the Board of Revision of Taxes. Under this bill, salaries would be reduced to $18,700 for members of the Board and $19,250 for the Chair. This change would more closely align the salaries of the members of the BRT with 4 4/15/10 - WHOLE - BILL 100212 those of other boards and commissions who work similar schedules. The board of the BRT typically holds hearings two or three times a week for about three hours, but their salaries of 70,000, 72,000 for the secretary and 75,000 for the Chair are far higher than those of members of other boards and commissions who provide vital services for the City. For example, the Zoning Board meets two days a week for three and a half to four and a half hours. Its members are paid per meeting attended and have received about an average of about $20,000 per member last fiscal year. Members of the Civil Service Commission earned up to 17,500 in FY09. Members of other boards, all of which typically meet two times per week, earn far less. All of the members of the Tax Review Board and the L&I Review Board made less than 10,000 in FY09. It is hard to justify why the 5 4/15/10 - WHOLE - BILL 100212 members of the BRT make more than three times as much as the members of the next highest paid board, and it is certainly difficult to defend the City paying $70,000 for what is only part-time work, particularly at a time when the Administration and City Council are working together to try to find a way to fill a $150 million hole in the FY11 budget. That concludes my testimony and I'd be happy to answer any questions that members of the Committee may have, and I'm joined this morning by Finance Director Rob Dubow and City Solicitor Shelley Smith.

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Mr. Metzner

I am the Reverend Ken Metzner, a resident of the 900 block of Kimball Street, which was one of the City's hardest hit blocks with respect to the arbitrariness of the most recent spot assessments by the BRT. I have testified here before in favor of the legislation that voters will act on in May to abolish the current BRT, and I certainly have been a vocal critic of the BRT's practices. I am not a fan of the BRT as an institution. I am, however, a proponent of the democratic 7 4/15/10 - WHOLE - BILL 100212 process, of the importance of civil discourse and of the bedrock principles of fairness and respect, and that is what brings me here today. As I was considering my testimony this morning, I was reminded of a thought by the great Christian mystic, Father Thomas Merton. He said, One of the moral diseases we communicate to one another in society comes from huddling together in the pale light of an insufficient answer to a question we are afraid to ask. I submit that with respect to this bill, there are several questions that are not being asked. First, what is its true intention and motivation, and is that intention appropriate? To couch this bill as the Administration has in terms of a mere money-saving measure is misleading. The bill should be called what it is, retaliation for the BRT's refusal to renew the Memorandum of Understanding. To call it anything else 8 4/15/10 - WHOLE - BILL 100212 distorts reality. And to do so I believe suggests that we are uncomfortable with that factual truth, and for good reason. There is something unseemly about participating in this game of one-upsmanship, finger-pointing and name-calling. The City deserves enlightened leadership, inspired leadership. We are not seeing that today. The paralysis with the BRT is bad for everybody, not just the BRT. I submit that this measure continues a degenerative trend. It institutionalizes vindictiveness rather than leading us to higher ground, common ground. Tone and tenor are important in this Chamber and in this process. The spirit and intention behind legislation are important. Doesn't our city deserve better? Fairness and proportionality are important as well. Two of the BRT members have been on the job for several 9 4/15/10 - WHOLE - BILL 100212 weeks. They clearly have had nothing to do with the decades-long history of mismanagement that has led us to where we are today. Is it appropriate to reduce their salaries by 75 percent? And what precedent does it set to do this, when the law prevents an Administration from removing from office an intransigent official. Should we sanction actions that seek to subvert the law by engaging in this kind of conduct? There are other concerns which I believe also are not being addressed. Mr. Armbrister just testified on behalf of the Mayor's Office that salaries of $18,000 and $19,000 are appropriate. If that is so, I ask how can those salaries be reconciled with the much higher ones in the referendum that voters are asked to vote on May 18th? The referendum that Council has submitted to the voters says, in part, that the Chair of the Board shall receive an annual salary of $50,000. The secretary of the BRT shall 10 4/15/10 - WHOLE - BILL 100212 receive an annual salary of $45,000, and its each remaining member of the Board shall receive a per diem of $150 for each day up to a maximum of $40,000. I would like to know which are the appropriate salaries. Is it the ones that Council and the Mayor have submitted to the voters at $50,000, $45,000 and $40,000 or is it $18,000 or $19,000? If it is the latter, then I submit that the current referendum needs to be reformed. At a minimum, we need an answer to that question. Secondly, even if we assume that the payroll savings are the true motivation, which I submit they are not, will those savings be realized? Have we heard any testimony about the amount of savings? We have not here, because I submit it is an embarrassing low amount of savings.

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Mr. Metzner

I have done a calculation, and I'm more than happy to stand corrected if my numbers are not right, but by my calculation, the grand total 11 4/15/10 - WHOLE - BILL 100212 savings will be $167,000 over the next five and a half months. That is because the current payroll for the BRT, excluding benefits, is -- for the BRT members is about $41,000 per month. This proposed bill reduces that to about $11,000 per month. However, the referendum that this body has asked voters to approve will raise those salaries again to $24,000 per month effective October 1. Therefore, we're looking at a savings of five and a half months times approximately $30,000, for a grand total of approximately $167,000. I would like to hear whether we honestly believe that those savings are worth this effort, are they worth the integrity of this institution, or are they worth the costs that most certainly will be realized when the BRT challenges this measure in court, which they assuredly will do. Won't those savings of $167,000 be more than offset by the costs associated with the legal battle? 12 4/15/10 - WHOLE - BILL 100212 I would submit moreover -- and I'm glad to see Ms. Smith here -- that enacting this measure actually undercuts the City's legal position. The City has argued that the BRT in its petition before the Supreme Court lacks standing because it has not actually suffered any harm, and that any harm that it might suffer at this point is theoretical until October 1st if and when the legislation is enacted. By enacting the legislation today, which is effective immediately, the 75 percent reduction in salary creates the harm that the City has argued does not currently exist. So I think it is something that this body should consider. In addition, I have questions that I am not seeing examined concerning the legality of the Memorandum of Understanding. One court has already raised very serious concerns about it. I'm referring to Judge DiVito's decision in the Court of Common Pleas of February 13 4/15/10 - WHOLE - BILL 100212 16th, 2010. That was the case where one of the employees of the BRT brought an action to declare that the Memorandum of Understanding was an illegal transfer of power from the BRT to the City in violation of State law, and she claimed that she was being harmed by virtue of that. Now, the judge decided she had no 10 standing at that point because she had not actually been harmed. However, the judge said, and I quote, "The City defends the provisions of the Memorandum of Understanding in its brief. The Court finds this argument disingenuous and unpersuasive. " I have not heard any testimony nor do I know of any analysis that looks at that issue, and I would be willing to wager that that is something that the BRT will raise when it files its anticipated legal challenge to this. 14 4/15/10 - WHOLE - BILL 100212 Finally and, in my view, most importantly, how does this measure advance the efforts to reform the BRT's practices? We haven't heard how a salary reduction of 75 percent will energize anyone to engage in reform. It is more likely to have the opposite effect. The bill is, therefore, flawed, because it also appears to rest on at least two unsupported assumptions, in my view. First is the existence of a plan to fix the problems at the BRT, and, second, frustration of that plan by virtue of the BRT's refusal to extend the Memorandum of Understanding. We have not heard any testimony with respect to planned actions over the next five and a half months that now purportedly are being frustrated by virtue of the BRT's intransigence over the Memorandum of Understanding. So I don't believe that this bill gets to the heart of the matter, which is reform. I submit that any action on 15 4/15/10 - WHOLE - BILL 100212 this bill should be deferred until such time as it can be part of a more comprehensive dialogue that considers these and other issues. Thank you.

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Councilman O'Neill

In case there's any questions or anything. I have an amendment that would hopefully be a better way of doing whatever it is we're trying to do. I don't want to put a label on what we're trying to do, but it is an unusual act we're taking. We all know that. And it's my understanding that the dispute here between the Board and the City, the Administration and Council is whether we have the authority to appoint or change the structure of the appeals function. The assessment is more or less conceded, 17 4/15/10 - WHOLE - BILL 100212 we can do that. I don't think anybody questions whether we can set the salary of the members. And it occurred to me that since we're only -- a Court is going to decide whether this Board stays, because we don't have the authority, or that the ordinance that will hopefully pass on the ballot becomes the law and a new Board is established under those guidelines. The only thing we're talking about here is what should they be paid. We have that authority. We've already established and had passed and signed by the Mayor the bill that sets the salary of what we hope is the new Board approved by the voters and approved by the Court, who is hearing that case that I referred to. So it seems to me a more direct way of doing this and less complicated and, frankly, I find it much easier to justify is just take the salaries out of that bill that's going before the voters that's going to be the salary later and 18 4/15/10 - WHOLE - BILL 100212 make it the salary now, because at the time, we didn't know we had a dispute that the Board wanted to and is in court trying to stay as the Appeals Board of the assessments. So this language was prepared by the Solicitor. It basically reflects those numbers, and I offer it as an amendment to this bill, basically removing the 70 to and so on to 12 exactly what we've already passed and 13 sent to the voters in the reform 14 legislation and just change the level. 15 Because everything has changed in the 16 last week or so, two weeks, and it seems 17 to me that this is logical to also change 18 since this Board -- we didn't anticipate this Board doing this, what has happened, the court appeal. So I'm offering this, and it's pretty straightforward. We all know the salaries and per diems and the caps that were in the original legislation, and I've talked to several members and seemed 19 4/15/10 - WHOLE - BILL 100212 okay with this and I hope all the members are.

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Councilman Green

Thank you, Madam Chair. I just received this this morning. Councilman O'Neill came over and explained it to me. I'm not sure I agree with the logic or the premise behind introducing this, because what the BRT is asking for in their lawsuit is for the ballot measure not to be put on the ballot, which means if they are successful in their lawsuit, the BRT will stay in place with all assessors and other people working for the BRT and we would have to reintroduce a bill, leaving the BRT in place and doing the assessment function separately and reauthorize that and repass. So I don't think that sort of the logic here holds water with respect 20 4/15/10 - WHOLE - BILL 100212 to this. It's really -- we're just -- this bill is about how much we want to pay the current members of the BRT. I want to pay them $18,700 a year and not $45,000 or $50,000 a year. It's that simple. The question is that simple. It's not that complicated. We get to set salaries in this body for that Board, and I don't think we should adjust the amount of salary from what the Mayor requested. It's a very simple issue, what do we think this current Board is worth. Are they worth $18,700 a year or are they worth $45,000 or $50,000 a year? I think that they're worth $18,700 a year. And when this comes up in the public meeting, I urge my colleagues to reject this amendment and pass the bill as the Mayor has sent it down to us, unless someone can tell me that this is what Mayor Nutter wants. Thank you, Madam Chair.

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Councilman Goode

Thank you, Madam President. I was not going to speak. I believed there would be no debate and that people would automatically support this amendment. I actually believe that most of what the witness said was actually true. I was not prepared to support the bill as presented by the Mayor. I think that we've already gone through the legislative process to decide what the salaries should be. And we're not setting the salaries for a current Board. Instead, we're setting salaries for the Board, period, until and unless those salaries are changed by a Charter amendment that that is approved. Therefore, when we pass a bill that's going to become law, it is something that is permanent until amended. So it is vindictive to set salaries for a certain set of people as opposed to what you 22 4/15/10 - WHOLE - BILL 100212 believe the job should pay. So I will be supporting the amendment. Thank you, Madam President.

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Council President Verna

It has been moved and seconded that Bill No. 8 100212 be reported out of Committee with a favorable recommendation, as amended; further, that the rules of Council be suspended so as to permit first reading at our next session of Council. Thank you all very much. (Committee of the Whole concluded at 10:15 a.m.) - - - 29 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 April 15, 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.)

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