But the RFP, you just said, was not specific enough in that it did not say what buildings --
Well, as the Managing Director said, we can come back and give you, through the Chair, a description of what was done, give you a copy of the RFP, give you a copy of the responses or at least a summary of that, and you can draw your conclusions from that.
All right. I mean, so essentially what we're going to have to do, Madam Chair, is cut even where we think there's revenue because the revenue assumptions are not -- are 171 3/23/10 - WHOLE - BILL 100117, etc. being -- I don't know how to put this. We're getting revenue numbers that are lower than we should reasonably expect them to be through certain initiatives, like street furniture, through advertising on buildings and stuff like that, and we're going to have to rely on the Administration to move expeditiously to bring those in in order to avoid the cuts that we put in. I guess we can do conditional things, if they get that revenue, they don't have to -- they have an additional appropriation in this department or that department. I don't know how else to hold them accountable to things like this. That's all my questions for now. Thank you, Madam Chair.
Thank you very much. The Chair recognizes the Procurement Department. Is there anybody else to testify on this? 172 3/23/10 - WHOLE - BILL 100117, etc. (No response.) MR. McPHERSON: The next department is the Procurement Department. (Witnesses approached witness table.)
Good afternoon. COMMISSIONER ORTMAN: Good afternoon. DEPUTY COMMISSIONER STITT: Good afternoon.
Could you leave quietly, please. Would you state your name for the record, please. COMMISSIONER ORTMAN: Yes. Hugh Ortman, Procurement Commissioner of the City of Philadelphia.
Please proceed. COMMISSIONER ORTMAN: Good afternoon, Council President -- or excuse me; Councilwoman Tasco and other members of City Council. I am Hugh Ortman, 173 3/23/10 - WHOLE - BILL 100117, etc. Commissioner of the Procurement Department. With me today is Deputy Commissioner Mary E. Stitt. I am presenting for your consideration the Procurement Department's Fiscal Year 2011 budget request. The Procurement Department is requesting a total appropriation for all funds of $445,700,802, of which 4,238,000 is in the General Fund. The General Fund budget for Fiscal Year 2011 provides $2,423,253 for Class 100, payroll expenses, supporting 50 employees; $1,766,267 for Class 200, purchase of services; and $49,054 for Class 300 and 400, supplies and equipment. This budget is the same as the Fiscal Year 2010 projected obligations of $4,275,000, except for the transfer of $36,426 for IT consolidation. The Grants Revenue Fund budget provides $150,000 for Class 200, purchase of services, and the Water Fund budget provides $69,228 for Class 100, payroll expenses, for two employees. 174 3/23/10 - WHOLE - BILL 100117, etc. The Procurement Department is comprised of three divisions. The Services, Supplies and Equipment Division centrally purchases products and services required by City departments to provide their services to the public, monitors the City's Class 300 inventory of supplies, accounts for personal property, and disseminates bid information to the public. The Public Works Division processes capital projects and concession bids, administers the citywide advertising program, and coordinates the inspection and disposal of City property. The Executive Division provides the leadership, management and direction of the Procurement Department. The mission of the Procurement Department is to obtain quality goods, services and construction in a timely, cost-effective and professional manner through a competitive, fair and socially responsible process in accordance with 175 3/23/10 - WHOLE - BILL 100117, etc. the law. The FY11 General Fund budget request should provide the resources necessary to accomplish this mission. The Procurement Department has a unique a role in City government in that our customers are the internal departments who need goods and services so that they in turn can provide goods and services to the citizens of Philadelphia. It is our job to find out what our customers need and provide it as quickly and efficiently as possible. To that end, the Services, Supplies and Equipment Division issued 210 bids in FY09, resulting in 356 contract awards totalling $91,567,000. For the record, it should be pointed out that in that last sentence, there is a typo in the distributed copies; 210 as read is the correct number of bids. These awards, coupled with contract renewals, mean that at any given time there are approximately 800 active Procurement contracts available for use. 176 3/23/10 - WHOLE - BILL 100117, etc. Also in FY09, 801 small purchase orders under $30,000 were also processed, totalling $5,210,754. By virtue of the solicitation process, the majority of these awards are made to OEO-certified vendors and other small businesses. In the last year, our Capital Programs Unit processed 116 bids resulting in 99 contracts worth $214,178,451. Of those, 44 contracts are ARRA funded, with a total dollar value of $146,898,133. In FY09, the Surplus Disposal Unit contributed over $750,000 to the General Fund, including 550,000 from an online auction contract for used vehicle and equipment sales and 150,000 from the direct sales of scrap metal. An additional 335,000 was deposited into the Water and Aviation Funds. The Procurement Inspections Officer works closely with the using departments and the Water Testing Lab to ensure that all supplies and equipment 177 3/23/10 - WHOLE - BILL 100117, etc. meet the specifications as required in the awarded contracts.
The Inspections Officer certifies that materials meet specifications prior to contract award. Random follow-up inspections are also conducted throughout the entire contract to verify product quality. The Procurement Inventory Unit collects inventory data from all departments, issues tags for all 400 Class purchases, including the vehicles and equipment, and provides the Finance Director with consolidated inventory reports on an annual basis. The Department is also responsible to certify local business entities that may qualify for the five percent bid preference on contract awards. This effort is an incentive meant to encourage local vendors to get preference in bidding opportunities while continuing to have a base of operations within the City. The certification process involves verification that 178 3/23/10 - WHOLE - BILL 100117, etc. applicants indeed have a bona fide location within the City and that all permits and taxes are current. Procurement works closely with the Office of Economic Opportunity and is committed to supporting the Administration's goal of a percent 9 minority, women and disabled-owned 10 business participation in City 11 contracting. While it is OEO that is 12 responsible to set and track 13 participation ranges on City contracts, 14 Procurement has an active role in helping 15 prime vendors meet those ranges and 16 ensure that OEO-certified vendors have an 17 opportunity to participate. At pre-bid 18 meetings, vendors are encouraged to seek 19 participation from M, W and 20 DSBE-certified vendors, and they're 21 introduced to certified businesses. 22 Procurement continues to partner with OEO 23 in training programs designed to educate 24 certified vendors about the bidding 25 process and contract opportunities with 179 3/23/10 - WHOLE - BILL 100117, etc. the City. The Economic Opportunity Cabinet, of which I am a member, meets with OEO on a regular basis to discuss just how the Department and the City should proceed in these efforts. Councilwoman Tasco, this concludes my testimony. I will be glad to answer any questions that you or the other members of City Council may have regarding my testimony.
Thank you very much. We'll go to the Councilmembers, then I'll come back. COMMISSIONER ORTMAN: Councilwoman, before we continue, my little hearing device that worked so well the last time is not working today, so my assistant, my Deputy, may have to -- I may have to ask for additional --
And we'll ask our members. The Chair recognizes Councilman Goode.
Thank you, 180 3/23/10 - WHOLE - BILL 100117, etc. Madam Chair. Good afternoon, Mr. Ortman. COMMISSIONER ORTMAN: Good afternoon.
In your testimony, you say Procurement works closely with the Office of Economic Opportunity, OEO, and is committed to supporting the Administration's goal of a percent minority, women and 12 disabled-owned business participation in 13 City contracting. What does that mean? 14 COMMISSIONER ORTMAN: That 15 means that myself, my Deputy and other 16 Department members go to any particular 17 function, whether it may be outreach to 18 minority vendors, to certified or 19 non-certified vendors, and try to get 20 them to sign up as registered vendors 21 with OEO so they can be made aware of 22 just how the City operates, what their 23 role may be, how they can receive 24 contracts, where to find the OEO 25 regulations, where to find the 181 3/23/10 - WHOLE - BILL 100117, etc. application to become registered with OEO, that sort of thing.
The Administration set that percent goal, 6 yet the last few years it's only been 18 7 percent in terms of DBE participation. 8 What has actually changed after the Mayor 9 released the Strategic Plan for the 10 Office of Economic Opportunity in terms 11 of the procurement process? How has the 12 interface with your office changed or how 13 will it change? How, in reality, after 14 the plan was released has the procurement 15 process changed? 16 COMMISSIONER ORTMAN: I'm not 17 sure the process itself would have to 18 change. We need more vendors to 19 participate to become registered so that 20 we can get better responses for the bids 21 and the subcontracting opportunities that 22 may go out there. 23
Are you sure 24 that's true? Our disparity studies have 25 consistently shown over the last two or 182 3/23/10 - WHOLE - BILL 100117, etc. three years that participation could be percent to 28 percent, while we've 4 only been reaching 18 percent. So it's 5 my position that the capacity already 6 exists and has existed for several years 7 to reach 25 to 28 percent. That's what 8 our City's consultant, Econsult, has told 9 us, but we just haven't been reaching the 10 goal because it hasn't been that focused 11 on securing those opportunities or 12 identifying those opportunities 13 throughout the procurement process. 14 So I'm not sure it's a matter 15 of not having reached out to enough 16 vendors to build that capacity. 17 Obviously something has been going wrong. 18 And it's my understanding the Strategic 19 Plan calls for those people who were 20 focused on certification to now be 21 focused on involving themselves in the 22 contracting process. In fact, what was 23 said within that plan is that they would 24 be involved in the pre-bid process, 25 they'd be involved in the awarding 183 3/23/10 - WHOLE - BILL 100117, etc. process, they'd be involved in the contract monitoring process and throughout every stage of procurement. Is that happening or is that not happening? COMMISSIONER ORTMAN: Your last sentence, that they would be involved in every stage of procurement, I'm not quite sure what you meant by that, but --
It's their plan, and as part of the Administration, I guess it's supposed to be your plan as well. Have you read the Strategic Plan? COMMISSIONER ORTMAN: Yes.
The Strategic Plan calls for OEO to be involved and OEO's staff to be involved -- COMMISSIONER ORTMAN: I'm sorry. I thought you were referring to individual vendors. I'm sorry. Yes. The OEO is -- as soon as we get a bid ready, before it even goes on the street and before it's even typed, 184 3/23/10 - WHOLE - BILL 100117, etc. it's submitted to them to let them know what's happening. Once the bids are -- they come to all our pre-bid meetings, of which there are ranges or goals in the particular bid. They explain to any of the vendors that are there, whether they're prime or subs, the process.
Do they have any sign-offs that have to occur throughout the procurement process? COMMISSIONER ORTMAN: I'm sorry, sir?
Do they have any sign-offs that have to occur throughout the procurement process? Does OEO have to give you a signature at any point in order for the procurement process to move forward? COMMISSIONER ORTMAN: Well, whenever we have a pre-bid meeting, everybody that's there signs in. We have a separate sheet for City employees. I'm talking about --
The way it's 185 3/23/10 - WHOLE - BILL 100117, etc. been described in previous hearings and described some within the Plan, there would be a check-off in terms of the pre-bid process. There would be a check-off in terms of the contract award process. There would be a check-off at every stage of the process as an actual signature authority that OEO would have to have to make sure that at each stage of the procurement process there was an opportunity for OEO to be involved and to identify new opportunities for disadvantaged businesses.
Point of information. COMMISSIONER ORTMAN: That particular official process is not in place at this time, no. 20
Speak into the mike, please. 186 3/23/10 - WHOLE - BILL 100117, etc.
In 1987 in the old procurement process, there was a signature required by the Minority Business Enterprise Council for it to be a valid contract, and the counter signature was the Controller's Office. I think my colleague may want to know is there an official signature required for it to be an executed contract? COMMISSIONER ORTMAN: I'm not familiar with that process, sir.
Thank you. COMMISSIONER ORTMAN: I'm not saying it's a bad idea. It sounds like a good idea, but I'm not familiar with it.
Actually, let me return to that in a second and very quickly. Of the dollars that you were requesting, how much is being used for purchase of services? COMMISSIONER ORTMAN: I'm sorry?
Purchase of services, Class 200. 187 3/23/10 - WHOLE - BILL 100117, etc. COMMISSIONER ORTMAN: The only involvement we have with professional -- you're talking about professional service contracts?
You have 1.7 million and you have a 150,000 figure. Which involve direct contracting from the Procurement Department? COMMISSIONER ORTMAN: You're asking about the Class 200 purchase of services. Virtually all of that is for advertising, for mandated advertising, not just for Procurement, ours is relatively small, but any mandated advertising, for Sheriff sales, for City Commissioners. Virtually all of that money is for that.
So is there a DBE participation goal for that money? COMMISSIONER ORTMAN: For advertising?
Yes. COMMISSIONER ORTMAN: We just contact the newspapers and put an ad in 188 3/23/10 - WHOLE - BILL 100117, etc. the newspaper. I don't know where we could have -- I mean, most of our -- all our ads go in the Philadelphia Tribune, but, I mean, there's no particular set goal.
You do realize this is not making sense to me, right? Why would there not be a goal for $1.7 million in advertising? COMMISSIONER ORTMAN: All right. As I say, this is only for advertising, and advertising is mandated in certain newspapers. It's actually mandated for the Procurement in one of the top three paid circulation newspapers in the City.
I also understand that you use the Tribune because it's cost effective and that that number is a substantial number. I'm just asking, why would it not be identified as such in terms of goals set? COMMISSIONER ORTMAN: I'm afraid I can't answer that question, sir. 189 3/23/10 - WHOLE - BILL 100117, etc. I'm sorry.
In terms of the 150,000 -- COMMISSIONER ORTMAN: I mean, there's a lot of money here, I understand, but as I say, it's virtual advertising.
And there should be a goal set. Particularly if you're already utilizing the Philadelphia Tribune and you're already attaining a goal within that contracting, why not set a goal there? But my second question simply is, for the $150,000, what is that for, and is there a goal set for that? COMMISSIONER ORTMAN: I would defer to Debbie Beatrice on that one. Oh, I'm sorry. We have a contract -- actually, Finance has a contract with a company called Chartwell, who goes out and audits contracts that we have mainly for construction projects, because in the process of construction 190 3/23/10 - WHOLE - BILL 100117, etc. projects, a lot of taxes are paid and incorrectly billed to the City. Chartwell goes out and gets that money back, and they get a percentage --
So you're saying you've identified the contractor for that? COMMISSIONER ORTMAN: I'm sorry?
You're saying you've identified the contractor for Fiscal Year '11? COMMISSIONER ORTMAN: Yes, but that's a professional service contract through Finance.
You've already identified a contract for Fiscal '11? COMMISSIONER ORTMAN: I'd have to check with Finance. It may be. I'm not sure. 191 3/23/10 - WHOLE - BILL 100117, etc.
All I can say to you is that there seems to be a complete disconnect between the Office of Economic Opportunity and the Procurement Department. That can't happen in order for the Administration to reach its goal. It's not only clear in terms of the fact that there is no signature requirement throughout the contracting process, but the fact that even within the direct contracting being done by the Procurement Department, there are no goals set, nor does there seem to be any different system than there is in general, that people have gotten the contract before, so they will continue to get the contract, and that's just wrong. COMMISSIONER ORTMAN: I understand, sir, and the signature -- I assume that was some sort of a process that was in a regulation of some sort, fell by the wayside somewhere along the line. I don't know. I will look into --
It's 192 3/23/10 - WHOLE - BILL 100117, etc. actually supposedly the Administration's plan, and I'll finish up very quickly. What they say is that they're going to take those personnel that were assigned to certification, they will then assign them to project managers, Procurement officials, throughout every department, where they have staff assigned there, and they would be involved in every stage of contracting, from beginning to end, and have signature authority at every stage, from beginning to end. That's how we would ensure that opportunities would be identified and secured for disadvantaged businesses. It's very clear that if the Procurement Department does not know about it or says it does not exist, then it is not real. COMMISSIONER ORTMAN: I will look into that.
It's also equally clear that there were not goals set even for Class 200 funds allocated to the Procurement Department directly. 193 3/23/10 - WHOLE - BILL 100117, etc. Thank you, Madam Chair.
Thank you, Madam Chair. To follow that line of questioning, during those years where the then Minority Business Enterprise Council had signature authority, there were the highest levels of minority and female participation in the history of this city. There is something to the signature authority, that a contract is not a contract until it is reviewed. So whatever we have to do to make sure that that process is changed so that it includes that, if that's a part of the plan, we support that. The second thing that I will ask you is, do you still classify all contractors under SID codes? COMMISSIONER ORTMAN: Say again. 194 3/23/10 - WHOLE - BILL 100117, etc.
SID codes. They're standard commercial, industry something or other acronym. COMMISSIONER ORTMAN: I'm familiar with the code, yes.
Do you still classify all businesses under those -- COMMISSIONER ORTMAN: We use our own codes.
What -- COMMISSIONER ORTMAN: They were homegrown years ago, I guess, 15 years 14 ago. 15
My question 16 becomes, under each classification of 17 work, whether it's professional service, 18 procurement or equipment -- I mean public 19 works or equipment, can you give us an 20 aggregate change over your tenure by way of number of minorities in each of those categories? To further, I guess, expound upon the point of the potential of 24 percent, if you have more structural 25 engineers, then there is a greater 195 3/23/10 - WHOLE - BILL 100117, etc. probability that one of them will get a contract opportunity. So if you have categories of work that have seen an increase in minority businesses, increase in growth in female businesses, it is our expectation that the needle should move a little more in the right direction by way of inclusion and participation if discrimination does not exist. So we'd like that information to say we have 12 more architects than we had a year ago. 13 We have 30 more engineers. We have 14 people who provide various types of 15 marketing and public relations. So by 16 SID codes -- that's what we used to call 17 it -- we want to see those categories to 18 see if, under Councilman Goode's premise, 19 there is an increase in those areas. 20 Second thing that I think -- COMMISSIONER ORTMAN: Can I comment on that first, Councilman? We try to anticipate some questions that you would have for OEO. That's one that's absolutely OEO. We don't have the answer 196 3/23/10 - WHOLE - BILL 100117, etc. for that. We don't even have, to my knowledge, the ability to gather that information. OEO would have to have that. DEPUTY COMMISSIONER STITT: The commodities that the Office of Economic Opportunity vendors would be certified under would be housed by the OEO. We will be happy to contact them and get that information and see if there has been an increase from last year to this year. With the new Strategic Plan in place, I would hope that we can also make a comparison next year since their process has now been changed, and does that then affect the increase in those commodities.
All right. It is our expectation that there is a teamwork that has now begun to happen. So, therefore, if they have the information, you should have the information for utility purposes, if nothing else. 197 3/23/10 - WHOLE - BILL 100117, etc. DEPUTY COMMISSIONER STITT: Sure.
So that is our expectation. COMMISSIONER ORTMAN: We'll get it for you. We just don't have it.
All right. The idea that you're going out under requirements contracts right around now to find out the expectation and purchasing habits of requirements contracts for next year, so if you are buying pencils under a bulk contract -- DEPUTY COMMISSIONER STITT: It's about six to nine months ahead of time.
So we should be right now in the process of determining those levels of participation, correct? DEPUTY COMMISSIONER STITT: That is part of the process.
So the information about who is available for 198 3/23/10 - WHOLE - BILL 100117, etc. work is essential in that methodology. DEPUTY COMMISSIONER STITT: Each of those contracts go up to OEO. Every contract that we let or every contract that we put out for bid goes to OEO first. They review it. I believe they put a process together and an evaluation. They analyze who is available for that, and that's how they then set the range.
Point of information. DEPUTY COMMISSIONER STITT: It then comes back down to us --
I'm not trying to be funny, but you said a whole lot in terms of what the process is. Have they ever verified to you that's the process? DEPUTY COMMISSIONER STITT: I'm 199 3/23/10 - WHOLE - BILL 100117, etc. sorry?
Have they ever verified that to you, that that's the process, or has the same number appeared in those contracts in terms of participation goals? DEPUTY COMMISSIONER STITT: I would have to look at each of the contracts.
I would venture to say that the same number has appeared in those contracts in terms of participation goals. The number is not real and that it's based upon no process whatsoever. DEPUTY COMMISSIONER STITT: And all I can say to that is that we rely on the Office of Economic Opportunity and their expertise in that area.
Or lack thereof. COMMISSIONER ORTMAN: They receive every individual bid, as I mentioned before, before it goes on the 200 3/23/10 - WHOLE - BILL 100117, etc. street so that they can apply the ranges to it. That is -- actually, that's a sign-off. They sign that. They also -- there is a review when the bid comes back that if it has goals, that has to be reviewed by OEO prior to any award whatsoever. DEPUTY COMMISSIONER STITT: Absolutely. COMMISSIONER ORTMAN: Matter of fact, it will sit on the desk until they come back with their determination. DEPUTY COMMISSIONER STITT: So even though there may not be an authorized signing, the process that you were referring to in the past, it can't move without OEO's review and assessment. It will not go into the street. And if they have assessed goals, it will not be awarded until they have made a determination.
Point of 201 3/23/10 - WHOLE - BILL 100117, etc. information. Councilman Goode.
If everyone knows the number is the same, if everyone knows the number is not based upon any analysis or evaluation, if everyone knows the contract is going to eventually move anyway, then it's just a matter of someone calling over and saying, Put that number in the contract. If no one is reliable for checking whether it's a real number or if no one even cares whether that number is actually met, then what you're talking about is a process that has not worked, which is why clearly disparity studies show that there's a capacity for percent to 28 percent 18 participation but there has been less -- 19 it's been around 18 percent 20 participation, and the reason why that 21 number has been flat for a few years is 22 because there's no new work being done in 23 terms of evaluating what those goals 24 should be. And the truth of the matter 25 is, luckily, we do have an annual 202 3/23/10 - WHOLE - BILL 100117, etc. disparity study that's required under the Philadelphia Home Rule Charter that actually tells us that the capacity in public works contracting and the capacity in professional services contracting has risen. Therefore, the participation should rise. All I'm going to say to you is that if you go back and do an examination and you find that those numbers have been the same and flat for several years, you should report that back to this Council. DEPUTY COMMISSIONER STITT: And we'll be happy to do that, sir.
I'm sorry. I apologize. Councilman Jones had a point of information, which threw him out of sync, so he now goes on his own.
Just 203 3/23/10 - WHOLE - BILL 100117, etc. quickly --
Which pushed you under Councilwoman Brown. So don't be saying point of information.
I think if you follow the general line of this back-and-forth questioning, we don't want, after two years, for the silos to still exist. Although they're a separate department, they need to be integrated into your process, because I can guarantee you when we start talking about operating -- when we come back a little later, we are not going to want to hear about how it was their job. We have an expectation that the department heads talk to the Procurement people, who talk to OEO, and at the end of the day, the needle moves to the right. You have, in my estimation, a best-case scenario. You have a former Procurement Commissioner who is now 204 3/23/10 - WHOLE - BILL 100117, etc. responsible for OEO. It doesn't get much better than that. When those participation levels were at their highest is because there was a back-and-forth communication, that I didn't have to wait and figure out where the opportunities were. They were put in front of me and say, Hey, what do you think about this, and do we have enough participation to create competition in order for there to be a market for minorities and females. My point to you is, take advantage of that, because at the end of the day, it is the numbers that will resonate in our minds. And you are to us all one team, the departments, the OEO, the Procurement Department, the City, and where the businesses out there that are relying on you to make sure that there is no discrimination, they paint all of us with the same brush. So we need to get in a huddle and get the team thing going on so that 205 3/23/10 - WHOLE - BILL 100117, etc. everybody is on the same page, and that is our expectation. Thank you, Madam Chair.
Thank you, Madam Chair. I think I will move to Councilwoman Krajewski's chair just for probably -- COMMISSIONER ORTMAN: I appreciate that.
You're welcome. Thank you, Madam Chair. Is that better? COMMISSIONER ORTMAN: Good.
So we've looked at the potential reductions that you've put forward, and it looks like we can save $181,000 in Class 100 spending by eliminating one full-time equivalent position, backfill DROP positions with 206 3/23/10 - WHOLE - BILL 100117, etc. employees receiving lesser salaries, delays in hirings and lump-sum payment reductions. What full-time equivalent position did you give the Budget Office information that you could eliminate? COMMISSIONER ORTMAN: I don't know if it's actually eliminating. We're actually consolidating. We're going to take one person that's already in the position and move him or her into a position as a supervisor, but continue to do the work that they're already doing. So there will not be -- it's going to be -- DEPUTY COMMISSIONER STITT: It will be streamlining. COMMISSIONER ORTMAN: Streamlining is what you want to call it.
But that's not currently part of your budget proposal, is it? COMMISSIONER ORTMAN: It's all -- there's a whole combination of 207 3/23/10 - WHOLE - BILL 100117, etc. things in our budget proposal that could probably be better explained by --
Well, let's just go through it. For each department, I asked how long positions have been vacant, if there are vacant positions, what specific job duties will be fulfilled by that position and how those job duties have been handled while the position has been vacant. So Procurement's budget detail indicates several positions are either new or have been vacant for an extended period of time and are budgeted to be filled. Starting with the 70,000 per year Chief of Staff, which is a new position, what are the duties of this position? COMMISSIONER ORTMAN: Could you repeat that last question?
I said it's a new position and what are those duties? COMMISSIONER ORTMAN: He supports the Deputy Commissioner and the 208 3/23/10 - WHOLE - BILL 100117, etc. Commissioner in various strategic initiatives.
So who has been performing these functions in the past? COMMISSIONER ORTMAN: We have tried to do it between the Deputy and myself and it's become overwhelming. And we did have a Purchase Manager, who has finished his four years of DROP just within the last couple of weeks, and we're anticipating this will cover -- his position will cover this position for a certain period of time anyway.
What would happen if we didn't have the Chief of Staff position, if we cut it? COMMISSIONER ORTMAN: As I said, the work that's been coming with the daily operations with the PhillyStat, 209 3/23/10 - WHOLE - BILL 100117, etc. with all the training and development that has to be going on, we just are becoming overwhelmed to try and do it on our own.
So if you didn't have to go to PhillyStat meetings, you wouldn't need the position? COMMISSIONER ORTMAN: Oh, no. 10 I'm saying that's just one of many, many things. Reporting the -- just gathering data. The person in this position is excellent at that. He's excellent at doing the reports.
So this position is filled already? COMMISSIONER ORTMAN: Yes.
It was not authorized in last year's budget. COMMISSIONER ORTMAN: I have to ask Debbie Beatrice that question. DEPUTY COMMISSIONER STITT: No, it was not. Yes. We consolidated. We had a position that was going to be filled, one particular Purchases Manager 210 3/23/10 - WHOLE - BILL 100117, etc. position. That was going to be filled. At this time, that is being paid out of class. It was a supervisor who has moved up.
What does "paid out of class" mean? DEPUTY COMMISSIONER STITT: That means that they're covering the position temporarily and being paid on a level that if they were in there permanently. That supervisor position is now open, and that's how we were able to move the money so that we could add analytical capacity to our department. We needed to add analytical capacity to our department. We have been part of a very large reform agenda with the Managing Director's Office. We are trying to become much more efficient, moving to -- we're sophisticated to some extent in our purchasing. Actually, we're pretty sophisticated in our purchasing. However, we are trying to move to become more automated. We are 211 3/23/10 - WHOLE - BILL 100117, etc. looking at alternative purchasing options. So those are the type of strategic initiatives that we needed support in, driving those projects so that we will be able to have results.
The second new position appears to be an Administrative Technical Trainee at 31,000 per year. What are the job duties of this position? COMMISSIONER ORTMAN: We currently have percent of our staff in 14 the DROP program. So we will be 15 losing -- that's not counting the two we 16 just lost two weeks ago. So we're going 17 to be losing people periodically over the 18 next couple of years. Administrative 19 Trainee comes in at a much lower salary 20 and sooner or later learns those jobs and 21 moves up the ladder, but while we're 22 trying to prepare for the future, this is what an Administrative Trainee would do. As we lose technicians that are much higher salary, we bring people in at that 212 3/23/10 - WHOLE - BILL 100117, etc. level to become trainees. That's why it's an Administrative Trainee. And they will learn the job, and they'll be replacing a much higher-salary person for that time period up until four, five years from now when they reach that bracket.
The budget detail shows several vacant positions in Procurement, including a Clerk III in supply management inventory and supervisor in public works. Starting with the Clerk III, has that position been filled? DEPUTY COMMISSIONER STITT: No, it has not.
Who has been performing these duties? DEPUTY COMMISSIONER STITT: The supervisor mostly and there is another staff member that has probably taken over some of that. The impact has been a slowdown of our process, which is actually going in the total opposite way 213 3/23/10 - WHOLE - BILL 100117, etc. of what our goals are. It's actually to become more efficient. However, we have been covering it because that's what we need to do at this time. COMMISSIONER ORTMAN: I should point out, Councilman, that in the FY08 budget, we had 62 General Fund positions and now we're down to 50. So we've been consolidating quite a lot over the last couple of years.
I understand. We're moving towards an electronic purchasing platform, right -- COMMISSIONER ORTMAN: I understand.
-- where you won't have to do most of the back-up work that is done by the 50 people, right? DEPUTY COMMISSIONER STITT: That's correct.
So rather than replacing people who are leaving, even with lower-priced positions, why don't we just accelerate the rollout of 214 3/23/10 - WHOLE - BILL 100117, etc. the electronic purchasing platform? COMMISSIONER ORTMAN: I would love to know how to do that. We're trying the best we can.
Well, you're not responsible for that rollout. COMMISSIONER ORTMAN: We're working with DOT. We've been in meetings on quite a regular basis. I know they've done a lot of work. We've done a lot of work. Mary has done a lot of work. Our Chief of Staff has done a lot of work. It just takes time to get these things through. One problem we have, to be honest with you, with our procurement process, it's so far actually advanced, not technology-wise but in detail-wise, than in other cities and other locations that trying to get something off the shelf is just not going to work, because they don't do the things that we've been doing for years. And we have -- as I say, it's manual. So we're trying to get 215 3/23/10 - WHOLE - BILL 100117, etc. something together where we can do it technology-wise or we're going to have to build it ourselves.
Well, I don't agree with that at all. We never have to build anything ourselves. We may have to modify something -- COMMISSIONER ORTMAN: We're trying to do that, too. Just our commodity codes alone --
But we should not be hiring programmers to build our own programs that only the City of Philadelphia knows how to manage. We need to buy -- we need to use our Oracle Business Suite that we have a license for, use their eCommerce platform, and we can have a product out very quickly. If not, there are companies that integrate -- if we put out an RFP for a solution describing your process, we'd have three bids in three months. COMMISSIONER ORTMAN: There is an -- 216 3/23/10 - WHOLE - BILL 100117, etc.
Or nine bids in six months. DEPUTY COMMISSIONER STITT: We are in the process of looking at all that and --
So why don't we just tell the market what our problem is and ask for bids or even do an RFI rather than try to come up with internally in lots of meetings, meetings with the DOT --
Thank you. Good afternoon, everyone. I wanted to continue with the line of questioning raised by Councilman Goode just to make sure I understand all that I 217 3/23/10 - WHOLE - BILL 100117, etc. heard.
Councilwoman, would you please speak into the microphone. It would be very helpful.
Okay. I do want to continue with the line of questioning raised by Councilman Goode. Did I understand you to say that you do not have an adequate vendor list or enough vendors on your list? COMMISSIONER ORTMAN: Our vendor list is quite extensive. It's the OEO-registered vendors that we need to really expand on. That's what we're trying to do. We're working with OEO just to do that, and that's why they changed their certification process, in order to help that along as well.
And what ways have you discussed with OEO how they can expand their registered vendor list? COMMISSIONER ORTMAN: Well, changing the certification process was 218 3/23/10 - WHOLE - BILL 100117, etc. one of them we discussed with them, and as I mentioned in the testimony, we will attend any functions, whatever they ask us to come to. We actually send our Procurement Commission Supervisor from public works to -- he goes out to our Spanish-speaking groups to meet with them.
Then what's the interface with the chambers, like the African American Chamber, the Hispanic Chamber, the Asian American Chamber, where you have a captured audience of members who are hungry for opportunities with the City? COMMISSIONER ORTMAN: We'll attend any function that we hear about. DEPUTY COMMISSIONER STITT: Recent --
What I'm asking, what is the in-house strategy, plan of action that you take the initiative to execute with regards to local chambers? Is there any strategy or 219 3/23/10 - WHOLE - BILL 100117, etc. thinking given to the value of connecting with the local chambers to help Procurement and OEO raise the numbers of registered vendors? COMMISSIONER ORTMAN: We do connect with them, but it is all coordinated through OEO.
Okay. COMMISSIONER ORTMAN: We absolutely connect with them. As I said, OEO attends the Spanish-speaking chamber functions himself and he brings information from both public works and he brings it from SS&E so that he can pass this around and get the information to the people.
Did you want to add something? DEPUTY COMMISSIONER STITT: Yeah. Just recently we attended a function at the Enterprise Center. Councilman Jones was there. The Managing Director was there. I believe that the Mayor also attended. 220 3/23/10 - WHOLE - BILL 100117, etc. COMMISSIONER ORTMAN: Councilwoman Blackwell was there. DEPUTY COMMISSIONER STITT: Councilwoman Blackwell. And if I have forgotten anyone, I do apologize. There were several departments, if not almost all departments represented. A one-hour workshop was done by myself and the Professional Services Department showing how do you do business with the City in Philadelphia. We went through step by step how our website works. We went through what's a competitive bid, what's a non-competitive bid. It was well attended, to the point that I believe one is being scheduled in April. It may be at the Convention Center. I have not gotten the details on it, but the Enterprise Center may not be a chamber, but it's community outreach.
Oh, absolutely. They are a valuable link in that whole equation. So have you been able to 221 3/23/10 - WHOLE - BILL 100117, etc. measure the yield of that effort? DEPUTY COMMISSIONER STITT: I haven't, but I have a feeling that the department -- the Budget Department actually brought this together and it was focused on American Recovery and Reinvestment funds. So I would have to find out from them.
Okay. I just want to try to get another question in. How many Procurement officials are there, period? I think I understood you to say there is a Procurement official in each City department, correct? COMMISSIONER ORTMAN: They are what we call Procurement Specialists.
Okay. COMMISSIONER ORTMAN: And they're in certain departments, mostly the larger ones.
Such as? DEPUTY COMMISSIONER STITT: Water, Streets. COMMISSIONER ORTMAN: Water, 222 3/23/10 - WHOLE - BILL 100117, etc. Streets, Fire, Police.
And in those departments where there is not an identified Procurement official, who handles that duty in making sure that this entire OEO issue is adequately addressed? COMMISSIONER ORTMAN: I'm afraid I can't answer that question. I don't know.
So then that underscores Councilman Goode's assessment that the disconnects still exist. Would that be fair to say? COMMISSIONER ORTMAN: Again, I would ask -- I think we'll have to go back and call OEO and talk to them to see what they know about those particular functions as well, because I know everybody -- the OEO is strongly involved right now with departmental involvement in all the bids, much more so than they have been in the past, and this is before the new Director took over. They've 223 3/23/10 - WHOLE - BILL 100117, etc. actually brought in every department, talked with each department on various one-on-one about what their goals were, how they were going to get them reached and so on. It's an ongoing process and it absolutely has increased greatly over the last year.
What has increased? The interface between those two offices? COMMISSIONER ORTMAN: The interface between the departments and OEO and the function of the departments when it comes to goals and participation ranges.
Who does the contracting ultimately in those departments? COMMISSIONER ORTMAN: Each department has their own contract administrator. It depends again on what the contract is for. I'm sure that they would have one for supplies, one for services basically. I can't really tell 224 3/23/10 - WHOLE - BILL 100117, etc. you.
So it remains, at least for me, a mystery on how OEO and the various departments are interfacing and meeting the objectives of the Strategic Plan, of the new Strategic Plan that's been released by the Mayor for OEO. DEPUTY COMMISSIONER STITT: My understanding, if I may, is that there is a contact in every department for the Office of Economic Opportunity where they review everything.
We don't doubt that there's contact, but what Councilman Goode has been attempting to underscore is, what does that -- define "contact," and that's where there's a blur. So we'll have to look forward to the testimony from the Office of Employment Opportunity. Thank you, Madam Chair.
Councilman Goode. Point of information. 225 3/23/10 - WHOLE - BILL 100117, etc.
Just a point of information. At the end of the day, OEO doesn't do any contracting; is that correct? They don't do the contracting? DEPUTY COMMISSIONER STITT: No. 8 COMMISSIONER ORTMAN: Unless they have professional services contracts.
But in general, the contracting you're referring to and the contracting process you're referring to is done by the departments themselves, so the departments are ultimately responsible for that contracting? DEPUTY COMMISSIONER STITT: Yes.
So every time we ask a question about participation, it doesn't make much sense to point to OEO. Although they're supposed to have some involvement and their involvement is supposed to be 226 3/23/10 - WHOLE - BILL 100117, etc. beneficial, at the end of the day those departments do the actual contracting and have to be held responsible for that accounting. COMMISSIONER ORTMAN: The departments do their own professional service contracts. They do not do the supply, service, equipment or anything that has to do with that particular purchase.
OEO does next to nothing. Between the Procurement Department and the departments themselves, that's where the contracting actually occurs. COMMISSIONER ORTMAN: Could you repeat that one more time, sir. I'm sorry.
I said between the Procurement Department and the Procurement Specialists within the various departments, that's where the contracting actually occurs. It's not actually OEO doing the contracting. 227 3/23/10 - WHOLE - BILL 100117, etc. COMMISSIONER ORTMAN: Most of our contracts are citywide contracts, so we involve all the departments. What each individual department does as far as contract management, unless there's a problem, we don't usually get involved. If there's a problem, we jump in to solve it. So I'm not sure if I'm answering or even hearing all of your question, but each department is responsible for their own contract management.
Exactly. And the point is simply that OEO does not do contracting, so OEO cannot be ultimately held responsible for contracting. That's my simple point. COMMISSIONER ORTMAN: I'm not sure what OEO does with the departments. I can't speak for them.
You're not sure what OEO does with departments in terms of contracting? 228 3/23/10 - WHOLE - BILL 100117, etc. COMMISSIONER ORTMAN: I'm not sure on a day-to-day basis what they do. I mean, they're meeting with them on a regular basis, as I explained about two or three minutes ago. What type of recording they're requiring, what type of records they're -- what kind of reports they're requiring, that I'm not familiar with.
Commissioner, you're saying that each department lets professional services contracts. They do not go through the Procurement Department at all? COMMISSIONER ORTMAN: They come through the Procurement just for an approval, which means we basically, Deputy Commissioner and myself, can review them to make sure it's not something that should not have been done through professional services or that there's not a current contract in place 229 3/23/10 - WHOLE - BILL 100117, etc. that we're aware of through Procurement. Our part is relatively small because -- the Law Department does the same thing, the Finance does the same thing, but it does go through our approval path.
But not for minority participation or any of that? COMMISSIONER ORTMAN: No. No, ma'am.
But that rests with the department. Each department is supposed to identify participation on those contracts? COMMISSIONER ORTMAN: I don't want to give you a wrong answer. My understanding is, though, that they do go -- same as our contracts go to OEO before we put them on the street, my understanding is that the same thing happens with professional services.
Or should happen. COMMISSIONER ORTMAN: Excuse 230 3/23/10 - WHOLE - BILL 100117, etc. me?
Or should happen. COMMISSIONER ORTMAN: Or should happen, yes.
Thank you, Madam Chair. I'll get back to electronic procurement. I just want to hit another position. Inventory Supervisor, has that position been filled? DEPUTY COMMISSIONER STITT: No, not as yet.
How long has it been vacant? COMMISSIONER ORTMAN: That's the consolidation of we're expecting to take a current employee, put them into that position and not replace the current employee.
Does that 231 3/23/10 - WHOLE - BILL 100117, etc. create a vacant position in your budget that's not reflected in your budget detail? DEPUTY COMMISSIONER STITT: No, it does not, sir.
Madam Chair, while they look for that, I have a request to make of our witness.
Okay. So I'm looking at the budget detail and I see Inventory Supervisor was not filled in '09, but was there -- or at least it's in -- maybe it wasn't there, but Fiscal '10 budgeted positions it is now expected to be filled. Who in this budget detail is filling it? COMMISSIONER ORTMAN: There's a test to be given. We don't know yet. We don't know which one of the positions involved that we currently have will be 232 3/23/10 - WHOLE - BILL 100117, etc. the one that's selected for the job.
Okay. But -- COMMISSIONER ORTMAN: It's one of three people.
-- you are going to eliminate the position of the person who is selected for the job, right? COMMISSIONER ORTMAN: That's our intention at this point in time.
But that's not what you're budgeting for. (Witness approached witness table.) COMMISSIONER ORTMAN: This is Debbie Beatrice from the Administrative Services Center.
What the Commissioner is talking about is, you're absolutely right, that position is not shown as a cut in Fiscal '11 budget. What the Commissioner is talking about is it was part of the plan if the department 233 3/23/10 - WHOLE - BILL 100117, etc. was subject to any cut.
So basically you wouldn't fill -- as part of the $181,000 that you provided to the Budget Office, this would be one of the things that was done?
Okay. And the full-time equivalent position that you would cut as part of that $181,000, who was that?
That would have been either the Surplus Disposal Officer or the Inspections Services Officer, because they would both be vying for the supervisor position, and then that one position would have been cut.
And those cuts that you sent the Budget Office are not reflected in your position count here?
Okay. Thank you. 234 3/23/10 - WHOLE - BILL 100117, etc. There's probably at least $200,000, Madam Chair. Let's get back to electronic procurement. Could you please -- and I'm not going to go through it now because it would take us forever -- put down on a piece of paper for me exactly how -- basically how you want an electronic procurement system to work, and I'll undertake to find you a commercial off-the-shelf system that does it. Could you estimate how many hours you've spent over the last year, because I know we talked about electronic procurement last year, how many hours you spent over the last year meeting with DOT or meeting with some other department or the MDO's Office or in PhillyStat or some other thing talking about getting to an electronic procurement system or meeting about it or writing memos about it? COMMISSIONER ORTMAN: Lots. I'll admit to that.
Would it be 235 3/23/10 - WHOLE - BILL 100117, etc. six or eight people ten hours a week? DEPUTY COMMISSIONER STITT: I wouldn't think it was that high, not ten hours a week, and I'm not -- I don't think that the volume of people --
Six or eight people five hours a week? DEPUTY COMMISSIONER STITT: Possibly on average.
So basically one full-time equivalent position just still talking about it and we haven't gotten anywhere? COMMISSIONER ORTMAN: We've gotten -- DEPUTY COMMISSIONER STITT: We've actually gotten very far. When we started this process, we didn't even have requirements in place. We have requirements in place now. We know what we want. Before we didn't even know what we --
Well, my fear is that often when departments put 236 3/23/10 - WHOLE - BILL 100117, etc. together requirements, what they do is think about their existing workflow processes and how they do things today rather than sort of look at what's available and figure out how they could change their workflow processes. DEPUTY COMMISSIONER STITT: We've actually done both of these analogies.
And do you have written material on that? DEPUTY COMMISSIONER STITT: I'm sorry?
Do you have written material on that? DEPUTY COMMISSIONER STITT: We do have written material. I would have to check with DOT to see where it's at. However, we have looked at it. We had to know --
That is great. If you would forward to the Chair all written material you have on the issue of electronic procurement, we can 237 3/23/10 - WHOLE - BILL 100117, etc. move on.
The "Chair" meaning President Verna. DEPUTY COMMISSIONER STITT: No 6 problem. Thank you.
Last year's budget hearings you may recall some questions I asked that I have not yet received the answers to. One question related to the cost of mailing bid announcements. My understanding, that 5,000 bid announcements are mailed each year, and I've asked for the cost of doing so, including staff time broken down by department, supplies, postage, et cetera. Do you have this information? DEPUTY COMMISSIONER STITT: The staff time I would have to work with someone to look at, but you are right when it comes to the number of bid announcements that are sent out, and they are sent out with regular postage. So we can come to that number, which is probably around the $10,000 mark for 238 3/23/10 - WHOLE - BILL 100117, etc. Calendar Year 2009.
It's the staff time I'm concerned with. DEPUTY COMMISSIONER STITT: The staff time, I would have to work on that.
How many people in your office basically work on that? COMMISSIONER ORTMAN: One. DEPUTY COMMISSIONER STITT: I would say one.
One sends out 5,000 packages? COMMISSIONER ORTMAN: Well, the mailroom actually mails them out down in the basement of MSB.
So you have one full-time person doing mailing, essentially preparing -- COMMISSIONER ORTMAN: Handles the entire mailroom, incoming, outgoing, deliveries to various departments and so on. DEPUTY COMMISSIONER STITT: 239 3/23/10 - WHOLE - BILL 100117, etc. That's not their only responsibility.
Now, the second question was about moving to an online system for vendor performance reports, something you noted would yield efficiency gains and also allow for easier and better review for past performance data when considering new bids. DEPUTY COMMISSIONER STITT: That would go into the eProcurement process.
And that's part of your requirements? DEPUTY COMMISSIONER STITT: That is part of our requirements, absolutely.
I'll look for that when I get that material. Still following up on a question from last year, the projected staff change if all Procurement was electronic. DEPUTY COMMISSIONER STITT: I 240 3/23/10 - WHOLE - BILL 100117, etc. don't know we would have that information at this moment.
Would you like us to make the investment to make -- DEPUTY COMMISSIONER STITT: Absolutely. I would.
Well, for me to support that, I want to know -- DEPUTY COMMISSIONER STITT: Sure. That would be part of our analysis. We just haven't gotten as far as that to be able to provide very solid information to make sure that our estimate is correct.
How much staff time is currently spent on data entry related to paper forms? DEPUTY COMMISSIONER STITT: I don't have an estimate of that.
If you could prepare that and send it to the Chair. These are questions I asked last year, so -- DEPUTY COMMISSIONER STITT: And 241 3/23/10 - WHOLE - BILL 100117, etc. we did --
Councilman, if you asked these questions last year so we can go to lunch, could you just give them the list, please, and let them answer them again?
I could. The Operating Budget in Brief indicates a significant increase from 88,000 in FY10 to 298,000 in FY11 in revenue generated by the Procurement Department for master bid bonds. My guess is the increase was related to ARRA-funded projects, but I wanted to confirm. COMMISSIONER ORTMAN: Well, there were 44 of those. So that would account for a pretty good number. I don't have the exact number. I do know it was 44 ARRA public works bids.
Your testimony indicates the Procurement Surplus Disposal Unit contributed over 750 to the General Fund in FY09, 242 3/23/10 - WHOLE - BILL 100117, etc. including 550 from an online auction contract for used vehicle and equipment sales and 150K from the direct sale of scrap metal. The Operating Budget in Brief shows 554K in other revenue from the Procurement Department. Is this the online auction contract revenue? COMMISSIONER ORTMAN: Five hundred and some thousand?
Five hundred fifty-four thousand. COMMISSIONER ORTMAN: It should be. This is done more -- this is for FY09 reports that I have. The online vehicle auction, $706,345 for FY09. That includes equipment and vehicles -- I'm sorry. That figure is vehicles. There's additional equipment that was sold, including tires. There was the fire boat that was sold for 25,000, aluminum poles, 6,850 and so on. So that would be -- that sounds like the right number.
If you don't 243 3/23/10 - WHOLE - BILL 100117, etc. have the answer right now, if you could just get back to me as to exactly what the 554 was in the budget brief in other revenue from the Procurement Department. You don't know that that's specifically what you're referring to. It sounds like you're referring to a higher number than 554. So also -- COMMISSIONER ORTMAN: There were performance bonds, there's bid security, there is bid bonds. Well, bid bond is not a financial asset in our account, but --
If you'll just get back to us with the detail, and I will save the rest of my questions that came from last year and get them to you via e-mail. Thank you. DEPUTY COMMISSIONER STITT: Thank you. 244 3/23/10 - WHOLE - BILL 100117, etc.
Thank you. Is anyone else here to testify on this department? (No response.)
Thank you very much for your testimony. COMMISSIONER ORTMAN: Thank you.
I would suggest that you please next year answer these questions. DEPUTY COMMISSIONER STITT: Yes, ma'am. Thank you. COMMISSIONER ORTMAN: Thank you.
Okay. We don't need a third year without them being answered. We will break and come back at 2:45. Thank you. (Luncheon recess.)
The Committee of the Whole is now back in session. Thank you. 245 3/23/10 - WHOLE - BILL 100117, etc. We will now hear from the Division of Technology. (Witness approached witness table.)
Please identify yourself for the record and proceed with your testimony.
Good afternoon. My name is Allan Frank, the Chief Technology Officer for the City. And now I'll read my testimony. Good afternoon, Council President Verna and members of City Council. I am Allan Frank, Chief Technology Officer for the City of Philadelphia. I am pleased to provide this testimony regarding the Division of Technology's Fiscal Year 2011 Operating Budget request. Fiscal Year '10 has been a challenging and exciting year for the 246 3/23/10 - WHOLE - BILL 100117, etc. Division of Technology. On July 6, 2009, Mayor Michael Nutter signed an Executive Order consolidating all of the City's IT functions, personnel and infrastructure in the Division of Technology. With the enactment of the Executive Order, we have spent much of the year working with departments involved in the consolidation to work out the specifics regarding IT personnel, budget transfers and learn as much as possible regarding the departments and their IT needs in order to further improve service provisions. DOT's major objectives are to provide reliable information technology infrastructure and efficient and cost-effective application solutions for City operating units, to provide innovative solutions to City agencies through strategic planning, centralized oversight and project management, and to efficiently support City agencies through of the data center, help desk and IT network. These initiatives support our 247 3/23/10 - WHOLE - BILL 100117, etc. three-pronged strategy to enable high performance government, provide a secure and stable IT operating environment and reduce costs. As a result of the consolidation of the Public Property Communications Division in Fiscal Year '10 and the consolidation of 28 departmental IT budgets included in the Division of Technology's Fiscal Year '11 budget request, the Division of Technology's all-funds budget request for Fiscal Year '11 totals $124,842,042, which includes 366 employees. Of this total, $67,432,032 is in the General Fund, including 283 employees; $16,855,025 is in the Water Fund and includes 79 employees; $6,294,985 is in the Aviation Fund and includes four employees; and $34,260,000 is in the Grants Fund, mainly to support 9-1-1 related operating and capital expenditures, as well as the PGW Digital Orthoimagery and UASI grants. 248 3/23/10 - WHOLE - BILL 100117, etc. In addition to the 366 employees and $124,842,042 included in our Fiscal Year '11 budget, there are seven mainly grant-funded departments which will operate under Memorandums of Understanding to govern approximately 102 additional IT employees and an estimated $17,279,591, for a grand total of $142,121,633 and overall 468 employees. Fifty-seven IT employees working for independently elected officials and their IT budgets, which total 5,547,000 will not be part of the consolidation. The consolidation of information technology will help us to better coordinate operations through the consolidation of common IT support functions and rationalization of staffing, reduction in equipment such as servers and printers and their associated operating costs, rationalization of purchasing and efficiencies in professional services, automation and simplification of processes and 249 3/23/10 - WHOLE - BILL 100117, etc. improvement in cross departmental communications, collaboration and information sharing. All of these initiatives will allow us to better and more efficiently serve our customers, the citizens of Philadelphia, and departments that they do business with. Two examples of the Division's accomplishments for Fiscal Year '10 include working in conjunction with the Commerce Department and other City agencies, we've completed the first phase of the Business Services Portal Project and initiated the second phase in order to simplify and automate processes for business owners to open or expand businesses, ultimately making it easier for customers to do business with the City.
Phase 2 is scheduled for completion next month, and we will add additional functionality, including interactive components and the ability for online application processing. This 250 3/23/10 - WHOLE - BILL 100117, etc. project promotes the Mayor's goal of creating jobs by making it easier for small businesses to set up shop in the City. As part of an ongoing effort over the past year, DOT has focused on eliminating redundant IT infrastructure, including servers. Thus far, we have eliminated 111 servers, saving approximately $333,000 on an annual basis. Through this continuing initiative, we anticipate identifying additional savings, especially in the areas of server virtualization, communications and Enterprise-wide platforms for certain services. The Division of Technology is committed to supporting the Administration's goal of percent 21 minority, female and disabled-owned 22 business participation in City 23 contracting. The Division of 24 Technology's Fiscal Year '11 25 participation goal, I'm happy to say, is 251 3/23/10 - WHOLE - BILL 100117, etc. 35 percent, up from an anticipated 25 percent target for Fiscal Year '10 and an actual of 20 percent in Fiscal Year '09. As we move into the next fiscal year, we look forward to continuing to work with the City departments in support of all of the Mayor's priorities, particularly that of reforming government to work better and cost less. In combination with our Fiscal Year '11 $25 million Capital Budget request, the consolidation of IT in the Operating Budget will well position the Division of Technology to carry out the Administration's goal of reforming government in the coming years by allowing us to set citywide priorities and achieve savings through economies of scale. This concludes my testimony. Should any Councilmember wish to further discuss any of the matters outlined in my testimony, I would be happy to answer questions now or would be glad to meet 252 3/23/10 - WHOLE - BILL 100117, etc. with you individually at your convenience to further discuss any suggestions you may have for how we may work together to improve government through the use of technology. Thank you for your time and consideration.
Thank you. The Chair recognizes Councilman Greenlee.
Thank you, Madam President. Good afternoon, Mr. Frank. Just a couple of quick questions, if I could. One, are you working at all with the Board of Revision of Taxes on their issue and the whole trying to get their records together? Has there been any working relationship there?
And so this whole change they're doing, you're 253 3/23/10 - WHOLE - BILL 100117, etc. working with them on that?
The other issue -- and I know the Records Department is coming up next and we still have some issues with fraudulent deeds and that kind of thing, but what is your working relationship with them as far as have you been working with them at all on that kind of issue, the fraudulent deed issue or the real estate transfer tax, that kind of thing?
I have not specifically been working with them on those two issues, though I work with the Records Department in a number of areas as it relates to their systems and, in particular, moving forward as we move to automated records and documents across the City.
Okay. 254 3/23/10 - WHOLE - BILL 100117, etc. All right. Well, I'll bring up the rest with the Records Department. Thank you, sir. Thank you, Madam President.
You're welcome. The Chair recognizes Councilman Jones.