COUNCIL OF THE CITY OF PHILADELPHIA PUBLIC HEARING AND PUBLIC MEETING BEFORE THE COMMITTEE OF THE WHOLE - - - 400 City Hall, Philadelphia Wednesday, 6/6/01, 3:04 p.m. - - - BILL 000708 - Transfers in appropriations for FY 01 from Grants Revenue Fund, Director of Finance - Provision for Other Grants. . . BILL 000709 - Transfers in appropriations for FY 01 from Grants Revenue Fund, Director of Finance - Provision for Other Grants. . . BILLS 000416, 417 - Stadium-related bills. BILL 010418 - Transfers in appropriations for FY 02 from General Fund, Director of Finance. . . BILL 010419 - Reducing rate of tax on real estate within City and by authorizing Board of Education to impose increase in the rate of tax. . . BILL 010420 - Amend that certain agreement by and between City of Philadelphia and Philadelphia Convention and Trade Bureau, currently known as the Philadelphia Convention and Visitors Bureau. . . (Full text of all bills attached hereto.) PRESENT: COUNCIL PRESIDENT ANNA C. VERNA, Chair COUNCILWOMAN JANNIE BLACKWELL, Vice Chair COUNCILWOMAN BLONDELL REYNOLDS BROWN COUNCILMAN DARRELL L. CLARKE COUNCILMAN DAVID COHEN COUNCILMAN FRANK J. DICICCO COUNCILMAN W. WILSON GOODE, JR. COUNCILMAN JAMES F. KENNEY COUNCILWOMAN JOAN L. KRAJEWSKI COUNCILMAN W. THACHER LONGSTRETH COUNCILMAN RICHARD T. MARIANO COUNCILWOMAN DONNA REED MILLER COUNCILMAN MICHAEL A. NUTTER COUNCILMAN BRIAN J. O'NEILL COUNCILMAN FRANK RIZZO COUNCILWOMAN MARIAN B. TASCO - - - VINCENT VARALLO ASSOCIATES, INC. Registered Professional Reporters Eleven Penn Center, Suite 600 Philadelphia, PA 19103 (215) 561-2220 2 6/6/01 - COMMITTEE OF THE WHOLE I N D E X Page Bills 000708, 000709, 010418, 010419 Debra Kahn, Secretary of Education. . . . . . 5 Rob Dubow, the Budget Director. . . . . . . . 27 6 Janice Davis, Finance Director. . . . . . . . 28 7 John Hawk-Bey, Private Citizen. . . . . . . . 51 8 Bill 010420 James Cuorato, Commerce Department. . . . . . 64 9 Tom Muldoon, President. . . . . . . . . . . . 70 10 Philadelphia Convention and Visitors Bureau 11 Bill Moore, President. . . . . . . . . . . . 73 Independence Center 12 13 Bills 000416, 417 Peter Longstreth, President, PIDC. . . . . . 90 14 William F. Martin, Esquire . . . . . . . . . 96 15 Tina Nelsen, Executive Director, CEPA. . . . 131 16 Robert Sklaroff, MD. . . . . . . . . . . . . 133 17 18 19 3 6/6/01 - WHOLE - BILLS 000708, 709, 010418, 419 P R O C E E D I N G S
I would ask all members of Council to please report to the chamber. Thank you. - - -
Good afternoon, everyone. Thank you for your patience. Before we start our public hearings, I would just like to ask that Mr. McPherson read the title of Bill No. 000708, 000709, 010418, and 010419.
Bill No. 000708, an ordinance authorizing transfers in appropriations for Fiscal Year 2001 from the Grants Revenue Fund, the Director of Finance - Provision for Other Grants to the General Fund, certain or all the City offices, departments, boards, and commissions. Bill No. 000709, an ordinance 20 authorizing transfers in appropriations for Fiscal Year 2001 from the Grants Revenue Fund, the Director of Finance - Provision for Other Grants to the General Fund, certain or all City offices, departments, boards, and commissions. Bill No. 010418, an ordinance 4 6/6/01 - WHOLE - BILLS 000708, 709, 010418, 419 authorizing transfers in appropriations for Fiscal Year 2002 from the General Fund, the Director of Finance - Contributions to the School District to the Grants Revenue Fund, the Director of Finance - Provision for Other Grants. Bill No. 010419, an ordinance amending Chapter 19-1300 of Philadelphia Code, entitled "Real Estate Taxes," and amending Chapter 19-1800 of Philadelphia Code, entitled "School Tax Authorization," by reducing the rate of tax on real estate within the City and by authorizing the Board of Education of the School District of Philadelphia to impose an increase in the rate of tax on real estate within the City.
Thank you. I would like to make a statement on Bill 18 No.'s 708 and 709, which are intended to support an additional $45 million in the City funding for the Philadelphia School District. These bills were introduced last year. One reason they have not been enacted is the concern shared by both the Administration and City Council that the $45 million payment not become an annual City obligation if the Commonwealth were to take 5 6/6/01 - WHOLE - BILLS 000708, 709, 010418, 419 over the School District under the provisions of Act 46, the school takeover legislation acted in 1998. However, on May 30th, the Mayor wrote to me to pledge that no funds will be transferred to the School District unless the Commonwealth provides sufficient assurances that this onetime $45 million grant will not be subject to the provisions of Act 46. The Mayor's letter also detailed the School District's financial crisis and the steps being taken to find a long-term solution to that crisis. Of course, in the short term, our principal concern is that there be funding sufficient to guarantee that schools can open next fall, and the Mayor has advised me that the $45 million commitment will be used in discussions with the Commonwealth to ensure that schools in fact remain open next year. I believe it would be helpful if the Mayor's letter were read into the record, and I would ask Mr. McPherson to please do so at this time.
"Dear President Verna: I know that you share my deep concern about the financial crisis facing the Philadelphia School 6 6/6/01 - WHOLE - BILLS 000708, 709, 010418, 419 District. This crisis could disrupt the lives and educational progress of more than 200,000 and their families, jeopardize the careers of more than 20,000 employees, and threaten the very economic strength of our city. "Philadelphia City government does not have the financial capacity to solve this problem on its own, and my administration has taken numerous steps over the past year to work with the Commonwealth leaders in an attempt to reach an agreement on a multi-year plan to restore the District to financial stability. I thank you and your colleagues for your commitment of time and attention in joining these efforts. "Tomorrow is the legal deadline for the Board of Education to adopt its Fiscal Year 2002 budget, which can be amended after the State adopts its budget next month. While the City and School District cannot possibly solve the huge financial problems on our own, I also believe that the District must spend and manage responsibly and that the City must do everything within its power to support our public schools. Therefore, I am asking you to take some significant actions tomorrow that 7 6/6/01 - WHOLE - BILLS 000708, 709, 010418, 419 will demonstrate the City's commitment to help restoring our schools to financial stability that is a prerequisite to their success. " "Last year at this time, Governor Ridge and I agreed to a series of onetime measures to keep our schools open for the full academic year that is now coming to a close. The Governor provided the District with subsidy advances and repayment deferrals that allowed the District to avoid an immediate cash crisis. At the same time, the Board approved nearly $30 million in budget reductions, and I committed that the City would provide $20 million in onetime assistance to the District. The City and the District also agreed to suspend for one year activity in the federal lawsuit alleging that the Commonwealth distribution of school aid had discriminatory effects. "The City, School District, and Commonwealth also agreed that we would attempt to find a longer-range solution to the District problems during the ensuing year. Now, there's one 8 6/6/01 - WHOLE - BILLS 000708, 709, 010418, 419 important step in that process. The District was able to negotiate, with the strong support of Governor Ridge and the business community, a new teachers' contract that contained important reforms and that also improved the District's ability to compete for teaches in our regional labor market. To close that contract and avoid debilitating school strike, I committed another $25 million in City funds to the District to pay onetime signing bonuses to the teachers. As another important step towards a long-range solution, Governor Ridge has proposed an unprecedented increase in aid for the District in the State budget awaiting legislative action in Harrisburg. Finally, the District itself has prepared a plan to achieve more than $275 million in budget cuts, new non-tax revenues, and operating efficiencies over the next five years as part of a long-term solution. "I want to thank Governor Ridge for his help during the past year and for his continued interest in addressing the District's educational and financial problems. I also want to thank House Majority Leader John Perzel, who not only has convened a group of City, School District, and 9 6/6/01 - WHOLE - BILLS 000708, 709, 010418, 419 Commonwealth leaders and officials to work on this problem, but personally brought a delegation of upstate legislators to Philadelphia for a firsthand look at the problems and potential of our public school system. I applaud his initiative in undertaking this effort, and I recognize that he alone cannot guarantee success.
"I specifically want to acknowledge the participation in Representative Perzel's group of two private-sector leaders: Ted Kirsch, leader of the Philadelphia Federation of Teachers; and Sam Katz, Chief Executive Officer of Greater Philadelphia First, who has experience not only as a businessman, but as a former chairman of the Finance Committee of the Board of Education. I want to thank House Appropriation Chair John Barley and House Education Committee Chair Jess Stairs for bringing their committees to Philadelphia to assess our situation and discuss potential solutions. I also wants to thank Senate Majority Leader David Brightbill, Appropriations Chairman Richard Tillman, and Education Chairman James Rhoades, and their staffs for the attention they have given to our issues. 10 6/6/01 - WHOLE - BILLS 000708, 709, 010418, 419 "We have had productive discussions with Democratic members and staffs, including Minority Leaders Robert Mellow and Bill DeWeese, House and Senate Appropriations Chairs Dwight Evans and Vincent Fumo, House and Senate Delegation Chairs Vincent Hughes and Louise Bishop, Senate and House Education Chairs Allyson Schwartz and Nicholas Colafella, and Senator Anthony Hardy Williams. "Finally, I want to thank all of the other leaders of Philadelphia's House and Senate delegations and their staffs for the time and effort they have committed in many meetings over the last year to understanding the District's problems in expressing their ideas and willingness to help. "Although we have not reached agreement on a multi-year workout, discussions continue, and I remain hopeful that we will succeed. Therefore, I believe that this is the right time for City Council to appropriate the $45 million that was committed to the District for the current fiscal year. My intent was always that these funds be a onetime appropriation. I pledge to you and the members of Council that no funds will be transferred to the School District unless we have sufficient assurances 11 6/6/01 - WHOLE - BILLS 000708, 709, 010418, 419 from the Commonwealth that the funds would not be subject to the local revenue maintenance of effort provisions of Act 46. In the event that the State takes over the School District with this understanding, I request that you take the steps necessary to move the ordinance for final passage on or before June 14. "I am also transmitting to Council a new ordinance that would transform into property tax millage of equivalent value the $15 million grant that the City otherwise would appropriate annually to the District. This action not result in any increase for the City taxpayers, nor will it impose an additional financial obligation to the City since the $15 million already is included in the five-year plan approved by PICA. This step, however, will be very meaningful for the District, as it has not received any increase in tax millage since 1990. The District will have greater predictability of revenues and some likelihood of growth as property values increase in the years ahead. Moreover, there is potential for the District to benefit from new State revenues if increased school property tax millage is taken into account in future Commonwealth 12 6/6/01 - WHOLE - BILLS 000708, 709, 010418, 419 funding formulas. Your cooperation in introducing this ordinance and scheduling a hearing and adoption by June will be a key contribution of our efforts 5 to forge ahead in developing a long-term funding 6 solution with the Commonwealth. 7 "Even if City Council takes the steps I 8 am requesting, we will not be certain that the 9 District's financial problems will be solved. 10 Despite the good will and best intentions of all 11 involved, stabilizing the District's finances is an 12 enormous challenge. The best efforts of the 13 Governor, House Majority Leader, and other 14 legislative leaders, our State delegation, my administration, the City Council, and our able new leadership team at the District may not be enough.
As I have said before, the School District problems are deeply rooted, have developed over many years; they cannot be solved easily or overnight. "In asking you to adopt these measures, I feel responsibility to outline publicly not only for you but for our students, their families, our teachers, principals, other employees, and our citizens the consequences of failure so that we may all redouble our efforts. 5 billion by Fiscal 2006. Without access to additional funds in the next few weeks, the District could run out of cash before the end of June. Even if Governor Ridge and I repeat the measures that we initiated at this time last year, it is unlikely that the District could keep schools open beyond February. "Because the District could not commit now to open schools for a full year, it also could not assure students, parents, teachers, principals, and other employees that our schools will remain under local control or avoid deep cuts in educational programs. Under such circumstances, thousands of families could begin making other plans for the fall. The District would find it increasingly difficult to retain and attract the kind of talented managers and other employees needed to improve the District's educational programs and business operations. "Avoiding this kind of catastrophe will require a combination of City, School District, and 14 6/6/01 - WHOLE - BILLS 000708, 709, 010418, 419 Commonwealth actions, at least some of which must be initiated without knowing if an ultimate agreement can be reached. My understanding is that the Commonwealth will not adopt its budget until mid-June, shortly before (or perhaps even) after Council's scheduled summer recess. I hope that we can obtain from the Commonwealth commitments to address over the next five years the District's need for additional State aid or viable new revenue sources, or both, and to reform the chart school law so that both the District and charter schools can succeed in Philadelphia and indeed across the Commonwealth. "Despite this uncertainty, I believe that the actions I am requesting of Council are the right thing to do. I also am willing to recommend additional City help for the schools as part of the structured workout plan in which the Commonwealth is our partner and in which the District's finances can be reasonably projected to be restored to sound condition over the next five years. I recognize that the Commonwealth would have a legitimate interest in establishing an oversight mechanism to ensure that the District and the City achieve the 15 6/6/01 - WHOLE - BILLS 000708, 709, 010418, 419 benchmarks of a workout plan. "Lacking a structured, multi-year workout plan in which the Commonwealth is our partner, however, I am unwilling to put additional City resources at risk and thereby jeopardize not only the finances of the School District but the finances of the City. ' "Achieving such a partnership with the with the Commonwealth will require a relationship that is cooperative and trusting, not adversarial. As part of my agreement to go forward, I will do all in my power to remove barriers to the ceiling of that partnership. m. today in City Hall Room 225 to discuss these issues in more detail. In the meantime, members also may phone 16 6/6/01 - WHOLE - BILLS 000708, 709, 010418, 419 Secretary of Education Debra Kahn if they have any questions. "Finally, I want to thank you and your colleagues for your dedication and hard work on behalf of the public school children of our city and indeed on behalf of all of the citizens of our city whose future depends so heavily on the quality education of our children. "Sincerely, John F. "
Thank you. I would just like to advise everybody that the bills before us in the form introduced in the form introduced would have transferred appropriations to the Recreation Department for the purchase of services. That proposed transfer was based on the Administration's plan to have the Recreation Department enter into a long-term license agreement with the School District that would permit the City to use certain School District facilities and for which the City would pay several years of license fees in advance, totalling $45 million. That complicated structure was intended to address Act 46 concerns but is no longer necessary, given the Mayor's pledge. 17 6/6/01 - WHOLE - BILLS 000708, 709, 010418, 419 Accordingly, it is my understanding that the Administration will propose amendments to Bill 4 No.'s 000708 and 000709 so that the appropriations will be transferred not to the Recreation Department for purchase of services, but to the Director of Finance for a onetime grant to the School District. Finally, I am very concerned that we are once again applying a temporary fix to a chronic problem. Every year since 1997, we have closed a gap in the school system budget by appropriating additional funds and not addressing the underlying problems. This year, we are facing a gap of more than $200 million and the threat of our schools being unable to open through the entire year. We cannot put the students, parents, and taxpayers of Philadelphia in this situation again next year. Over the next twelve months, I am certain that we all look forward to working with the Mayor and the leaders in Harrisburg to make sure that we do all that we can to rectify this situation. We must be able to turn the focus of our debate from merely keeping our schools open to improving the quality of education across the City. At this time, the Chair would recognize 18 6/6/01 - WHOLE - BILLS 000708, 709, 010418, 419 Councilman Longstreth.
Madam President, I'd like permission to leave the chambers and at the same time to be carried as voting for the bills that come before you today, plus any amendments thereto that also are passed.
Thank you, Councilman. Leave will be granted thank you. At this time, our first witness will be Mr. Dubow. (Witness comes forward.)
Debra Kahn, you might as well come up to the witness table at the same time. (Witness comes forward.)
Are we dealing simply with the bills dealing with the 45 million or are we also hearing testimony on the millage issue?
Thank you. 19 6/6/01 - WHOLE - BILLS 000708, 709, 010418, 419
They're the first two on , and on , the bottom two.
Good afternoon, Council President Verna and members of Council. My name is Debra Kahn. I'm the Secretary of Education for the City. And let me just begin by first of all thanking you, President Verna, for, one, expediting this hearing this afternoon. We, I think, and the school children and the employees of the School District certainly appreciate it. And, two, to thank you for reading the Mayor's letter into the record. I think that was very, very helpful. And I did submit my written testimony to you yesterday. I think it will be unnecessary for me to repeat that since so much of it really is excerpted from the Mayor's letter, but I do, as you had mentioned, we do have the amendments to offer to Bills No. 708 and 709, which would, as you explained, change the nature of this agreement in light of the Mayor's pledge of these ordinances so 20 6/6/01 - WHOLE - BILLS 000708, 709, 010418, 419 that --
Excuse me. Before you proceed, I know didn't get a copy of your testimony until 5:17 last evening. Do all Councilmembers have a copy of Miss Kahn's testimony? I know I received it at 5:17 last evening. You may not have seen it. Do you have extra copies with you? If anybody wants copies, please raise your hand so we can have them circulated.
I don't have a copy of the testimony, but were the amendments a part of testimony? Do we have copies of the actual amendments?
Miss Kahn, since many of the Councilmembers have not seen a copy of your testimony, maybe you can abbreviate what you have had delivered.
Sure, I'd be happy to do that. I really was just trying to save the members some time in light of your having read the Mayor's letter. 21 6/6/01 - WHOLE - BILLS 000708, 709, 010418, 419 But let me just speak to the amendments first. After discussion with the Council, the Administration would like to respectfully offer amendments that would restructure the proposed transaction so that the transfer of $20 million and $25 million respectively will be from the Grants Revenue Fund to the Finance Department rather than to the Recreation Department. Initially, the Administration had proposed that the funds be used by the Department of Recreation to prepay the School District for its use of District facilities over the next ten years through a license agreement, but the proposed amendment would do away with that approach and would allow for the money to be transferred directly from the Finance Department for use by the School District. And, again, we're in a position to be able to make this change because of the Mayor's pledge that unless the City and he receive adequate assurances from the Commonwealth that these funds would not be subject to the maintenance of effort provisions in Act 46 in the event of a State takeover. With that assurance, then we believe that 22 6/6/01 - WHOLE - BILLS 000708, 709, 010418, 419 we can structure this in the manner as amended, and I do have these amendments here. I'm also, of course, in support of Bills 010418 around 000419, which the City Budget Director, Rob Dub, will speak to in more detail. Back in March, when I was here to testify on Bill 708 and 709, certainly our support of these measures remains unchanged, but as the Mayor's letter did, I think, update you briefly on some of the developments that have occurred since that time, again, which are expressed in the Mayor's letter. On May 31st, however, of last week, the School Board adopted its Fiscal Year 2002 budget, and that budget includes $20 million in unidentified cuts and non-tax revenues that can be generated. Combined with the nearly $30 million in reductions that were taken from last year's proposed budget, this brings the District halfway to meeting the challenge that the Mayor had issued to the Board last spring of reducing the District's operating costs by $100 million. This action, however, still leave the District with a projected $217 million cumulative 23 6/6/01 - WHOLE - BILLS 000708, 709, 010418, 419 deficit.
For Fiscal Year 2002 and a $1.5 billion projected deficit by Fiscal Year 2006. The School Board can amend this budget after Harrisburg adopts the State's budget sometime later this month, but without access to additional funding within the next few weeks, the District is projected to run out of cash before the end of June. I also can't emphasize strongly enough what a devastating situation this would be certainly for the District and the City and the families and the children who depend on our school system. We can't commit now to open schools for a full year, and we also couldn't assure all of the people who depend on us that the schools would remain under local control or that we could avoid deep cuts in educational programs that are already too tight. Under these circumstances, families could make alternate plans for the fall, and others, frankly, who don't have options would be very anxious to say 24 6/6/01 - WHOLE - BILLS 000708, 709, 010418, 419 the least, not knowing what September would bring. I think in these circumstances -- and this is the situation we find ourselves in now, with an unstable situation -- the District finds it increasingly difficult to retain and attract the kind of talented teachers and principals and other employees that we really need to be able to make the District have high-quality educational programs and to improve its business operations. So what we're about now is trying to work out this arrangement with the Commonwealth so that we can avoid these really drastic circumstances and be able to work out the kind of long-term agreement for the long-term financial stability of the School District, which is the only way that we can get to the educational stability and educational quality that we all want to see for our children. And as I mentioned, City Budget Director Rob Dubow is, of course, here to answer questions about both the millage ordinances and any questions about these amendments. Also here are the President of the Board, Pedro Ramos, and our Chief Financial Officer Rhonda Chatzkel.
Thank you. 25 6/6/01 - WHOLE - BILLS 000708, 709, 010418, 419 Are there any questions from members of the committee? The Chair recognizes Councilman Kenney.
Thank you, Madam President. If this question is appropriate -- if not, let me know if I'm ahead of myself. Relative to the millage issue, if that's an appropriate area, Madam President?
I understand and agree with the concept with of the reconfiguration of the millage and I also understand it would represent what we've traditionally done in the $15 million grant area, that that reconfiguration would cover that grant.
So it's a good way to generate some additional money for the schools without having us go into the General Fund for additional monies.
The concern I have, 6/6/01 - WHOLE - BILLS 000708, 709, 010418, 419 however, is that -- and what I kind of need to get from the Administration is some assurance that the millage reconfiguration is not the first step in a potential request for increase in real estate taxes. It really is a serious concern for me. I recognize that when you try to balance educational needs, the needs of children, the needs of the District to stay open, there sometimes might be an incentive or maybe a secret wish that we could solve this problem at some point in time by raising real estate taxes or by at least requesting that we proof a real estate tax raise in the City. And I'm not making a judgment about the use of the money, 'cause I think the use of the money is appropriate. However, I would think that such a potential could be a devastating effect on the City's tax base. Obviously, we haven't had any tax increases since we've been here on real estate. People still complain, however, about their continued assessments, and those can be debated at the Board of Revision of Taxes and other ways. I just want to make sure that there's an assurance from the Administration and from our Finance Department and from our Budget Office that 27 6/6/01 - WHOLE - BILLS 000708, 709, 010418, 419 this is not a precursor to a request for an increase in real estate taxes, which I think would be just another brick on the load in the loss of our tax-paying population.
Let me just say that those of us who have been living with this problem day and night have a lot of secret wishes about how it can be solved, but I don't think that raising real estate taxes is one of them. You know, that's not been a part of the discussion. I think the record about the tax burden on Philadelphia taxpayers is clear, and that has not been part of the thinking.
Mr. Dubow, I'm not asking you for a formal representation by the Administration, but if you could give me your sense of the Administration's position on this issue of any discussion of the potential raise in real estate taxes. I'd like to make sure it's clear for the record that it is not the intention of this administration to, in fact, do anything like that.
It's not the intention -- Rob Dubow, the Budget Director. It's not the intention to raise real estate taxes. In our five-year plan, we commit to 28 6/6/01 - WHOLE - BILLS 000708, 709, 010418, 419 continuing reducing the City's tax burden and not to doing anything that would increase it.
Janice Davis, Finance Director. I'd like to echo what Mr. Dubow said. This is not something that is under consideration.
Thank you very much. The draft workout plan that has been circulated to Council, I think, was part of the passage of the budget by the School Board recently. Is that part of --
It wasn't a part of the budget itself; it's a document that we put together as a way of thinking about obviously how to work out and close the gap here and as a part of the discussions that have been going on with various leaders in Harrisburg.
One of the concerns that I have relative to this five-year workout is that while I recognize and admire the current School Board and District's efforts in reducing costs -- and I assume will continue that effort -- it seems 29 6/6/01 - WHOLE - BILLS 000708, 709, 010418, 419 to me from my reading of the workout that any shortfall in the proposed cost-cutting or savings would be guaranteed to be made up by the City, I guess, through the General Fund. Is that in fact accurate?
Well, as we work out and continue work and to continue working to get an agreement with the Commonwealth on a long-term plan, we would expect some levels of oversight through any effort and arrangement we put into effect, but certainly there would be State oversight. The issue of what the School District's and the local commitment would be as far as making efficiencies and increasing non-tax revenue is something that the City and the School District work very close together on to achieve. I think the way that we've expressed that is to say that the City Administration would guarantee that means as an attempt to underscore the Mayor's seriousness about, frankly, protecting the City treasury in the first instance and his seriousness about getting the job done at the School District. So it's a way of saying that we would 30 6/6/01 - WHOLE - BILLS 000708, 709, 010418, 419 have some level of City oversight as well that we can talk about in a way to be structured to make sure that, in fact, those savings and efficiencies come into effect.
Does that guarantee, however, give the legislature, perhaps, or the Governor's office some belief that, in fact, this will be a City problem in covering the shortfall in the anticipated savings? And I know that the Administration doesn't have the capacity to commit our votes to transfer the necessary funds to cover the shortfall. So on two accounts: Number one, I'm concerned about the legislature and the Governor's -- whoever the Governor is in that period of time -- belief for this record and through other conversations that we will in fact cover the shortfall through the General Fund -- shortfall of the savings; and, number two, how can we commit at Council whether we're here or whether there's other people here in 2003 to what we're discussing today. It seems to be almost two impossibilities.
Well, again, what you're referring to is really in the form of a proposal, 31 6/6/01 - WHOLE - BILLS 000708, 709, 010418, 419 and there is no agreement yet, and if and when, and we do hope there comes the time to flesh all of that out, you know, we can specify exactly what's meant by that. But I would just emphasize again that it's really the City Administration's attempt to underscore the seriousness of the situation, our commitment to working in partnership, but also to making sure that the School District does in fact achieve what needs to happen and to protecting, as a way of really protecting, rather than opening the City treasury.
Well, when the agreement -- whatever the agreement is -- is finally reached, who are the parties to the agreement?
That will depend on what form the agreement takes and, you know, exactly some of it may be done through legislation, I mean, so it really depends, and I'm just not in a position to answer that yet.
In some cases, State legislation. 32 6/6/01 - WHOLE - BILLS 000708, 709, 010418, 419
'Cause it's a concern for me as member of this body, you know, now and into the future if so desired to make commitments for succeeding councils, and I think that any agreement that does that, I think, would be flawed. And, again, one of the concerns about and your discussion about trying to protect the City treasury seems not to be consistent with the draft workout plan that we would in fact be open the potentiality of providing the shortfalls and the savings unrealized over a five-year period. That's just my reading of it. And recognizing that there's no specific agreement.
What we have been discussing is that there would be a committee aboard that would be sort of PICA-like in its oversight of the School District, a City board that would have some authority to force the implementation of those cuts in order to protect the General Fund. The General Fund is not in a position to absorb any significant portion of the $276 million in cuts without impacting our services. And so our proposal would be that there would be some group with oversight and with the 33 6/6/01 - WHOLE - BILLS 000708, 709, 010418, 419 power in fact to insist that the cuts be taken by the District, and that we would lend assistance in finding those cuts should there be difficulty with them being found at the District. It's the only way we can protect the General Fund.
Now, that's relative to the cuts, but in the draft of the workout plan, there's also an element that says the City will commit additional resources towards deficit reduction as part of a multi-year workout plan in which the Commonwealth is a partner. How are those kinds of resources -- I mean, this seems to be more contributory resources as opposed to savings. I mean, what additional resources could be identified, and how again could we commit future council, future governor, the current mayor in his second term, how can they commit new people or different people to an agreement that needs to be reached now?
Well, several things. One, as early as January, when the Mayor delivered his budget address and he was in this chamber and he talked about the fact that he knew, and a lot of people knew, that the City needed to do more, 34 6/6/01 - WHOLE - BILLS 000708, 709, 010418, 419 although it already does a lot, but it needed to do more in terms of supporting public schools. And, again, as recently as the letter that he sent to you, he said that he would be prepared to recommend even more City support as long as it was a part of the long-term solution. So, you know, that's -- that would in fact be a commitment that he would make if and when, and we hope that we get to that time. As far as committing future administrations or future councils, again, you know, there's a lot of just actions that we all take in City government. Borrowing is one of the best examples, through capital borrowing. I mean, debt service, obviously, you know, there are obligations that are made into the future. But, again, once we get an agreement and figure out, you know, how much each party would need to contribute and exactly what it would be applied towards, you know, we'd be in a better position to talk about all that.
And I know you've alluded -- the Finance Director has alluded to PICA. Has the legislature or any member of the 35 6/6/01 - WHOLE - BILLS 000708, 709, 010418, 419 Governor's team been approached about expanding the current PICA authority to issue bonds to cover some of the School District deficit? And what's the status of our PICA bonds from 1992? Do we have a borrowing capacity within PICA as it exists today that could be utilized for School District purposes?
PICA's borrowing authority has expired, so there's no authority to borrow through PICA.
Can that be extended statutorily -- legislatively through State statute to allow for borrowing authority to cover School District issues?
I'm sure the State could, you know, enact a new legislation, the new legislative package that would include the authority to borrow.
That was just statutory. I mean, the statutory authority has expired, and new legislation could change that.
Not extend. They could -- 36 6/6/01 - WHOLE - BILLS 000708, 709, 010418, 419
But the discussion at this point, as I understand it, is a PICA-like authority which would be City only?
What has been Harrisburg's response -- or has Harrisburg or any members of the legislative delegations had discussions about a City-only PICA? Have they responded or reacted to it?
I don't think so. If I'm understanding, and I'm not sure I am, but --
These are internal discussions; this is nothing that's been broached with Harrisburg at this point.
And this is a board that would relate to the $276 million in reductions. It's not an oversight authority in the way that PICA is. In other words, what we're trying to say is that in the way that PICA has some oversight over the City, this board would have some ability to enforce actions on the school issue.
But, again, as part of the 37 6/6/01 - WHOLE - BILLS 000708, 709, 010418, 419 agreement with the Commonwealth, we would expect that there would be an oversight mechanism that the State would want to see, and there are a variety of forms that that could take, and so that's been the area of discussion with the Commonwealth.
Well, why not simply replicate what had been very successful in '92? I mean, does that not make -- that that format make the State even more stakeholders in the resolution 11 of the School District funding crisis? I mean, if this is a City-only PICA-type authority, the State, if they're not a part of it directly or have a stake in it, at some point in, they're time not partners; they're still observers and people who may comment and give us money as they see fit. Why would we not want a PICA-type authority that would include appointees from the Governor for caucuses at a (inaudible)?
Well, I think we would want some type of State oversight mechanism in which, in fact, the State was a partner with us, whether it's PICA or something else, and I'm not an expert on the PICA law and PICA operations, but certainly, as I said, the oversight mechanism could take a variety 38 6/6/01 - WHOLE - BILLS 000708, 709, 010418, 419 of forms, and that would be the topic of more conversation.
In this instance, however, I would point out that PICA, while it set the framework, did not provide funding. And we are looking to the State to assist on the funding side of any PICA relationship as well as the oversight.
PICA obviously didn't provide the funding but it provided the credibility for us to go into the market to borrow. And while I recognize the School District bond rating is nowhere near what the rating was for the City at the time, I just wonder whether or not direct State involvement in the authority would in fact make them stakeholders more than they are today in this long-term funding issue. So thank you very much.
You're welcome. The Chair recognizes Councilman Nutter.
Thank you, Madam Chair. I haven't been in a hearing in a while for the Committee of the Whole. 39 6/6/01 - WHOLE - BILLS 000708, 709, 010418, 419 First, Mr. Dubow, Miss Davis, and Miss Kahn, it's my understanding, and I'm sure you went over this already, that the original structure of the transfer of the $45 million has now been adjusted, if not significantly changed, to a straight transfer as opposed to the licensing agreement. Is that my understanding?
Okay. With that in mind, one, I want to say thank you for that. We had a lot of discussion about that issue the last time we had a hearing on these particular matters. I think the City Solicitor was here, there was a tremendous amount of discussion, if not a little bit of controversy, about that, and I do deeply appreciate the Administration making the adjustment to a straight $45 million transfer, which I think I've indicated in other discussions that I wanted to be supportive of the School District but I did not like that particular structure of the transaction -- having nothing to do with my support for the District and I'd be pleased to support this. So I do want to thank you for that. In the discussion just a couple seconds 40 6/6/01 - WHOLE - BILLS 000708, 709, 010418, 419 ago with regard to the issues raised by Councilman Kenney and possibly others about the cuts that the District, I think, has indicated it wanted to make, and Miss Davis began to talk about the City somehow trying to guarantee or ensure that those cuts are made, this board concept of -- it sounds like some people who would be responsible for making these cuts -- if you went into deep detail on this earlier, I apologize and you don't have to go that far. But if you didn't, can you give me a sense of how this would actually work?
This is just something that's been in discussion. We did not identify the specific tasks that this committee would be assigned. We would envision initially a reporting relationship that would be perhaps backed up by the authority to assist the District in identifying cuts should they have difficulty. Does that answer your question?
You're welcome. Miss Davis, you always answer my questions. It's the gentleman next to you that never answers any 41 6/6/01 - WHOLE - BILLS 000708, 709, 010418, 419 questions, you know that.
We've been going through that for a year now. About a year or so ago or more than a year or so -- I guess, it was actually during 1999, I had worked on a measure, which was supported by many members of City Council, to change the governance structure or the appointment structure to some extent to allow for the first time in any of our, I think, collective histories how the mayor would appoint members to the School Board, and changing from a staggered and fixed-term structure to a concurrent-term structure virtually immediately after the mayor is elected in any election cycle. The primary purpose of that was, in the view of many of us, was to create a clear line of accountability. And I think, one, the Mayor has certainly, almost immediately after coming into office, utilized the authority available to him, made the appointments they he wanted to make, and I think the Board has tremendously benefitted from that change. 42 6/6/01 - WHOLE - BILLS 000708, 709, 010418, 419 With that as a backdrop, my concern about the, as you term them, kind of in-house discussions about this board, is in that scenario, it would almost sound as if we are creating another layer that the Mayor, this mayor, or any other mayor would have to work through to get these cuts made. You have a School Board, City Council still here and certainly has at least the authority, if not the responsibility, to talk about what's going on with the School District, and then there would be this other entity, and then there might be a legislatively expanded PICA. In the Chicago model, for instance, the mayor essentially has direct authority and responsibility for the schools. And in our own case, I mean, the Mayor -- the previous mayor did what he did and some people, I guess, liked it and some people didn't, but it's all, you know, old history at this moment that when the time came for the City to respond to its fiscal challenge, the City made certain decisions, and ultimately, the Mayor made those decisions because ultimately, the Mayor's responsible for what goes on here in the City. And he didn't have to talk to a board or a 43 6/6/01 - WHOLE - BILLS 000708, 709, 010418, 419 group or anybody other than the people that worked directly for the Mayor and working in concert with the City Council and the Council President at the time. So I raise with you the concern about another group having some authority about what happens versus creating an even narrower line of authority and accountability where it really should be. And, I mean, for my purposes, saying nothing about Miss Chatzkel or anyone else, I mean, at some point in time, as the District and the City move closer together, especially in the area of finance and a number of others, I don't think we need additional people having say at the table; we need in those circumstances fewer people having something to say. Because at the end of the day, someone does have to be responsible and accountable, and quite honestly, I don't want to have to learn the name of another new group or agency responsible for cuts at the School District. And so as we're pursuing legislative strategies, I begin to wonder whether or not we should also be asking the legislature to amend the school code of 1949 to give us as a city of the 44 6/6/01 - WHOLE - BILLS 000708, 709, 010418, 419 first class direct authority and responsibility for the District's budget and enable us to work closely together on those cuts as opposed to the creation of a new group. I'm not criticizing that idea; I'm just positing it as a different idea.
Councilman, I think you're exactly right about the intent of this being to have a system where the Mayor's full authority and accountability can in fact be exercised and not to establish another layer. So I don't think that we have been, and when the Finance Director said, you know, we've been having internal discussions, not talking about legislating any kind of new oversight mechanism locally, but talking about utilizing the existing structure with the Mayor, in this case, local secretary of education, the board and the School District management leadership to just continue to work as we do now as a team but in harmony, but to make sure that at the end of the day, what the board commits to does in fact happen. Not that we have any reason to say that the board would commit to something that it doesn't have every intention of making happen. But it may be in some 45 6/6/01 - WHOLE - BILLS 000708, 709, 010418, 419 cases, it needs assistance and support from the City to facilitate some things since, for example, a part of the strategy would be to have some functions maybe be consolidated or streamlined. So I don't think we're talking about legislating a new system but to use what we have now.
Okay. It just seems to me that we -- I think we've put ourselves in a stronger position, whether here locally or in Harrisburg, that to the greatest extent possible, if the City can present itself and the District as a unified entity, where increasingly, not only authority but responsibility is resting in a particular place, that we are trying to solve as many of our problems as possible, and that when we ask the State for something, we are virtually only asking because we cannot do it for ourselves, it seems to me that they might have a greater comfort level that the PICA-like model did work, the City has full authority to do what it needs to do and taxing authority over its affairs. If we needed to do something and we were in a position to, whether we wanted to or not, raise 46 6/6/01 - WHOLE - BILLS 000708, 709, 010418, 419 the sales tax 1 percent, dedicate those revenues to the debt service, as well as slice off a percentage and a half of our wage tax, we can do that for ourselves. The District, on the other hand, is totally defenseless under these circumstances, having no ability to raise revenues because they're totally dependent on the City and the State, and to a smaller extent, the federal government. So I'd just like to see a scenario where we are asking for every possible authority that we can have to better control and manage and show to the world that we can actually do it under our own power and authority as opposed to, well, one thing, we've got to go somewhere else and the other thing, we have to talk to this group, and then there's this other subgroup, and I understand and appreciate that you're not seeking legislative authority to create something else. But, again, I would say as straight and narrow and as clear as those lines of authority and accountability can be, I think it helps us in the end as we try to make our case in the Commonwealth, whether it means additional operating support or I've had a continuing concern, as you know, about 47 6/6/01 - WHOLE - BILLS 000708, 709, 010418, 419 the infrastructure of the 264 buildings that we have where the average age is probably still up in the sixties, even with, you know, newer facilities that may have come on line, and that the Commonwealth has shown a great interest in bricks-and-mortar projects here in Philadelphia, whether it's assisting us with the naval shipyard, the Convention Center possible expansion, other large facilities that the State has contributed to. And so I would wonder whether or not we might have a decent shot at partnering with the State on a significant capital improvement program, which would probably be bond-funded as well, and whether or not they would be willing to put some of their dollars into that as we continue to work on our operational budget, which, quite honestly, does not seem at the moment to be getting much traction in Harrisburg as it relates to additional dollars beyond the 67 that's been a topic of discussion up there. So I would like to see some effort on the capital improvement side. Lastly, there has been a little thing that continues to be mentioned -- hopefully, it won't be mentioned anymore -- in the print media 48 6/6/01 - WHOLE - BILLS 000708, 709, 010418, 419 about the nature of the transfer of dollars and who asked who to do what and when and whether somehow this body was holding up the transaction, which I think we know amongst ourselves is not necessarily the case, while the Administration and other people have been trying to get to the most important issue of this, which is whether or not these dollars would be subject to Act 46, the provisions of Act 46, and would obligate the City on a long-term basis to an additional $45 million obligation. Can you provide any clarity to the record as to what has been going on since the last hearing?
And is it your impression that the body has been reluctant to have a discussion about this, or have you really been trying to get some answers to other issues before this issue even came to us at this moment?
We've been approaching this issue on multiple fronts for at least the past year. I mean, I think the concerns about Act 46 were shared by both the City Council and the Administration. That was why we originally structured the proposal the way that we did. We understand that it was not favored by you and some 49 6/6/01 - WHOLE - BILLS 000708, 709, 010418, 419 other members. And so all of that, you know, took some time to work out and to get it into the form we have it now. Having said that, we always knew and we've had cash flows available from the School District since -- I think it was probably back in December, showing that the dollars were needed certainly in this year but were not need nevertheless until the end of the year. And so for that reason, I would say if Council does what we're requesting that they do and approve these ordinances by your last session for the season next week, then, you know, that would be acceptable and fit in with the timing that the District needs the funds.
And under that timing circumstance, it does not place the District in peril, as we've tried to get answers to a series of very important questions, but the District and the Administration have been doing due diligence in trying to make sure that we have as much protection as possible while being mindful of what your cash flow situation is, and the non-action on this bill 24 has not placed the District in a perilous situation. Is and that an accurate assessment? 50 6/6/01 - WHOLE - BILLS 000708, 709, 010418, 419
That's correct right now, again, assuming that those dollars come through before the end of the month, number one; and, number two, it has always been important nevertheless for the City to make good on the Mayor's recommendation and on the commitment in order to set the stage and provide the foundation on which we could then build for the long-term solution.
Okay, thank you. Thank you, Madam Chair. Mr. Dubow, good afternoon to you.
Well, actually, there are many people in the audience who are deeply saddened, who would enjoy the exchange, but I have nothing for you today. Thank you.
Are there any other questions from members of the committee? (No further questions.)
Can I ask all 51 6/6/01 - WHOLE - BILLS 000708, 709, 010418, 419 members to please come back so that -- oh, I'm sorry. Is there anyone else to testify on this bill? Is Mr. Bey here? Thank you both for testifying. (Witness comes forward.)
Good afternoon. Thank you for coming in to testify.
Yes, good afternoon and thank you for having me. President Verna, I'm here today to offer an additional remedy for appropriations for the School District of Philadelphia. And first of all, as I said, it's my purpose here today to introduce to the honorable members of the Philadelphia City Council an emergency appropriations request for the School District of Philadelphia that I submitted to the United States Senate Committee on Appropriations Subcommittee on Labor, Education, Health and Human Services on May 2, 2001. And, secondly, I plan to inform the honorable members of the Philadelphia City Council on the status of the aforementioned emergency 52 6/6/01 - WHOLE - BILLS 000708, 709, 010418, 419 appropriations request for the School District of Philadelphia. And, thirdly, I have an urgent request to make of the honorable members of the Philadelphia City Council with regards to processing my emergency appropriations request for the School District of Philadelphia. Here is the text of my emergency appropriations request for the School District of Philadelphia as it was submitted on May the 2nd, 2001. To the United States Senate Committee on Appropriations Subcommittee on Labor, Health and Human Services, Education. Members: Arlen Specter, Chairman, Pennsylvania; Thad Cochran, Mississippi; Judd Gregg, New Hampshire; Larry Craig, Idaho; Kay Bailey Hutchinson, Texas; Ted Stevens, Alaska; Mike DeWine, Ohio; Tom Harkin, Ranking Member, Iowa; Ernest Hollings, South Carolina; Daniel Inouye, Hawaii; Harry Reid, Nevada; Herb Kohl, Wisconsin; Patty Murray, Washington; and Mary Landry, Louisiana. Declaration of Education Project. Emergency Appropriations Request for the School District of Philadelphia, Pennsylvania. 53 6/6/01 - WHOLE - BILLS 000708, 709, 010418, 419 Pursuant to paragraph of the September 3 22, 1862 Emancipation Proclamation, which states that on the first day of January, in the year of our lord, 1863, all persons held as slaves within any state or designated part of the state, the people whereof shall then be in rebellion against the United States, shall be then thenceforward and forever free; and the Executive Government of the United States, including the Military and Naval Authority thereof, will recognize and maintain the freedom of such persons, and will do not act or acts to repress such persons or any of them in any efforts they may make for their actual freedom. I tender this Emergency Appropriations Request for Federal Funding for the School District of Philadelphia, to wit: 1. The City of Philadelphia requests that the United States government aid and assist it in educating all indigenous persons of African descent to their Moroccan heritage. 2. The City of Philadelphia requests that the United States government aid and assist it in educating all students to Moroccan history. 3. The City of Philadelphia requests 54 6/6/01 - WHOLE - BILLS 000708, 709, 010418, 419 that the United States aid and assist it in expunging the terms Negro, Black, and Colored from all City, State and federal records and forms as they relate to a means of describing human beings. 4. The City of Philadelphia requests that the United States government aid and assist in providing its communities with a safe and conducive environment for educating students, including the assistance of the military and naval authority, which will provide subordinate support to civilian authorities as required. 5. The Emancipation Proclamation was issued by President Abraham Lincoln on September 22, 1862 and passed by the United States Congress on December 15, 1862.
Whereas, the Emancipation Proclamation was issued President Abraham Lincoln on September 22, 1862 and passed by Congress on December 15, 1862, and the attached Emergency Appropriations Request for the School District of Philadelphia is consistent with this law; the United States Senate Committee on Appropriations Subcommittee on Education, Labor, Health and Human Services is requested to appropriate $130 million to the School 55 6/6/01 - WHOLE - BILLS 000708, 709, 010418, 419 District of Philadelphia for the purposes listed below: 1. $50 million to repair and improve the infrastructure. 2. $15 million for training teachers. 3. $25 million for hiring new teachers. 4. $10 million for upgrading books and forms and purchasing new supplies. 5. $30 million for educating students to Landmark Education's Curriculum For Living. Respectfully submitted, John Hawk-Bey. C. handling appropriations requests for the State of Pennsylvania, to ascertain the current status of my emergency appropriation request for the School District of Philadelphia. Miss Baker informed me that my appropriations request is on hold until she receives a confirmation letter from the City of Philadelphia stating that they are on board with my request. Additionally, Miss Baker 56 6/6/01 - WHOLE - BILLS 000708, 709, 010418, 419 stated that a letter is also required so that upon approval by the Senate Appropriations Committee, they will know who to cut the check to. My urgent request to the honorable members of the Philadelphia City Council is that you immediately write a letter to Senator Arlen Specter and make it to the attention of Miss Adrienne Baker, and in this letter, you confirm that you are all on board with my emergency appropriations request for the School District of Philadelphia, and request that the appropriations request be approved and funded immediately. I am also requesting that I receive a copy of all correspondence forwarded to or received from Senator Arlen Specter's office with regards to this matter. Thank you.
Thank you very much. We appreciate your taking the time to come in to testify and for your interest in our schools. Mr. Dubow, is he here? Just for the record, would you please indicate what the amendments are to Bill 708 and 709. Thank you Mr. Bey.
You're welcome, President 57 6/6/01 - WHOLE - BILLS 000708, 709, 010418, 419 Verna.
Thank you very much. I believe we've made copies. Have they been circulated to members of the committee? Do Councilmembers have copies of amendments 708 and 709? Okay, you gave us your copy? I would like to make an announcement. I would like all members who are going to be voting on these bills to please report to the chambers so that we can cast a vote. Thank you. Mr. Dubow?
The amendment to Bill 708 would change the two sections, which had read 2.17, Department of Recreation purchase of services. That would now be 2.46, Director of Finance - Contribution to School District, Contributions, Indemnities and Taxes. And the amount would stay at million. 22 For Bill 709, again, the 2 section would 23 be amended. It had read 2.17, Department of 24 Recreation Purchase of Services, in the amount of 20 25 million. It would now read 2.46, Director of 58 6/6/01 - WHOLE - BILLS 000708, 709, 010418, 419 Finance to School District - Contributions, Indemnities and Taxes, and it would still be $20 million.
Yes. Instead of purchaser, it says -- (Unintelligible, parties talking over each other.)
I just wanted the record to reflect that. Thank you. Any questions from members of the committee? (No questions.)
Seeing none, would all Councilmembers please -- I'd like to recess the public hearing so that the members of the School District do not have to wait. We'll recess our public hearing and go into our public meeting. - - - 59 6/6/01 - WHOLE - PUBLIC MEETING
The Chair recognizes Councilwoman Blackwell regarding Bill No. 4 000708.
Madam President, I move that Bill 000708 as amended be reported out --
Sorry, Madam President. I move that the amendment to Bill 708 be adopted. (Duly seconded.)
It has been moved and seconded that the amendment be adopted. All those in favor will signify by saying aye. Those opposed? The ayes have it and the amendment has been adopted. The Chair recognizes Councilwoman Blackwell.
Thank you, Madam President. I move that Bill 000708, as amended, be reported out of committee with a 60 6/6/01 - WHOLE - PUBLIC MEETING favorable recommendation and also a recommendation that the rules be suspended so as to permit first reading at our for next session of Council. (Duly seconded.)
It has been moved and properly seconded that Bill No. 000708 be reported out of committee with a favorable recommendation as amended and also a recommendation that the rules of Council be suspended so as to permit first reading at or next session of Council. All those in favor will signify by saying aye. Those opposed? The ayes have it and the motion carries. The Chair recognizes Councilwoman Blackwell regarding Bill No. 000709.
Is that amended? Madam President, I move that the amendment to Bill 000709 be approved. (Duly seconded.)
It has been moved and seconded that the amendment as presented by the Administration be adopted. All those in favor will signify by 61 6/6/01 - WHOLE - PUBLIC MEETING saying aye. Those opposed? The ayes have it and the motion carries. The Chair recognizes Councilwoman Blackwell.
Thank you, Madam President, I move that Bill 000709 as amended be reported out of committee with a favorable recommendation and also a recommendation that the rules of Council be suspended so as to permit first reading at our next session of Council. (Duly seconded.)
It has been moved and seconded that Bill No. 000709 be reported out of committee with a favorable recommendation as amended and also a recommendation that the rules of Council be suspended so as to permit first reading at our next session of Council. All those in favor will signify by saying aye. Those opposed? The ayes have it and the motion carries. The Chair recognizes Councilwoman Blackwell regarding Bill No. 010418. 62 6/6/01 - WHOLE - PUBLIC MEETING
Madam President, I move that Bill No. 010418 be reported out of committee with a favorable recommendation and also a recommendation that the rules of Council be suspended so as to permit first reading at our next session of Council. (Duly seconded.)
It has been moved and seconded that Bill No. 010418 be reported out of committee with a favorable recommendation and also a recommendation that the rules of Council be suspended so as to permit first reading at our next session of Council. All those in favor will signify by saying aye. Those opposed? The ayes have it and the motion has been adopted. The Chair recognizes Councilwoman Blackwell regarding Bill No. 010419.
Madam President, I move that Bill No. 010419 be reported out of committee with a favorable recommendation and also a recommendation that the rules of Council be 63 6/6/01 - WHOLE - PUBLIC MEETING suspended so as to permit first reading at our next session. (Duly seconded.)
It has been moved and seconded that Bill No. 010419 be reported out of committee with a favorable recommendation and also a recommendation that the rules of Council be suspended so as to permit first reading at our next Council session. All those in favor will signify by saying aye. Those opposed? The ayes have it and the motion carries. We will recess the public meeting and again go into our public hearing. - - - 64 6/6/01 - WHOLE - BILL 010420
I would ask Mr. McPherson to please read the title of Bill No. 4 010420.
Bill No. 010420, an ordinance authorizing the City of Philadelphia, acting through its Department of Commerce, to amend that certain agreement by and between the City of Philadelphia and the Philadelphia Convention and Trade Bureau, currently known as the Philadelphia Convention and Visitors Bureau, authorized pursuant to an ordinance approved by the Mayor on June 21, 1965.
Mr. Cuorato, are you testifying on this bill? (Witness comes forward.)
Does everyone have a copy of Mr. Cuorato's testimony? (Copy of Mr. Cuorato's testimony not submitted to stenographer; therefore, not attached hereto.)
Thank you, Madam President. Good afternoon, Madam President and members of City Council. My name is James Cuorato, 65 6/6/01 - WHOLE - BILL 010420 and I'm the City Representative and Director of Commerce. I appreciate the opportunity to provide testimony in support of Bill No. 010420. This bill will allow the City to amend and update its agreement with the Philadelphia Convention and Visitors Bureau with regard to providing visitor services at specific sites within the City. Subject to approval by the City, the Convention and Visitors Bureau has agreed to provide financial support for visitor services at the new Independence Visitors Center scheduled to open in November of 2001. The Independence Visitors Center is one of several significant developments in or near Independence National Historical Park that have received financial assistance from the City in an effort to expand our hospitality industry. When it opens later this year, the Independence Visitors Center will provide visitors information not only for the Liberty Bell and other attractions within Independence National Historical Park, but also for attractions and services throughout the City. Under its long-standing agreement with the City, the Convention and Visitors Bureau 66 6/6/01 - WHOLE - BILL 010420 currently operates the Philadelphia Visitors Center at the corner of 16th Street and JFK Boulevard. This facility is within JFK Plaza and as such, is owned by the City. The bill before Council will allow the Convention and Visitors Bureau to redirect the funding currently used to operate the Philadelphia Visitors Center directly to the centralized visitors services provided by the Independence Visitors Center. When the new facility opens, the Convention and Visitors Bureau will discontinue staffing Philadelphia Visitors Center and will return control of the facility to the City. The Administration plans to begin a public process to seek proposals for the reuse of the JFK facility. One objective of this process will be to find a use that is complementary to the City's ongoing efforts to revitalize this area of Center City. Another objective will be to identify a reuse capable of supporting the ongoing maintenance costs of the existing facility. This process will be designed to solicit input from City officials as well as interested members of the public. In an effort to better reflect current 67 6/6/01 - WHOLE - BILL 010420 conditions, Bill No. 010420 will also update other requirements placed on the Philadelphia Convention and Visitors Bureau. The City's agreement with the PCVB originally required that visitor services be provided directly within Independence Hall and on site at Valley Forge. Since the National Park Service has assumed jurisdiction over these two locations, it is no longer necessary for the PCVB to retain these specific visitor service responsibilities. In summary, the bill before you will allow the City to improve the coordination and delivery of the services provided to visitors as part of our overall strategy to expand the hospitality industry. I respectfully request your favorable consideration of Bill No. 010420 and a waiver of the rules to permit first reading at Council's next session. Madam President, I would be pleased to answer any questions that you may have. I would also point out that Tom Muldoon, the President of the Philadelphia Convention and Visitors Bureau, and William Moore, the President and CEO of the new Independence Visitors Center, which are the two 68 6/6/01 - WHOLE - BILL 010420 parties to this transaction along with the City, are also here to provide testimony and answer any questions.
Thank you. Councilman Kenney, would you rather hear testimony from Mr. Muldoon, or do you want to just --
I just have one question of Mr. Cuorato. In his testimony, he indicated that once the new center is completed and the operations change from the current visitors center, the property will be turned have over to the City. Who has the property now?
Are you aware of any plans for that particular location?
No. We are not -- we have had a preliminary discussion with Councilman Clarke and just indicated that we would look to do some sort of a request-for-proposal process to see if 69 6/6/01 - WHOLE - BILL 010420 there are any imaginative uses out there, but there are no plans out there right now.
I'm sorry, Councilman, you're aware of no specific interest or request for that property? Or you may be aware of it but not able to comment.
Actually, earlier on, there were several recommendations, but I found that those recommendations had no sponsors. So subsequently, it was determined that some group or body would get together and either prepare the RFP and review it at the appropriate time, but I did have a question and I can wait till you --
No, I just have one request. Is it Public Property that has jurisdiction over the building?
Councilman, I believe technically, it's Fairmount Park property.
That's pretty much the question I had. I wanted to make sure because there were some concerns raised by the City Council 70 6/6/01 - WHOLE - BILL 010420 designee to the Fairmount Park Commission, who also happens to be the Councilperson for the 5th District, of not having a sense of what was being proposed are for that site, so I wanted to make sure that you notify the park in any future decisions relating to that site.
Thank you. Any other questions for Mr. Cuorato? (No further questions.)
Good afternoon. Thank you for your patience. Please identify yourself for the record and begin your testimony.
Tom Muldoon, President of the Philadelphia Convention and Visitors Bureau. Members of City Council, this ordinance 23 addresses changes to the 1961 act known as "The Tourist Promotion Law" that designated the Philadelphia Convention and Business Bureau as the 71 6/6/01 - WHOLE - BILL 010420 official tourist promotion agency for the City of Philadelphia. In that ordinance, the Philadelphia Convention and Business Bureau, a private nonprofit organization, was given certain responsibilities in the promotion of Philadelphia as a destination for convention, meetings, and tourism. The operation of the Visitors Center at 1525 John F. Kennedy Boulevard was one of those requirements. The building known as the Philadelphia Visitors Center is owned by the City the bureau has operated the facility on behalf of the City. The bureau has operated the facility on behalf of the City. Upcoming. With the upcoming opening of the new Independence Visitors Center, a state-of-the-art facility previous, the previous administration requested that the bureau close the Visitors Center upon the opening of the Gateway Visitors Center and transfer operating funds to the new facility. This has been approved by the bureau's board of directors. In order to transfer the operating funds, the bureau needs relief from the responsibility to operate the Visitors Center on JFK 72 6/6/01 - WHOLE - BILL 010420 Boulevard. Naturally, we are concerned about the full and part-time employees of the current visitors center. We are working very closely with the board of directors and the president of the Independence Visitors Center to transition those staff members interested in working in the new facility. The passage of this ordinance will facilitate that transition in a most efficient way. We are excited about the new visitors center and its place in the heart of Independence National Historic Park, the magnet for most of our visitors. The new facility will provide an enhanced experience for all of the millions of visitors who come to this city and region and will greatly impact Philadelphia as a world-class destination.
Thank you very much. Are there any plans for use of the current building?
It's a great site. We had some idea many years ago, but as Mr. McPherson reminds me, when he was on the other side, he spoke against it. Many years ago, we talked 73 6/6/01 - WHOLE - BILL 010420 about trying to do day care out of that building for City employees.
One of the limitations that the City will have to investigate is that the heating unit is not very good, and the air-conditioning system was fixed by Public Property two or three years ago, with the idea being that it would last a couple of years. So physically, the heating and air-conditioning systems wouldn't last an extended period of time, and the building itself is in fairly poor physical condition.
Thank you very much. Are there questions for Mr. Muldoon? (No questions.)
Do we have anyone else to testify on this bill? (Witness comes forward.)
Good afternoon. Thank you. 74 6/6/01 - WHOLE - BILL 010420 I am present here today to urge your support of Ordinance No. 010420, which does address necessary changes to the tourist promotional law, which, among its requirements is to stipulate that the Philadelphia Convention and Visitors Bureau operate the visitors center currently located at 1525 JFK. The Independence Visitors Center Cooperation is a nonprofit 501(c)(3) organization incorporated in 1996 as proposed in a grant by the Pew Charitable Trusts to develop and operate a new visitors center in cooperation with National Park Service to be constructed on block number 2 of Independence Mall in the Independence National Historical Park. This $38 million project, the Independence Visitors Center, which was formerly known as the Gateway Visitors Center, is funded by the Commonwealth of Pennsylvania, the City of Philadelphia, the Delaware Port Authority, Pew Charitable Trust, along with Annenberg, Conley and Knight Foundations. We have also received considerable support on behalf of the Philadelphia Parking Authority and the National Park Service, 75 6/6/01 - WHOLE - BILL 010420 which will ultimately own this building. When we open our doors to the public on November 19th of this year, the Independence Visitors Center as the official visitors center for the Independence National Historical Park, the City of Philadelphia, and the surrounding region to orientate visitors to all of these areas as an exciting, informative, and state-of-the-art experience. As part of our opening, it was agreed with the previous administration that when this Independence Visitors Center opens, the City Visitors Center operated at 15th and JFK and the Independence National Historic Park Visitors Center operated by the Park Service as Third and Chestnut would close their operations, and those new duties would be absorbed by the new regional Independence Visitors Center. As Mr. Muldoon stated, the Convention and Business Bureau board of directors have approved the closing of the Visitors Center at 15th and JFK and are transferring operating funds to the new Independence Visitors Center. These funds will cover our current fulfillment and the staffing 76 6/6/01 - WHOLE - BILL 010420 operations in the new building. The National Park Service has also approved closing of the Visitors Center at Third and Chestnut, and those operating funds will be transferred as well. I request your support of Ordinance No. 7 010420, which will relieve the responsibility, as previous stated, and allow for the transfer of operation funds to the new Visitors Center at Independence Visitors Center at Sixth and Market Street. The timely passage of this ordinance will ensure that the Visitors Center will provide optimal visitor experience and a unique public-private partnership, which will be a model for tourism throughout this country. Millions of dollars have been invested in the Philadelphia area by the City and by the State and by federal government, including new hotels, the Regional Performing Arts Center, and the waterfront in an effort to make Philadelphia a truly world-class destination. And it is imperative that we meet our goal to have an officially funded first-class visitors center offering superior customer service and visitor amenities to make an impact on these investments. 77 6/6/01 - WHOLE - BILL 010420 We're making every effort to work with the Philadelphia Convention and Visitors Bureau to accommodate the current staff of the Visitors Center and provide each of those individuals that so desire an opportunity to become a part of this new and exciting venture. I appreciate your time and support of this ordinance and look forward to working with the City in the future. Thank you.
Thank you. Are there any questions from members of the committee? Councilman Nutter's light is on. I guess he left the room. Are there any questions from members of the committee? (No questions.)
We are now going to consider Bill No.'s 010416 and 010417. I would ask Mr. McPherson to please read the title of 78 6/6/01 - WHOLE - BILL 010416, 417 the bills.
Bill No. 010416, an ordinance authorizing the Commissioner of Public Property, the Director of Commerce, and the Recreation Commissioner, on behalf of the City of Philadelphia, to execute and deliver a first amendment to lease agreement by and between the City and Philadelphia Authority for Industrial Development with respect to that certain lease agreement dated July 12, 1994 by and between the City and PAID concerning certain premises lying between Broad Street and 11th Street. Bill No. 010417, an ordinance 15 authorizing the Director of Commerce and the Commissioner of Public Property, on behalf of the City of Philadelphia, to execute and deliver and consenting to the execution delivery by the Philadelphia Authority for Industrial Development of agreements with the Commonwealth, which shall provide that upon the occurrence of certain events described in this ordinance, the Commonwealth shall have the option to purchase for $1 and one-third interest in the respective interests of the City in PAID in said baseball park facility or said football 79 6/6/01 - WHOLE - BILL 010416, 417 stadium facility, as the case may be.
Thank you. Before hearing testimony on these two stadium-related bills, I would like to make a very short statement. Last week, the Administration briefed members of Council on these two bills and the status of the stadium transaction. Following that presentation, I remained concerned that the Administration was not acknowledging that the steps being taken to fill the $53 million stadium funding gap were inconsistent with the Administration's previous commitments. I expressed that concern in a letter, which was copied to the Mayor and to all members of Council. Earlier this week, the Mayor responded to my letter and sent a copy of his response to all members of Council. I very much appreciate the Mayor's prompt and forthcoming response, and I'm grateful by the tone of that response. I would ask Mr. McPherson to please read into the record the Mayor's letter, after which we will hear testimony from our first two witnesses, Mr. Longstreth and Mr. Martin. 80 6/6/01 - WHOLE - BILL 010416, 417
"Dear Council President Verna: Thank you for sending me a copy of your May 31, 2001 letter to William F. Martin regarding Bill 5 No. 010416, parking ordinance. I met with Mr. Martin and other members of the Administration Stadium Development Team to discuss the concerns raised in your letter, and felt it was important to respond directly. "At the outset, let me apologize for any misunderstandings which may have occurred during the course of the Administration's presentations and testimony regarding stadium development. While I am convinced that all presentations and testimony were made in good faith and without any intent to mislead, it is apparent from your letter and concerns raised by other members of City Council that we did not clearly spell out the implications of the proposed transactions. For that, I am sorry. "Your letter raises several issues in specific which I would like to address in turn. As to the Delaware River Port Authority (DRPA), the City identified it in early 2001 as a potential source of funds. For many weeks, we engaged in confidential discussions with DRPA representatives 81 6/6/01 - WHOLE - BILL 010416, 417 in an attempt to secure funding for this project. "Only very late in the process did DRPA explain to the City that for programmatic and policy reasons, a portion of its contributions would be categorized as a loan. We resisted the DRPA's initial request that the loan be extended to the City, and ultimately settled on PAID as the borrower. "Like the City, PAID has no independent source of funds to repay the loan, so we proceeded to identify a stadium-related stream of payments. The team's renewal rental obligations were identified as a repayment source. DRPA agreed that the loan would be subject to repayment only to the extent that the teams renewed the leases in 2033-2034 and would be repayable only from that source. 5 percent. 6 million, we decided to move forward with this aspect of the deal. "Also as to the parking revenue, Administration witnesses did point out that the deal structure called for all parking revenues to go to the teams, and the Phillies and Eagles subleases had consistent provisions. However, the Administration's financial presentation did not show the potential loss of City revenue from parking commencing in 2025. "Regarding parking, when the deals were structured in December 2000, the Administration knew the cooperation of Comcast-Spectacor and its affiliates would be required to restructure existing parking relationships and flows of parking revenues if this deal was to proceed. The Administration hoped that the restructuring could generate additional contributions which would facilitate the deal, but no deal had been struck among the City, PAID, Phillies, Eagles and Comcast-Spectacor. In fact, the deal currently before Council was finalized in the days leading to introduction. "To have tendered testimony many months 83 6/6/01 - WHOLE - BILL 010416, 417 ago would have been premature and would have put this element of the deal at risk. Perhaps better communication between the two of us and between our staffs in the period leading up to introduction would have been helpful, and I'll seek to accomplish that in the future. "As to the details of the parking revenue, as Mr. 5 percent. I believe this is a reasonable concession by the City both when we consider that it was anticipated by the original transaction presented to Council and that it will produce $20 million of additional contributions. "I hope this letter is responsive to the concerns raised in your May 31, 2001 letter to Mr. Martin. I am sincerely grateful to you and City Council as a whole for the timely and thoughtful consideration you have given to stadium matters both in December 2000, January 2001, and again now.
I believe that when completed, the two world-class 84 6/6/01 - WHOLE - BILL 010416, 417 facilities provide our city a wealth of benefits, including tax revenues for the School District and employment, tourism and entertainment opportunities for our citizens. At the same time, we will have established a $60 million children's fund and set new records for MBE targets for a public-private development project. "You and the City Council have been my partner in the success we have been able to achieve in stadium development during the last six months, and I once again ask for your most able assistance and cooperating by approving the stadium-related ordinances now before you for your consideration next week. "Sincerely, John F. Street, Esquire Mayor,".
Thank you. Our first witnesses are -- yes, Councilman Kenney?
I just would like to be recognized for the purposes of making a request and just one statement, if I can, prior to the testimony.
As you know, back in December of 2000, we all went through a very difficult process in approving the stadium legislation for both the Phillies and Eagles. It was not a pleasant experience for any of us, even those of us who supported the facilities from the get-go, but we did what we were supposed to do and moved this moved this project forward. Despite the Administration's position and despite our briefing information that this, in fact, what we're dealing with today was, in fact, well known to all of us, I think that the Council President and Chair of this committee would agree that that information, up until recently, was not well known to us, and despite the position of the Administration and our upcoming witnesses, I just want to read two quotes into the record and I'd also like to make a request. These are quotes that were made at a November 30, 2000 Committee of the Whole public hearing on the original stadium bills. First is from the Mayor. "I cannot tell you that we will know without a doubt exactly how this funding gap will be met. I can tell you and I will fully 86 6/6/01 - WHOLE - BILL 010416, 417 support an amendment to make sure that this happens and that the City will not pay. I guess what I'm asking you to do is just have some small confidence; that is, between the teams and those of us who are working with them, we can make this happen. " And from former PIDC Bill Hankowsky: "We are talking to several sources, both public and private, that could assist us in filling the gap. We have not concluded those discussions. " Let me emphasize, this is Mr. " That having been said and made clear for the record, I would make a request, Madam President, that we would take testimony but that we would hold these bills until September, and I'll tell you why. 87 6/6/01 - WHOLE - BILL 010416, 417 Number one, the stadium construction on the Eagles stadium has already begun. People are working there now, and this gap represents a $29 million hole. I do not believe under any circumstances that the work on the Eagles facility would been in fact stop between now and September 8 if we took testimony today and held these bills. 9 Number two, the Phillies facility, 10 although in design, it has been completed. So, 11 therefore, there's really no at this point urgency, 12 I believe, to have this approved without a two-month 13 delay so that we can consider this a little 14 thoroughly through the summer. 15 And, third, and the reason I'm making 16 this request is that we had a number of firefighters 17 who were here today. They had to leave to go to a 18 union meeting. They stayed for a number of hours 19 and they did their best to be heard, and I will be submitting Vice President Tom O'Drain's remarks for the record to the stenographer. But on November of 2000, the arbitrator awarded our City firefighters Local 22 a contract. In January 2001, the City signed that arbitrated contract, and then in February 2001, appealed the 88 6/6/01 - WHOLE - BILL 010416, 417 contract and went into court. There are five issues that are currently outstanding, and I think the most important amongst them, as we're all aware of, is the issue hepatitis C and that funding issue. As you know, in Harrisburg, the State House and soon the State Senate will approve legislation requiring or mandating that the hepatitis C risk be assumed for firefighters, police officers, and prison guards. I think it's incumbent upon us, considering the amount of effort and the amount of resources that we've already committed to this project from the public side, that we at least use this legislation as an effort to get the City off the backs of Local 22, have them agree to withdraw their appeal of this duly arbitrated award, this duly agreed-to award by the City. And if we can use this as leverage, I think it's an appropriate method of leverage to use. These people are our heroes, they are people who run into burning buildings and save us when we're in need.
They have a contract that's been arbitrated, they have a contract that's been signed, and they also have a contract now that the 89 6/6/01 - WHOLE - BILL 010416, 417 City is in court fighting. I think that if we can use this leverage for these additional dollars to help our firefighters, I think it's an appropriate thing to do, number one. Number two, this $29 million gap that represents in this project, to me, from my perspective, and I may be naive in saying this, but public entities like the Philadelphia Eagles whose value of team has probably tripled since we've approved this stadium legislation, the Philadelphia Phillies, who are a major important corporate entity in our city, and more importantly, Comcast, who is very a large and important company for our city and for our region cannot believe that the three of those entities together cannot find $29 million in financing to help get this project hole filled, to move on, to build the project that we've all contributed to, and that we all want to see happen. And I think that on two counts, on the fairness to our firefighters and their need and on the issue of free major corporate entities that we are publicly and very much supporting with public dollars in this project can probably find the money themselves. But even if they don't want to find the 90 6/6/01 - WHOLE - BILL 010416, 417 money themselves, I think we owe our firefighters what's coming to them by holding up this bill until the City agrees to withdraw its appeal of this arbitrated award. Thank you, Madam President.
Thank you. Mr. Longstreth and Mr. Martin, if you would approach the witness table, please. (Witnesses come forward.)
Please identify yourself for the record and proceed with your testimony.
Good afternoon, President Verna and members of City Council. My name is Peter S. Longstreth, and I appear before you today in my capacity as president of the Philadelphia Industrial Development Corporation to 91 6/6/01 - WHOLE - BILL 010416, 417 testify in support of City Council Bills No. 010416 and 010417. These bills relate to the new sports stadium development project. And I am joined at the table by William F. Martin who has represented the Administration with regard to this transaction since Bill Hankowsky left PIDC in December. By way of background, a briefing was held last Wednesday to review the content of these two bills, which was followed by an interchange of letters between the Council President and the Mayor and copied to City Council members. As you know, the briefing and the letters focused on several issued raised by Councilmembers, including use of public funds and the nature of the additional contributions. Following, I would like to outline each bill and would be happy to entertain any questions Councilmembers might have for me or Mr. Martin following my testimony. Bill No. 010416 authorizes the City and the Philadelphia Authority for Industrial Development, or PAID, to terminate or amend several existing lease agreements and approves a new master parking operations agreement all in regards to 92 6/6/01 - WHOLE - BILL 010416, 417 parking at the stadium at the sports stadium district. Significant terms of the new and amended agreement provide that: 1. All parties at the sports complex will be subject to relevant provisions of the parking and use agreements authorized by Council in December with respect to the Phillies and the Eagles. 2. All parties will be required to operate the parking lots in a coordinated and uniform manner at rates as specified during construction and to be agreed upon amongst the teams commencing in 2003. 3. PAID will be released from its obligation to operate parking and to guarantee a minimum of 5,755 parking spaces in the North Lot. In turn, PAID will relinquish rights to parking revenues in the North Lot that it otherwise would have received commencing in 2025 if the Spectrum Arena Limited Partnership, or SALP, opts to renew its lease at the sports complex. This release of obligations and revenues will continue only so long as the Phillies operate at the new ballpark. 4. The North Lot lease to PAID will be 93 6/6/01 - WHOLE - BILL 010416, 417 terminated and the majority of this land, together with the Veterans Stadium land, will be leased as the Broad and Pattison land from the City to PAID as described in Bill 010334. Subsequently, this land will be subleased from PAID to the Phillies per Bill 7 No. 000722-A, approved last December. We seek approval of this bill to accommodate the additional parking lots and sports facilities in the sports stadium district and to conform the business terms of the existing agreements with the new baseball park and football stadium transactions approved in December in specific, and in addition to authorization of the new master parking operations agreement, this bill 16 will authorize the following: First, amendments to both the arena premises lease comprised of approximately 46 acres, including the First Union Center and a majority of the surrounding parking from the City to PAID and to the sublease from PAID to SALP. Second, amendments to both the development parcel lease comprised of three parcels totalling approximately 10 acres within the First Union and Spectrum parking areas from the City to 94 6/6/01 - WHOLE - BILL 010416, 417 PAID and to the sublease from PAID to the Spectacor Adjoining Real Estate New Arena Limited Partnership, or SARENA, and a fifth amendment of the Spectrum premises lease from PAID to SALP, and finally, termination of the North Lot lease from the City to PAID. Bill No.
010417 authorizes the City to grant a one-third option in the proposed facilities to the Commonwealth under certain circumstances, and prohibits the use of the stadium or ballpark by other professional baseball or football teams which now or hereafter operate in other Pennsylvania-based venues. In December, Council approved Bill No. 16 000725, which authorized application for Commonwealth funding in the aggregate amount of not less than $170 million. This Council bill is required to comply with the statutory terms of the Commonwealth funding. The option is required under Commonwealth law in the event the facility is sold or upon expiration or termination of the sublease and development agreement between PAID and the teams. The prohibition against use of the facilities by other Pennsylvania-based professional 95 6/6/01 - WHOLE - BILL 010416, 417 baseball or football teams mirrors the language of the Pittsburgh team and is intended to restrict Philadelphia and Pittsburgh from using the new facilities to poach other professional baseball and football teams within the Commonwealth. In closing, I respectfully request your favorable consideration of City Council Bills 010416 and 010417, with a suspension of the rules to provide for first reading at Council's next session and final approval prior to Council's summer recess, which will further advance the finance and construction of the new baseball park and football stadium. When completed, the City will enjoy the many benefits of two new world-class state-of-the-art facilities and a sports complex unrivaled in the United States. In addition to locking up the teams into playing in the City for 30 years, this $1 billion construction project will generate numerous job opportunities for our local trades, provide additional tax revenues to the School District, and increase employment, tourism and entertainment opportunities for our citizens. At the same time, we will have established a $60 million children's 96 6/6/01 - WHOLE - BILL 010416, 417 fund and set new records for MBE targets for a public-private development project. City Council has been our partner throughout this process, and we thank you and we ask you once again for your cooperation in approving these two bills. This concludes my formal testimony. Mr. Martin and I would be happy to answer any questions that Councilmembers may have for us at this time.
Thank you. Mr. Martin, do you have a statement that you would leak to make at this time?
Mrs. Verna, I wanted to add my own thoughts to those expressed by the Mayor in connection with the letter that was read into the record and to confirm to Council that if -- on the two issues. First as to the parking. In retrospect and in review of the record, Councilmembers fairly state that it was not clear to them and it was not made clear to them regarding the direction of those 50 percent of funds after 2025, and the presentations that were made in December and January 97 6/6/01 - WHOLE - BILL 010416, 417 should have done a better job of presenting those materials. On behalf of the development team, I want to apologize to the members of Council for any omissions in those materials which may have contributed to any confusion or lack of understanding in that respect. As to the PAID -- as to the PAID loan and the application of those contingent streams of payments relating to the renewal rents, in subsequent conversations that I've had, especially with members of staff, they've impressed upon me the fact that members of Council are concerned that too fine a distinction was made there as between City monies and PAID monies. And it was certainly not our intent then, or our intent now, to be trying to not have the facts be made clear at the time. So as to the DRPA loan, I regret that we didn't come to Council leadership more proactively in the process and explaining where we were going with that and seek your input and acknowledgment. Beyond that, I think the Mayor's letter speaks for itself. Thank you.
Thank you. 98 6/6/01 - WHOLE - BILL 010416, 417 The Chair recognizes Councilman Kenney.
Thank you, Madam Chair. Mr. Longstreth or Mr. Martin, have the Philadelphia Eagles indicated to you in any way that if this legislation is not approved by June 14th that they would stop work on the site that they're now excavating and driving pilings and having people on the worksite? Did they indicate to you that they would in fact stop work on June 14th if in fact we did not pass this legislation?
Mr. Banner has indicated to me that their capital structure is counting on the financing occurring at the end of June.
He has not issued a threat. He has said that at this point --
Well, that's not a threat; that would be a statement of fact.
He has said at this point, he is going out-of-pocket in anticipation that he'll no longer have to go out-of-pocket after the end of June, and I think that the implication is at the end 99 6/6/01 - WHOLE - BILL 010416, 417 of June, that he would have to reassess the approach they've taken to the project.
Could you be more specific on the reassessment? I mean, is it your contention and is it your desire to make us believe that as of June 15, 2001, the Eagles would stop working at the T warehouse site because this legislation didn't get passed?
With all due respect, Mr. Longstreth, you're new here. And Mr. Martin, you've taken our slings and arrows before and you're done it with grace. I'm getting really tired of this June 14th, beginning-of-summer stuff. Everything we have to do in here is -- it's like a bewitching hour. If it's not done by the summer recess, somehow the world is going to be turned upside down. It's every issue of any import that I have been involved with in the last ten years, that if it's not done by the time we go on summer break, as Councilmember Goode said, we hit the beach, that the world's coming to an end. Why is that? It just seems to happen like clockwork every year, like the summer solstice. 100 6/6/01 - WHOLE - BILL 010416, 417
Councilmember, my only comment was going to be maybe an obvious one, which is, they are in the very sort of delicate phase of finalizing whatever it is, a $300 million financing, and this would totally destabilize it to the degree that they would have to stop work.
Again, we raised this issue before with the Business Journal and according to Business Journal, two weeks ago, Fleet Boston had already approved their financing. Without even the dedication of luxury box dollars or any other revenue from that building, they've already approved -- the Eagles must be in such great financial condition that Fleet Boston has approved their financing without any additional revenues being earmarked to pay it back and have already given them preliminary approval.
I think the key is preliminary. We all know what's reported in the newspaper is subject to a whole lot of conditions, and they haven't necessarily been met, and these are clearly one of them.
Well, I guess the other question is, if it was so clearly part of the 101 6/6/01 - WHOLE - BILL 010416, 417 original deal, despite the apologies of the Administration and of Mr. Martin on not being clear enough, if all of this was part and parcel of the bills we approved in December, why are you back here now? It must have been something that wasn't done or left undone in the rush -- again, in the rush before the very critical period before the Christmas holiday, because, you know, there's lots of amazing, mystical things that happen if we don't do things before the Christmas break too. So, I mean, there's two major times in our life. It's right before Christmas and right before the summer when all kind of terrible plagues come down upon the City if we don't do things in a certain time. But I'll tell you, if all of this was so neatly tied up, even though we didn't read it right or didn't get a chance to read it or didn't see it when we read it, why are you back here?
Councilman, we said at the prior hearings and we demonstrated in the documents that there was going to be a need to amend the SALP agreements.
According to 102 6/6/01 - WHOLE - BILL 010416, 417 Mr. Hankowsky, and I'll read his statement again: "Let me make it absolutely clear again. We are not filling that hole. We're not going to come back here." (I guess he met Council.) "We are not going to take some City resources, change the deal, and add City dollars to the deal." I mean, I know Mr. Hankowsky's not here, he's an honorable guy and he did a great job in putting this thing together, but he was very clear from his comments that we wouldn't see you guys again on this subject. And what I believe the SALP agreement reallocation or reorganization is simply the ability to raise parking fees to allow Comcast to get into the deal. Comcast is a very big, important, and corporation in the City, and I admire them greatly, but they had the wherewithal to be in this deal without a $12 or $15 parking fee at the stadium complex. And that is part of what the issue is for me. This is not just the issue of public money coming from the General Fund or coming from debt service of the General Fund. This is public money, like the Airport, coming out of the public's 103 6/6/01 - WHOLE - BILL 010416, 417 pocket. Now, you can call it "a user fee," and if I remember right, Councilmember DiCicco raised this issue of a surcharge on parking back in the November hearings, and it was dismissed as something that wouldn't be appropriate or wasn't needed. Now we come back and we make it very clear that the only way we're going to get this deal done without the Eagles walking off the site is by increasing the parking fee, which was what Councilman DiCicco requested and had dismissed back in November. Now, can you explain to me the duplicity here? Do you remember the interchange? I think it was with you and Councilman DiCicco about the parking surcharge.
It was with Mr. Hankowsky, but I do remember it, and there's a distinction between a parking surcharge --
And allowing -- a parking surcharge suggests money that's going directly to the public. What is happening here and what was stated at the prior hearing was that the teams would receive the parking revenue. 104 6/6/01 - WHOLE - BILL 010416, 417 In terms of why we're sitting here and why that wasn't made clear before, in my testimony of January 31st, we talked about items where we would have to come back for further action by City Council. "In particular, the Administration expects to come before this body with proposed bills, and one of the ones that is listed is to amend the existing agreement between PAID and Spectrum Area Limited Partnership as regards parking arrangements for the spots complex." Now, you may certainly question about this money in 2025 and what you could have assumed, but you could not have assumed that you weren't going to see us here again because we told you back on January 31 we were coming back.
According to Mr. Hankowsky you weren't coming back -- well, maybe he meant him 'cause after the deal was done, he quit. Maybe he wasn't coming back here again, but I think he said, "We're not coming back here again." I just believe that what happened in this deal is, we approved this thing with a 53 or a $54 million hole, we all questioned the hole when we approved it, and we were given assurance that the 105 6/6/01 - WHOLE - BILL 010416, 417 hole would not be filled in any way with public dollars. Shopped around the hole to a number of different place and weren't successful, thankfully, in getting DRPA money and some other money available to fill the hole. But now we're back here because you can't shop around anymore, and the only way to do it is by reallocating funds that would have come to the City or by raising parking fees for people who are going to use the facility. And I tell you, I don't mind that Comcast is in the deal, I don't mind that they want to be in the deal. All I wish is they would do what Ed Snider did back in 1993 or 4 and put their own money in the deal instead of putting other people's money in the deal. And that's my position and that's why I won't be supporting this particular request. Thank you, Madam Chair.
Councilman Rizzo. I'm sorry, Councilman Rizzo. David Cohen was first but I didn't know he was back in his seat. Is that okay? Councilman Cohen.
I know the 106 6/6/01 - WHOLE - BILL 010416, 417 Republicans usually make the final decision in this council. Their three votes are very important. I endorse everything that Councilman Kenney said. It seems as if we're back in the 1800s, when you had to have a weapon, you know, before you went anywhere and you better be all armed for battle and don't trust the other person because he may shoot first. So, therefore, sometimes you shot first. 'Cause it seems to me that everything that comes from the Administration, City Council tends to take in good faith, the way we think we're being talked to honestly and fully and in good faith. And then later on, we learn that all kinds of words of art have been used that have one meaning to the Mayor and to the people who work for the Mayor and totally different meanings to us in City Council. And so maybe we're still very naive after many, many years in public life, but when the Mayor or the executive office or any representatives come to us and say, We're not coming back, this is it, there won't be any more City money, we're still naive enough to believe it. And then we find, but well, but you know, the City money, that's not 107 6/6/01 - WHOLE - BILL 010416, 417 really City money, and maybe PAID is really a State agency and not a City agency; and, therefore, we'll put money into PAID instead of the City. You know, I just think that that was always a bad way to be dealt with between City Council and the Mayor, and I think it remains a bad way because it sours everything. And that's why there's so much confusion. For example, the firefighters were here and they have been on the phone -- I'm sure they've been on the phone to all Councilmembers, they've been with me, and they say simple things. And to me they're simple but they're true and they're clear. They say, How come the City's got money to suddenly throw $20 million more into the pot for the stadium but they don't seem to have any money for us and our hepatitis C problem? And, you know, that's pretty difficult. We can go through and I tried and they stopped me very quickly. I said, you know, there are different funds of money. Some money is City money and some people say other money which looks like City money, probably smells like City money, may even look like City money, but if you talk to 108 6/6/01 - WHOLE - BILL 010416, 417 the executive office, you'll find it's not City money, it's some other kind of money. And I said, and the stadium money is different; it's not really City money, you know, and I can hear the pauses on the phone and the request to please speak ordinary English, you know, communicate with us. Because people don't understand that when it comes to the stadium -- and it just seems to be anything will work, anything that is required to get a vote today on a matter we're going to say, and later on, we'll find a way of explaining that we really didn't mean what we said. And so I'm at this point where I don't really understand why it's necessary. Maybe I start from a different point than Councilman Kenney and I don't want to reargue the economics of the stadium deal. A decision was made, I think it was a very unwise decision. I'm comforted by the fact that every economist in the country attests to the fact that stadiums are not engines of economic development, that cities usually find themselves totally unaffected economically by the existence of stadiums. Or in the one case, Baltimore, where there was an effect; the effect was a negative 109 6/6/01 - WHOLE - BILL 010416, 417 effect, the economics of the city were hurt by the new stadium that people like to brag about and were not helped. So I don't want to argue with Mr. Longstreth, but I have to put the statement on the record 'cause I don't want anyone to believe that everybody in City Council really thinks that there's going to be economic development as a result of the stadiums.
I happen to agree with all the economists and even the Inquirer, which editorially supports the stadium deal, its main economist -- I think his name is Andrew Cassell, writes article 14 after article on the bad economics of stadiums. He says support a stadium if you like sport, if you get joy out of it, as we all are out of the possibility that Allen Iverson and the Sixers are going to prove to the Lakers that Philadelphia's the top team, that even with that, we'll sport, you know, stadiums for that reason. You like sports, you want the City to be the number-one team in sports field, fine. But don't support it on a false theory of saying it's going to help economics, 'cause it won't, it won't have any impact. The dollars that were spent for the stadium are going to 110 6/6/01 - WHOLE - BILL 010416, 417 be -- would otherwise be spent on other areas. But tell me, do we know precisely how much it's going to take from City funds, this shift in parking revenue? How are you going to get the money? Are you going to increase the bond sale? Is that what's going to happen to get the additional money?
No, sir. In the Phillies lease, there is a requirement that the Phillies will receive -- there's a defined term in the lease, "additional contributions," which is money to be identified. A portion of that money is anticipated to go to the Phillies and a portion is anticipated to go to the Eagles. If the ordinances before Council are approved and allow for the restructuring of the parking, the Phillies and Comcast-Spectacor will in essence be sharing a pot of parking revenue, which will be generated mainly because of the increase in the number of spaces. And from that increased pot of revenue, they will, on their own, dedicate a slice of that for purposes of borrowing $20 million. The $20 million will then go to the Phillies, and under the terms of the agreement, the Phillies will 111 6/6/01 - WHOLE - BILL 010416, 417 waive the right to receive that subset of the larger amount of additional contributions that the lease calls for. So it comes in through private sources into the Phillies. The way it works technically is that there will be a waiver by the Phillies of $20 million of additional contributions that are otherwise anticipated by the sublease.
Well, I see it totally different. You seem to indicate that this is going to be private money coming in. Who pays the interest on the bonds? You say that the increased revenue is going to be the basis for the $20 million loan.
But the bonds have nothing -- I don't want to confuse you. The bonds are the bonds. This $20 million has nothing to do with the bonds.
It's a private loan from a private lender to the Phillies or perhaps to a partner venture formed by the Phillies and Comcast-Spectacor. 112 6/6/01 - WHOLE - BILL 010416, 417
You mean it's going to be maybe what you call "a commercial loan" to cover loans that are not bonds?
Well, who's going to be paying the interest on that commercial loan?
The borrower, who, I'm assuming for these purposes, will be either the Phillies or perhaps a parking joint venture of the Phillies and Comcast-Spectacor.
Will there be any payments required on that loan to be made by PAID or by the City?
It will be by the public, as Councilman Kenney defined it, as a result of the additional -- the higher cost of parking? Is that's what's going to pay the loan? I'm having difficulty in understanding how the loan gets paid off.
The parking revenues at the complex as a whole are anticipated to increase for three reasons. We hope that there will be more customers down there in new stadiums as opposed to 113 6/6/01 - WHOLE - BILL 010416, 417 old stadiums; there will be more parking spaces under the control of the sports complex; and as we previously said, those parking revenues are going to the teams. So that pie is increasing 'cause there are more spaces after expansion than there are now. And finally, the rates that are being charged for those spaces will be more than they are now. So all of those three factors -- more people coming, more spots to put their cars, and higher rates than they are currently paying -- will increase the pie of revenue resulting from parking, and that's where the money comes from.
Why can't that kind of creative thinking of making something out of kind of nothing, why can't we apply other forms of City funds (inaudible) to get the money necessary for the firefighters and hepatitis C? Why is that all of that creative financing, you know, with companies (inaudible) you're going to borrow money from companies that don't exist, we don't even know who will make up the company, it may be the two teams 114 6/6/01 - WHOLE - BILL 010416, 417 themselves. Is that right? The two teams themselves may join in some kind of a joint venture to loan --
You know, it's very difficult to get full understanding of that out in the community. And I think everybody in the City would be much better off if the Administration, you know, were to talk cleanly from the beginning on and tell us what all the problems are and how we're going to resolve them and then -- so that Council can't come back later and say that you weren't fair with us. You know, you had a problem. I think just about every member of City Council agreed that none of us ever believed that you were going to come back for approval from City Council for some kind of funding that would be necessary to meet the gap. We were sure you were saying and the Mayor was telling us fully the truth as he understood it when he said this gap is going to be met without any 115 6/6/01 - WHOLE - BILL 010416, 417 responsibility on the part of the City. Thank you, Madam President. It puts all of us in a very difficult position, and I can fully understand why the firefighters can't understand why the City doesn't find a way to meet their needs 'cause their focus is to really do something for the City, constantly putting their lives on the line, and we can't be creative enough to find out how to handle their medical problems caused by the work they do for us. And yet we can be so creative to find all kinds of ways of using City money, but really the dollars aren't genuine because if you felt them, you wouldn't find the necessary (inaudible) you know in the paper money that it was genuine money. Thank you, Madam Chair.
You're welcome. The Chair recognizes Councilman Rizzo.
Thank you, Madam Chair. Mr. Martin, during the briefing that you had in the caucus room, the question was asked that you're the attorney obviously representing the City 116 6/6/01 - WHOLE - BILL 010416, 417 of Philadelphia, correct, for the record?
I asked a question about the increase in TV revenue that the Eagles apparently will be receiving, 15, maybe, it's reported, and again, I asked it to be confirmed, possibly $20 million more in television revenues. The suggestion is that the shortfall could have a negative impact on any of the financing deals that are in progress. Don't you think that if the question that I've asked is true, that there's a significant increase in TV revenues that the Eagles will receive, it would certainly have a positive impact on any financing deal that would be taking place right now. The hard part to digest here is -- and I want to be -- you know, I'm supportive of these bills being voted out of here favorably so the process could go, but there was an expression that I grew up with: "There's a thin line between need and greed." And I'm wondering why this has become the total responsibility. Is it strictly because of the agreement that was struck, the one that we didn't 117 6/6/01 - WHOLE - BILL 010416, 417 understand, or at least I didn't understand, that is requiring the taxpayers to come up and make up the shortfall. If the Eagles are going to pick up another 15, $20 million in television rights, why can't they use some of that to keep this project moving forward?
Councilman, I haven't yet -- although I've made an inquiry, I have not received a confirmation on the question that you first raised last Wednesday regarding what their expectations are regarding their TV revenue. And we are seeking to stay within the framework of the lease transaction that we negotiated with the teams. And I understand your concern that it's running disproportionately to the public sector. You know, the teams will come to us and the teams say that they have their own problems. The teams have represented to us that they're struggling with potential cost overruns on the design of their stadium, so that we're trying to balance the interests of the private and public sector so the project can keep moving.
Which we have no 25 responsibility for, we emphasize. 118 6/6/01 - WHOLE - BILL 010416, 417
So when we say to them, what about some of this extra revenue for the additional contributions, one of their responses has been, you, the public don't want to hear about our problems on construction costs.
Well, I think if I were an executive at the Eagles knowing how generous we've been and the atmosphere is that we'll just continue to be generous and just keep writing the checks, if I were an executive and worked for the Eagles, I'd be doing exactly knowing that what we're going to do what they want us to do with very little resistance.
Well, I do want to take a second to defend what we're proposing here because let's focus on the fact that the $20 million of additional contributions on its parking side is based upon arguably a pledge of only contingent revenues. Those revenues are only going to exist if the First Union Center extends its lease when it currently expires in 2025, and the present value of that stream of revenue is a number which is dwarfed by the $20 million of additional contributions. Similarly, in terms of the DRPA loan, 119 6/6/01 - WHOLE - BILL 010416, 417 the DRPA loan is a loan only to the extent those teams renew and then pay the renewal rents, and that stream of income also is 2.4 as compared to million. If you put the two pieces together of 6 public money that I know that the Council has fair 7 concerns about, you're talking about in the range of 8 $3.8 million on the one side as compared with 9 $34 million of monies coming into the deal on the 10 other side. 11 So from a raw numbers perspective, you 12 know, as the Mayor said in his letter, he thinks 13 that it worked out to be a pretty good deal. 14
Thank you. The Chair recognizes Councilman Kenney.
Mr. Martin, I appreciate your legal skills and your ability to argue 'cause you're very good. However, the premise that you're arguing, from my perspective, is flawed in the following way. Stadium Area Limited Partners has a value of revenue that's projected as a result of the stadium operations today. That's the Vets Stadium, 120 6/6/01 - WHOLE - BILL 010416, 417 Spectrum One, and the First Union, Comcast, Lacovia, or whoever it's going to be, those centers. There is an extremely lucrative value on the public investment that was made along with the private investment to build a new football facility and a new baseball field. The basis of the increase in revenue is directed to Stadium Area Limited Partners Comcast is directly related to our public investment of building two new facilities. They're going to have extensively more revenue as a result of the parking they control now because we made the public investment to build two new facilities to that will hopefully attract exponentially more people and cars to that facility. So what's wrong with the added value that they're gaining as a result of our public investment to build the Eagles facility and the Phillies facility on an ongoing year-round basis -- almost year-round now because there will be four buildings there that they could gain parking revenues from. I mean, they need the additional revenue from an increase in the parking fees to make it worthwhile for them? I'd argue that we've already made it 121 6/6/01 - WHOLE - BILL 010416, 417 worthwhile to them by putting public money into two new facilities that's going to expand their ability to collect revenue by the multiple events and the increased number of patrons and their cars that will be filling the parking lot they control today. I mean, we discount in some way the initial public investment in December that has inured to the benefit of Comcast and their ability to collect additional parking revenues because we've invested public money. I mean, it's like almost as if the public investment that we made doesn't really count. We need to improve their situation vis-a-vis changing the configuration of the parking fees come 2025 out and allowing them to take the cap off to allow them to charge up to $12 or $15 a car. I mean, have we totally discounted the public investment that's improved Comcast revenue possibilities as a result of what we've done already?
Well, it's not factored into our argument. What would the parking be worth? I mean, the parking today, if we hadn't 122 6/6/01 - WHOLE - BILL 010416, 417 done the facilities would be what it is today, with no increase, no real increase in customers, just about what they're getting now. We make a $300 million public investment along with the investment of the Phillies and the Eagles, a joint venture, and by virtue of just that investment, with Comcast doing nothing, have increased their parking revenues exponentially as a result of the opening of those two buildings in 2003 and hopefully 2004 or 2005. I mean, don't we get credit for doing that for them?
We do get credit, Councilman. Our position vis-a-vis Comcast has been complicated by the rights that were negotiated by them and given to them back in the '91 and '94 agreements so that --
Which they weren't a part of but they bought when they bought into or took over the Spectrum 2. I mean, they weren't -- part of the deal made in '91 and '94 was with Ed Snider.
But you understand, 123 6/6/01 - WHOLE - BILL 010416, 417 Councilman, there --
Well -- (Unintelligible, parties talking over each other.)
They were the successor entity, but didn't they read those documents when took over those facilities?
I guess they were like us; we didn't read the documents either.
We can't build the stadiums that we want to build without in essence the buy-in of Comcast-Spectacor.
And I don't dispute that. My point is, if Comcast-Spectacor wants to buy in, let them do it as Snider did, buy in. Why do we need to do maneuverings to allow the public in some form or another subsidize Comcast's involvement in the deal? Whether it's Comcast or whether it's "ABC Baking Company," I don't care who it is. The point is, we've already inured the benefit of Comcast resources there by investing $300 million in facilities that's going to increase 124 6/6/01 - WHOLE - BILL 010416, 417 their parking revenues under the current agreement. I mean, we've done that already. Now, in addition to the current agreement and improving their parking revenues, we're going to take off the cap, allow them to do what they want to do as far as, you know, colluding in a good way together to discuss what the parking fees should be, potentially impacting the neighborhood because once the parking number hits, as we've discussed before -- once the price hits a certain level, people start looking for sports spots in the neighborhood, it's a natural phenomenon. I've seen it happen over the last years in that 14 sports complex. People will find a spot on the 15 street, they'll find it. 16 But besides that, we have improved 17 Comcast-Spectacor's revenues in December when we 18 approved those two deals and were exponentially 19 improved because the Eagles will be sold out every 20 game, they'll have soccer, they'll have concerts. The Phillies will hopefully -- I don't know, maybe they will, maybe they won't -- fill that building on a regular basis, which is not being filled today. Their revenues are enhanced tremendously as a result of the public investment we made in December. 125 6/6/01 - WHOLE - BILL 010416, 417 Why now do we need to make an additional maneuver to get them more money so they can get the deal? I mean, why don't we get the deal? Why don't we get a piece?
Back in December, January we made the case what the benefit to the public of the new buildings were.
And the benefit to Comcast-Spectacor. You tell me that Comcast-Spectacor's position in the sports complex is not enhanced by us doing these public and private facilities? It's got to be. More people are coming to the complex.
You know, it not only enhances their parking revenues, but doesn't it enhance their development possibilities?
Councilman, your question is why didn't we say to them, Give us the $20 million, keep the caps on the rates, and make sure we get the 50 percent after 2025.
No. My question is, 126 6/6/01 - WHOLE - BILL 010416, 417 why --
That's not what I'm saying, that's not what I'm saying. What I'm saying to them is, three private entities, go work it out. We've done it, we've done our thing in December. You guys want to work out a deal on naming rights or whatever it is, go work it out, but we're out of it.
But you're saying private entities, go work it out, but let me tell you about what constraints the public wants to put on your ability to generate revenue. That, in fact, is what we have done.
No, we're not putting constraints on them. (Unintelligible, parties talking over each other.)
We're not putting constraints on it because they bought into the deal when they took over from Ed Snider Spectrum 2 -- or First Union Center. They knew what the deal was when they took it over, they didn't? They got more lawyers than we do. 127 6/6/01 - WHOLE - BILL 010416, 417 All I'm saying is that for us to discount or not to mention in this testimony the contribution and the improvement of their position in the sports complex because of the public investment we made in December and that we're making through the course of the next two or three years, I think it's unfair to us because basically what we're saying is, Poor Comcast, geez, they can't get the deal. Well, guess what, there are exponential revenues on parking along, in addition to potential development and commercial and retail in that complex is enhanced tremendously because of our public investment. And God bless them and God bless us if it all works out. But somehow, you know, this poor company, geez, they really need the extra money to get the deal. Well, get somebody else to get in the deal. Why does it have to be them?
Because they have pre-existing rights down there. We can't --
No, pre-existing rights to parking. 128 6/6/01 - WHOLE - BILL 010416, 417
Yes, and which we have enhanced their revenues by our public investment, which was never mentioned in anybody's testimony.
We're sort of going around in circles now, Councilman. Your answer is, why didn't say to Comcast, Take this deal or we'll go somewhere else. We were constrained by the agreements which were already in place.
No. What I'm suggesting is, instead of doing what we're doing now, by trying to plug a gap that was supposedly going to be plugged over the last six, seven months, five months with non-City involvement is now coming back, and we're going to do it. I mean, I think all Council President Verna letter was asking was, Admit it and just say this is what we've asked for, we were wrong back in December, we're coming back to you for more help. And what I'm saying, as far as Councilman Cohen concern and his recommendation, they don't have to be creative, Councilman Cohen; we need to be firm. If we want to take care of the firefighters and be fair to them, we don't move 129 6/6/01 - WHOLE - BILL 010416, 417 anything out of here until the firefighters are taken care of, and when they're taken care of, we'll move it. We don't have to be creative, that's not creative, that's just hardball, and people play it all the time. And those firefighters sitting in here, waiting for help from us in some degree or another are going to keep on waiting because when we pass this out of committee today, which is probably what we're going to do, they're still not going to get any relief and there's no leverage to give them the relief they need. Thank you, Madam President.
Thank you. Are there any other questions from members of the committee? Mr. Martin, you are aware that we've prepared an amendment to the master parking operations agreement that will ensure that significant amendments to that agreement come back to Council for approval. I understand that you have seen the amendment and that the Administration amenable to its adoption; is that correct?
And I believe 130 6/6/01 - WHOLE - BILL 010416, 417 that a copy of the amendment has been put on every Councilman's desk. You'll stay with us, Councilman Cohen?
The argument just put forth by Councilman Kenney on the leveraging of the firefighters' problem makes an awful lot of sense, and I think that he's right. I think we probably could settle the issue of hepatitis C and firefighters, maybe even the police and the correctional officers that are involved in the state bill could be covered quite quickly if Council followed Councilman Kenney's advice. And I want you to know, you've convinced me. I'm not going to vote no these two bills.
Well, I think that makes a lot of sense and I think City Council has to think in terms of leveraging its power, just like the City Administration thinks in terms of leveraging funds. The same concept exists. If we want to solve the problem before us, we've got to be ready to use our power; otherwise, the Administration will continue to talk to us in one 131 6/6/01 - WHOLE - BILL 010416, 417 way and explain to us months later that they meant something else. And if we keep falling for that approach, we're not going to solve many problems. So I'm joining Councilman Kenney in his vote in the hope that some more of my colleagues will and we'll get a solution both to the stadium bills and to the firefighters. I think we could have this problem solved by the end of the week if we vote no on this bill or hold it up until we settle the firefighters.
Are there any other questions or comments be members of the committee? (No further questions.)
Gentlemen, you will remain in the chamber, please. Tina Nelsen from CEPA. (Witness comes forward.)
Thank you, Madam President. My name is Tina Nelsen and I'm the Executive Director of CEPA, the Consumer Education and Protective Association, and I am here today to urge Council to reject these proposed changes to the stadium deal. 132 6/6/01 - WHOLE - BILL 010416, 417 It should be self-evident to every member of Council that the financial arrangements that are now being asked to be approved were not envisioned in the original bills setting forth the financing of the stadium deal. These bills prove beyond a shadow of a doubt that more public money is needed to build these stadiums than was envisioned, and it is in direct contradiction to what the public was told, that no additional public money would be needed, and it is also in direct contradiction to the legal representation the lawyers representing the City and PAID made to the court during the hearing challenging the legality of the stadium deal. Passing these bills would break the faith of the people of Philadelphia, who were told that no more money -- I repeat, no more money -- will be taken away from the necessary and the vital public services, which have previously been mentioned, to fund the stadium. It will also make it much more likely that we will win the lawsuit challenging the process used to pass the stadium. Part of the legal challenge is that the hearings were defective 133 6/6/01 - WHOLE - BILL 010416, 417 because they did not inform the public as to the true and accurate public cost of the stadiums. And at this point, the only way to honorably and legally proceed is for Council to accurately calculate the true cost of the stadiums, cap the cost at that amount, and hold new and meaningful public hearings on the financing of the stadium. To do anything else would be deceiving the public, unconstitutional, and lead to more litigation. Thank you.
Thank you very much. Are there any questions or comments from members of the committee? (No further questions.)
Our next witness is Dr. Robert Sklaroff. (Witness comes forward.)
Please identify yourself for the record. 134 6/6/01 - WHOLE - BILL 010416, 417
Councilwoman Verna and Councilpeople, thank you for holding this hearing. I am Robert B. Sklaroff, MD, and I'm here today to voice opposition to approval of Ordinance 416. My disclaimer is as follows. This testimony only related this ordinance. It has not been possible to review --
Excuse me, excuse me, Doctor. Have you circulated your testimony?
We didn't know you were coming in. I would really appreciate your abbreviating your testimony as much as possible. 135 6/6/01 - WHOLE - BILL 010416, 417
Thank you. (Dr. Sklaroff begins reading aloud his written testimony, which is attached hereto in its entirety.)
Do you have much more? Because we will make your entire testimony as part of the record. It will be given to the stenographer. Again, I'm going to ask you to please abbreviate your testimony.
Well, I'm putting a lot of information on the record for legal reasons as well because I want you to have a total knowledge not only of this information --
And I just told you that your entire testimony will be given to the stenographer and it will be in the record.
I understand that, but the public also has to know this information, and a lot of it, three pages of it, is --
What public is here? 136 6/6/01 - WHOLE - BILL 010416, 417
Whomever is here should be able to hear this information because I have a lot of it, three pages of which I acquired on Monday.
Apparently, you did a lot of work on this, and we appreciate it.
That is correct. (Dr. Sklaroff finishes reading aloud his submitted written testimony in its entirety.)
And that's why I wanted to read the whole thing, and I'm subject to a critique if anyone has any attack with anything I've said in terms of its accuracy 'cause my credibility is what trying to put forth at this time.
I just have some pages from the Geneva Convention that he didn't read as to cruel and unusual punishment. I'm sure the doctor means well, but at this late time and hour, I'll forego the question.
Thank you. The Chair recognizes Councilman DiCicco.
Thank you, Madam Chair. 137 6/6/01 - WHOLE - BILL 010416, 417 You know, tomorrow Bill 629 is scheduled. I was just curious, for those folks who are in opposition to Bill 629 and allege that this bill will silence people, I would suggest that they reconsider their support for this bill after this last witness. Thank you anyway. (Laughter.)
Thank you. Are there any questions or comments? (No questions.)
Are there any other witnesses to testify? (No response.)
I would ask all Councilmembers who are in the building to please report to the chambers. We're getting ready to vote 138 6/6/01 - WHOLE - BILL 010416, 417 on the bills that we have just heard. I'd like the record to also reflect that Councilman Longstreth, before leaving, did cast his vote in the affirmative on all bills and amendments. If there are no further witnesses, this will conclude our public hearing. - - - 139 6/6/01 - WHOLE - PUBLIC MEETING
We will now go into our public meeting. And the Chair recognizes Councilwoman Blackwell regarding Bill No. 010416. I'm sorry. The Chair recognizes Councilman Kenney first.
Thank you, Madam Chair. With all due respect and with apologies for any difficulties I'm putting on the Chair or other members of Council, I would reiterate my request on Bill No. 010416, that it be held at least until we come back in September in an effort to draw attention to the firefighters who need relief and whose contract is not being honored by the City and being appealed with City taxpayer dollars to stop the firefighters from receiving their arbitrated award. So I would reiterate that request. I appreciate and respect the Chair's ruling on it. If the Chair rules we will proceed, I will be voting no on the bill and urging my fellow colleagues to also vote no on behalf of our hard-working and courageous firefighters. Thank you. 140 6/6/01 - WHOLE - PUBLIC MEETING
Thank you. The Chair recognizes Councilman Cohen.
With due respect to the Chair, my request has been made. It's a friendly request. I think the Chair understands my request and I think the members of the committee understand my request. It is not in the form of a motion.
Thank you, Councilman. I did hear your request earlier and I did check with the majority of the Councilmembers, and it is the sentiment that, one, the stadiums has absolutely nothing to do with hepatitis C or what is occurring, and I think that this bill is what it is. It's certainly not going to change, and whether we do it today or do it in the fall, it will not change. And I think that what we should be doing is trying to talk to the Administration to try to urge them and show our support for the firefighters and 141 6/6/01 - WHOLE - PUBLIC MEETING see what avenue we could pursue in doing precisely what it is that you're asking.
I accept the Chair's ruling and the wishes. The only thing I would add for the record is that this Council in the past has admirably used linkage like Minority Business Enterprise and minority participation and things like Councilman Nutter's police review board and other types of linkages for worthy goals. I understand the way in which the legislative process works and I think that this might be an issue that will get the Administration's immediate attention, I would suspect. Having that being said, I accept the Chair's ruling.
Councilman, let's do this. If we report this out of committee today, we still do have a week before final passage on it. Maybe during that time, we could have a meeting with the Administration to ascertain what direction we can go in pursuing what it is that you would like to accomplish.
I accept the Chair's ruling on that and appreciate your effort to make 142 6/6/01 - WHOLE - PUBLIC MEETING that happen. Thank you.
Thank you. The Chair recognizes Councilwoman Blackwell.
Thank you, Madam President, I move that Bill 0104 --
I move that the amendment to Bill 010416 be adopted. (Duly seconded.)
It has been moved and seconded that the amendment as presented by adopted. All in favor will signify --
Point of order. With respect to what issue is that bill? What bill is it?
We're voting 143 6/6/01 - WHOLE - PUBLIC MEETING on the stadium bills right now.
We've already voted on the School District bills.
All those in favor will signify by saying aye. Those opposed? The ayes have it and the motion carries. The Chair recognizes Councilwoman Blackwell.
Thank you, Madam President. I move that Bill 010416, as amended, be reported out of committee with a favorable recommendation and also a recommendation for a suspension of the rules so as to permit first reading at our next session of Council. (Duly seconded.)
It's been moved and seconded that Bill No. 010416 be voted out of committee with a favorable recommendation as amended and also a recommendation that the rules of Council be suspended so as to permit first reading at our next Council session. 144 6/6/01 - WHOLE - PUBLIC MEETING All those in favor will signify by saying aye. Those opposed? The record will reflect that Councilmembers Kenney and Cohen voted in the negative. All other Councilmembers have voted in the affirmative; therefore, the bill passes . The Chair recognizes Councilwoman Blackwell with regard to Bill No. 010417.
Thank you, Madam President. I move that Bill No. 010417 be reported out of committee with a favorable recommendation and also a recommendation that the rules be suspended so as to permit first reading at our next session of Council. (Duly seconded.)
It has been moved and seconded that Bill 010417 be reported out of committee with a favorable recommendation and also a recommendation that the rules be suspended so as to permit first reading at our next session of Council. All those in favor will signify by saying aye. 145 6/6/01 - WHOLE - PUBLIC MEETING Those opposed? The ayes have it and the only one voting in the negative is Councilman Cohen, and the record will reflect that. Therefore, the bill passes. The Chair recognizes Councilman Clarke regarding Bill No. 010420. Councilman Clarke?
We're voting on Bill No. 010420, the bill on the last page.
I don't have my sheet in front of me. Thank you, Madam Chair. I move that Bill No. 010420 be reported out with a request for a suspension to be read at the next session of Council. (Duly seconded.)
It's been moved and seconded that Bill No. 010420 be reported out of committee with a favorable recommendation and also a recommendation that the rules of Council be suspended so as to permit consideration at our next Council session. All those in favor will signify by saying aye. 146 6/6/01 - WHOLE - PUBLIC MEETING Those opposed? The ayes have it and the motion carries. And I want to thank everyone very much for all of their patience.
The notice went around to all of the members of the Streets and Services Committee, that the public meeting is being held tomorrow morning at 9:15, and we have 39 bills that have to be still be reported out of that committee.
And I would ask everyone to please be prompt because I think that we have approximately 60-some-odd bills to be considered tomorrow.
Madam Chair, there will also be a Public Property and Public Works Committee tomorrow morning at 9 o'clock. There are only four bills on the calendar and if we can get a quorum quickly, it will move along right away.
I will be available if you need me. Councilwoman Miller? 147 6/6/01 - WHOLE - PUBLIC MEETING
I was out of the chambers when we took a vote on 708 and 709, and I'd like to be recorded as voting aye on both bills and amendments.
Thank you, the record will so reflect that. The record will also reflect that the vote was unanimous for the School District Bill No.'s 000708 and 000709.
I also want to note that the Law and Government Committee will be held at 1:30 in the afternoon, which will be a continuation on the health matters.
Thank you. I would urge everyone -- I know everybody's going to be interested in watching the game tonight, but try to get here early so that we could start business in a very timely fashion. Thank you. (Adjourned 6:07 p.m.) 148 C E R T I F I C A T E I HEREBY CERTIFY that the foregoing proceedings of the Council of the City of Philadelphia of Wednesday, June 6, 2001, were reported fully and accurately by me, and that this is a correct transcript of same. RE: COUNCIL COMMITTEE OF THE WHOLE BILL NO.'S 000708, 000709, 010416, 010417, 010418, 010419, 010420 __________________________________, JOSEPHINE CARDILLO, Registered Professional Reporter