COUNCIL OF THE CITY OF PHILADELPHIA PUBLIC HEARING COMMITTEE ON FISCAL STABILITY AND INTERGOVERNMENTAL COOPERATION - - - Room 696, City Hall Philadelphia, Pennsylvania May 13, 2003 2:48 p.m. - - - RESOLUTION 030030 - Resolution providing for the approval by the Council of the City of Philadelphia of a Revised Five Year Financial Plan for the City of Philadelphia covering Fiscal Years 1004 through 2008... - - - PRESENT: COUNCIL PRESIDENT ANNA C. VERNA, Chair COUNCILWOMAN JANNIE BLACKWELL COUNCILWOMAN BLONDELL REYNOLDS BROWN COUNCILMAN DARRELL L. CLARKE COUNCILMAN DAVID COHEN COUNCILMAN W. WILSON GOODE, JR. COUNCILMAN JAMES F. KENNEY COUNCILWOMAN JOAN L. KRAJEWSKI COUNCILWOMAN DONNA REED MILLER COUNCILMAN MICHAEL A. NUTTER COUNCILMAN ANGEL L. ORTIZ COUNCILMAN FRANK RIZZO COUNCILWOMAN MARIAN B. TASCO - - - V A R A L L O, INCORPORATED LITIGATION SUPPORT SERVICES 1835 Market Street, Suite 600 Philadelphia, Pennsylvania 19103 215.561.2220 215.567.2670 I N D E X RESOLUTION 030030 PAGE ROBERT DUBOW, Budget Director ............... 3 05/13/03 - FISCAL STABILITY - RES. 030030
The select Committee on Fiscal Stability and Intergovernmental Cooperation is now in Session regarding public hearing on Resolution 030030. I would ask Mr. McPherson to please read the title of the Resolution.
Resolution providing for the approval of the Council of the City of Philadelphia to revise Five-Year Financial Plan for City of Philadelphia covering Fiscal Years 2004 through 2008.
Yes. Rob Dubow, Budget Director, as you probably know by now. We are recommending some changes to the Five-Year Plan based on the amendments that we proposed for the '04 budget. In the testimony of the '04 budget, I ran through with you the increases we were proposing. I'd also like to walk through the decreases. In total we were looking for $108.6 million in funding over the life of the plan. That was to pay for three things. One was the fire 4 05/13/03 - FISCAL STABILITY - RES. 030030 fighters award, the cost of that award that exceeded what was exceeded in the Plan. There was 030073, it was a wage tax reduction Bill. And the third was the expenditures that we were proposing to add to the plan. That totaled 108.6. To pay for that there re a series of actions that we put in the Plan. The first is lowering our assumed growth in our Social Security payments. We had assumed pay raises in that projection but, as you know, in the Five-Year Plan we don't assume pay raises. So we've now made that assumption consistent with the pay raise portion of the Plan. The Plan originally assumed that the prison census would be 8,000. It's been between 7100 and about 7400 for the last five or six months. So we're taking that assumption down to 7500, our census. We're also reducing our indemnities budget starting in '05, our disabilities budget starting in '05. We're assuming that there's one year of debt service on borrowing to expand the Convention Center instead two as in the original budget. We're reducing our vehicle acquisition 5 05/13/03 - FISCAL STABILITY - RES. 030030 budget which is consistent with our plan to reduce the size of the fleet and we're reducing the ending fund balance from just over million to just under 5 4 million. 6
Mr. Dubow, the 7 amendments that we have approved will be handled as 8 technical corrections? 9
Thank you, Madam 12 Chair. 13 Mr. Dubow, do you have a document that 14 shows -- I know there was one handed out at the budget meeting the other day, the much-discussed budget meeting.
Yeah, I heard about it. You should have been invited. Do you have a document that lays out what you were just talking with us about with regard to how you're dealing with --
Yes, it should have been distributed. There's a three-page document. It's three tables. The first table is titled "City 6 05/13/03 - FISCAL STABILITY - RES. 030030 Council Requests for Additional Funding Recommended Increases." The second page goes through the adjustments.
Just tell me one thing. What's the total cost of Bill 030073?
Councilman, that's the Bill that -- Mr. Dubow will correct me. This is the Bill offered by Councilman Mariano that, I believe -- this is the Bill that says if the real estate tax revenues go up by more than 2 percent of the previous year, the excess dollars are used to reduce the resident wage tax rates. The cost of the Bill over the Five-Year Plan is $45 million. Is that a correct explanation, Mr. Dubow?
I guess what has always kind of fascinated me about this is, how did you out of no where found the dollars to be able to 7 05/13/03 - FISCAL STABILITY - RES. 030030 deal with a $45 million Bill over the next few years, but we could not figure out -- I'll even use the number that you prefer -- figure out how to give people an $8 million relief in property taxes by way of the percent cap Bill. How is it that you 7 could find money to cover $45 million but you 8 couldn't find money to cover 8? 9 Did I not ask for enough? Was the Bill 10 too cheap? I'm just financially fascinated by how you were able to do that.
Well, we show here there are a series of adjustments we made. They're not without risk. We looked to places where we thought that the risks were less than taking them from other areas of the budget, and that's how we found the money.
Maybe it's just shear coincidence, but as I look at this chart, I see that the savings in if FY '04 just happen to be $8.1 million. And obviously what we were talking about in terms of the property tax issue was for the current fiscal year. But I just wondered if, you know, that same pencil sharpening had been done 8 05/13/03 - FISCAL STABILITY - RES. 030030 possibly for FY '03, we might have actually been able to provide some amount of relief to people. It's an interesting situation, where a $45 million Bill we can figure out how to adjust our Five-Year Plan for that; but an $8 million Bill, we couldn't figure out to do that. It's interesting. I'd just thought I'd ask the question. You're fine. Thank you, Madam Chair.
Madam President, I just can't resist the obvious. Obviously, ways can be found to move around money, save money, make adjustments wherever the Administration wants to. I think the word "Administration" is a euphemism for the Mayor. If the Mayor thinks a policy ought to exist, he finds a way, whether he gets involved in a $300 million loan for the schools or for NTI or for whatever purpose or for tax reduction. But if he's not for it, it doesn't matter if it's only a few thousand dollars there's no money for it. Wouldn't that be an pretty accurate picture, Mr. Dubow?
No, I don't think that's accurate. 9 05/13/03 - FISCAL STABILITY - RES. 030030
I think a lot of what we've added to the '04 budget and to the Plan was as a direct result of requests from City Council. You asked us to go back to the commissioners; we did. We added funding. You asked us to go back to Clerk of Quarter Sessions, and we did and added funding. The same for the BRT, the same for the Cultural Fund, the same for the Recreation Activities Fund. The ordinance that reduce the wage tax was a City Council ordinance; it wasn't an Administration. So I actually say the bulk of what we found here was to pay for things that Council proposed, not that the Administration proposed.
Well, I congratulate the Mayor. Without debate with anybody, without telling anybody in advance, he suddenly announces huge grants of money, Safe Streets, NTI, loans of all kinds involving hundreds of millions of dollars. And then he has squabble over a few thousand dollars in City Council. I think it satisfies a macabre interest in showing that City Council's not capable of dealing with big problems, therefore they 10 05/13/03 - FISCAL STABILITY - RES. 030030 squabble about a few hundred thousand dollars while the Mayor worries only about hundreds of millions. And I think that's the story today. Thank you Madam President.
I think there's actually over the life of the Plan well over $50 million of things that came from Council, so I don't agree with your characterization.
Thank you. Are there any other questions or comments from Members of the Committee? (No response.)
Do we have anyone else to testify? (No response.)
Seeing none, the Chair recognizes Councilwoman Tasco for a motion on Resolution No. 030030.
Madam President, I move that Resolution 030030 be reported out of Committee with a favorable recommendation.
Do I hear a 11 05/13/03 - FISCAL STABILITY - RES. 030030 second? (Duly seconded.)
It has been moved and seconded that Resolution No. 030030 be reported out of Committee with favorable recommendation. All in favor will signify by saying aye. (Aye.)
Those opposed? The ayes have it and the Resolution will be reported out of Committee with a favorable recommendation. (Council adjourned at 3:00 p.m.) 12 C E R T I F I C A T I O N I HEREBY CERTIFY that the foregoing proceedings of the Council of the City of Philadelphia of May 13, 2003, were reported fully and accurately by me, and that this is a correct transcript of the same. RE: COMMITTEE ON FISCAL STABILITY AND INTERGOVERNMENTAL COOPERATION ___________________________ Lisa C. Bradley, RPR and Notary Public