COUNCIL OF THE CITY OF PHILADELPHIA COMMITTEE ON FINANCE - - - Room 400, City Hall Philadelphia, Pennsylvania Thursday, February 16, 2006 1:35 p.m. - - - PRESENT: COUNCILWOMAN JANNIE BLACKWELL, CHAIR COUNCILWOMAN BLONDELL REYNOLDS BROWN COUNCILMAN W. WILSON GOODE, JR. COUNCILMAN BRIAN J. O'NEILL COUNCILMAN JUAN RAMOS BILL 050371 - An ordinance amending Section 19-203 of The Philadelphia Code, entitled "Payroll Deductions"... BILL 050661 - An ordinance authorizing the creation of a loan or loans to provide funds for and toward various capital municipal purposes; authorizing the Mayor, City Controller and City Solicitor or a majority of them to sell bonds at public or private negotiated sale... BILL 060015 - An ordinance amending Chapter 19-200 of The Philadelphia Code, entitled "City Funds - Deposits, Investments, Disbursements," by clarifying the requirements for city depositories. - - - V A R A L L O Incorporated Litigation Support Services Eleven Penn Center 1835 Market Street, Suite 600 Philadelphia, Pennsylvania 19103 215.561.2220 215.567.2670 2
Good afternoon. What a great crowd. This must be the post Valentine's Day group. At any rate, thank you all for being here. We will now -- we're one short. We have to wait. Sorry to hold everybody up. I hope we go quickly. I have a PHA Board meeting at 2:00. I'd like to be able to do all these things we have to do all at the same time. (Pause.)
Thank you very much. We will now convene the Committee on Finance with regard to three bills that we'll hear today. We have a quorum present. To my right, on the end is Councilman Juan Ramos. Next to him, Councilman Brian O'Neill. To my left, Councilman W. Wilson Goode, Jr., and to his left, the Honorable Blondell Reynolds Brown, who is Vice Chair of this Committee. We will ask the Clerk to read the title of the first bill listed on the 3 2/16/06 - FINANCE - BILL 050371, ETC. Calendar, which is Bill No. 050371 dealing with the Firefighters PAC. And if you are here, would you please come forward, those who will testify. Thank you very much. I see my friends Les Yost and Bill Dell. I know it's a good day when you're here. Thank you. Clerk.
Bill 050371, an ordinance amending Section 19-203 of The Philadelphia Code, entitled "Payroll Deductions," by adding a new subsection permitting City employees, who are bargaining unit members of Firefighters' Local 22, to authorize payroll deductions for contributions to FIREPAC, all under certain terms and conditions.
Thank you very much. Welcome. Thank you for being here and we welcome your testimony. MR. McBRIDE: Thank you, Councilwoman. 4 2/16/06 - FINANCE - BILL 050371, ETC.
Certainly. MR. McBRIDE: Honorable members of Council, my Union sisters and brothers, my fellow citizens, good afternoon. My name is Brian McBride. I am a Fire Lieutenant and a proud 30-year veteran of the Philadelphia Fire Department. I am also honored to serve as President of the International Association of Firefighters Local 22, the Union that represents the 2,200 active Firefighters and Paramedics who risk their lives daily in order to serve the citizens of Philadelphia. I appear today before this Honorable Council to request that Council amend Section 19-203 of The Philadelphia Code to permit Firefighters and Paramedics to authorize voluntary payroll deductions for contributions to FIREPAC, a political action committee that is intended to promote public awareness and support of the issues related to the 5 2/16/06 - FINANCE - BILL 050371, ETC. health and safety of the City's Firefighters, Paramedics and citizens. FIREPAC is funded primarily through voluntary contributions made by active and retired Philadelphia Firefighters and Paramedics, which activities are protected under the First Amendment of the United States Constitution. This freedom of expression was confirmed in federal court as a result of litigation initiated by Local in 2002. 14 City Code Section 19-203 15 currently permits employees to make 16 voluntary contributions via payroll 17 deduction to a wide variety of 18 organizations, including labor 19 organizations, relief associations, 20 credit unions, pension funds and 21 insurance companies. In fact, Section 22 19-203 already permits deductions for contributions to a political action committee that is administered by AFSCME District Council 47. Thus, the proposed 6 2/16/06 - FINANCE - BILL 050371, ETC. amendment would simply provide the Firefighters and Paramedics with the same payroll deduction privilege that is already provided to other City employees. It is the Union's position that amending Section 19-203 to add FIREPAC is not only a matter of basic fairness to Firefighters and to Paramedics. We also believe that amending the Code will improve the level of public discourse on issues related to emergency services in our City by facilitating the involvement of the men and women who actually provide these services to the citizens of Philadelphia. We believe that such involvement will result in a more informed and hopefully better-served public, and we ask that this Honorable Council help to improve the public discourse on these issues by passing the proposed amendment. This completes my testimony. On behalf of over 4,000 retired and active Philadelphia Firefighters, members 7 2/16/06 - FINANCE - BILL 050371, ETC. of Local 22, I wish to thank each and every Councilmember for your time and attention to this matter, as well as for your longstanding support of the men and women of the Philadelphia Fire Department who risk their personal safety each and every day in order to protect the lives and property of the Philadelphia citizens. Thank you.
Thank you very much. We thank you as well and all who are here. We see people from across the board, Eugene Blagmon, we see Tom Cronin and all of our friends who are here across the City who do such a great job. Are there any questions or statements from members of the Committee? (No response.)
That means support, I think. 8 2/16/06 - FINANCE - BILL 050371, ETC.
Absolutely. We will do the third bill 5 listed, Ordinance No. 060015, and we ask the Clerk to read the title of the bill.
Bill 060015, an ordinance amending Chapter 19-200 of The Philadelphia Code, entitled "City Funds - Deposits, Investments, Disbursements," by clarifying the requirements for City depositories.
Thank you. Is there anyone here to testify on this bill? City Treasurer. Thank you. Welcome. Thank you very much. Please identify yourself to the record and begin your testimony.
Good afternoon, Madam Chairman and members of the 9 2/16/06 - FINANCE - BILL 050371, ETC. Committee on Finance. I am John Nacchio, the City Treasurer for Philadelphia. I appreciate the opportunity to testify before you on matters related to City depositories and financial institutions authorized to accept City deposits. I remind the Council that the principal functions of the City Treasurer's Office is to administer the disbursement and distribution of printed checks that includes the coordination of associated forms of electronic payment processes. This function is in addition to managing the City's cash in order to provide daily liquidity in a variety of bank accounts to cover the disbursed payments while simultaneously working to maximize the daily investment of excess cash reserves. The City Treasurer's principal objective is to protect and grow the financial assets of the City. On December 1, 2005, the City Council of Philadelphia approved a resolution, resolving that the Office of 10 2/16/06 - FINANCE - BILL 050371, ETC. the City Treasurer shall commission an annual study of lending disparities by City depositories and produce a report deliverable to the Mayor and to the City Council. The annual report shall include a comprehensive analysis of home lending, small business lending and branch patterns, as well as the measurement of the community reinvestment and fair lending performance of banks receiving City deposits. Please be advised that as of the date of this testimony, funds are not available to the City Treasurer's Office in the FY2007 requested budget appropriation for this study, as approved by City Council. The City Treasurer has no 19 objection to the request annually that City depositories that are authorized under Section 19-201 certify compliance with Section 17-104 of The Philadelphia Code and provide a long-term strategic plan that addresses how the depositories will match or exceed peer lending 11 2/16/06 - FINANCE - BILL 050371, ETC. performance to address disparities in its lending and investment activities for the July 1st of each year certification to the President of City Council. That concludes my testimony. Do you have any questions?
Thank you very much. Questions or statements from members of the Committee? Councilman Goode.
Thank you, Madam Chair. Mr. Nacchio, thank you for your testimony. Just a real simple question. On the matter of the cost of the report, is that something that you're going to request or we should request at the time of your budget hearing, or how would you like to handle that?
Yes, of the report. For the record, the study cost 12 2/16/06 - FINANCE - BILL 050371, ETC. us $35,000 for the analysis of one year's data. Council bought two years' worth of data, 2003, 2004. What we need is data for 2005, which is not yet available. What we basically need is an amount sufficient for one year's data within the budget. It only cost us $35,000. I'm sure that will be negotiable. I don't know if that's a nominal fee or if that's something that we need to deal with through budget testimony.
As part of my preparation for the budget, I will make the Budget Director aware of the amount and the need for this contract.
Thank you very much. Are there other questions or concerns from members of the Committee? (No response.)
Thank you. We'll now ask the Clerk to read 13 2/16/06 - FINANCE - BILL 050371, ETC. the title of the third bill on our agenda, Bill No. 050661, dealing with the Capital Budget. And would those who are here to testify feel free to come forward as he reads that bill. Thank you.
050661, an ordinance authorizing the creation of a loan or loans to provide funds for and toward various capital municipal purposes; authorizing the Mayor, City Controller and City Solicitor, or a majority of them, to sell bonds at public or private negotiated sale.
Good afternoon, Councilwoman Blackwell and members of the Finance Committee. My name is Vince Jannetti. I'm the Director of Finance for the City. With me are various officials from the Finance Director's Office and the Capital Budget Office. I am here today to testify on behalf of Bill No. 050661, which was introduced on June 16, 2005, and to testify in support of this bill. 14 2/16/06 - FINANCE - BILL 050371, ETC. The purpose of this bill is to obtain approval from City Council to place a loan authorization question on the Primary Election Ballot on Tuesday, May 16, 2006. The loan question requests an increase in indebtedness from the electorate in an amount not to exceed $69,680,000 to fund the City's fiscal year 2006 Capital Budget. State law requires the City to place a question before the electorate during an election to increase its borrowing authority. The loan authorization, if approved, would finance capital projects classified for the following purposes and in the following amounts: For Transit projects, $5,067,000; for Streets and Sanitation projects, $17,678,000; for Municipal Buildings, $25,738,000; Parks and Recreation and Museums, $17,558,000; and for Economic and Community Development, $3,639,000. In order to provide appropriate time to advertise and print the ballot 15 2/16/06 - FINANCE - BILL 050371, ETC. question to ensure that it is placed on the May 16, 2006 Primary Ballot, the bill 4 should be enacted no later than March 16, 2006. The City Commissioners need to have a certified copy of the Loan Authorization ordinance and ballot question by March 30, 2006. Finally, attached as part of this testimony is the proposed ballot question requesting loan authorization from the electorate of the City. This concludes my written testimony. I also request that the rules of Council be suspended to allow for first reading at the next meeting of Council. I'd be happy to answer any questions Council might have at this time.
Thank you very much, Mr. Jannetti. Councilman O'Neill.
Yes. Mr. Jannetti, I'm fairly 16 2/16/06 - FINANCE - BILL 050371, ETC. familiar with this issue, and I just wanted to know if you're aware that the Administration originally reduced in the Capital Budget of '06 the recreation amount that Councilmembers have control of from million to 5 million. It was 8 put back in by amendment. The budget was 9 signed, but my understanding is, there's 10 been no agreement on whether the Capital 11 Projects Office will be authorized to 12 spend the 12 million as opposed to the 5, and that we don't have any agreement on that yet, and doing this act, which you're requesting, would then be premature. Is there an agreement that I'm not aware of?
Let me go back to '05 just to give you some perspective. In '05, the same issue occurred, and the budget was reduced by 17 2/16/06 - FINANCE - BILL 050371, ETC. the Administration from the 12 million to the million. It was amended back in by 4 Council, signed by the Mayor at the $12 5 million level. Council then authorized the bond question assuming that the $12 million, since the Mayor had signed the budget with the amendment, would be spent, and we were told, with Mr. Tustin sitting here from the Capital Projects Office, that the Administration told him -- and he works for the Administration -- that we can only spend a half a million dollars a district, or $5 million. That's the '05 budget. So having been burned once, we did not want to put the ballot question on for '06 until we've got an understanding, an ironclad understanding, that the $12 million that was approved in the budget, signed by the Mayor, will be spent by the Capital Projects Office. And if there had been those discussions further, since the budget passed and since we missed the deadline in November, 18 2/16/06 - FINANCE - BILL 050371, ETC. I think this is premature today, but if you have something to clarify that, I'd love to hear it.
Well, Councilman, I'm told that the additional $7 million is in the Parks and Recreation line.
Well, it was in last year, too, and it still is. There's $7 million that isn't allowed to be spent from the '05 approved bond issue.
The authorization is there, but if Mr. Tustin isn't allowed to spend it, it doesn't really matter if it's there, because the Administration controls what he's allowed to process. So I've had many meetings on this, and I respect his position. He's not going to make the decision. He's going to follow instructions. And I can 19 2/16/06 - FINANCE - BILL 050371, ETC. assure you that -- no one wants to hold up the ballot question, unless we're going to be back where we were a year ago. We still haven't resolved '05. '05 has $7 million authorized by the voters, unauthorized by the Administration to spend.
I was about to say for me the key thing is that the money is in the authorization.
Right, but last year's is, too, the '05, and we are not allowed to spend that. Is that your understanding? Does CPO work under Finance or under the Managing Director?
Can you 20 2/16/06 - FINANCE - BILL 050371, ETC. verify that information for the record?
Thank you very much. Are there any other questions or concerns from members of the Committee? (No response.)
Seeing none, this will end our hearing part of this, our gathering, and we will enter into the stated meeting.
Thank you. The Chair recognizes Councilman O'Neill for a motion with regard to Bill 25 No. 050371. 21 2/16/06 - FINANCE - BILL 050371, ETC.
Madam Chair, I move that Bill No. 050371 be reported out of this Committee with a favorable recommendation and a further recommendation that the rules of Council be suspended at the next session. (Duly seconded.)
It has been moved and seconded that Bill No. 11 050371 be reported out of Committee with a favorable recommendation and, furthermore, that the rules of Council be suspended so as to permit first reading at our next session of Council. All in favor will say aye. (Aye.)
The ayes have it, and so it passes. The Chair recognizes Councilman Goode with regard to Bill No. 060015.
Thank you, Madam Chair. I move that Bill 060015 be reported out of Committee with a favorable recommendation and that the 22 2/16/06 - FINANCE - BILL 050371, ETC. rules of Council be suspended so as to permit first reading at our next Council session. (Duly seconded.)
It has been moved and seconded that Bill No. 8 060015 be reported out of Committee with a favorable recommendation and, furthermore, that the rules of Council be suspended so as to permit first reading at our next session of Council. All in favor will say aye. (Aye.)
The ayes have it, and so the bill passes. With regard to Bill No. 050661, this bill will be referred to our next Council Finance hearing on March 6th at 11:00 a.m. so that we may try to resolve this issue dealing with the Recreation Department monies allotted and monies 23 2/16/06 - FINANCE - BILL 050371, ETC. spent. So that will be heard, along with our PGW hearing on that date, March 6th at 11:00 a.m. This Committee hearing then is recessed until that date for that one bill. The others are passed out. Thank you, everyone. (Committee on Finance adjourned at 2:00 p.m.) - - - 24 CERTIFICATE I HEREBY CERTIFY that the proceedings, evidence and objections are contained fully and accurately in the stenographic notes taken by me upon the foregoing matter on February 16, 2006, and that this is a true and correct transcript of same. ______________________________ MICHELE L. MURPHY RPR-Notary Public (The foregoing certification of this transcript does not apply to any reproduction of the same by any means, unless under the direct control and/or supervision of the certifying reporter.)