¡›î› COUNCIL OF THE CITY OF PHILADELPHIA PUBLIC HEARING COMMITTEE OF THE WHOLE - - - Room 401, City Hall Philadelphia, Pennsylvania Wednesday, February 13, 2002 10:00 a.m. - - - BILL NO. 020028 - An Ordinance to adopt a Fiscal 2003 Capital Budget. BILL NO. 020029 - An Ordinance to adopt a Capital Program for the six Fiscal Years 2003-2008 inclusive. - - - PRESENT: COUNCIL PRESIDENT ANNA C. VERNA COUNCILWOMAN JANNIE BLACKWELL COUNCILWOMAN BLONDELL REYNOLDS BROWN COUNCILMAN DARRELL L. CLARKE COUNCILMAN DAVID COHEN COUNCILMAN FRANK J. DI CICCO COUNCILMAN WILSON W. 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 ANGEL L. ORTIZ COUNCILMAN FRANK RIZZO COUNCILWOMAN MARIAN B. TASCO - - - VINCENT VARALLO ASSOCIATES, INC. Registered Professional Reporters Eleven Penn Center 1835 Market Street, Suite 600 Philadelphia, Pennsylvania 19103 (215) 561-2220 ¡›î› I N D E X BILLS 020028, 020029 PAGE Maxine Griffith, Planning Commission ......... Robert Dubow, Budget Director ................ 19 Richard Tustin, Capital Program Office ....... 21 Gary Jastrzab, Planning Commission ........... 41 Paul Deegan, PIDC ............................ 42 Carlton Williams, Dept. of Recreation ........ 49 Jane Curato, Director of Commerce ............ 59 Estelle Richmond, Managing Director .......... 75 Karl Bortnick, Information Technology ........ 79 Stephanie Craighead, Fairmount Park Commission 98 William Johnson, Streets Dept. ............... 105 Joseph Syrnick ............................... 108 Cheryl Kritz, Law Department ................. 124 Thomas Kline, Capital Program Office ......... 134 Joe Doyle, Streets Dept. ..................... 148 Beth Ounsworth, Friends of Phila. Parks ...... 171 Maya Burnett, Family of the Dell East ........ 174 Rena Brown, Family of the Dell East .......... 175 Warren Haskins, Family of the Dell East ...... 178 Carlton Williams, Dept. of Recreation ........ 180 3 2/13/02 - WHOLE - BILLS 020028, 020029
I regret the delay. This is the public hearing of the Committee of the Whole regarding Bill Nos. 020028 and 020029. I ask Mr. McPherson to please read the title of the bills.
Bill No. 020028, an ordinance to adopt the Fiscal 2003 Capital Budget. Ordinance 020029, an ordinance to adopt the Capital Program for the six Fiscal Years 2003-2008 inclusive.
Mr. Dubow, are you going to be the first to testify? Good morning. Please identify yourself for the record and proceed with your testimony.
Good morning, Council President. My name is Maxine Griffith, and I'm Executive Director of the City Planning Commission and Secretary for Strategic Planning. Before I move forward with my formal remarks, I'd like to take a moment to thank the gentleman on my right, Gary Jastrzab who is our Director of Policy and Strategic Planning. As you may know, Ernie Leonardo, who for many years shepherded the Capital Program, took his dream job 4 2/13/02 - WHOLE - BILLS 020028, 020029 in New York. He's now traveling all over the world. We saw him during the holidays. He's doing fine. But he did leave us in a little bit of pickle. And Gary Jastrzab and his staff stepped into the breach wonderfully to guide the Capital Program through this process. And I'd like to publicly thank him and also acknowledge someone else he'd like me to thank, I'm sure, and that's Liz Kozart who to assisted him. So to Gary, Liz, and the entire Capital Program staff, I'm very appreciative. As you know, one of the Home Rule Charters mandated responsibilities of the City Planning Commission is to prepare and submit to the Mayor a recommended Capital Budget and Program. As you know, the Capital Budget and Program establishes a plan for investment in the City's physical infrastructure, public facilities, and municipal buildings. And we have some slides, if we can begin those now. This morning I'm pleased to present for your consideration the recommended FY2003-2008 Capital Program and the FY2003 Capital Budget. We believe we have crafted a lean and efficient Capital Program that makes effective use of limited 5 2/13/02 - WHOLE - BILLS 020028, 020029 resources. 2 billion over a six-year period renew City's extensive infrastructure and public facilities. The total cost for the 96 recommended projects for FY2003, the first year of the program, is 507 million of which 90 million or percent is 11 funded by new city tax-supported loan funds. New 12 City self-sustaining loans, which are issued 13 primarily by the Airport and the Water Department 14 account for 220 million or 43 percent of the total 15 budget year funds. Federal and State funding 16 combined total 156 million or 31 percent of which 97 17 million is for SEPTA-related projects. 18 New City-tax supported loan funding is very competitive across departments because borrowing capacity is limited by the Constitution by the Commonwealth of Pennsylvania as well as by the City's ability to pay of resulting debt. And of course, Mr. Dubow will speak to that in more detail in his testimony. For these reasons, most of the difficult 6 2/13/02 - WHOLE - BILLS 020028, 020029 decisions represented in this recommended program focus on projects that require new City tax-supported funding. While budget year funding is about tee programmed last year for FY2003, subsequent years will be reduced as the City approaches its debt limit. And again, Rob will speak to that in more detail. Most of my testimony focuses on FY2003, the budget year of the Capital Program since budget year funding will become actual appropriations. Projects and priorities for the subsequent five years of the Capital Program are projections based on our best estimates of future needs. The largest portion of the budget year funds almost 211 million or 42 percent is recommended for neighborhood development and includes renovations and improvements to basic neighborhood facilities and infrastructure. Economic development is the next largest allocation with 136 million or 27 percent recommended in support of the City's economy. Neighborhood development projects directly support the Neighborhood Transformation 7 2/13/02 - WHOLE - BILLS 020028, 020029 Initiative, NTI, through the renewal of community facilities including libraries, neighborhood parks, and recreation centers, police and fire stations, and site improvements in support of neighborhood housing and commercial revitalization programs.
Other improvement projects, such as those for transit stations and other SEPTA facilities, street resurfacing, street lighting and signage and replacement of water and sewer mains are also funded through the Capital Budget. The City will continue to assess neighborhood infrastructure to ensure that the Capital Budget and Program will most effectively support the goals. In the Recreation Department funds are recommended for the improvement and renovation of playgrounds, courts, lighting, and buildings including roofing, heating, safety systems and code compliance. Existing swimming pools will continue to be upgraded to improve health and safety and to minimize water losses due to outdated circulation systems. Eighteen neighborhood playgrounds and recreation centers will be renovated using million of City funds matched by million grant from the 2/13/02 - WHOLE - BILLS 020028, 020029 Commonwealth. A total of over 13 million in new funds are recommended for recreation projects in FY2003. The Fairmount Park Commission will continue to renovate and restore its grounds and athletic facilities, many of which serve the City's neighborhoods. Funding is provided for improvements at Fisher Park, the Cobbs Creek Recreation Area, and other sites throughout the City. The Free Library is completing the major rehabilitation of its branch libraries using a combination of public and private funding. 4 million will support a major renovation of the Walnut Street West Branch Library in West Philadelphia and the replacement of the Widener Branch in North Philadelphia. Additionally, City Capital funding of 395,000 will enable the Free Library to make other necessary building systems and structural improvements at its branch libraries. 8 million for site improvements is recommended for the Office of Housing and Community Development. These site 9 2/13/02 - WHOLE - BILLS 020028, 020029 improvements include new curbs, sidewalks, and other physical infrastructure at housing redevelopment sites. These include the Cecil B. Moore Homeownership zone, Richard Allen Homes, Schuylkill Falls and Ludlow Village. To have continue improvements in neighborhood commercial centers, 1 million in new City funds is recommended for site improvements, curbs, sidewalks, street trees, signs, lighting and public parking. Such improvements, provided they are part of a comprehensive strategy for the area, are intended to attract and leverage other public and private investment in both commercial and residential projects. 3 million is recommended for the Streets Department in FY2003 for neighborhood street reconstruction and resurfacing as well as for traffic control and street lighting improvements, school and pedestrian crossings, signs, signals, and bridge reconstruction. These City funds will be matched by almost 11 million of State and Federal funds. 7 million in federal and state funds is recommended transit 10 2/13/02 - WHOLE - BILLS 020028, 020029 infrastructure investments that support neighborhood development. Among these are the reconstruction of the Market Street Elevated Line, the construction of the Girard Avenue light rail line, station renovations, and various other track, signal, and infrastructure improvements. The Water Department will also continue to invest heavily in replacement of water distribution mains and sewer lines serving City neighborhoods with more than 50 million in self-sustaining funds recommended for these projects in FY2003. The Health Department will continue upgrading its health centers with new tax-supported funding of 620,000 in FY2003. Windows will be replaced at Health Center 4 while other centers will receive new equipment and furnishing to provide better service and more effectively compete with private sector providers in attracting and maintaining insured customers.
The Fire Department has undertaken a major capital investment program to improve the working conditions for its fire fighting personnel, and to insure continued operational effectiveness of 11 2/13/02 - WHOLE - BILLS 020028, 020029 all of its stations. Recommended funding in FY2003 emphasizes the rehabilitation of existing fire stations with 9O0,000 for heating, ventilation, and air conditioning systems, roof replacements, and interior and exterior renovations. The goals of the City's economic development program are to a retain and attract business, provide jobs for Philadelphians, revitalize City's neighborhoods as centers of economic activity, and maximize the potential for other economic development activities. 5 million in new City funding and to industrial and waterfront development. As mentioned earlier, 1 million is also recommended for neighborhood commercial center improvements. The City supports industrial development in both older inner City industrial areas and in the newer City-managed industrial parks, primarily in the far northeast and southwest sections of the City. In the City-managed industrial parks, tax-supported funds matched by revolving funds from the City's Industrial and Commercial Development Fund are scheduled for building or renewing roadways 12 2/13/02 - WHOLE - BILLS 020028, 020029 and utility lines in order to maintain and increase the number of available industrial sites. A total of 2 million in City tax-supported funding is recommended for improvements for the Philadelphia Naval Business Center, the City's industrial parks, and for the City's Enterprise and Empowerment Zones. Penns Landing is enhancing its position as a visitor destination. The Hyatt Regency Hotel located adjacent to the Independent Seaport Museum is complete. Work on the family entertainment center is expected to begin this year. A total of 510,000 is recommended in FY2003 for pier reinforcement, sea wall reconstruction, and general site improvements. Philadelphia International Airport is an important economic development engine for the City. The airport is in the midst of an ambitious expansion program bringing this facility up to world class standards. In 2000, the latest year for which statistics are available, Philadelphia International Airport was the 19th busiest airport in the country, up from 24th in 1996. Nearly 21,000 people are now employed there. A fourth runway was recently completed for use by smaller commuter airlines, and 13 2/13/02 - WHOLE - BILLS 020028, 020029 last June Terminal F opened to provide better service for commuter aircraft passengers. Construction continues on Terminal 1, the new international terminal which is scheduled to open shortly. In addition, improvements to existing facilities such as rest room renovations and installing of moving sidewalks will be undertaken to ensure passenger comfort and convenience. A total of 88 million in new City self-sustaining funds matched by almost million in federal dollars is 12 budgeted for physical improvements at the City's two 13 airports. 14 Health and safety projects make 15 improvements to City facilities that promote public 16 health, safety, and welfare. One example is the 17 City's water and waste water treatment plants where 18 50 million of self-sustaining funding is recommended 19 for necessary improvements. 20 million in 20 self-sustaining funds matched by 10 million in Federal funds is also recommended for security improvements at Philadelphia International Airport. Other health and safety projects include improvements to life safety systems at public buildings, asbestos abatement at municipal 14 2/13/02 - WHOLE - BILLS 020028, 020029 facilities, and City matching funds for SEPTA public transit projects that involve rider safety and accessibility. Funding for facilities serving our most needy citizens is also included in the recommended budget.
A total of 900,000 is recommended for mechanical and interior improvements at the Stenton Family Shelter, the Riverview Home, and the Gateway Shelter for Adult Men. 2 million is recommended for security improvements at the Philadelphia Industrial Correction Center and the Detention Center. At the zoo, 250,000 is recommended in budget year to install security alarm and voice evacuation systems at a number of zoo buildings and retail sites and for asbestos and lead abatement in the Penrose Laboratory. The City has used Capital Program funding to make substantial progress towards bringing municipal facilities into compliance with the Americans with Disabilities Act, ADA. Increasingly, accessibility improvements are accomplished as City agencies undertake specific 15 2/13/02 - WHOLE - BILLS 020028, 020029 renovation projects. The Capital Program Office continues to initiate ADA improvements on an as-needed basis. No new funding is recommended in FY2003 for this purpose because the program has sufficient funds available to cover anticipated projects during the coming year. Regular allocations for ADA improvements will resume in 2004. The Capital Program enhances the City's fiscal stability by investing in projects that enable government services to be provided more efficiently. The Police and Fire Departments will continue to improve their dispatch and communication systems technology. From the Managing Director's Office, the City will develop and integrated database to better coordinate departments that provide services to children and families. This integrated case management system will improve the efficiency and effectiveness of the Departments of Health and Human Services and the Office of Emergency Shelter and Services. Also recommended for funding are a variety of projects to renovate and modernize buildings used for essential City operations and 16 2/13/02 - WHOLE - BILLS 020028, 020029 functions. Among these are the family court building on Logan Circle for which 2 million is recommended in the budget year for phased renovations. Also recommended for improvements are various Streets Department's supported facilities such as the Traffic Signal and Sign Shop, the Street Lighting Shop, and the Sanitation Division's Torresdale Yard. Funds for the renovation of the Department of Licenses and Inspection Field Office No. 6 are also included in our recommended budget. We have also recommended budget year funding for mechanical renovations at the Medical Examiner's Office and much needed HVAC renovations at the Health Administration Building. The Municipal Energy Office, MEO, has been spearheading efforts to make the City's use of energy more efficient. The Green Lights Program focuses on installing energy-efficient lighting fixtures. In FY2003, 250,000 is recommended for lighting upgrades at facilities throughout the City. A similar amount is recommended for the Energy Star Program to replace HVAC and other mechanical systems 17 2/13/02 - WHOLE - BILLS 020028, 020029 at various facilities with more efficient units. The Capital Program is committed to these and similar projects because they generate substantial operating budget paybacks in the form of reduced energy costs. Quality of life projects contribute to the livability of the City as a whole. Funding is recommended for a number of improvements to cultural facilities used and enjoyed by all citizens. Included among these is the restoration of City Hall. Recommended funding of 5 million for City Hall in the budget year will allow continued roof and exterior treatments as well improvements to interior heating and cooling system. The Capital Program includes an additional planned investment of million in City Hall through FY2008. 4 19 million is recommended for renovation work at the 20 recently acquired Perelman Building. An additional 21 million is recommended to upgrade the Art Museum's 22 security system and for asbestos abatement.
5 million of City 24 funding is recommended for improvements to historic 25 structures, utilities, drainage, landscaping, 18 1 2/13/02 - WHOLE - BILLS 020028, 020029 footways, stables, parking areas, and for pavement improvements at Rittenhouse Square. City funds will be matched by 750,000 of Federal funding for these quality of life improvements projects in Fairmount Park. 2 million is recommended for projects that include improvements to the Bear Country exhibit. Roof replacements at several building, infrastructure improvements, and general safety and security upgrades. 3 million raised from private sources for these projects. In conclusion, let me say that although the recommended Capital Budget and Program strategically allocates very limited resources to ensure the City's capacity to deliver needed public services effectively, it also provides for the kind of investment in Philadelphia's future that is key to our City's economic health and growth. We must continue our prudent stewardship of Philadelphia's physical infrastructure and seek to enhance the resources available to do so. Thank you very much.
Thank you. 19 2/13/02 - WHOLE - BILLS 020028, 020029 Mr. Dubow.
Good morning President Verna and Members of City Council. My name is Rob Dubow and I serve as the Budget Director for the City of Philadelphia. While Maxine's testimony focused on the projects that will be funded in the program and the FY03 Capital Budget, I'm going to focus on how we determine the level of City-supported funding that we included in each year of the program. As you know, our ability to issue debt is limited by the State Constitution. Under the Constitution, we're allowed to have debt equal to 13 1/2 percent of the ten-year average of the assessed value of real estate in the City. As of February 1, 2002, the City's remaining debt capacity stood at a $140.8 million. Under the Constitution, the only way that capacity can increase is if we retire existing debt or if the assessed value of property in the City increases. In constructing the FY03-FY08 program, we distributed our remaining capacity to meet the minimum needs of our capital infrastructure while not using up all of our capacity in one or two 20 2/13/02 - WHOLE - BILLS 020028, 020029 years. Factoring projected increases in assessed value and debt retirements, we determined we could fund roughly $90 million in Fiscal Year '03; 80 million in Fiscal '04; 70 million in Fiscal '05; 60 million in FY06 and 50 million in each of '07 and '08. Clearly, the levels are sufficient to meet even the minimum needs of our infrastructure. As a result, the City is reviewing ways to pay for some capital projects out of the Operating Fund, pay down debt if operating funds are available, or issue debt through other authorities. The FY03-08 Capital Program spending plan also assumes use of the unissued $40 million general obligation authorization for Veterans Stadium repairs from the FY01 Capital Budget. The $40 million authorization in FY01 was to be used for Veterans Stadium and became unnecessary when the stadium repairs were financed through the Philadelphia Authority for Industrial Development. City Council was also presented with an ordinance 23 that eliminated the prior general obligation authorization of 40 million for Veterans Stadium repairs. If that ordinance is not approved, the 21 2/13/02 - WHOLE - BILLS 020028, 020029 City will have to reduce the '03-'08 Capital Program spending plan in front of you today by that $40 million. I'd be happy to answer any questions that Council may have related to the recommended Capital Budget and Program as presented.
Yes. Rick Tustin is here to testify on the Capital Program's Office operating budget.
Good morning, Council President Verna and Members of City Council. My name Richard Tustin. I am the Director of the City's Capital Program Office. The Capital Program Office has two basic missions. First, to oversee and manage the City's budget for the Capital Budget for all City departments and agencies. And second, to provide project management services for the design and construct of new and renovated City facilities for many of the City's operating departments. I am here today to present our requested 22 2/13/02 - WHOLE - BILLS 020028, 020029 Operating and Capital Budget requests for Fiscal Year '03. This request includes an appropriation of $2,412,269 in Operating Budget with an additional request of 7,070,000 in the Capital Budget. Our Operating Budget request includes 1,082,298 in Class 100 to support positions. 8 This is an increase of $15,760 over Fiscal Year '02, 9 estimated obligations due to contractural raises. 10 465,000 in Class 200 funds for architectural 11 engineering and other professional service 12 contracts, space planning services to support City 13 lease and real estate consolidated efforts, staff 14 training and computer software. 750,000 in Class 15 800 for payments to support the CPO's Capital Fund 16 for City-wide construction requirements contracts 17 for the repair and maintenance of City buildings' 18 systems and infrastructures. And 114,200 for 19 material supplies and equipment upgrades. 20 Our Capital Budget request includes 21 6,770,000 in funds to support 84 positions, an 22 increase of 1,280,000 FYO2 adopted budget due to the transfer of the planning and engineering staff from the Recreation Department to the Capital Program Office. It should be noted, however, that this 23 2/13/02 - WHOLE - BILLS 020028, 020029 consolidation results in a $310,000 net reduction for these services from FY02 adopted budgets for both agencies. 300,000 for general environmental remediation projects. Fiscal Year '02 has seen some growth for the Capital Program Office with the addition of the will Free Library, Municipal Energy Office and recreation capital projects to our existing portfolio, bringing the total number of agencies we now serve to 16. These changes should yield additional savings to the City through the elimination of contracted project management services and reduce the time and cost necessary for project completion. The Capital Program Office also plans to increase the quality of our construction oversight services in '03, working together with the Department of License and Inspection, construction inspectors in both agencies will receive the same training in building code and compliance issues in order to expand the capacity of the CPO inspectors to provide oversight on City construction projects. By the end of Fiscal '03, the Capital Program Office will have completed several major 24 2/13/02 - WHOLE - BILLS 020028, 020029 construction projects that each have a cost of over a million dollars. These projects include improvements to Locust Street concourse, major renovations to Veterans Stadium, renovations the Walnut Street Branch Library, restoration of Belmont Mansion, new Police Forensic Laboratory, a new office for the Police Special Victims Unit. A new 768-bed women's detention facility, a new 24th/25th Police District facility, renovations to Stenton Shelter, renovations to fire houses of Engine and 12 72, and renovations to Memorial Hall's roof and dome. The Capital Program Office is also proud of our MBEC participation on professional services contracts. 5 million awarded to date. In closing, I would like to reiterate that the Capital Program Office is committed to improving the process by which capital projects are conceived, budgeted, implemented, and completed. City Council's approval and support of this requested budget will allow the Capital Program Office to maximize the value of taxpayer's capital 25 2/13/02 - WHOLE - BILLS 020028, 020029 investment in public facilities.
Thank you for allowing me the opportunity to present this testimony. And I would be happy to answer any questions at this time.
Thank you. The City's Capital Budgets are shrinking due to our debt incurring capacity. How are we as a City going to meet our capital infrastructure needs in the future? I notice that in the out years, particularly in '08, we will have less than half of what we have in '03 for capital projects. Can you tell me how we're going to meet our needs in the future?
We're looking at a couple of options for how to expand our capacity beyond what's shown in the program. One is to start looking at doing some things to pay as you go. One example of that is the security work in City Hall. We have an operating transfer ordinance in front of you and that includes operating funding for that work. Another is to try to see whether we can use authorities to issue debt to help us fund similar program. And we have an example of that in year 2/13/02 - WHOLE - BILLS 020028, 020029 two, we have a portion of the study center being funded through an authority. But even with issuing through authorities, we are constrained just our overall debt burden. We want to make sure that that doesn't get too high. We understand that it's a problem that we have to come to grips with over the next few years, and we'll continue to examine our options.
Can you tell us what percentage of the general fund budget goes to servicing the City's debt, including the debt we have issued through authorities.
I'll get you an update. The last number I saw, excluding our unfunded pension obligation, was a little under 11 percent. And then when we added in unfunded obligation, it was about 15 percent. But I will get you a written response on that.
Well, tell us what the Administration's position is with regards to how much the General Fund Budget should be used for incurred debt payments.
We, during the course of the last year, spent some time talking to our financial 27 2/13/02 - WHOLE - BILLS 020028, 020029 advisors and they talked to rating agencies. And the advice we got was that your debt services and percent of revenues should not be above percent. 5 And so we're using that as kind of our guiding 6 principle. 7
What is the 8 dollar amount of the Capital Budget and Program that 9 is going to cover salaries for City employees? 10 And I know it's a policy decision, but 11 why doesn't the Administration put these expenses 12 into the Operating Budget and save some debt 13 capacity? 14 I think from what I read, the Capital 15 Program Office is $7 million per year.
The '03 Capital Budget includes about 6.8 million for salaries for Capital Program Office employees who work on the Capital Program. And THAT'S always been treated as a legitimate use of capital dollars because their work is directly related to projects.
Rob, if those expenses were in the Operating Budget, wouldn't we save some debt capacity?
We would save debt capacity, 28 2/13/02 - WHOLE - BILLS 020028, 020029 but we would also be using General Fund dollars that otherwise would be going for other things. So we'd have to take it from somewhere else in the Operating Fund.
Can you tell us what the Administration's position is with regard to computerization and funding those requirements through the Capital Program, what the total cost of computer and computer-related items that are included in the program?
We would have get that for you get, Council President, and we'll get that for you in writing.
I will add, too, that we look at using several different sources for funding, information technology in addition to the Capital Program. We anticipate using the Productivity Bank to fund projects.
What is the balance in the Productivity accounts.
Well, why not fund this computerization through the bank? 29 2/13/02 - WHOLE - BILLS 020028, 020029
We do plan to use Productivity Bank dollars to fund computerization projects.
You have no 6 idea as to what the cost of that will be?
No. I don't have a total amount of projects that are going to be funded through the bank.
I have several other questions, but I see that other Councilmembers want to be recognized. So at this point in time I would like recognize Councilman Nutter.
Let me stay in the same area. I had some other questions, but I am intrigued. We've had somewhat similar discussions about the use of certain dollars, and I think we all 30 2/13/02 - WHOLE - BILLS 020028, 020029 understand that these are allowable uses, at least under the law, but we also understand that just because something is legal doesn't necessarily mean that it's right. Of the $89,946,000 of this Capital Budget, how much of that is for salaries?
That's right. The Water Department pays for some, but that doesn't go against the $89 million.
So 83,1 is actual dollars spent for projects; is that your testimony?
Any other cost that would be related to a project, whether they be for design services or construction management services, they're all factored into the cost of the project.
Those are usually 31 2/13/02 - WHOLE - BILLS 020028, 020029 for outside consultants, though, right?
My question was directly related to City employees, our workforce. $6.8 million.
And tell me again what the rationale is for why we do that? This is similar to a CDBG discussion on how we off-load City employee costs through that program.
Those employees work exclusively on capital projects. So it seems appropriate to allocate their cost to those projects.
Okay. And the response earlier was if you weren't paying for them through capital funds, they'd just be in the Operating Budget; is that correct.
Or if I may add, Councilman, they might accrue a consultant cost. The Capital Program Office takes on a great deal of work that -- and I understand it in years before 32 2/13/02 - WHOLE - BILLS 020028, 020029 their formation was given to consultants to do, architects, engineers, project managers, et cetera.
Could we get a breakdown as to how many employees there are and how many consultants are also in the budget?
There are 84 employees that are paid from that $6.8 million. The number of consultants, we could get back to you with that information. We'll look at each and every project that we're managing and which of those projects have consultants and which ones do not. So I can get back to you with the number of the consultants as well.
Sure. Now, before there was a Capital Program 33 2/13/02 - WHOLE - BILLS 020028, 020029 Office, how were these employees paid? And what side of the ledger were they on?
I think they were paid out of Capital but out their specific departments. For example, during the last year Recreation was assumed into Capital. And if you look at last year's Capital Budget, you'd see a separate line item for employees in Recreation. Now that's gone.
So when it got collapsed into Capital Program, you kept the accounting practice and it just ended up they're now together; is that correct?
And if we didn't do it this way, is it fair to say if all of these employees were being accounted for paid out of operating funds, you'd have $6.8 million more to spend on projects; is that correct.
Yes, 6.8 million more for projects and 6.8 million less in the General Fund for other things.
And to the earlier question, Mr. Dubow, please tell me your response again to the rapidly declining capital dollars 34 2/13/02 - WHOLE - BILLS 020028, 020029 available as they're laid out from '03 to '08. Is the number 89 or 90 this year, 80, 67, 58, 51, 48; is that what you're anticipating over the next six years?
Well, it will float around about a million or two a year. What I said in the testimony was 90, 80, 70, 60, and then 50 in the last two years.
Last year was 90. And I think the few years before that were all probably around 120. But I'd have to get back to you with the specifics.
And so in the out years, how do you propose to take care of all of our facilities? Are we going to go back into a late-'80s mode of significant deferred maintenance, which you know is a bit of an oxymoron in the government. I mean, it's just deferred and then you 35 2/13/02 - WHOLE - BILLS 020028, 020029 end up paying twice as much later on. I mean, how are we going to do this?
There are two areas in specific that we're looking at. One is to try to use some outside authorities to issue that so that it wouldn't count against the State calculation of our debt-incurring capacity. And the other was to look for appropriate projects that would be paid as you go, and one of those we gave, for example, was the City Hall repairs.
Well, I understand that. But that then has impact on the Operating Budget which in, you know, starting next week you're going to tell us we don't have money over there either.
That's right. I mean, obviously, our resources are constrained on both sides.
Is there fully developed -- I don't sports analogies, but is there a fully development game plan going forward for how you're going to deal with this or do you have any proposal or ideas.
We don't have a fully 36 2/13/02 - WHOLE - BILLS 020028, 020029 developed plan. One of the reasons that we gradually take the number down, is to give ourselves to develop that plan.
Okay. Let me go back to what I wanted to start with. Director Griffith, can you just give us a short overview on how is the Capital Budget and Program put together? What is the process?
We hold a series of hearings with agency heads and their staff. The Budget Office is in attendance, as is the Capital Program Office. Sometimes you also have representatives from the Mayor's office there. We fully discuss each request. We focus in, especially in these times of scarce resources, on issues of timing; are funds really needed in this fiscal year for the proposed project. We also look at phasing. We look at the agency's track record in terms of expending funds. And we try to prioritize in the ways described in my testimony in the slide presentation. Where does each project fit within the framework of the City's objectives, and then prioritizing it within that framework. We also look very closely at leveraging dollars. Would City 37 2/13/02 - WHOLE - BILLS 020028, 020029 expenditures leverage significant State or Federal monies? I would also add on to Mr. Dubow's testimony that we're looking very aggressively at resource development, at foundations, corporate giving programs et cetera. So we try with the advice all the entities that I stated earlier to put together the best recommended budget, given scarce resources. We then enter into dialog sometimes after those hearings with agency heads. And we present this recommended budget to our Planning Commission who reviews it, asks some of the same tough questions that are being asked here. And then that becomes the recommended budget.
At what point in all that do you meet with Councilmembers to talk about their concerns?
As you know, Councilman, we had a similar conversation last year. There is no formal phase in this process, although, from time to time where there are questions or queries or where we feel we need more information, information that the agencies can't provide, we will get back to individual Councilmembers. Most of the discussion, as I understand it, between the Council and the 38 2/13/02 - WHOLE - BILLS 020028, 020029 Administration happens between Councilmembers and agency heads or deputies. They then present an integrated and comprehensive program to us and to the team that you see right here for review.
There's no formal process at this time. It's my understanding that at least in recent history that has not been a part of the formal process. Again, the conversation gets -- I don't know what kind of analogy this, it's probably not a sports analogy -- but sort of front-ended with the agencies.
But you could create a process, right? Is there something that prevents you doing that? Are you restricted in some way, shape, or form? Are you not allowed to have a formal process?
Certainly a process could be created. Again, although we chair this team, so to speak, the team has many players. That's a 39 2/13/02 - WHOLE - BILLS 020028, 020029 sports analogy.
And certainly that conversation could be held amongst team members.
Well, I would really like to strongly encourage some level of a more formalized process. And I do meet with some of the departments on either as-needed basis project by project as the year goes on, but there is nothing formal leading up to the compiling of this particular budget. And with every respect to the agency heads and departments, every now and then, you really do want to make your case directly to the people who will be making a decision. They have a number of people and issues to try and represent. And I'm sure you could appreciate a Councilmember might have a slightly different perspective or unique insight or a particular passion about a particular project which they'd like to talk directly to the folds who will make the ultimate decision. Agencies don't make the ultimate decision. The Planning Commission and obviously the Administration puts the budget book together, but unless you feel you are legally or morally 40 2/13/02 - WHOLE - BILLS 020028, 020029 constrained in terms of having some kind of process, I think you could probably establish one of your own which might make some of this a little easier.
I will certainly take that under advisement, Councilman. Thank you.
I appreciate that. Did you get that answer from Rob Dubow?
Actually, that's true. Let me talk about a couple specific items. . By the way, who picked the colors?
Liz of our staff picked the colors. And before you say anything about Liz, she a new grandmother. She now has three granddaughters.
I don't any issue with -- I mean, pink, fuchsia, I'm a flexible guy. I just wondered. Sometimes they're green. I figured it was like what ever paper was left over.
A lot of time and attention, Councilman, went into this choice of 41 2/13/02 - WHOLE - BILLS 020028, 020029 color.
And I'd be happy to get you in the loop on that next year, Councilman.
Yeah, that's really how I want to spend time. (Laughter.)
The $5 million for the PIDC Land Bank improvements and administration, what is the Z Fund category? Could you explain that?
Z Funds are revolving loan funds. My name is Gary Jastrzab with the City Planning Commission. Z Funds are revolving loan funds where income coming back into PIDC through land sales goes back into the fund which is then used for other improvements.
So what do you attribute the difference between the '02 funding level and the proposed '03 funding level?
That, I believe, has to do with the balance of those funds. As those 42 2/13/02 - WHOLE - BILLS 020028, 020029 improvements are paid for, the loan balance is paid down. And depending upon activity, that money may not return to the revolving fund as quickly. It is an estimate, a projection.
I understand. Part of my question is in '02, the funding level for land acquisition was one and a half million dollars. In '03, from the book, it appears to be $5 million. To what do you attribute the three and a half million dollar increase.
We would like to just confirm our response, but we believe it's because we collapsed a number of separate projects into a larger pool of funds that could be utilized on an ongoing basis. But luckily, saved by the bell, we have someone from PIDC who can respond.
Good morning. My name is Paul Deegan. I represent PIDC. Councilman, we increased the capital funds because we need to buy more land. We're at a very low ebb in the land bank, so we put all the money we could in there for this year.
Do you have current anticipation of land that you will be purchasing in 43 2/13/02 - WHOLE - BILLS 020028, 020029 the next fiscal year?
Well, we're looking at a number of sites. We're looking at the Byberry Hospital site. We're looking at various sites and maybe add on to West Parkside, for instance.
Now, Paul, are you just saying that because I'm asking the questions and you want me to move on?
No, Councilman. We are looking at expanding West Parkside and giving it more frontage on Parkside Avenue, which is one of the problems with marketing the industrial park.
Okay. Paul, I don't know if this in your -- it may not be in your bailiwick, but on of the Item 41, neighborhood commercial centers, site improvements, we're showing $1 million citywide?
I'm just intrigued as to what we would do with a million dollars citywide for -- there must be at least 25 to 30 44 2/13/02 - WHOLE - BILLS 020028, 020029 designated commercial corridors throughout the City. I mean, a million dollars I know is still a lot of money in most people's pocketbooks, but I don't know what a million dollars does citywide in our commercial corridors.
Do we have someone from Commerce who can to speak to that in specifics? Again, in general, Councilman, as we try to get someone who can speak to the specific program, as with the land bank, we have tried to collapse in some cases small requests, which for a neighborhood commercial strip could be a big deal into a pool of funds that can be used as needed. As you know, often timing is key in these cases. Funds that you think can be expended in this fiscal year cannot be, they're captured by one project where another project could use it. So it's a pool. And if we don't have anyone here now, we will get you details on expected expenditures.
Well, let me ask a follow-up. On the same line in the same area, there's also anticipation of $1 million in State funding. What is that and where did it come from and what is it for? 45 2/13/02 - WHOLE - BILLS 020028, 020029
Councilman, Gary Jastrzab again. I believe that that's a state DCED Grant that is being applied for by the Commerce Department.
And you have every reason to anticipate that we're going to receive it?
They're used generally for commercial strip site improvements; streets, sidewalks, lighting, signage, things of that nature.
And how do people apply for those funds? How do you access those dollars?
That request from the Commerce Department is based upon the Commerce Department's assessment of what commercial strips can be treated in a particular year. There's oftentimes all of the budgeted funds for a year cannot be spent because of various kinds of delays. So it's based upon the Commerce Department's assessment of strips to be treated in a particular year. 46 2/13/02 - WHOLE - BILLS 020028, 020029
Do you know if we presently have funds that are unexpended for the current fiscal year?
I do not know the amount. We can certainly find that out for you.
And, Councilman, we're also trying to locate a representative from the Commerce Department who can respond to some of these questions.
That would be helpful. And I do plan to be here all day. Mr. Dubow, what's our bond rating?
What is our bond rating presently by the three rating agencies?
I think it's the equivalent of the highest B rating for two of them, and I think it's an A minus for the third. I can get you those particulars.
Councilman, we do have a number of other members that want to be recognized so will have a round-robin. Councilman Rizzo.
Thank you, Madam Chair. I'll just put this question out to the panel. I'm not sure who I would direct it to. Councilman Darrell Clarke had to leave. He had a specific question, so I'll try my best to frame this question. It's in reference to the NTI bonds. If there is an area in the City that isn't blighted, it's not going to be demolished in any and we would just like to do a project, let's say, in Center City in one of the out areas of Center City for pedestrian lighting or a project like. Where in the NTI money can we do projects like that aren't demolition or are not considered blight?
I'm wondering, Councilman, whether you would allow us to defer that question to Friday when the full array of NTI folks will be here to answer questions related to the neighborhood transformation initiative.
Well, I think it's more a matter of -- I think it's specifically about 48 2/13/02 - WHOLE - BILLS 020028, 020029 the monies, the budgeted money for the NTI project. I think we have the power or the ability to answer that question today.
Well, it may be that Director Dubow can respond. There are a number of legal constraints related to the use of bond funds which I don't feel comfortable responding to.
Your question specifically on the uses of NTI bonds I would also feel more comfortable if we put that off until Friday because I don't want to get it wrong. I'd rather have the people who know more about answer the question when they're here.
I had one question. I believe I brought it up in our private conversation. I'll put it on the record now. In reference to Camp William Penn. I visited that facility last year. And obviously, it's a camp, it's an out door environment. But I've noticed that there's significant needs there and I see know capital budget for Camp William Penn at all. It 49 2/13/02 - WHOLE - BILLS 020028, 020029 seems to me to operate that for under $4O0,000 a year with salaries, et cetera, out of the Operating Budget seems to me a very difficult chore for the people that are working there. And there are kids that spend the summer on a weekly basis there, and I plan to go back. And it's to the point now where the people that work there -- maybe it's not a bad idea, but to get a piece of lumber that they need to fix something, they had to chop a tree down. That in itself isn't so bad, but it seems to me that that facility really needs some major attention. And I've suggested that we look for grant money for that facility, whether it's state money, federal money, to make that a better environment. Again, as a kid I went camping and I don't expect it to be like the Four Seasons, but I do expect it to be cleaner than I saw it and in better maintenance than I saw it.
Good morning, Council President Verna and Honorable ladies and gentlemen of City Council. Councilman Rizzo, I respect and thank you for posing that question. The Department of Recreation -- by the way, my name is Carlton Williams. I'm the Deputy Commissioner for the 50 2/13/02 - WHOLE - BILLS 020028, 020029 Department of Recreation. We consider Camp William Penn a valuable community treasure and also important to the experience of young people to have that outdoor experience, as you mentioned earlier. There hasn't been an appropriation for Camp William Penn in quite sometime; in fact, over years. 8 However, the Department of Recreation has taken 9 steps to improve their existing infrastructure. 10 Last year we sent over 50 employees up to Camp William Penn to do minor repairs and also improve the appearance. We're also looking at re-allocated over $40,000 this year to improve the amenities. So it is on our schedule and agenda, and we do value the camp.
Then are you telling me that there's no need for a Capital Budget for Camp William Penn, that you're going to handle this all with operating cost, because what I saw is beyond an Operating Budget's ability to deal with.
No, sir, I'm not telling you we don't need capital dollars for that. However, we want to address the immediate problems first and also do an evaluation of what's needed and to look at appropriations for the upcoming years. 51 2/13/02 - WHOLE - BILLS 020028, 020029
You're welcome. The Chair recognizes Councilwoman Tasco.
Thank you. Good morning. Could you tell me how much debt we retire each year?
Let me see whether I have it in my pile here. Otherwise, I'll have to get back to you. Let me get back to you on that. I have numbers here, I'm just not sure that they're -- I'll give you a written response.
Okay. We can come back to that. In the Capital Budget, how does the neighborhood development interface with the Neighborhood Transformation Initiative.
As I stated in my 52 2/13/02 - WHOLE - BILLS 020028, 020029 testimony, NTI is a very important component of what we call Neighborhood Development Program. And again, those broad umbrella terms are just a way of organizing, of helping us to organize our review and prioritization of projects. But it's a very important component and the major component, at least as we see as it going forward, of neighborhood development.
Will any of the Neighborhood Transformation Initiative dollars be commingled or part of the Capital Budget?
Absolutely, Councilwoman. One of the sort of new ways of looking at things brought on by NTI is we try to look at them comprehensively. So we try to look at a neighborhood as part of a planned strategy, not as simply dollops of money. So once a plan has been developed, we then will decide, that is the inner-agency team in consultation with the Council and other elected officials, what streams of money are appropriate for any given component of the project. And, obviously, leveraging private dollars is also an important part of that strategy.
The projects that 53 2/13/02 - WHOLE - BILLS 020028, 020029 are in this book that you have appropriated money for, these projects will go forth under the Capital Program?
Tell me how would recreation facility and its improvement figure in with the overall NTI program and your thinking in that.
As proposed, and as you know it will be before you again on Friday, each area of the City covered under NTI, a plan will be developed with this inner-agency task force. We're going to have our first meeting, actually, I believe next week to review plans that have already been submitted by community-based organizations, CDCs, block associations, in some cases through Councilmembers, et cetera. Recreation is at the table during those discussions and will add its voice and its project planning know-how to developing this coordinated plan. The other important piece that NTI response to is in the past, the planning would be done by one group of people who would then hand the plan over to the implementation folks hopefully to 54 2/13/02 - WHOLE - BILLS 020028, 020029 implement. In some cases, the plans might not be geared appropriately to the funding sources available, and you have this gap. With NTI, the planning staffs -- and we're not the only folks in government who do planning -- will be at the table with those operating agencies who also have to implement the plan. So when the plan sort of comes out of the bottom of the chute, everyone who has a piece in it will have had an opportunity to comment funding or anticipated funding will have been earmarked or at least designated. And the hope is that those plans can then move forward and not be stymied by what sometimes is referred to as planners blight, where you have a good plan but no funds to implement.
Will all of that that you just said have an impact on my effort to improve a recreation facility in my district?
Well, absolutely. On the other hand, it does not mean that improvements to individual facilities are targeted improvements or health and safety improvements aren't going forward or would not go forward even absent an NTI program. We're talking about the ability to augment and 55 2/13/02 - WHOLE - BILLS 020028, 020029 amplify and create sort of a community benefit spin-off from projects that move forward within the NTI framework. But we're still charged with prudent stewardship of the infrastructure. So if a roof leaks, we have to fix it.
What about those projects that have been in the planning stage already for capital improvements, particularly for recreation facilities? Will they be impacted and will they go forward as planned?
I would ask Recreation to step up and speak to that specifically, especially if you have questions about specific facilities. But as I understand it, there is no repair of a recreation facility that is being held up because NTI has not moved forward yet.
Okay. How many places is there in Neighborhood Transformation monies in the Capital Program? And is most of the money in the Operating Budget? How can we track it?
I want to make sure I understand your question. There is no -- although we use the phrase "Neighborhood Transformation" fairly broadly, there is no specific NTI monies in 56 2/13/02 - WHOLE - BILLS 020028, 020029 this budget because there have been no NTI monies appropriated. A lot of these monies fall within the general objective that we have with NTI of neighborhood improvements and may be referred to as NTI programs. But there's no separate stream of money that is labeled NTI that you could track through the process.
On the Operating side, there are a few places where you can see NTI money. In Managing Director's Office. There's money for lot cleaning and for tree trimming. Those both are part of the Neighborhood Transformation Initiative and there's debt service on the proposed bond issues. So those are places where you can track NTI spending.
In the Recreation Department, the capital monies refer to repairs and renovations and roofing. And I mentioned roofing because sometimes when we appropriated the district council people get their money for improvements to existing facilities, you all will ask us to repair a roof. Isn't there a pot of money separate from our allocation for a roof repair?
Yes. In addition to the 57 2/13/02 - WHOLE - BILLS 020028, 020029 general line item for improvements to existing facilities, there is a Line 87 refers to improvements for recreation centers for fencing, security, roofs, lighting, et cetera.
So you all shouldn't be asking us for roof money, right?
Well, we go back to the same old problem, Councilwoman. There is really not enough in the money in the budget to do everything that we need. So we do ask everyone to pitch in. Again, if it's a specific facility that you have an query about, we can bring Recreation up to respond to that or we can ask them to touch base with you after the hearing to discuss it, or your staff.
There is a notation of $6.8 million for curbs and sidewalks in the NTI budget. Are there other instances where capital funds will be placed in NTI categories?
There's $6.8 million recommended in the budget year for site improvements at four housing sites, Hope 6 Redevelopment projects in the City as well as additional money for commercial strip site improvements and neighborhood industrial district improvements. So those monies 58 2/13/02 - WHOLE - BILLS 020028, 020029 could certainly be considered part of an augmentation of NTI bond funds.
Councilwoman, if I may, let me also try to clarify. As I said before, there are broad categories of neighborhood development programs and projects that we label NTI because they meet NTI objectives and concerns. That's actually separate from a stream of funds that one could track through various projects and programs that come from a single source marked NTI.
I'm going to come back to that. Is there still defense conversion still progressing? And what does that entail? And what has been the benefit for the City? And what financial improvement has it brought to the City?
I believe that we now have representatives of Commerce here. And if I could ask -- If you could repeat the question, we'd appreciate it, Councilwoman.
What's happening with defense conversion and what impact has it had on the City? What benefit has it had on the City? 59 2/13/02 - WHOLE - BILLS 020028, 020029
I'm sorry. You're going to have to identify yourself for the record, please.
My name is James Curato. I'm City Representative and Director of Commerce for the City of Philadelphia. We have over 50 businesses that are actively employing people at the Philadelphia Naval Business Center. We're now turning our attention to the eastern portion of the base that to this point has not been developed. We did, using primarily federal funds, build a new boulevard that begins at the entrance to the navy yard and takes you into the eastern portion of the site. We think that being able to provide direct access now to that area will open it up to development, and we're working on our request for proposals for portions of the eastern half of the naval base site. So we've been, I think, successful and are continuing to market the office portions of the site on the western side of Broad Street, and now we will be turning our attention to the eastern portion. 60 2/13/02 - WHOLE - BILLS 020028, 020029
Thank you very much. I think I have one other question, not for you Mr. Curato, but about CBH, the Health Department and the integrated management system. I've had a question raised to us about the kind of information that is required from clients in both departments. I'm interested in this integrated management case system and how much information are we asking individuals to provide?
We have several representatives of agencies that can respond to that query. Let's see who'd like to step up to the plate.
I'm not stepping up to respond, but Estelle Richmond is going to respond to that and she's out in the hall, so we're going to go get her.
Why don't we go back to this NTI because I'm reading on the budget book and it says, "As part Neighborhood Transformation Initiative, over $6.8 million for site improvements is recommended for the Office of Housing and Community Development." And I heard you mention this in this testimony. I was watching 61 2/13/02 - WHOLE - BILLS 020028, 020029 upstairs although I wasn't here, I heard this. "These site improvements include new curbs, sidewalks, and other physical infrastructure." Are you saying that you're going to appropriate $6.8 million out of the NTI program for this?
No, ma'am. This is still the Capital Program. And again, I know it's semantically confusing because we're using the phrase "Neighborhood Transformation Initiative" to cover a very broad category of projects that are funded in various ways but that meet the objectives of NTI. But we're not, obviously, use the projecting NTI bond funds for those projects. So they are -- using Gary's phrase, they augment or support the NTI program. And the NTI program is much more than just the use of bond funds. It is how you integrate the bond funds with Capital, with Operating to really develop a comprehensive integrated program.
Okay. I just want to talk about the technology and the Health Department and Human Services Department, and that's the only question I have. 62 2/13/02 - WHOLE - BILLS 020028, 020029
I believe someone went to get the Managing Director she was here earlier. Perhaps if you had another question.
Thank you, Madam Chair. I'd like to ask Mr. Tustin of the Capital Program Office for some information. First I'd like to congratulate you on your MBE participation on professional service contracts. But I'd like to get information concerning MBE participation on some of the construction projects. I'd actually like to know -- I'd like a list of the contractors over the last five years, which maybe a bit much and maybe I'll think about the condensing the request, but I'd like the firms ID'd as a minority firm, the type of contract, and the project. But off the top of your head, do you have any idea of what is the percentage and the dollar amount of those MBE contracts for 63 2/13/02 - WHOLE - BILLS 020028, 020029 construction companies?
Councilwoman,I do not have that information. That is usually collected through the Procurement Department since it's a Public Works contract. They keep all the data on that information. But I can get to them and ask them for the information you need.
Thank you. That's the only question I have right how, Council President Verna. Thank you.
Thank you. The Youth Study Center replacement on , how much funding has been allocated to this project from prior budgets? And can you tell us what was the source of those funds?