2392 COUNCIL OF THE CITY OF PHILADELPHIA CONTINUED PUBLIC HEARING COMMITTEE OF THE WHOLE FY '04 OPERATING BUDGET - - - Room 696, City Hall Philadelphia, Pennsylvania Wednesday, March 12, 2003 9:55 a.m. - - - BILL 030004 BILL 030008 BILL 030010 - - - 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 W. WILSON GOODE, JR. COUNCILMAN JAMES F. KENNEY COUNCILWOMAN JOAN L. KRAJEWSKI COUNCILMAN RICHARD T. MARIANO 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 2393 I N D E X WITNESSES NELSON A. DIAZ, City Solicitor ............. 2394 CHRISTOPHER LANE, Law Department ........... 2398 LYNNE ABRAHAM, District Attorney ........... 2434 ELLEN GREENLEE, Defender Assoc. ............ 2459 CHARLES CUNNINGHAM, Defender's Assoc. ...... 2469 JAMES CUORATO, City Representative ......... 2491 CURTIS JONES, PCDC ......................... 2509 CAROL LAWRENCE, Deputy City Rep. ........... 2513 CHARLES ISDELL, Budget Officer ............ 2545 JAMES COLEMAN, JR., Civic Center ........... 2585 2394 3/12/03 - FY '04 OPERATING BUDGET
Good morning, everyone. This is a continued public hearing of the Committee of the Whole regarding Bill Nos. 030004, 030008 and 030010. The Law Department will be the first to testify today. Good morning, your honor.
We do have a copy of your testimony. If you would like to summarize, we'd be very happy, and we will make certain that the stenographer gets a copy of your entire testimony which will be transcribed in full. Thank you.
Thank you. I appreciate that. I'd love the transcription of it completely since I think we've had a wonderful year with regard to the Law Department, and I will summarize for the benefit of time. We've had a record year, not only in regard to tax collections, but we will continue to have that record year. We've also had the third year of low indemnity fund expenditures, and we will continue that in the next Fiscal Year. 2395 3/12/03 - FY '04 OPERATING BUDGET Our contracting process is something that I'm very proud of that I hope you look at. We were serving you at 70 days and we are now down to 30 days in procedures with regard to getting contracts out. Our honors program is building a future for the Law Department, and that is one of the areas that I think will help create a great Law Department for the future. Lead Court has gotten great benefit. Compliance is up 30 percent out in the City, and that is something that I think all of you should be proud of, not only our joint effort with the Court Common Pleas, but with the Law Department. We've had a staff reduction from 234 to 207, so we have continued the decrease in our budget as required by the goals set forth by the Administration. We've reduced outside counsel expenditures by 2.1 million, and we will continue to do that in the coming fiscal year. Overall, our budget essentially is about 10 percent under what was required. Outside of the expenditures for DROP Program, we're within those 2396 3/12/03 - FY '04 OPERATING BUDGET parameters. That essentially is a summary of some of the things that I think the Law Department has provided for you. And in addition to that, we've continued our minority contracting. I'm very proud of the fact that my department contracts -- 53 percent of our contracts go to minority and women. I don't know of any other department in the City that has that record, but I am very proud of if. And also, with regard to the hiring, in terms our hiring the predominate numbers, 68 are women, 50 percent are minorities, 49 percent of the 154 attorneys on our staff are women and 35 percent are minorities. At the management level, which is where it counts, of the 8 members of the executive committee are women and are minorities; 4 of the 8 chief deputies are women and 4 minorities; and 7 of the 19 divisional deputies are women and 4 minorities. So I would hope that you would be proud of the service that I am trying to provide for you, the Mayor, and all elected officials in the City. Thank you, Madam President. 2397 3/12/03 - FY '04 OPERATING BUDGET (Written testimony attached.)
You're welcome. How many of your employees are under the DROP Program; and when will they be leaving?
On -40 of the detail in FY '04, there's $100,000 for TWA National Airlines, US Air, United Airlines bankruptcies. Can you tell us what's that for?
Yes. The airline industry, as you know, is going through tremendous decline, and as a result, they are filing bankruptcies and we 2398 3/12/03 - FY '04 OPERATING BUDGET need to have representation to be able to get the proper benefit as a result. Let me give you an example. USA Airline industry bankruptcy. We have an attorney who has saved and followed through the process of keeping our gates open and keeping Philadelphia the primary responsible carrier for US Air. In addition to that, we have proposed that a Philadelphian become a member of the board of US Air, and that nomination has gone forward and will give us representation right on the corporate level. So we are on a day-to-day process making sure that we protect the interest of US Air in the airport.
By the way, that will happen with American Airline who's going to declare bankruptcy, United Airline who has declared bankruptcy, and we had TWA prior to that, if you recall.
Also, on -20 you have $60,000 for PGW pensions, et cetera. Can you explain that, please? And why are we paying for it?
Council President Verna, my 2399 3/12/03 - FY '04 OPERATING BUDGET name is Christopher Lane. I'm Director of Administration for the Law Department. That contract -- there are multiple matters involved on that contract. The PGW matter on that particular contract is relatively inactive at this point. The other matters you see listed there, pensions, domain names, Penn Treaty, Park Pier, those are the matters that those dollars will be spent for in the next fiscal year.
They've come to a conclusion, as far as I understand, the Penn Treaty particularly.
Well, why do we have it in FY '04 if we've already concluded it?
In terms of closing it out. They still are doing pension work, by the way.
Also on that same page, we have $704,000 for labor, civil rights, pensions, and the Parking Authority.
Yes. As you know from prior testimonies, Ballad has been traditionally the attorneys for Act 111 issues which include both the fire fighters and the Police Department. That's one area they have continually been responsible for. 2400 3/12/03 - FY '04 OPERATING BUDGET Also, prior to my coming on, they were representing the City in some of the Parking Authority litigation issues. I have taken the Parking Authority litigation issue in-house, so we are handling that in-house now. But they are continuing to represent us with regard to the Act 111. As you know, the fire fighters negotiations are ongoing and have not been completed. And that has been the cost of representing us with regard to that area. The domain name that is indicated there is probably a minor expenditure because I would have known where the money is going.
Also, on 22-21, we have $50,000, police officer conflicts and Eastwick condemnations. Is that for the area that was flooded or are these for the sinking --
It's a combination of two representations. One is they are representing us in a conflict situation with regard civil rights. As you can tell from my budget and my presentation, we are not contracting any work out. So they have one case in civil rights. Secondly, there are 70 properties that need to have a transfer and to have someone do the 2401 3/12/03 - FY '04 OPERATING BUDGET transfer, and so we have hired them on real estate to represent the City with regard to 70 transfers at the Eastwick project.
The flooded area? I know there are two different issues out in Eastwick.
It's the one near the airport. Is that the one that's flooded? It's the one near the airport where we have 70 properties that need and require transfer. I can get you the information exactly which property it is. We'll get you that information right now.
I would appreciate it. At this time, the Chair recognizes Councilwoman Brown.
I believe, first of 2402 3/12/03 - FY '04 OPERATING BUDGET all, that paragraph 6, , should probably be highlighted and boldfaced and underlined because it truly reflects what's possible. You're to be congratulated for building a department that truly reflects the diversity of this City. My colleague Councilman Ortiz has introduced an important piece of legislation and in it proposes that MBEC should be moved from the Finance Department to the Law Department. Have you had a chance to review it at all yet?
I have not been given notice of that issue, but I would welcome it. We have some excellent lawyers who have worked on that issue. Michele Flamer, for example. We are very committed to diversity, as you can tell, not only from our hiring, but from our contracting. But in addition to that, at your request, we filed an amicus brief with the Supreme Court with regard to the Michigan law case to emphasize the fact that this City is in favor of Affirmative Action. But I would welcome whatever your pleasure.
Well, the hearings, I understand, are next Friday. 2403 3/12/03 - FY '04 OPERATING BUDGET
I don't know. I've got to talk to -- Madam Chair, I did send --
Why don't you put your microphone on, Councilman?
Yes, I received it last night 5:07 p.m., and as a result, I will work on it as soon as I have an opportunity to get to back to the office.
But again, congratulations on your leadership because it really does start with the leadership in a department to send the message through the ranks what the mission should be with regards to minority and female contracting. Thank you for your testimony.
I think a lot of people are just afraid of the consequences of litigation which occurs. And as you can tell from my background, I'm not afraid of litigation when you have to do the right thing. And I think it's important that you do the right thing. I've had litigation following me from HUD in terms of my Affirmative Action roles. But that's the role that one who has commitment has to conduct himself with.
I agree completely. 2404 3/12/03 - FY '04 OPERATING BUDGET Thank you, Madam President.
You're welcome. At this time the Chair recognizes Councilman Ortiz.
Excuse me, City Solicitor. I think I missed your beginning. Did you state how many contracts that are given out by the Law Department and how many of them go to black and Latino law firms or latino lawyers and so on?
I'd be happy to. In the testimony that we presented, and it's codified in the record, 53 percent of all of our contracts go to minorities or women. We probably have the largest Latino service contract --
Could you give us a listing of those by firm and so on?
Sure. We can provide that. We can give you all of them and then you'll be able to dissect that. In addition to that, even when we handle matters with majority firms, we try to get the majority firms to use minority attorneys so it's not just sufficient that they're getting the work.
I'd like those 2405 3/12/03 - FY '04 OPERATING BUDGET details on that, what are the subcontracts of those firms.
Let me give you an example. What we're doing with Duane Morris, there are two African Americans lawyers over there, so we ask them that it would be important for them to have representation provided to us from the two African Americans lawyers. And thereby we utilize those attorneys as primary contacts with us so that not only do we do the minority contracting, but we make sure the majorities are willing to respect the minorities that are in those majority firms.
And this is a question I ask every year. How many lawyers do you have?
There was only one when you asked me the question a year ago. There are seven Latino lawyers today, three are in the management area, there's one that we have an offer out right now, and there are two others that we are sending a letter for the honest program. So hopefully, by the 2406 3/12/03 - FY '04 OPERATING BUDGET time you ask me this question next time, we will have increased our population by a thousand percent. I only committed 400.
I like that because I've been asking the question and this is the first time we have increases.
And the other thing you should be aware of, Councilman, is that 50 percent of them happen to be Puerto Rican of the Latino lawyers. So that I don't discriminate against any Latino, but you should know that the predominate population also should be considered, and so 50 percent of the Latino lawyers happen to be Puerto Rican.
Thank you. The Chair again recognizes Councilwoman Brown.
Follow-up to your remark that you require that prime lawyer firms do business with minority and female-owned firms that are minority. Is there a monitoring piece in place to ensure that they are indeed honoring that stipulation? 2407 3/12/03 - FY '04 OPERATING BUDGET
It really is totally my direct contact with them, and I control every contract we have unless it comes to me as requested by the City Council for me to hire someone or it comes down from the Mayor that I hire someone. I predominately hire nothing but minorities.
No, for the contracting, for the prime. And then let them do the subcontract if they need to.
Are there any other questions or comments from Members of the Committee? Councilman Nutter, do you have any questions or comments of the Law Department.
Yes, I do, Madam President. I apologize for being late. Mr. 2408 3/12/03 - FY '04 OPERATING BUDGET Solicitor, one thing I wanted to talk about was a topic we've had a fair amount of conversation about in the past regarding code enforcement. And I also notice that there is a new edition of the newsletter which talks about the Code Enforcement Division, the headline, "Law Department's Code Enforcement Division Improving the Quality of Life Through Court Action." Could you talk to us a little bit about what those activities are and, I guess, how they've been improved over the past few years? Because I've certainly had a number of situations involving code enforcement, the results of which were not necessarily the greatest.
My testimony, Councilman, indicates under the general revenue fund that the Law Department reorganized last year, effective July 1, 2002, a new regulatory government law group was formed at no extra cost to the citizens through improving the structure of the Code Enforcement Division which is now part of this group. The Code attorneys accelerate the rate at which attorneys close matters involving management, building, electric, fire prevention, health and property 2409 3/12/03 - FY '04 OPERATING BUDGET maintenance codes. A total of 739 such matters have been closed in the first six months of FY '03, as compared to 133 for all of FY '02. For FY '03, we projected a $400,000 increase in fines collected as compared with the previous year and expect to continue this same high level of collections throughout FY '04. The Division also inaugurated a clean rails program to remediate nuisance conditions along the numerous miles of railroad rights-of-way in the City, which included a financial commitment from Conrail for clean-up of the Richmond branch in Kensington. The Regulatory Affairs Unit recovered more than 1 million in fines and environmental projects benefited Philadelphia and redirected approximately 1 million from testing of non-drinking water outlets in Philadelphia's public schools towards a quicker resolution of active drinking water outlets. Other accomplishments of the regulatory and government law group included the passage of Act 94 by the General Assembly to enhance redevelopment of blighted properties and streamline condemnation authorities. 2410 3/12/03 - FY '04 OPERATING BUDGET The Law Department continues to maintain improved case analysis procedures to allow these early assessments. Does that help you, Councilman?
That actually was slightly narrowly focused on some of the day-to-day average life things that happen out in the community with bad properties or people not being in compliance with the code and what happens in terms of those cases. There is the ongoing wonderful circumstance of when you're working with L&I and you're trying to get compliance and does a case end up in court, does it go to Municipal Court, does it go to Common Pleas Court, or the Equity Court, and who makes those decisions? Just trying to get things to a final conclusion. We have that situation that I sent over to you not too long ago, and I know your staff responded, 6239 Laughton Street, as an example. I mean, there are multiple examples too numerous to burden this entire record with or zoning cases go on forever. The people are denied it. The Zoning Board or maybe they're approved and people appeal, as is their right, and they go to Common Pleas or 2411 3/12/03 - FY '04 OPERATING BUDGET Common Wealth or Pennsylvania Supreme Court and we still don't get complete compliance with the law. And I guess it is not completely clear to me as to who decides whether something goes to Municipal Court or Common Pleas Court and stays on it to conclusion. That's, unfortunately, been a bit of my experience. And you and I have talked to this in the past.
Councilman, relating to 6239 Laughton Street, the property was on the Mayor's walk on August 6, 2001. Almost immediately, L&I cleaned up and sealed the vacant house. And the Health Department abated the vermin. Inside the house was total disarray with the floors covered with several feet of discarded clothing and filled plastic trash bags and open boxes. The amount debris was astounding, and I have sample photos of that. Subsequent to that, right now there was a pending violation notice that had been placed against 6239, calling for repairs to loose drains, sprouts, repairs to loose window seals. These are fairly minor violations but do contribute to noise disturbance to the neighborhood. Deadline for repairs on March 9th was given by the City Law 2412 3/12/03 - FY '04 OPERATING BUDGET Department. And the City's Law Department is in contact with the owner's attorney to get those repairs complied with.
I'm sorry, you went a little fast for me. What happened on March 9th?
Yes, sir. As you know, we are trying to avoid the fact that -- we want to treat everybody the same, and the fact that this owner is a City employee at the Recreation Department is also embarrassing to us so we have to make sure that the enforcement efforts regarding this property is being imposed just as it would be against any other property owner.
I'm not asking for any extra enforcement because the person's a public employee. Although, as you say, it is certainly extra embarrassing and that's just something that the government has to deal with. On the other hand, there is certainly a perception in the community that but for the fact that the person happens to be 2413 3/12/03 - FY '04 OPERATING BUDGET a public employee that they're actually getting a bit of a break. I don't know where the line is. I don't really care what the person's status is. What I care more about in this particular example or any other example is that we have good, fair, timely enforcement. And this one has, as I say, bedeviled us for an extended period of time, and I don't really understand it. And as I mentioned, there are many other situations.
Now, one of the questions you asked relating to whether you go to Municipal or whether you go to Common Pleas Court, basically it's an equity. And the Municipal Court judge is sitting as an equity judge, which means he's sitting as a Common Pleas judge assigned to that court by the Common Pleas President Judge, therefore, he's acting as a Common Pleas judge.
But don't some of the L&I enforcement matters actually get processed through the Municipal Court, not just the Equity Court?
That's as a result of the President Judge procedures which allows a Municipal Court to sit as an Equity Court. 2414 3/12/03 - FY '04 OPERATING BUDGET
I'm not talking about the Equity Court. My question is, I thought that there were some violations that just automatically went or were processed through Municipal Court, having nothing to do with Equity Court.
Again, the Municipal Court sits as an Equity Court. Now, the fact that there are complied with through the Municipal Court and the fact that L&I processes them without our participation is something that has occurred.
Why is that? Why would L&I be processing violations to court without the Law Department?
Because you can't afford the amount of legal cost that they claim they want to participate in that area.
To the best of my knowledge, that issue has not been raised. And we had L&I, I think, for four hours last week and that particular issue never came up. 2415 3/12/03 - FY '04 OPERATING BUDGET
Well, I think we should at least have the opportunity to either affirm or deny that kind of policy and procedure on behalf of the citizens of this City who expect a certain level of enforcement. I think they deserve a certain level of enforcement. And if we can at least know what's involved in making the system work better and not either by omission or by design have a system that functions at a less-than-decent level because a decision was made away at least from the Council about whether or not to have such a system in place because of cost. I mean, I think that's, quite honestly, a part of what the budget process is all about.
I would agree with you. I'll give you that information because essentially the ones in Municipal Court are low level matters, we'll be happy to give you that information.
Okay. I'd appreciate it. Tell me a little bit about the decision -- in the past there was a document that, I 2416 3/12/03 - FY '04 OPERATING BUDGET think, would actually cover much of the same information here. It used to be called City of Philadelphia Law Department Client News, which some seem to be attributed to specific lawyers based on their expertise and others were general in topic matter. Tell me a little bit about the decision to switch now to te Philly Solicitor and what was involved in that.
We didn't have a way of communicating issues that related to importance to the entire City. In particular, for example, so many editions include public access to City records under the Pennsylvania right to know. The Philadelphia Law Department Civil Rights Unit in terms of the fact that the's a national landmark and a model for the Country based on the ability to reduce cost to its citizens and ethics on boards and non-profits. Those are utilizations that needed to be disseminated to and within the government, and that's why we created the Philadelphia Solicitor.
It only touched upon some legal issues within the department and was not 2417 3/12/03 - FY '04 OPERATING BUDGET utilized in the same fashion.
We do it in-house much as possible, in that we have a layout and consultant that we use on an as-needed basis, which is Keel Associates.
Essentially, it provides to our folks the layout and any editing that's necessary and make sure that it's printed on time and on schedule.
And this is viewed as an essential service of Law Department to have someone layout a newsletter?
It's essential to have a newsletter. The question is we didn't have the capacity. I tried to get a public relations type 2418 3/12/03 - FY '04 OPERATING BUDGET individual who would manage that hired inside, and it was denied.
The Client News was coming out sporadically, as I indicated to you, and it was not adequate in terms of providing the information that was necessary to the City, and that's why we created the Philly Solicitor.
Who are the same people who were writing the Client News.
Well, there were lawyers writing the Client News, right?
It may not have been the same people all the time, but they were lawyers.
Well, it was not the same. If you look at the prior one, it was really not writing. A lot of it was just redacting what you got from a case law. It was not necessarily a 2419 3/12/03 - FY '04 OPERATING BUDGET writing or an editing or a compilation or response in English so people could understand. So that when you pick one up, you know that you have to comply with the Right to Know Act and whether or not you have 5 days, 10 days, 12 days in which to file. That information, whether you're involved in non-profit organizations, you have the opportunity to understand whether or not there is prohibition to be involved in fund-raising with regard to non-profit organizations and whether or not you can hold yourself out in the participation of that and what time and how to do it and what the limitations were either within the Ethics Act of th State or the Ethics Act of the local requirements under the Charter.
They go to all the employees in the City, essentially our mailing list within the 2420 3/12/03 - FY '04 OPERATING BUDGET City.
And that is $60,000 in the current fiscal year and $40,000 next fiscal year?
There's a story in today's Daily News that I'd like to ask you some questions about regarding a meeting allegedly regarding yourself, the Managing Director or the Finance Director and the City Representative/Commerce Director. Is the report in today's paper accurate?
I haven't read the paper. 2421 3/12/03 - FY '04 OPERATING BUDGET Would you please let me know what it is.
Sure. It's a Daily News story on , headline, "Mayor's Staff Meets Campaign Team." The story goes on to talk about seven high-level City officials gathered at the Mayor's re-election headquarters for a meeting with several campaign operatives, including the poster communications consultant, field researcher, and communications director approximately two weeks ago. Is that accurate?
There was a meeting held in which that we were told parameters as to why we should not communicate anything with regard to the political part of the street operation and that we are to organize ourselves with regard to the governmental side and avoid any participation on the political side.
Who told you that? MR DIAZ: That was the meeting that we went to, to tell us the parameters.
We were all asked to attend by the City, by the 2nd floor. 2422 3/12/03 - FY '04 OPERATING BUDGET
It appeared on my calendar as a request from people on the 2nd floor, and I showed up.
And as City Solicitor, you needed to go to a meeting about how to function and operate in a political environment.
I had no idea what the meeting was about before I was invited. I was asked to attend a meeting, and I attended the meeting. When I found out what the meeting was about, obviously it was an appropriate meeting for the cabinet to know what the parameters were.
Well, you advise the entire government about the appropriate involvement of political activities because you put out a political guide. Let me finish my question. As the City Solicitor, and I think 2423 3/12/03 - FY '04 OPERATING BUDGET recently in the e-mail blast from MOIS, you're the person that puts out the political activity guide, right? And you advise all the public employees about the nature of their involvement, what it can and cannot be in political campaigns, don't you do that?
Mr. Solicitor, we get one of these like clockwork every year. This is not a new service of the government.
Not on MOIS it hasn't been. It's the first time it's ever been on MOIS on Internet web page, Councilman.
I don't care whether it's on the web page or not. What I'm telling you is that every year under every Solicitor we've ever had, at least during my time, somewhere around about this time of year we get a fairly standard document that lays out the do's and don'ts of political activity. This is not a new phenomena. Whether 2424 3/12/03 - FY '04 OPERATING BUDGET it's on the web, whether it's available in other parts of the universe is not unique to the current situation, nor I would think particularly unique to the fact that you had a meeting with campaign consultants. Didn't you put out one of these guides last year?
I don't recall when it was put out, but that triggered making sure that I put it out.
The fact that you as City Solicitor and other officials had a meeting with campaign staff inspired you to put out this notice?
Reminded me that the political season is coming, we have to do it again.
Okay. But I think when you check your records, you're going to -- I mean, you were here this time last year, right?
So you were here 2425 3/12/03 - FY '04 OPERATING BUDGET this time last year?
I started on December 2nd of a year ago prior to the Governor's raise.
Right. December 2, 2001. But you're saying you don't have recollection that probably within the first two months of 2002 the City Solicitor's Office would have put out a guide to all public employees reminding them of what their actions can and cannot be with regard to politics?
I may have because I wanted to read it myself to understand what my limitations were. I would have read it sometime during the gubernatorial race, so I would have put it out soon thereafter.
So whether you participated in the meeting, again I'm going to say to you, it is like clockwork that this document comes out. Whether you had the meeting or not, the Solicitor's Office would have sent out this document.
I can't tell you it's like clockwork. I can only tell you what I do, Councilman. 2426 3/12/03 - FY '04 OPERATING BUDGET
Well, I understand that. I can tell you from my experience it's like clockwork. So what did you learn at the meeting?
That the political individuals were the ones in charge of the political issues and these were the individuals and we were to stay away from our involvement.
I don't know the names of the parties that were there. They were from the -- I don't know them. I've never met them before.
So you testimony is is that the political aids explained to you as a City Solicitor what you can and cannot do as a City Solicitor for the City of Philadelphia?
I don't know the details. 2427 3/12/03 - FY '04 OPERATING BUDGET All I know they told us that they are involved in the politics and we're involved in the government.
But you probably knew that before you went to the meeting, right?
I had no idea what the meeting was about before I was invited to the meeting, Councilman.
Forget about the meeting. You knew that -- you didn't need to go to that meeting to find out that you were involved in a government and not involved in a campaign, right?
I don't know, Councilman. I can't answer that question because I don't know what the details of the additional information that was given to the other members of that group. When I got there, the meeting was ongoing.
Well, I understand that. But you did read the guide that you put out last year on the one you put out this year or the one that you read shortly after you came into the government, and I know you must be familiar with the Charter Section 10-107. I mean, you're familiar with that?
I'm familiar as a result of 2428 3/12/03 - FY '04 OPERATING BUDGET correspondence that I received that I responded to it in which I have essentially been accused of involvement in political activity, which is a lie.
One of the republican members of the Republican Party, I assume.
I have no knowledge or idea what you're speaking about. But you're not saying that I've accused you of being involved in politics?
You're enunciating that I've been involved in political activities by going to this meeting.
No, I'm asking questions about the meeting. And I paid my 60 cents and I got a newspaper today and I'm trying to understand what happened.
What I'm telling you is all they talked about was the parameters between the government and the politicians. They did not discuss the law.
Okay. Who is Greg McGarrity? 2429 3/12/03 - FY '04 OPERATING BUDGET
Advising you in your private citizen capacity, or advising you as the --
Let me finish the question. Representing you in your private capacity as a citizen or in your capacity as a City Solicitor of Philadelphia?
And he is therefore empowered to make or give opinion as to the City Charter?
Why wouldn't you get advise from the Law Department? I mean, you're a public official.
Because I'd like protect 2430 3/12/03 - FY '04 OPERATING BUDGET myself personally from any innuendos or anyone who's trying to ruin my reputation and anyone who is trying to defame me.
This is in general, not specific to this particular situation?
That I went to a political activity and that I violated the section that you named in the Code.
Well, Mr. Solicitor, I've made no charge or allegation. I've simply asked you about a newspaper story reported in a publication of general circulation in which a person is quoted indirectly as being your attorney. And I've not experience a situation where the City Solicitor had a lawyer. And then I, maybe incorrectly, assumed that like the rest of us when we need legal advise or some question arises, we usually go to the Law Department and ask for advice.
Well, again, I'm going to say for the record, I am not attempting to 2431 3/12/03 - FY '04 OPERATING BUDGET defame you. And you must have had some conversation with him prior to this public hearing taking place because the story is in the paper today and you had no idea that, I'm assuming, either when the story was going to run or that anyone, including myself, was going to ask a question. But I do resent --
If you're trying to imply that I'm trying to defame you, 1, you are wrong; 2, I think I have a right to ask a question; 3, I think if you go back and read the transcript no 13 charge or allegation has been made. I have asked questions, which I think as a member of Council I have a right to do.
Okay. I appreciate that. So what are the rules, just for the record, on political activities by public employees?
Because I'd be happy to send you a written guidance on that issue. 2432 3/12/03 - FY '04 OPERATING BUDGET
I think everything we ask generally in a budget hearing has to do with the budget. But you're at the table and I think you're in a position to kind of generally answer that question. What is the rule?
It's more appropriate to respond you in an opinion delineated each one of the issues I don't miss anything regarding the area of political activity, involvement of City employees.
And obviously, that's why we put the web on so that people can go through the web and if they have specific questions they can then get specific opinions from the Law Department.
I understand. Generally, unless you're going to radically change our policy, I mean, more often times than not, I think most of our opinions are probably going to still come by way of document and paper.
And initial or signature or something like that on the document.
Okay. I do appreciate the information and your responsiveness.
I just have a question to ask you. The federal employees are covered by the Hatch Act.
No, we're under the City Charter. The Federal Hatch Act essentially has allowed individuals now to be involved in political activities as long it's their own time. And prior to the amendment to the Hatch Act, they couldn't participate at all. And now only senior executives are limited from participating in political 2434 3/12/03 - FY '04 OPERATING BUDGET activities under the federal government. That's what they call SESs.
And our Code essentially totally limits us totally based upon the City Charter. For example, your employees don't have the same restrictions as the employees of the Mayor's Office.
So my Council employees can engage in political activities?
They have a totally different requirement under the City Charter.
You're welcome. Are there any other questions or comments of the Law Department? (No response.)
Seeing none, the Committee will stand in recess until 12:30, today. Thank you. (Hearing recessed.)
Good afternoon. I want to thank everybody for your patients. This is 2435 3/12/03 - FY '04 OPERATING BUDGET the continued public hearing Committee of the Whole. We will now hear from the District Attorney.
Council President Verna, Members of the City Council, my name is Lynne Abraham. I'm the District Attorney of Philadelphia. I have previously distributed to this body a brief statement of one and a half pages. Essentially, this report says that last year I appeared before you and requested a zero increase in all budget categories except Class 100. And in that class, you approved a request for 1.7 percent increase. This figure, of course, was not sufficient to cover all of the fully contracted cost of living increases but, nevertheless, we were able through fiscal prudence to live within our budget. This year it appears as though the City's financial picture has even worsened. Plus, we are faced with the possible threat of war and the national economy and City revenues have continued to decline. On the other hand, our costs have continued to rise. But as a result, I've been asked by the Mayor to, again, exercise fiscal discipline and restraint and to accept a budget decrease. At the same time, I believe that our City's safety is 2436 3/12/03 - FY '04 OPERATING BUDGET my No. 1 priority and I'm sure it's the City's No. 1 priority. Therefore, I'm giving a budget to Council that ensures that my office has a continued high level of performance while recognizing the realities of our fiscal City situation. As last year, I am requesting no 8 increase in Class 200, 300 or 400, but what I am seeking for personnel costs is a Class 100 situation which will represent a 1.5 percent decrease, when one factors into contracted cost of living increases and the lump sum anticipated payments due to DROP membership. In order to make this reduced budget work appropriately, I'm requesting a no cost transfer of 100,000 from Class 100 to Class 200. We requested that this information be put in the -- by the Budget Bureau in the budget detail and it was timely submitted by us. However, the Budget Bureau neglected to include it in the budget pages submitted to Council. The Budget Bureau apologized for their oversight and they have agreed to present this transfer request to you in the fall. And that's my entire statement, Councilwoman.
Thank you. Mr. Dubow, you're taking care of this 2437 3/12/03 - FY '04 OPERATING BUDGET issue?
Thank you. Can you tell us how many of your employees are in the DROP Program and if they will be going out this year?
We believe it's about eight, eight to nine, and they are going out this year.
Are they all attorneys or is that part of the clerical staff also?
It's mixture of attorneys non-attorney personnel. There are, of course, additional DROP people who do not go out this year. If you need the specifics, we'll be happy to provide them to you.
No, I'm just wondering. Wouldn't you have to replace most of these people? Nd is that included in your budget once you have paid them for their sick time and vacation time?
Yes, we have, Councilwoman. In other words, it's all in there. 2438 3/12/03 - FY '04 OPERATING BUDGET
It's fine. I mean, if you're asking do I want more; of course. But is it fine the what it is; I accept the realities of the City's financial situation. I want to help the Mayor and Council do its appropriate work while keeping the City safe.
Thank you, Madam President. Good morning, District Attorney.
The first couple of years I was here, you gave a lot discussion around the truancy initiative by the District Attorney's Office. And it's interesting in just today's Daily News there's an editorial which speaks about the 15,000 truant students we still have. The School District has undertaken some great initiatives. But can you give me an update on the involvement of your office? Is the 15,000 a decrease or an increase and 2439 3/12/03 - FY '04 OPERATING BUDGET what lies ahead around this whole truancy citywide effort?
Councilwoman, as you know, we have been deeply concerned about truancy because it is a marker -- it's not a predictor but it is a marker of young people we see who are involved in the criminal justice system and our juvenile divisions. You show me a kid who is truant, and the chances are enhanced that he or she while not in school may get himself into criminal justice problems; if not, just outright mischief and incorrigibility in the home and in the community. The truancy initiative in our office still stands. And when Paul Vallas came to Philadelphia, I can't say I'm the first, but one of the first people he came to visit was my office. And we had extensive discussions about truancy. Sometime later on down the road, he wanted us to come over and discuss with him and his staff our truancy initiative and then further elicited our help in training the parent truant officers, if that's the right word. They used to be truant officers, then they called them attendance officers. They really are truant officers. And we have done 2440 3/12/03 - FY '04 OPERATING BUDGET that. And I personally went to the classes with the parents and talked to them about their role and how important their own input would be. And we continue to be hopeful. We're hopeful because I think with the new Administration, we're hopeful that the City school system will not see the need to lie to us any more about how many people are in school. As I mentioned in my previous testimony, which I stand by, we found that there were essentially two sets of books. One that they gave to us and then the other books. The ones they gave to us make it look as though there were more kids going to school than there were. But we found a way to find out the real situation, and we have advised Mr. Vallas and his staff about this. They have assured us that there's not going to be anymore cooking the books, that they will count the number of absentees correctly and they agree with us that it is not appropriate for the school system to wait 10, 15, 20, or days. 21 They're jumping on it right away. And the extra 22 emphasis of parental involvement by these newly 23 trained men and women I think will add an extra 24 underscore to the emphasis about going to school and 25 staying in school. 2441 3/12/03 - FY '04 OPERATING BUDGET
And why it's important. Does any of your budget cover the cost of these additional parent truant officers, or is that strictly the School District?
No, we did this as a volunteer labor of love position because we want to help the school system succeed so we went to the School District and we entered into those training Sessions just as a favor to Paul Vallas and his staff.
And is the 15,000 an increase or decrease from recent years, might you recall? It's currently 15,000.
I think that's the same, isn't it? It's a decrease, Councilwoman.
Which speaks to the value of the program. Finally, we heard earlier testimony from the Mayor's Office of Community Services that they run two truant programs, if you will. Do you know 2442 3/12/03 - FY '04 OPERATING BUDGET what the total number is?
I certainly don't, I'm sorry to say. You're asking me how many truancy programs?
I don't know. Our goal is obviously criminal justice related and educationally related. In other words, we're looking to decrease the number of kids who wind up in front of youth aid panels or the courts by emphasizing in all that we do the need to go to school. And just as an aside, again, as a labor of love of my office, we have between 600 and 1,000 school children we invite to our office throughout the year every year. We feed them lunch. We introduce them to the criminal justice system from a jobs perspective point of view. We mentor them and offer them new ways to think about career options. Their teachers love it. We love it. And it's a good way to show youngsters to think universally when you're thinking education and job opportunities. So this is something that I started 2443 3/12/03 - FY '04 OPERATING BUDGET several years ago, and it's increased in popularity and support throughout the School System of Philadelphia.
I'd like to speak with you later about that in a smaller setting.
You're welcome. The Chair recognizes Councilman Clarke.
Just one quick question. It's kind of somewhat related to testimony that we had yesterday when we had the courts in and the Clerk of Quarter Sessions and there was some requests for additional funding in part because of increased arrests, increase cases associated with crack down on crime, drugs. And I asked a question about some statistics that I didn't 2444 3/12/03 - FY '04 OPERATING BUDGET quite understand. And I got an explanation, but to be honest with you, I still didn't understand that particular explanation. Maybe you can shed some light on that. My understanding is that the prison population is down from prior months. And I basically asked if the increase in arrests and cases, why do we have a decrease in the prison population?
I'm disadvantage because I didn't hear what the Clerk of Quarter Sessions or whoever the official was who appeared before the committee. But the prison population can be decreased for a variety of reasons. Number 1, because of the offenders who are being arrested by the police, many of them are capable of posting bail because of the nature of the charges. There could be increased paroling power of the court. There could have been sentencing by our courts to state prisons. There could be a variety of reasons why the population is lower, although as I was given to understand over the past several months, the prison population was over 8,000. Now, that in and of itself is a very high figure, and I don't know what 2445 3/12/03 - FY '04 OPERATING BUDGET the figure is today. And I'm just sort of speculating or guessing what the decrease is, but essentially if a person is arrested by the police for possession of a small amount of drugs in his or her possession, that's bailable. And a lot of our bail commissioners would put that person out on nominal bail or a figure of bail, say, 10,000, but no money is posted. The defendant just signs his or her name to this imaginary bail bond and says that if they fail to appear, they'll pay $10,000. Well, they frequently fail to appear and there's no effort to collect the $10,000. So any number of things can explain a diminution of population in the prison without diminishing necessarily the numbers of arrests.
But that's not abnormal. Is there anything abnormal going on, to your knowledge? People have been able to post bail.
I'm not aware of anything that's abnormal. Remember, the police arrests have piqued and they go up and down, like anything else. Prison populations go up and down, but I'm not aware of anything, to use your term, abnormal about the population decreasing. Obviously, one of the things 2446 3/12/03 - FY '04 OPERATING BUDGET is you have to be careful that prisons don't get too overcrowded that we have another lawsuit on the City's hands.
I'm comfortable with the fact that the population is decreasing. I guess what I'm trying to find out, are we accepting more plea bargains or is there something going on with individual's ability to now post bail as opposed to in prior years?
All right. I was just trying to get an explanation. Thank you. Thank you, Madam President.
You're welcome. At this time the Chair recognizes Councilman Nutter.
Thank you, Madam Chair. Good afternoon, Madam District Attorney.
I wanted to ask a question about -19 in the budget book.
I don't have that before 2447 3/12/03 - FY '04 OPERATING BUDGET me, I'm sorry to say, Councilman. Would you indulge me a moment while a take a look at this so we can try to ascertain what it is? We have it. Thank you.
I didn't think Rob and company were getting so cheap that they weren't giving the departments the details of their own budgets. I just wanted to ask -- it makes mention here the grants are basically passed through grants to organizations that are assisting the office and structural dealings with crime victims. Who are these grants going to?
These are essentially community-based organizations, victim witnesses assistance folks who work out in the community in every neighborhood of the City.
Do we have a listing of the recipients or participants in the program?
Yes, sir, I think we do, Councilman. Just give us a moment while we try to find those names for you.
We have a pass-through from PCCD, the Pennsylvania Commission on Crime and Delinquency, that gives the money to us and we pass through to the Philadelphia Children's Alliance, for example. We have another one, a grant as a pass-through to the Anti-violence Partnership. Let me just see if there are any others. We also have a pass-through to St. Gabriel's Hall that does our juvenile work. I think those are the three that would cover that amount of money, Councilman.
Okay. If you could provide to the Chair a detailed listing of the organizations, who they are and what they do, that would certainly be helpful.
You mean people who come from the Pennsylvania Commission on Crime and delinquency that refer to this document, 31-19?
-19, you want a list of the groups who are getting that money and source of the money?
We will provide that. 2449 3/12/03 - FY '04 OPERATING BUDGET
We get materials from your office from time to time, which I do appreciate, with regard to the -- I don't want to call it -- it's not a sheriff's sale, it's the forfeiture of properties. And there are these, I guess they call them, auctions.
Auctions, it's a public auction, yes. Ever state legislator, representative, and senator, all elected officials and the general public, these are all advertised sales at public automation, yes.
Could you get us a list for the past year and maybe categorize it by ZIP code as to how many properties actually went through the auction process and then the total number that was at least available for auction? I don't know if every property gets taken when you have these auctions, but if you could also detail which properties were actually acquired by people through the forfeiture process, I'd appreciate it.
Thank you. I wanted to ask you about a recent news account regarding a State Supreme Court committee on 2450 3/12/03 - FY '04 OPERATING BUDGET the issue of moratorium regarding the death penalty. Are you familiar with that committee and its work.
I know the committee. I haven't had a chance to read the report since it was just issued, I think, two days ago.
All right. I think the news account was Wednesday, March 5th, the story ran, but I think it's actually a fairly large report. We've had some discussion about this particular issue in the past. Are you aware of any of the members of the committee, any of the people who served on the committee?
Councilman, I'm sorry, I don't remember who was on the committee. I'm sure that I know some of them by either name or some sort of association, but I haven't yet received a copy of the report.
Has anything, whether it's this Pennsylvania report, and we acknowledge that you haven't had a chance to read it, but has anything happened in the course of past year, given some of the other events are the actions taken, for instance, in other states that has given 2451 3/12/03 - FY '04 OPERATING BUDGET you any concern with regard to the issue of the death penalty in general or moratoriums specifically with regard to Pennsylvania?
Councilman, I am always concerned about people to assassinate people on our street and I'm always concerned about the pursuit of justice. We, as I've told you previously, consider the death penalty the last resort of our society, and we seek it only in cases that we deem appropriate rate and leave those decisions up to our public. The debate about capital punishment has existed in this country as long as there's been capital punishment. And we are, obviously, involved in the debate. So to that extent, we're always concerned about how we best achieve justice. And we believe that until or unless the Governor says, "I'm going to agree on a moratorium," which he has so far decided he is not in favor of or our legislature decides the law or our courts decide to strike down the law, we will follow the law of Pennsylvania and the United States Constitution and the Commonwealth of Pennsylvania.
But did I understand you to say that if the Governor is in support of the 2452 3/12/03 - FY '04 OPERATING BUDGET moratorium, you would then be in support of the moratorium?
I don't know what he's going to say and I'm not going to guess what the governor is going to say until and unless he says it.
I understand that, and I'm not trying to guess either. I was taking it based on the statement that you made and you made reference to the Governor and what he might say. And I understand that the dealt penalty can be imposed in accordance with the State guidelines. Some of our discussions in the past has been, I think, in the area of whether or not it must be imposed as opposed to either life with no parole or other measures that can be taken. I think you've characterized it more as, "It's the law and we're going to follow the law," but you're not always required to seek the death penalty; is that correct?
We are not required to seek the death penalty. It is discretionary, and we exercise our discretion with care and caution and with a lot of thought.
Lastly, as a part of 2453 3/12/03 - FY '04 OPERATING BUDGET this particular debate, and there was -- I don't know if you saw the newspaper story. It was on the front page of the Inquirer on Wednesday, the 5th, the top of the fold, there was a chart, and I just want to ask you about some of the figures in the chart and what your views might be. From the report, it indicates that percentage of inmates on death row who are categorized as black is 62.4, but that blacks comprise 9 percent of Pennsylvania's general population and that whites on death row are 30.6 percent whereas the white population in Pennsylvania is listed as 87 percent. Do those numbers either surprise you or give you any pause for concern as it relates to how death penalty cases are either handled or how certain people end up on death row? Do those numbers seem unusual to you?
Well, they seem unusual in this respect -- and again, I'm at a disadvantage. I don't have the report. I haven't looked at the methodology or --
I'm sorry, may I finish my statement? 2454 3/12/03 - FY '04 OPERATING BUDGET
I haven't looked at the report. I have received a report. No one sent it to me yet. I haven't examined the methodology or the reasons for the conclusions reached. But I will state as an observation, and I can't go further than that, I don't know why they would use as a comparison the figure of the numbers of blacks in the population, the general population of Pennsylvania, and use that against the number of prisoners in prison. I think that's the wrong way to measure whether the death penalty is being sought appropriately. So I can't think of a worse way to make a comparison than to say, "Well, the general population of the State is X, and the population of death row is Y, so therefore this is the correct measure." I think a better and more fruitful way was to look at perhaps the prison population or those of the prison population who commit murder, not the general population, and then see if that's an appropriate counterbalance. In other words, vis-a-vis, the number of people on death row, how many people commit murder, how many people are of what race or another and to see if there's a 2455 3/12/03 - FY '04 OPERATING BUDGET correlation between those figures, not the general population of the Commonwealth of Pennsylvania. The general population is not committing murder, it's a small percentage of that population, so you comparing apples and oranges, frankly.
I understand. Do you think that from a percentage basis, the percentage of African Americans who commit murder are on death row in the same percentage as the percentage of whites who commit murder who are on death row? Are those numbers flat?
Councilman, unless I know the numbers and have a chance to look at it, I'm not in a position today to answer your questions.
But based on what you said earlier in terms of an analysis or a comparison, I think your premise is -- and I don't want to state what your premise is, but --
My premise is they used the wrong way to compare population to population.
I understand that. But you would think that the if the system is operating fairly that the percentage of one race that commits murder, a comparative number or number 2456 3/12/03 - FY '04 OPERATING BUDGET close to that should be the same percentage who are on death row has compared to the other.
I think that would be a better way of measuring it, Councilman. I'm not saying --
We'd have to take a look at that, Councilman, and see whether our methodology and figures is a better measuring place than the general population of Pennsylvania.
If there was a disproportion between those two figures, would that give you concern.
Well, Councilman, I'll tell you what, I am concerned about justice in Philadelphia. And when the Supreme Court reviews the report and shares it with us and we have a chance to discuss it more fully, I'll be in better position to answer your question. I don't think that it's appropriate here to just stand up or sit down and bandy things about without a full reading of the report and an analysis of what was decided and why. Only then when we analyze what the 2457 3/12/03 - FY '04 OPERATING BUDGET committee did and why can we then look at those figures and say what is and what is not disproportionate.
I can certainly appreciate your a perspective, and I don't know why the court didn't send you a copy. I don't have a copy either. I just read the newspaper story. I at least have access to that. And the jump of the newspaper story actually apparently directs people to the court's web site and I think anyone can get it have access to it. At least from my perspective, as taxpayers dollars are being used to potentially send someone to prison and on death row and to, as has been characterized I think the penalty of last resort, it is at least from my perspective more than appropriate to ask in a budget hearing how taxpayer dollars are being used especially in light of some of the controversy and increased the amount of debate on that particular issue, not only from a cost standpoint but also certainly from a human standpoint. So I can appreciate that we won't have a full debate and discussion about this. And if you do have an opportunity to access the court's web site, that might be the easiest way to get ahold of 2458 3/12/03 - FY '04 OPERATING BUDGET the document. But we have, as you know, had some of this conversation in the past. I think it is an important public issue. We're all public servants trying to represent our respective constituents, and it is an item of active conversation and debate as late as last week out of a committee established by the Pennsylvania Supreme Court. So, obviously, the Court must care somewhat about this particular issue. I don't know why they established a committee, but when you look at the list of people who are on the committee -- and I think you're right, you'd probably recognize some of these names. Judge Chen and Andre Dennis and our City Solicitor Nelson Diaz, and Professor Haddon up at Temple and Charisse Lillie and Lynn Marks, I mean, some fairly well-known Philadelphians. There might be others. I don't know some of the other people on the list. Sounds like a fairly decent group of folks who were serious about looking at this issue. So I'll b glad to pass on any additional information I get. I appreciate your viewpoint. Thank you.
Thank you, Madam Chair. 2459 3/12/03 - FY '04 OPERATING BUDGET
Thank you. Are there any other questions from Members of City Council? (No response.)
There being no 7 further questions, you may be excused.
Next we have the Defender Association. Good afternoon.
Good to see you too. Welcome. Would you like to proceed with your testimony? I see it's quite extensive, but you'll summarize it.
It will be a very brief summary, Councilwoman, I assure you. My thanks to you and to the Members of City Council for allowing us to appear here today. It gives us an opportunity to thank you for the continuing support of the Defender Association over the years, and most specifically this year we're very grateful that the Mayor and City Council have 2460 3/12/03 - FY '04 OPERATING BUDGET agreed to an administrative pay plan that will help us over a four-year period to gain parity with the City support staff which will help us in terms of stability and productivity. We're also busy working with the various Welfare to Work Programs to build a better work force for Philadelphia. This is a tremendous help to us. The biggest news for us in 2002 and the biggest dislocation we've had in a long time was our move from the offices at 17th and Arch to 1441 Sansom Street which was accomplished at the beginning of July in 2002. I must introduce my first assistant Charles Cunningham on my left and our Controller Salim Twardos on my right, and thank those specifically as well our business manager Linda Kozinski and my assistant Chris and our Assistant Controller Christian Mule who along with our Information Systems Manager Rus Tower were responsible for probably as seamless a move as was possible under the circumstances, but it was extremely stressful. In addition to moving into a building that was not completed and our elevators weren't ready, we have a landlord who was building 2461 3/12/03 - FY '04 OPERATING BUDGET apartments over our heads, so it's been a daunting to get relocated, to get our new voice over data system in place and our computers converted to windows 2000. So I express publicly a great deal of thanks to the business manager as well as to our information systems manager and his small staff for completing this work. We also worked extensively during this year with City agencies, Capital Programs, Public Property, and Finance to see that we're doing the best with the money that we have and what we need to be economical in this new very costly location we're in as compared to where we were. We're in the midst of having an energy audit done because our electric bills have skyrocketed well beyond what was expected. But we keep on trucking in terms of where we are in trying to get things set up for our staff. As a brief recap of the work over last year and partly in answer to Councilman Clarke's question, the reason why the prison population is down is that there are fewer arrests. It's a very simple equation. There were 3,000 fewer arrests in 2002 than in 2001. Right now, we have seen a drop on a monthly basis to well below -- what had become 2462 3/12/03 - FY '04 OPERATING BUDGET the standard last year was about 4,000 arrests a month. It's now slipping down about 300 a month, which is why primarily the prison population has fallen below 8,000, the high watermark it reached just a month or so ago. During last year we were appointed to represent clients in 72,000 cases. We handled an astronomical 377,000 court listings for our clients and also produced 75,000 miscellaneous pieces of work such as social service interventions, investigations and interviews. What we've seen, just a brief snapshot, over ther last is we have seen a levelling off in terms of the numbers of cases except probably homicide and our special defense. But Municipal Court cases have leveled off at about, for us, 80,000 listings a year, which is a lot of cases, but it's 6,000 below what it was the year before. So the cases have leveled off.
Not that it's not still an extremely heavy load, but what we're seeing is a very significant increase more in the social service aspects of what we're doing for our clients, and this, too, is part of why the prison population is dropping is because more people are being released 2463 3/12/03 - FY '04 OPERATING BUDGET to go to treatment programs and on early parole through the efforts of our Probation Department or Adult Social Service. Adult Social Service last year had an increase of 40 percent in the numbers of cases that they were handling. And our clients who were placed into treatment programs jumped from 874 in 2001 to 2700 last year, so there's a threefold increase in the number of people we're placing or being able to place in treatment programs. Of those persons, 86 percent of them were in jail at the time they were released to go into treatment. So I think we're beginning to feel the affect the FIR Program, the Forensic Intensive Recovery Program, and the numbers of people we're able to get out and into treatment. It's really very encouraging how well we've done on alternatives to incarceration. The Probation Department, as I mentioned, last year handled 50,000 probation hearings and handled an additional 40,000 calls and letters from clients and their family. Our Juvenile Unit this past year was honored with the American Bar Association's Juvenile 2464 3/12/03 - FY '04 OPERATING BUDGET Defender Leadership Award and also was busy during this year producing a video with a grant that we received. It's entitled "Protecting the Rights of Philadelphia's Children," which we completed a couple months ago and will be using in schools and at the Youth Study Center to educate children on what their rights are and how the judicial system operates. We've also done a lot of work in our Juvenile Unit on the girl's initiative because there has over the years been a disparate treatment of young women because there have not been treatment facilities available for girls. The Assistant Chief of our unit, Sandra Sifkins (ph), has been very much involved in this, not only the disparate treatment issues, but also abuse issues. Many of the girls who are arrested have been subjected to abuse, whether it's physical or sexual. And a lot of the things they get arrested for are acting as a result of that abuse. So we've been working over probably now three years on a girl's initiative. Our Juvenile Social Services, I mentioned also has a significant increase in the number of cases, a 27 percent increase in the cases that they're handling, 2465 3/12/03 - FY '04 OPERATING BUDGET so that piece of our work is really burgeoning. Our Prison Services Unit has succeeded in a program this year to bring down state prisoners so that they may get a speedy trial. And also we have succeeded in being able to bring them down to Graterford. We did this on our initiative with courts and the DA and everyone else to see that there would be space for them to stay at Graterford so they could be brought to Philadelphia just for the day and not crowd the Philadelphia prisons, have their trial heard, and then also if they have preliminary hearings to take care of, preliminary hearings as well. This was a new program, and there were 350 state prisons who took advantage of this opportunity. The last two programs we've been very involved with over the last year have been Community Court which has actually had a one-year anniversary. We've represented 600 clients in Community Court on misdemeanor charges, and it's really been enormously successful especially in terms of the wide variety of treatment programs that have been available and the social service piece has been very well developed in community court and is working very 2466 3/12/03 - FY '04 OPERATING BUDGET well. We're also involved and have been since April '97 in Treatment Court which deals with the persons involved in misdemeanors and felony drug-related offenses.
In that five-year plus time since April '97, 85 percent of those who have gone through Treatment Court, and it takes a full year, 85 percent of them have successfully completed a year without any further involvement with the law. That's 480 people and that's 480 people who might otherwise be in prison but have taken advantage of this program. It's been a wonderful success. That's just a brief snapshot of some of the work we're involved in in addition to all the daily courtrooms we are staffing. 6 million for Fiscal Year 2004. We have been meeting with the Budget Director and re continuing our meetings to resolve some unresolved issues from Fiscal Year 2003 so that we can determine a proper base for Fiscal Year '04. We're working on those issues and we met probably, I guess, about a month ago now and our discussions are ongoing with Budget Director Dubow. 2467 3/12/03 - FY '04 OPERATING BUDGET For Fiscal Year 2004, we will requesting an additional amount of $817,300 in recurring costs. And it's divided into just two categories, $760,000 for additional costs of benefits and insurance for our staff, and $57,300 for additional utilities expenses that we have incurred in our new location. 90 per square foot. So you can see why we've been working with Public Property to get an energy audit and to find out exactly what's going on and if that's what we're going to face. So that's what that additional amount is. In addition to that, there's only one other non-recurring request, and that's for $83,000 for a back-up generator for our telecommunications system. We had allocated 50,000 for that, but the estimate because it has to be now placed on the roof of the building has skyrocketed and it's up to $133,000. So those are the requests that we are making of City Council that we have made to the Budget Director on behalf of the Mayor. I can say at this point in time we will certainly continue as we have over these many years 2468 3/12/03 - FY '04 OPERATING BUDGET to provide what we consider to be high-quality legal representation in the most fiscally responsible way we can. I thank you for all your support over the years and thank you for hearing us out today.
Thank you. And we thank you for your support and your leadership through the years. I think it's great that the prison population is down and the arrests are down and that clients are receiving drug treatment. Are you working with the -- I guess the question I really want to ask you, do you believe that the state budget, Governor Rendell's budget and the cutback in the drug and alcohol abuse funds will have a serious impact on what your are trying to do?
My expectation will be that it will. Because most of the funding for these treatment is handled through Philadelphia's Department of Health and I don't know where they fair in the Governor's budget, but it seems as though everyone who's engaged in anything to do with the social services network is going to be hit. I know we have already been told in terms of our work in the Juvenile Unit, but this comes from the Justice Department in Washington, that they will be 2469 3/12/03 - FY '04 OPERATING BUDGET cutting out some of the our grants that we have had for work with juveniles for mental health cases, for those who have special education problems. Those grants will be disappearing right away at the end of this fiscal year. I would expect certainly that we're going to feel the impact of the budget as it presently exists that the Governor has presented to the House and Senate.
Charles Cunningham. I think you're rightfully concerned about the cutback on these things. I think one of the things we need take a look at is the success of programs such as Treatment Court and the FIR Program because if these programs are impacted, then what you're going to see is you're going to see everything rise. The first thing you're going to see is a rise in the prison level again. So you're really looking at a situation where people are going to have to say, you can pay me a little bit now or you can pay me a lot later. And I think there needs to be a reexamination as to what needs to be cut because in the end, if you cut these programs back and you deprive these people of the means to get the treatment, then you're only going to create a 2470 3/12/03 - FY '04 OPERATING BUDGET problem down the road. And that's what we're going to be facing. And I think, once again, if you look at the impact that these programs are having and the success that they're having, then there's no -- what we really should be talking about is expanding these programs to make the treatment more available rather than less available.
We agree with you on that. Are you allowed to taken any action to notify our Congressional Delegation about the possible loss of those grants?
Very happy to be supportive of that. The Chair now recognizes Councilman Nutter.
I don't have don't have a question. I do have a comment. Ms. Greenlee, I was quite pleased after at least all the little time that I've been here, what I thought I heard you say was that as a result of the ongoing discussions with the Budget Office 2471 3/12/03 - FY '04 OPERATING BUDGET which my recollection is -- and it may predate my time, but I know this issue of pay parity with the District Attorney's Office certainly came up during my time in, I think, the early '90s. Did I understand your statement to say that that parity has now been reached and is not just the illusive goal?
With the attorney staff no, it has not -- the equality has not been reached. The pay equity plan ended last year. I'm sure that the District Attorney has stepped a bit of us because she will never allow us to catch her. And I know that their starting salary probably is at least a thousand or 1500 more than ours. What I was talking about, actually, was the administrative pay plan today because we're just starting that in the hopes of catching up with the City. But we will start to fall behind the District Attorney in terms of attorney salaries.
You will keep the Council informed of that situation. I know it kind of ebbs and flows, but there has been a concern over at least the past 8, 9, 10 years about the pay parity issue and access to a wide variety of 2472 3/12/03 - FY '04 OPERATING BUDGET resources so that you can do your part in the administration of justice and the District Attorney can do her part in the administration of justice. And I think when the two parts are working together, you actually have something that is close to what any of us might think is a fair system of justice. But both sides have to, I think, have adequate resources. I think on our side you've been working with the President's office and Finance staff on these kinds of issues over the past couple years?
Well, actually, we've probably worked more with the City's Budget Office than we have with Council.
I understand. Rob's a good person to work with no matter what I say about him from this particular vantage point. He does track after the money. No better person to look after your own funds because he treats the City budget as if it is coming out his pocket personally. So the answer is, "No. I'm sorry what was the question?" (Laughter.)
Seriously, you'll 2473 3/12/03 - FY '04 OPERATING BUDGET keep us informed as to what's going on?
We will. Actually, the biggest difficulty is trying to get any accurate information as to what the District Attorney is paying people. So it's a little hard to know exactly where we are, although that I am sure that we are certainly a little bit behind if not a lot behind.
Ms. Greenlee, I just left your nephew. He told me to say hi.
I just got a from my legislative assistant about some earlier question I had asked, actually, yesterday and as recent as today. I had a question about this whole issue of prison population, arrests. In earlier 2474 3/12/03 - FY '04 OPERATING BUDGET testimony from the First Judicial District and the Clerk of Quarter Sessions. I think there was actually a request for an increase because the increased number of arrests as a result of the crackdown on crime, Safe Streets, on and on and on. And I asked about the fact that the information that we had received that the prison population was down to 7100 and to explain why that is the case. And I was told that essentially people are able to make bail now more so than they were in past. I've heard that people were referred to state prison as opposed to the county prison. There were a number of things that were told to me that created that particular scenario. I guess now I need to ask you since I've talked to essentially three branches of government as it relates to judicial system, the First Judicial Clerk of Quarter Sessions, and the District Attorney today. They all gave me similar responses. Can you first clarify the prison population, did that in fact go down?
Yes, it has gone down. It reached a high point of 8,000 probably about two months ago. And it has gone down. And two simple reasons for that are there fewer arrests. Last year 2475 3/12/03 - FY '04 OPERATING BUDGET in January of 2002 the arrests were 5103 people who were arraigned. In December, that number was 3672. So that high point we reached in terms of arrests at the beginning of last year and prior to that of 5,000 was like a huge number we'd never seen, has now fallen on average to 4,000 or below in the last -- probably only in the last 3, 4 months. Also, there are a lot of people being released to treatment programs. Last year there were almost 2700 people who were released to go to treatment programs through the forensic intensive recovery program. But it really is the drop in arrests. And Safe Streets has not increased the number of arrest, actually the number of arrests have dropped.
It's a deterrent. And I think that Commissioner Johnson expressed it that way. Their idea was not that they were going to be making more arrests, but they were going to provide a deterrent and drive people out and there would not, in fact, be more arrests, and there are fewer 2476 3/12/03 - FY '04 OPERATING BUDGET arrest now.
As a matter of fact, I think that they thought that it would be considered a success if the arrests went down because that would indicate that the sellers were not out on the street making sales.
With respect to the Safe Streets program, the fact that we have a deterrent, people are now not openly selling drugs on the targeted drug corners and there's obviously a shift in the focus of drugs, we assume -- or do you think that there are less drugs being sold or do you think they're shifting their method of operation?
I defer to Charlie. He's the one that's out in the districts more than I am.
Let me say this. My thoughts on the matter are that there's probably a shifting of how drugs are sold. I know that the police philosophy in this matter is that by creating a situation where the police are on the streets and the drug sellers can't be in their open air market situations that this, hopefully, will drive the drug traffic out of Philadelphia. I'm not sure that that's what takes place. People are very 2477 3/12/03 - FY '04 OPERATING BUDGET resourceful and most times people will resort to other methods. I think, however, the police themselves would probably be the best people to see whether or not this has, in fact, led to a drop in the actual sale of drugs in the City of Philadelphia. I mean, you can say, yes, there's been less sales of drugs in Philadelphia because now we're not catching the people because they've gone to a different method of selling the drugs or place to sell the drugs. So I'm not sure that you can really assess the validity of the program.
Have we -- and I don't know if you have this information. I guess the police will probably. Have we seen an increase in drug sales in surrounding counties? I know at one point there were some concerns raised by outlying counties that some of the drug sales were shifting to outlying counties.
You're asking me a question I don't have the answer to. I can't say 2478 3/12/03 - FY '04 OPERATING BUDGET that I've heard any outside public defenders office calling us and saying "Boy, we got a lot more clients."
I'm not. It's not even a question of breaching it. I just don't know that I can speak on that issue because I haven't heard one way or the other that this program has, in fact, forced the drug sales out of Philadelphia and into the outlying counties. I'm not sure that they have the ability, to be honest with you, to really assess whether or not Safe Streets is, in fact, cutting down on the sales of drugs. I think they can say that perhaps this program has turned the streets back over to the neighborhoods. People might feel safer walking down the street, because I know that that's one of the things that the Mayor has talked about. That may be happening. And there's nothing to say that that's not a valid thing to happen. But I don't know whether they have the ability or whether anybody really has the ability to determine whether this program has actually cut down on the sales or use of drugs in the City of Philadelphia. 2479 3/12/03 - FY '04 OPERATING BUDGET
Just one figure for you, Councilman, which I mentioned earlier when you weren't here. From 2001 to 2002 there was a reduction of 3132 arrests. So that's a fairly substantial drop in that one year.
We've achieved step one, we've got them off the corners. Now we've got to figure out a way to enhance our ability to stop that problem indoors, which we assume that they're -- being as resourceful as they are, we assume that they're probably to some degree --
To be very honest with you, I think the only way that you're really going to be assured of cutting down on drug sales and drug usage is you're going to have to commit yourself to programs. One, teach about the use of drugs to our children when they're in school at a young age. And then commit to programs that are, in fact, going to provide treatment for those who have become afflicted with drug use. Until we are truly committed to that and doing it on a wider basis, then you're going to have drug problems. You're going to have drug sales as long as people want drug 2480 3/12/03 - FY '04 OPERATING BUDGET sales. The way to clean up the drug problem is to dry up the demand. And we will only dry up the demand by teaching the youth of the country, the youth of this city, about how destructive drugs can be. Once we do that and we then provide treatment for those who have become afflicted with it, I think that's when you're really going to see a drop in drug usage.
Since you're bringing that point up. You're obviously familiar with the Scared Straight Program.
It's my understanding -- and I know you're not in charge of the prison system -- that the ability to have that program in the prisons has been reduced or eliminated. Do you have anything about that?
I have not heard that it has. I don't know. I honestly don't.
I think there were serious questions raised about its efficacy, that it really didn't seem to work.
Yes. And I'm sure there are other problems attached to it as well. 2481 3/12/03 - FY '04 OPERATING BUDGET
When you say the educational component as it relates to young people and older people not to get involved with drugs, do you have any recommendations as to what strategy we should take?
I know that we have some programs that go out to the schools. We have to take steps and educate our children as to just how destructive drugs can be. I'm fortunate because I have the ability to talk to my sons and to give them specific examples about how destructive it can be. I've had the ability to bring home a picture and show a women at and that same woman at and 15 showed it to my sons and say, "Do you believe that 16 this is the same person?" And they couldn't believe 17 that it was the same person because they thought it 18 was the other person's mother. And I have the 19 ability to talk to my children and give them 20 examples of how destructive it can be. We need to 21 do those things. And we need to go out and we need 22 to -- and it's not a one-time program. It is a 23 persistent program. It is persistence in showing 24 and demonstrating how destructive it can be. 25
Unfortunately, in a 2482 3/12/03 - FY '04 OPERATING BUDGET lot of areas we don't have the family structure that would provide that type of leadership, so we're left with in too many cases government or some agency taking the responsibility of providing that training and that leadership. And I guess I'm asking you as it relates to government agencies, if there is a shift in the focus in terms of arrests and if there are any cost savings associated with arrests? If you believe drugs are still being sold, should we target that cost savings to programs that would ultimately decrease the demand for drugs as opposed to simply driving it inside and it continuing to destroy lives?
I think we do need to target more of the money. For instance, the District Attorney's Office has money that they get from confiscating and selling property. I think some of that money could be used to be poured into drug programs and to different programs. You know, when you look at Treatment Court, I think Treatment Court is amazing. I think it's amazing for a number of reasons. One of the reasons I think it's amazing is because of George Mosley -- and I don't want to demean the District 2483 3/12/03 - FY '04 OPERATING BUDGET Attorney herself, but I think George Mosley who was first involved in it from the District Attorney's Office went into this program with the right attitude. And the attitude was to understand that people who have drug addiction are going to have relapses and you can't just say once they have a relapse to lock them up and throw away the key. It is a realization about what it takes to recover from drug addiction. And when you look at the success of Treatment Court, if you're really concerned about resolving the drug problem, you can't help but say to yourself, "Why don't we begin to expand this program? Why don't we begin to look at other programs and understand what it is?" So I think there are things that can be done. There's money that can be obtained by forfeitures from the district Attorney's Office. I'm not saying take everything from them, but I'm saying some of that money may be used for these kinds programs. Why not use some of that money for these types of programs?
Thank you. 2484 3/12/03 - FY '04 OPERATING BUDGET The Chair recognizes Councilwoman Blondel Reynolds Brown.
You mention in your testimony that there has been a 27 percent increase juvenile crime.
No, not juvenile crime. In social work; in the number of case being handled by our Social Services Unit, not in the number of arrest of juveniles.
Okay. Restate your statement because, clearly, I got it wrong.
I probably wasn't communicating correctly. What I was talking about was the increase in the number of cases on which we're social service referrals. And the Juvenile Social Services Unit, which is a specific unit of about eight social workers, their work increased over the last year by 27 percent. So they were taking 27 percent more referrals and working with the youngsters. 2485 3/12/03 - FY '04 OPERATING BUDGET There has not been -- I think with the juvenile crime, it's leveled off. The number of arrests have pretty well leveled off, the same as with adults. Not that it's not high; it is high, but there hasn't been sharp spike of the numbers of juveniles arrested.
And what might you contribute the levelling off to, what factors?
I don't know other than there really are fewer arrests being made. And I guess substantially if you were arrest for drug cases, that seems to have cut into that case load.
You mention on of your testimony -- you give some discussion to the Girls Conference.
Can you speak to what the goals or outcomes have been as a result of that initiative, and will it be ongoing?
It will be ongoing. One of the primary reasons for this initiative was that girls who were arrested were staying in custody longer because there were fewer facilities that would accept girls. So that has really, 2486 3/12/03 - FY '04 OPERATING BUDGET Councilwoman, been the focus of our efforts. And I can't tell you specifically how much more we have opened up in the way of treatment because I didn't i inquire about that. But that has been the focus, to find more treatment options for girls who are arrested so that they do not stay in custody comparatively so much longer than males do.
I think their average stay when we started this two years was like 30 days or 40 days. The boys were not staying anything like that, and it was simply a matter of there not being placement. So we've been working with court administration and dispositional planning unit to enhance that. I can't tell you specifically right today what the results were, but I can certainly find out from Sandra Simpkins who has spearheaded our work and who has written a couple of articles about it.
Yes. You actually 2487 3/12/03 - FY '04 OPERATING BUDGET mention that in your testimony. That particular document, Violence Against Women, is that available through your office?
Thank you very much for your testimony. Thank you, Madam Chair.
The number of drugs being sold is not down, is it, that you know about? I think that's the statement that you just made.
My statement is that I don't know that you can say that the number of drug sales has been down because I don't know whether or not drug dealers have resorted alternative methods to dispose of the drugs or sell the drugs. And I don't know whether you're in a position to say that drug usage is down in the City of Philadelphia. 2488 3/12/03 - FY '04 OPERATING BUDGET
Is the level arrested are down across the board in terms of different categories of crimes?
They kind of leveled off. I wouldn't say that they're dropping so much, but they've leveled off in most areas.
I think your question is whether or there has been a drop, for instance, in burglaries, a drop in robberies, a drop in car case; or are we just seeing more or less a drop in drug sales. I don't know if these figures that we have here break it down in terms of the categories of the crimes. My suspicions are --
I'd say that my suspicions are that you may have seen a drop in the number of people who are being arrested for possession of drugs. You may recall that former Police Commissioner Timoney came in, he had an initiative 2489 3/12/03 - FY '04 OPERATING BUDGET and he was talking about the quality of life crimes. And I think that his program was attempt to arrest as many buyers as well as sellers. I'd like to take a look -- and I don't know what the figures look like with regards to buyers and whether or not there's been a decrease in the number of buyers, because perhaps in the past -- I know at one time it seemed as though before Police Timoney's initiatives began, the police might look and arrest two buyers as opposed to when the initiative began arresting four or five buyers. So if you're now returning back to a system where you're just arresting maybe or buyers and not waiting around to arrest five more buyers before you arrest the seller, then that's certainly going to produce a decrease in the number of arrests and you're going to see that reflected MC. And I think that we are seeing a decrease in the MC case load. I don't have any specific figures myself. Court Administration may be able to give you figures as to what is the difference between the arrests of those people who are just being arrested for possession now as opposed to a year ago.
Have we achieved 2490 3/12/03 - FY '04 OPERATING BUDGET equity between your office and the DA?
Well we don't have any figures to compare because they don't allow access to their figures. I would have to guess that it's on average with our young attorneys fewer than 10 years experience it's probably a difference that range from 1,500 to $5,000 in what the district attorneys are paid and what our -- and that's probably a conservative figure.
Well, the average case load depends on -- because we have a zone system, it depends on what courtroom you're in. If you're doing preliminary hearings, it's probably 30 cases a day. If you're doing misdemeanor trials, it's probably 25. With felony waiver work we try to cap it at 8 a day. Major trials is probably 15 a month.
Those figures can 2491 3/12/03 - FY '04 OPERATING BUDGET fluctuate. I mean, there are times when you can actually have more than felony waiver cases listed 4 on any given day. There are times when we have more 5 than 25 misdemeanor trials listed in a courtroom on 6 a given day. And there are times we have had lawyers 7 that have walked into preliminary courtrooms with as 8 many 40 files that they had to be prepared to put a preliminary hearing on. And each of those files not only has to be prepared the night before, but once you return to the office you are required to write up a summary. So there is an awful lot of paperwork that these young people have to take care of.
Thank you very much. Are there any other questions for Defender Association? (No response.)
There being none, we thank you for coming in to testify.
Next we have the City's Representative's Office and the Department of 2492 3/12/03 - FY '04 OPERATING BUDGET Commerce. Good afternoon, Mr. Cuorato. Would you state your name for the record and begin your testimony?
Good afternoon, Councilwoman Tasco. Good afternoon Members of City Council. My name is James J. Cuorato, and I am City Representative and Director of Commerce for the City of Philadelphia. Seated with me at the table today is Duane Bumb, Deputy Director of Commerce. Also available today to answer questions are other representatives from our department, the Division of Aviation and our quasi public agencies, PIDC and PCDC. 2 million. Of the General Fund amount of $41,372,050, 77 percent or $31,995,000 consists of the Convention Center lease service fee. The 2493 3/12/03 - FY '04 OPERATING BUDGET remaining $9,377,050 consists of $4,631,250 in economic stimulus funds and $4,745,800 for basic department operations which will be carried out with three fewer staff than Fiscal Year 2003. I would like to briefly highlight a number of items from our 2004 budget and also certain projects and programs in which we have been engaged over the past year. I will begin with the Office of City Representative which, as you know, contains the Office of Arts and Culture and the Office of Ceremonial and Special Events. 5 million for the Philadelphia Cultural Fund. 75 million. 75 million figure is the highest in the Cultural Fund's history and the $250,000 was added during this Administration as a reflection of our commitment to supporting arts and cultural organizations. Utilizing a substantive review process, the Philadelphia Cultural Fund made grants during FY 2003 to 214 local arts d cultural institutions. 2494 3/12/03 - FY '04 OPERATING BUDGET Our office is also responsible for the Art Commission, Art in City Hall, and the Percent for Art Program. " This program is designed to encourage Philadelphia residents and visitors to attend more arts and cultural events citywide throughout the year. The program involves the publication of a calendar which catalogs and promotes all arts and cultural events in neighborhoods throughout the City. In 2002, we tripled our distribution of this calendar. Our Office of Ceremonial and Special Events plans and implements official City ceremonies. In addition, our office either produces or is involved in the production of a number of special events and tourism initiatives including the Philadelphia Holiday Festival, the Philadelphia College Festival, the City Hall Ball which funds the City Hall tour program, the Philadelphia Marathon, and the Book in the Cook. Our office is also responsible for coordinating public relations and City services for festivals and parades and for distribution of official City gifts, proclamations, tributes, and citations. 2495 3/12/03 - FY '04 OPERATING BUDGET Moving to Department of Commerce side of our office, we function as the coordinating entity for the City's economic development programs and initiatives. Commerce directly manages the Keystone Opportunity Zone Program, City's Neighborhood Economic Development programs including those funded through community development block grant contracts. Economic development related capital improvements, international business development, including the sister cities program and business services through the Mayor's Business Action Team. Commerce also contracts and works closely with the Philadelphia Industrial Development Corporation and Philadelphia Commercial Development Corporation on loan programs and other business services. In addition, the economic development arm of the Empowerment Zone and the newly designated Renewal Community is housed within our offices to better coordinate economic development efforts throughout the City. Regarding the CDBG portion of our budget, we are still in discussions with the Office of Housing and Community Development and the Mayor's Office concerning our economic development 2496 3/12/03 - FY '04 OPERATING BUDGET allocation for FY '04. We have agreed to reduce our administrative costs by percent across the board 4 at Commerce, PIDC, and PCDC.
Further reductions in 5 programs are still being discussed and we will be in 6 a position to present our final economic development 7 plan as part of the CDBG budget that is presented to 8 Council. 9 Some of the highlights of our activities 10 over the past year follows: The new stadiums in South Philadelphia are both under construction. Having Lincoln Financial Field has enable us to submit a very competitive and aggressive proposal to host the Army/Navy game during the years 2004 to 2008. A decision from the academies on where the game will be played during those years is expected by the end of this month. Residential development has continued at brisk pace. New projects have included Phoenix, the St. James, 2121 Market Street, and Dock Side. We are moving ahead with development plans for the old Byberry Hospital site in Northeast Philadelphia which has sat dormant for years. We have developed a master plan that has received community support. 2497 3/12/03 - FY '04 OPERATING BUDGET We continue to support expansion of our major healthcare and research institutions, including the ambitious billion dollar put forth by the University of Pennsylvania and Children's Hospital in West Philadelphia. Turning to retail development, we continue to foster an environment in which retailers can flourish both downtown and in our neighborhoods. Examples include Burlington Coat Factory which will replace JC Penney as an anchor department store at the Gallery, and the announcement by Ikea that they will construct a flagship store and anchor a major 600,000 square foot retail commercial project in South Philadelphia. 2 million per year in new tax revenues. I would point out that Ikea was heavily courted by New Jersey. However, we were able to work with the developer of this project and complete agreements for Ikea to build in Philadelphia. Although, he's not here today, I would also mention that Councilman DiCicco played a key role in helping us to secure 2498 3/12/03 - FY '04 OPERATING BUDGET Ikea for the City. A major new shopping complex will be developed on the site on the Whitman's Chocolate factory in Northeast Philadelphia. 8 million in new taxes for the City. I would also comment that Councilman O'Neill played a key role in helping us complete this transaction. A new Borders Flagship store has just opened at Broad and Chestnut Streets. Rittenhouse Row continues to thrive as the hottest retail area in the region with new shops and restaurants opening regularly. Goldman Properties Development of the 13th Street corridor in Center City continues to move forward. Development is about to begin on another major retail development at 23rd Street and Oregon Avenue South Philadelphia on the site of a former Defense Department facility. And finally, in November of last year, Philadelphia welcomed it's first Krispy Kreme location to Northeast Philadelphia. One of the 2499 3/12/03 - FY '04 OPERATING BUDGET fastest food chains in the country, Krispy Kreme is looking for additional locations in the City. We have also spent considerable time and resources in spurring economic development projects in our neighborhoods. Some examples include Avenue of the Arts North, which has become a major focal point for this Administration and has a number of projects at various stages. These include the renovation of the historic Blue Horizon, the expansion of the Pennsylvania Academy for the Fine Arts, the revitalization of Progress Plaza, and the development of a major entertainment center at 1600 North Broad Street to be developed by Craft Co. and Canyon Johnson. Our staff worked on a number of neighborhood projects throughout the City, including a new Flyers Skate Zone in the Northeast, the Draft on Cecil B. Moore Avenue, land acquisition in the Frankford, and the People for People development at 800 North Broad Street, just to name a few. All of these projects will help to revitalize and strengthen neighborhoods and create jobs for residents.
We also continued our highly successful 2500 3/12/03 - FY '04 OPERATING BUDGET marketing planning and community festival program. To date, this program has supported 67 community events and neighborhood planning efforts. By 5 utilizing a portion of our economic stimulus funds 6 and dispensing grants in small amounts with a 7 matching funds requirement, we have been able to 8 support these efforts in virtually every 9 neighborhood in the City. 10 We will also continue our unprecedented 11 outreach programs to businesses, both large and 12 small in an effort to help them grow in 13 Philadelphia. Within the next 60 days we will begin the next phase of our business outreach program. Under this program, our representatives visit businesses selected at random throughout the City. Our goal this year is to visit 300 to 400 businesses distributed proportionately throughout the City by council district. Our representatives bring with them a survey to asses each business' feelings about doing business in the City and assess their needs for continued growth in Philadelphia. We will also continue our Center City office retention program. We have compiled a list of approximately 60 businesses in Center City who 2501 3/12/03 - FY '04 OPERATING BUDGET employ more than 200 people and whose leases expire in the next five years. Peter Longstreth of PIDC, Paul Levy of the Center City District, and I visit each of these businesses to determine their future plans and hopefully convince them to stay and grow in Philadelphia. We have visited approximately half of the businesses on our list and will look to complete our visitations this year. We are also planning to extend the program to business in the 100 to 200 employee range. This program has been successful in identifying several companies who had been leaning towards moving out of Philadelphia and has given us an opportunity to keep them here in the City. All tolled, the businesses on our list account for approximately $100 million in City wage taxes. Briefly, other highlights from the past year have included our assistance to a number of small businesses who are Philadelphia institutions, including old original Bookbinders, I. Goldberg Army Navy Store, and Esposito's Meats in the Italian Market. And then perhaps the most significant economic development transaction of 2002, American 2502 3/12/03 - FY '04 OPERATING BUDGET business financial services announced that by mid-2003 it will relocate its headquarters and 750 employees from Bala Cynwyd to 234,000 square feet in Center City's Wannamaker building. This company was heavily targeted by New Jersey and the suburbs but chose Philadelphia as a result of a creative incentive package developed by the City. Touching briefly on several other areas of development in which we have been involved, I would note the following: We have worked closely with the newly formed Innovation Philadelphia in order to enhance the global innovation economy of Philadelphia by providing the resources to grow, attract, and retain human and investment capital. While it has only been operational for a little over a year, Innovation Philadelphia has achieved a number of accomplishments in setting Philadelphia on the course to become a leader in the knowledge economy sector. From the hospitality and tourism sector, we have continued our Philly's More Fun When You Sleep Over Program which is now in its second year. This highly successful program has been directly responsible for the booking of over 54,000 2503 3/12/03 - FY '04 OPERATING BUDGET additional room nights since its inception. Due in large part to this initiative, Philadelphia was named by travel magazine as the top city in the country from post-September 11th recovery in the hospitality industry. On the waterfront, which has received a great deal of attention lately, we are working diligently through a process to select a new development plan for Penns Landing.
We currently have a request for proposals that is being prepared and will be issued to seven qualified development teams. The process that we have undertaken contains an unprecedented amount of public participation through our special Penns Landing web site and numerous forums and community meetings. I am confident that we will select a quality development team that will bring us the right project for Penns Landing. I would also note that the delay of Penns Landing should not obscure the fact that tens of millions of dollars have been invested in a number of quality project, including the $75 million Dockside Apartment Complex; the Moushulu, which will stay on the Philadelphia waterfront and has move into the Penns Landing Marina with a reopening 2504 3/12/03 - FY '04 OPERATING BUDGET scheduled for May 1, 2003; and the complete demolition of the former incinerator at Delaware Avenue and Spring Garden Street, creating an attractive 8-acre development parcel at a key waterfront location. We will be devoting additional time and resources to the development along the Schuylkill River. This Administration and the Commonwealth of Pennsylvania have fully endorsed a master plan for the title Schuylkill which represents what could be the next great frontier for development in the City. The planning includes a mix of recreational and commercial development and will be highlighted y a riverside trail and park. This heretofore untapped resource will be used to its full advantage for the benefit of all Philadelphians. We will also be launching a major new student retention program called the Knowledge Industry Partnership which will be chaired by Dr. Judith Roden, the President of the University of Pennsylvania. This partnership includes our Department, business and tourism leaders, and representatives of the major academic institutions in our region. Working together, we will achieve 2505 3/12/03 - FY '04 OPERATING BUDGET the goal of keeping our best brightest young people here in Philadelphia to live and continue their careers. To complete my testimony, I will just briefly summarize activities at the airport. I am pleased to report that during calendar year 2002, passenger traffic rebounded more quickly at our airport than in the nation as a whole. 6 percent during this period, our airport experienced a percent increase. million international passengers. Other major developments at the airport over the last year have included the near completion of the new International Terminal which will open next month, a $20 million expansion of Terminal D, a new $53 million aircraft de-icing station, a new $10 million aircraft rescue and fire-fighting training facility and two new garages which have added 5,000 additional spaces at the airport. We are also in the midst of a comprehensive master plan study that will identify facility improvement needs for the next 20 years. 2506 3/12/03 - FY '04 OPERATING BUDGET This master plan will focus on new runway configurations which will greatly increase our airline capacity and enable us to continue to grow this great regional asset. This concludes my testimony. I would like to take this opportunity to thank all of the members of City Council for their support for our activities over the past year. And myself and the staffs of the Division of Aviation and our development agencies are available to answer any questions that you may have. Thank you very much.
Thank you, Mr. Cuorato. The Chair recognizes Councilwoman Brown.
Thank you, Madam President. Good morning, Commerce Director and to your team. Let me start out first by saying congratulations to the Commerce Department and your Division of Aviation for the extraordinary showcasing of both fine and performing artists out at the airport. It's a nice way embrace tourists who come to the City and a welcome surprise for someone like me who lives here and was not aware of 2507 3/12/03 - FY '04 OPERATING BUDGET that wonderful addition, so it's definitely something that should continue. We know that the arts are thriving in Philadelphia and Philadelphia thrives because of the arts. And we also know that there's been substantial increase in the cultural fund. That's the good news. The bad news is that there are many more new and emerging organizations that are getting support from the cultural fund and because of that the per organization cost has dropped. Based on my homework, in FY '02, the number was 8929 per organization. And now with the support of the Commerce Department funding so many more organizations, that cost has dropped to 7980. So you should know because of that reality, I plan on introducing a budget amendment and hope to work closely with both the Administration and my colleagues who sit on the cultural fund board to come up with a number I hope will be both reasonable and responsible, given the City's budget dilemma that hopefully will achieve two things: One, provide a cost of living increase for those organizations; and two, move us back to FY '02 level of funding. So I share that with you as an FY I 2508 3/12/03 - FY '04 OPERATING BUDGET knowing that at a later hour I will doing that. Secondly, with regards to NTI and PCDC and the work that the Philadelphia Commercial Development Corporation is doing in the neighborhoods, can you or a member of your team speak to how NTI -- we know the dramatic impact it's having on the residential side. I'm curious to know how the neighborhood corridors are being integrated into the NTI initiative. Could you or a member of your team speak to that?
Yes, Councilwoman. I'll ask Curtis Jones to come up here. And while he's coming up, let me just make two comments on your first point. One is to thank you for your support for all that we do in the Office of Arts and Culture and we appreciate your support. Certainly, from a budget standpoint, as with virtually every area of my budget, I'd like to be able to do more. We're trying to do the best we can with resources and stay within the guidelines that we're given. And also, I cannot let the comment about the airport go without acknowledging the wonderful job that Charlie Isdell does in every facet of airport operations. And you mentioned the arts program. I don't think it is an 2509 3/12/03 - FY '04 OPERATING BUDGET overstatement to say that we have the finest arts program that any airport in the country has. And it really has generated so much interest and so much positive publicity for us. It is not a place that you would traditionally find the types of exhibits that Charlie and his team display there, and it's just another touch that makes our airport special.
Yes. It's extraordinary. And I couch my interest in the budget amendment, I couch it with the words "reasonable and responsible," because I'm well aware of the directives that you're receiving from the Administration. But to the extent we can bring this world, the arts an cultural world, up to where we used to be, that would be great.
Chairman Verna and Councilwoman Brown, thank you all for that question. When it comes to NTI, as you are aware, we're in the first phases of that which have been resulting in a number of clean-ups, a number of demolitions, and that process moving along. What I think also is happening is there are major plans for housing development in place of those vacant lots. What we are hoping to do is meet the development ahead of 2510 3/12/03 - FY '04 OPERATING BUDGET the curve and be on the commercial corridors that are directly impacted by that new construction and rehabilitation so that we can bring existing residents and possibly new residents a good mix of business-related services so that the quality of life can be enjoyed.
Absolutely. So what we're doing IS we have a voting membership on the Vacant Property Review Committee, as you're aware, Councilman Goode. We are trying to make sure that a lot of those properties that get picked up by the City of Philadelphia are at least landbanked and with future development purposes in mind so that at the time that commercial development catches up with housing and residential development, we're able to offer small businesses an opportunity to take advantage of some of that prosperity.
Regarding the dramatic change in shift or the impact the development of that Market Street El is going to have on 52nd Street and what that means for all of those businesses on that corridor -- and the District Councilperson Councilwoman Jannie Blackwell 2511 3/12/03 - FY '04 OPERATING BUDGET is intimately involved with that, but given the mission of PCDC and given that particular corridor, what is your prognosis? Has SEPTA approached your agency to be a part of those discussions to help those businesses there so that they're not sacrificed at the risk of making that technological transportation improvement?
The impact of the construction has been dramatic, I mean, pedestrian traffic, vehicular traffic has been impacted by it. What we've attempted to do in our small way is to work with the businesses along with SEPTA consultants to try to work with them. We've also down promotional campaigns by which SEPTA has also contributed a portion of funds to that to try to encourage shoppers, for example, Spend the Holidays in Your Neighborhood Campaign, to come into those areas through receiving discounts and other encouragements to actually shop in neighborhoods as opposed to going to malls and other locations to spend their dollars. That has been successful, and we are going continue that effort throughout the construction period.
Is the City through 2512 3/12/03 - FY '04 OPERATING BUDGET your agency a partner in that advertising initiative?
Absolutely. As a matter of fact, historically, we were probably initiators of that initiative some years ago and now have 7 sought out partners. Public Utility Commission has 8 been a partner, SEPTA has been a partner. Trying to 9 encourage the consumer to think "shopping in your 10 neighborhood" and how important that is to maintaining viability along those corridors.
Well, there's a lot of interest on SEPTA specifically and the businesses and how those worlds are colliding and what we as a City have to do to the extent possible keep them thriving and surviving, if you will. The thriving quotient has dropped dramatically, but there's an interest now to help them survive through this major transportation phase. So I'm pleased to hear that PCDC is at least the table with SEPTA to play a role in assisting those agencies on those business corridor. My final question goes back to arts and culture and the role of arts and culture with the NTI initiative. I know Pittsburgh has a wonderful 2513 3/12/03 - FY '04 OPERATING BUDGET model where artists -- and actually, Philadelphia. PhilaDanco is probably one of the first arts institutions in the City to work with the City, take blighted residences, convert them into artist housing and bring life back to a block. Is that discussion happening at the NTI table on how we can more intimately involve the arts and culture community around NTI?
Councilwoman, let me ask my Deputy City Representative for arts and culture to respond to that for you, Carol Lawrence.
Thank you. Please state your name again for the record.
Good afternoon, Councilwoman Brown. Yes, we have been at the table with the NTI to discuss different opportunities for the arts and cultural community to be involved in those conversations, especially artist housing. And as the conversation proceed with the NTI Committee, especially under Maxine Griffith, we are involved in neighborhood outreach programs. So we are at the table to discuss with the community as well as with the planning programs to figure out what we can do. So it's in the planning stages at this point. 2514 3/12/03 - FY '04 OPERATING BUDGET
So we don't have a document, a strategic plan of sorts that will guide us on how arts or artist housing is included in the NTI initiative? MS LAWRENCE: My understanding is we will be moving in that direction. We have not reached that point yet. But there is a plan to create a plan in the future to address those needs.
Have we had any discussion with the arts and cultural advocacy community? Have they approached you to register that this is a good thing and something that needs to be included in the NTI discussions?
Well, we'll look forward to the written document because my colleague here Councilman Goode reminds me that Frankford also is allowing artists to make a difference around NTI and community development. So we'll look to see how we can do that system-wide citywide.
We will. And I think it is important to acknowledge that within the entire City, every community with artist base, they are very interested in elaborating on a plan. So we 2515 3/12/03 - FY '04 OPERATING BUDGET will work very closely with the Planning Commission and NTI.
And we will keep your office apprised of your developments in that regard, Councilwoman.
Thank you for your testimony, Commerce Director. Thank you, Madam Chair.
You're welcome. The Chair recognizes Councilman Goode.
Let me start by thanking the Commerce Department and PIDC and PCDC for their continued support of my legislative initiative and implementation of those initiatives and you in particular for your consistent support. And, of course, I have numerous requests to your department because this is my area of special 2516 3/12/03 - FY '04 OPERATING BUDGET interest and so I just want to go through a number of additional requests. First, as relates to the Community Capital Works Program, can you tell me what is projected allocation to that program in the next Fiscal Year?
Councilman, I believe the request that it come to us was for $300,000, if I'm not mistaken. Perhaps you can correct me if I'm wrong.
I thought the request that had come to us was for $300,000 and we were looking to see if we could rather than provide that out of community development block grant funds, provide that in-kind services, basically services that our staffs would prove because the CDBG budget is so tight.
Actually, I'm referring to Philadelphia Partnerships Program, Community Capital Works.
I'm sorry. Let's start over. The program that you were referring to is? 2517 3/12/03 - FY '04 OPERATING BUDGET
Community Capital Works. The micro entrepreneurship program housed at the Philadelphia Development Partnership.
I'm sorry. $250,000. I was confusing the two programs. The answer to your question is $250,000.
There has not -- I shouldn't say that. I believe they did ask for more money, but we told them given funding levels throughout our budget we were more than likely would have to just keep them at the current level of $250,000.
Because this program is actually a self-employment program, have you considered seeking Workforce Development funds for the program or utilizing Workforce Development programs for a portion of the funding?
I don't know if -- that request has not come from us. I don't know if it's come from PDP, but it's certainly an avenue that we can explore.
I think actual 2518 3/12/03 - FY '04 OPERATING BUDGET service providers get used to the same source of funding. I think it's something that should be suggested to them in terms of -- particularly if they're seeking an increase. But I'm thinking specifically about the work that they're doing particularly with ex-offenders and the fact that the Mayor has embraced economic development initiatives for ex-offenders trying to reduce prison recidivism and the fact that the Mayor has actually identified economic development dollars through Workforce Development dollars for that type of development. So I was thinking maybe it's something we should suggest to them in a way that we can get some funding to that program and actually fulfill some of the Mayor's recent commitments in an that regard.
Agreed. And we will reach out to Workforce Development Corporation along those lines.
Okay, now I can give you the answer that I gave you previously, which is the request had been for $300,000. And we were looking to see if we could provide the services, basically 2519 3/12/03 - FY '04 OPERATING BUDGET in-kind services, in lieu of actual dollars because our CDBG funding is so tight. If all of that doesn't work, there's a possibility we may be able to do a portion of in-kind and a portion of cash. But we will, either way, try to reach that $300,000 mark.
I know in the past -- I guess in this year, Year 28, OHCD was actually funding LISC to do both housing and economic development in terms of capacity of building for community development corporations. Do you know if they plan on continuing funding directly?
Can you sort of find out whether that's something that could be split? I know it's the same pot of money in terms of community development block grant, but what they're planning on doing?
And lastly, what's the status of the acquisition grant program at PCDC? My understand from several community development corporations that are involved in Commerce 2520 3/12/03 - FY '04 OPERATING BUDGET Department's Program and the CDC Tax Credit Program that has been frozen, can you tell me why it's been frozen?
Councilman, any additional money that would have to get added from that program, I believe, would have to come from our economic stimulus program, and that's the request that we're reviewing right now because there are no 13 other CDBG dollars that are available. So we're looking to see if we can fund that program additionally through our economic stimulus program.
That wouldn't fall into -- I know through legislation passed by this Council that's being implemented by OHCD, there is a mandate of at least 5 percent of all CDBG dollars be spent on community development by community development corporations. That wouldn't fall within that 5 percent?
I believe it would. But I don't think the 5 percent amount is an issue. I think it's dollar availability is what I think the 2521 3/12/03 - FY '04 OPERATING BUDGET issue is.
Well, my understanding is percent is roughly $4 million and 5 this is a program that has a hundred thousand or 2 within it.
But the 5 percent covers all economic development activities, not just PCDC's acquisition program.
I understand that. I'm just assuming there's probably room there, given the nature that there's $4 million being spent by a number of different programs, I would just think that that program wouldn't be eliminated; there are other programs that probably can be reduced to make room for that program. And I actually believe that the CDC community will probably rather prioritize that program before some of the other funding that it receives from the community development block grant program.
I think you're right. And we are going to take a look at Year 29 as to how we allocate our economic development funds because I think we can allocate them and get more money to programs that are working better at the neighborhood 2522 3/12/03 - FY '04 OPERATING BUDGET and CDC level as opposed to putting further funds into some programs that are not being used as efficiently or in as great a volume as we'd like.
One of the things I have impressed upon the CDC community is that now that it has the 5 percent mandate, now that we have a CDC tax credit program, now that we have consistent funding over the next years that 10 amounts to probably $50 million investment or more, that they come up with some industry standards that they decide how they're going to evaluate their own performance and that they make suggestions for how we spend that 5 percent. And I think they probably would rank that acquisition grant program as a priority in terms of what they're looking to do in terms of redevelopment of commercial corridors.
Thank you. At this time the Chair recognizes Councilman Nutter. 2523 3/12/03 - FY '04 OPERATING BUDGET
Thank you, Madam Chair. Mr. Cuorato, I just two issues that I want to raise with you. One is, you mention in your testimony about a development project. And I just received a letter recently from one of our unions, Local 1776, of the testimony regarding the issue of Wal-Mart. I have no personal issue with that particular company, but they have apparently attracted the attention over some time, not just recently, of Local 1776 here in Philadelphia. And I just wanted to know what the Administration's view was on the Wal-Mart situation and their apparent conflict with unions?
Well, as with any dispute involving a major employer and unions of the City, I hope that it can be resolved.
I think their corporate philosophy is that they're anti-union. So I don't know that the City of Philadelphia is going to change their philosophy. It's kind of a big company.
Understood, Councilman. I guess the reference in my testimony is to the 2524 3/12/03 - FY '04 OPERATING BUDGET project in Northeast Philadelphia, the Whitman's Chocolate factory.
Although I think Wal-Mart was not mentioned at that time.
I thought there were, since they and Barnes and Noble are supposed to be the two anchors.
It is unfortunate. I don't think we want to be in a position of discouraging the expansion of stores like Wal-Mart in Philadelphia. They are huge job generators, and I don't think we want to be in a situation where we're discouraging them from coming in.
I understand that and I'm not suggesting that. What I'm trying to figure out is, what's the -- how do we balance the interest of -- I mean, we are obviously a very supportive government of unions here in Philadelphia at a variety of levels. And o I'm just trying to 2525 3/12/03 - FY '04 OPERATING BUDGET figure out from a policy standpoint how we deal with this kind of issue. I mean, it's not some like Joe and Jane store on the corner. This is an a massive national, possibly international corporate entity that has that particular corporate philosophy, and we have many citizens in the City who are members of Local 1776 and who are expressing concern. I mean, I've receiving letters. So I'm just trying to figure out what the City's posture is in that kind of situation.
Councilman, I don't know what we as a City can do. I mean, a corporation like Wal-Mart will look at a situation in Philadelphia, assess how much of a problem they foresee in employing people and how they're going to react with the unions and make a decision as to whether they're going to build further stores in the City of Philadelphia. For the Whitman site, there is no 21 financial assistance being provided. The only approvals that were requested and received through City Council and the City were for zoning changes. So it is, for all intents and purposes, it is now a private development on a site that is now zoned in 2526 3/12/03 - FY '04 OPERATING BUDGET accordance with what's being planned there.
I understand that, but we're always going to be free and open and honest with each other. I mean, if not for the action of the government, the development doesn't happen, right?
No money on the table, doesn't seem like a big thing, but sometimes getting a bill passed by Council is actually somewhat significant.
And in this case it certainly was because without the zoning change, that project doesn't happen; you're correct.
Okay. Just thought I'd ask. I need to respond to the letter that was sent to me recently, so I figured I'd ask you. Let's talk about Keystone Opportunity Improvement Zones. It's my understanding that State Statute was passed not too long ago allowing for expansion of Keystone Opportunity Zones and I think a new program Keystone Opportunity Improvement Zone, which the City is required to, and Council and the Mayor specifically are required to pass an 2527 3/12/03 - FY '04 OPERATING BUDGET ordinance authorizing the establishment of these zones. It is my understanding that there is actually a deadline by which this action must be taken. And I would only express to you concern, this year will by its own force of events be a fairly busy and active year for a variety of reasons, and I want to make sure that we meet the statutory deadline. But I'd also like to get out on the record, to the extent that you can share information about the areas that we may be looking at for these new zones and any planned or perspective projects that may be affected by having these zones in place or that may benefit from having these zones in place, to give some context to the importance of this legislation, because I think it does actually involve some live projects. Could you share that with us for the record?
Sure, Councilman. Just before the end of 2002, acting on legislation that was approved by the General Assembly in Harrisburg, Governor Schweiker had the ability to authorize a new set of zones called Keystone Opportunity Improvement Zones or KOIZs, as we call them. These are add-ons to existing KOZs and KOEZs, so we're 2528 3/12/03 - FY '04 OPERATING BUDGET going to keep going until we exhaust every vowel.
Right, and then you start doubling back and do the double A and double B.
Yes. The Governor designated three new Keystone Opportunity Improvement Zones. These provide -- and again, these opportunity zones are areas in which businesses that move in pay no city or state business taxes for a period of years. The advantage of the Keystone Opportunity Improvement Zones, the new ones, are that they get a fresh 15-year clock starting in the year 2004. It is a tremendous incentive. This program overall has been a tremendous incentive to bring businesses into Philadelphia, and we've got examples both large and small. The three new areas that were designated by the Governor in Philadelphia are 300 acres at the Philadelphia Naval Business Center, a site up in Northeast Philadelphia that was specifically tailored for us to bring in the Vanguard Company. That's a company that we've wanted to bring into Philadelphia for a long period of time. And a 2529 3/12/03 - FY '04 OPERATING BUDGET cluster of properties in West Philadelphia generally around the area of the University of Pennsylvania and Drexel and 30th Street Station. Those three areas have been designated by the Governor as Keystone Opportunity Improvement Zones. However, they must now be approved by this Council. And then following -- if Council approves that legislation, it must be filed with the State by no later than June 1st of this year. So that's the deadline to which you were referring, and we will meet that deadline.
Well, let's talk about a timetable. But also when you mentioned the site out in West Philadelphia similar to specific mention being made of Vanguard at a potential site in the northeast. It's my understanding that, for instance, the Sera Center building proposed to literally be placed right across the street from 30th Street Station, I've seen some of the drawings and materials for that particular building, it seems like it represents an incredible new opportunity, not only for a high-rise office building but tremendous access to the train system, the expressway and bringing a new high-tech office 2530 3/12/03 - FY '04 OPERATING BUDGET building to West Philadelphia on the west side of the Schuylkill River. It seems to me that given a number of projects including, certainly, the Sera Center, the importance of getting the KOIZ legislation passed is important and unless there are some significant complications or additions -- and I have at least one addition that I'd like to propose to you -- can you give us a sense of when the legislation will be coming over to City Council?
Councilman, I will answer that question for you in just a second. Let me just add that the legislation that we will be bringing to you will not only include a recommendation for approval of these three new Keystone Opportunity Improvement Zones, but the state legislation also gives us the ability to add to existing KOZs and KOEZs. It's a great opportunity for us now to come back and pick up some properties that we either missed the first round or where circumstances have changed and now it would definitely be a great benefit to have them in a zone. And the first example that comes to my mind I believe is in your district which is the Bud Company.
That's what I was 2531 3/12/03 - FY '04 OPERATING BUDGET going to suggest to you.
Which unfortunately is moving out but that property which is nearly 50 acres is going to need the kind of incentive that the Keystone Opportunity Zones to bring. To answer your question, we have to have our application filed with the state by June 1st. I would hope that we would have legislation ready to be introduced into City Council within the next three weeks. That would give us virtually all of April and all of May to have the process discussed and hopefully approved.
Thank you. Councilwoman Miller has a point of information.
I just have a further question about the KOEZ. What is KOEZ? What is the "E" for?
The "E" stands for expansion. The State Legislature in Harrisburg actually has acted on these zones three times. The 2532 3/12/03 - FY '04 OPERATING BUDGET first time was the original program called Keystone Opportunity Zones. Then they came back and did a second round called Keystone Opportunity Expansion Zones. And we did the first round and then the 6 second round we added 8, so we now have 20. This 7 final round gives us the ability to add three new 8 areas. Those are KOIZs. And I know this gets 9 confusing. And also add properties to exist KOZs 10 and KOEZs as long as they are contiguous to existing 11 zones. In other words, we couldn't just go to an 12 area of the City that is not designated and pull a property out and designate it now.
Well, that's exactly what I wanted to find out because I do know about the legislation, but I just never heard the term "KOE." Maybe I missed it. Because I was interested in finding out if we could in fact expand the zone that's in my district, but it's not contiguous to the one that already exists.
We can take a look at it, Councilwoman. Vince Dougherty of my staff who manages the Keystone Opportunity Zone program, we can talk to you about the property or if there are any other properties in your district that you think 2533 3/12/03 - FY '04 OPERATING BUDGET might fit the criteria that we might have. And if there's a way we can do it, we'd be glad to.
Excuse me. If you don't mind, at this time the stenographer is asking for a five minute break. Thank you. (Brief recess.)
We can now proceed with the hearing. Councilman Nutter, you were questioning Mr. Cuorato.
Yes. Mr. Cuorato, that you anticipate having legislation for KOIZ over in about three weeks. A quick look at the calendar would indicate that that would have you sending legislation over in anticipation of the April 3rd Council Session. Do you think you can use that as a deadline, including having conversations with Councilmembers if they want to have expansions of existing empowerment zones or other projects? That's three weeks from tomorrow.
And I appreciate that. And along with that, do you think we could 2534 3/12/03 - FY '04 OPERATING BUDGET then use as a goal basically the month of April to get the legislation completed? I'm going to make the -- this is the kind of thing that -- I mean, it's a good thing all away around. If we spend the time during the next three weeks getting the legislation ready, the hearing should be pretty much a fairly smooth process. We have a public hearing scheduled relatively soon, get a first reading, get final passage. The last Thursday in April is April 24th, and that's another three weeks in the course of April. Do you think that's a timetable that we might be able to meet?
I deeply appreciate it because, certain, I think all of us care about this. And the opportunity to provide these economic incentives and benefits as quickly as possible meet the state deadline even, quite honestly, a little early, would certainly demonstrate to the State our enthusiasm about the program and that we're ready to go and trying to get something done.
Thank you. Thank you Mr. Cuorato. 2535 3/12/03 - FY '04 OPERATING BUDGET Thank you, Madam Chair.
You're welcome. The Chair recognizes Councilwoman Tasco.
First, before I begin I'd like to say that enjoy working with Eleanor Hider (ph).
Actually, she's down in your office right now meeting with your staff.
She's been very supportive, very helpful, and very thorough.
Especially with our Rising Sun Avenue Project. We appreciate her very much and the hard work she does.
I have a couple of questions. But first, I want to talk about an issue that's in my district now that's really causing us some real problems. We found out that the Mayor's 2536 3/12/03 - FY '04 OPERATING BUDGET Business Action Team had assisted a company to operate at Seventh and Grange in a residential area, an industrial factory which has caused and is still causing me agida. The lack of enforcement by L&I to get to cease and desist. It took us numerous community meetings to address many of the problems that were raised. They tore away shrubbery and land and just weren't very cooperative with the community, very hostile to the community. We had to go to court. And the Zoning Board has granted them the okay to still operate there. And it is still causing the community a lot problems. A lady called the other day; she couldn't get out of her house because the trucks blocked the drive. And these are issues that we raised on the zoning hearing, issues we raised on the court case. But my concern is that before any activity goes on in a council district, certainly we ought to be made aware of what's happening. No one from the Mayor's Business Action Center contact us to let us know they were working with the business to go on that site. And the other question I want to know, is there any effort in their research or support of a business going into a community, do they check to 2537 3/12/03 - FY '04 OPERATING BUDGET see if the company has any prior code violations? Because this company certainly had a number of those violations and it really has been very, very -- and they're up in arms about it. We met with this gentleman here to talk to him about. Do you have any update?
That's Vince Dougherty, Director of the Mayor's Business Action Team. Councilwoman, we will go back and check to see if there are any violations that are currently pending at this time. We were not aware that they were causing such problems in the neighborhood, quite frankly. I know they employ about 150 people, and I mean --
Listen, they may employ 150 people and that's fine and we want encourage business to come into the community. But an industrial site in a residential community should not exist. And we don't know yet what they're doing. And these tractor trailers -- first you have to see if the market can bear what they're planning to do. Never can figure out what they're doing. Commerce Department, you all know. MBEC knows exactly who they are and what they're doing. And 2538 3/12/03 - FY '04 OPERATING BUDGET what we need is some effort on behalf of your office to go talk to those people, find out exactly what they're doing, what their plans are and report that back to us, because we can't a clear answer. The residents are ready to go to court. They're going to appeal the zoning variance. And what you ought to do is try and find them another site. That's what you need to do because it does not belong at Seventh and Grange. Seventh and Grange is a residential site. And the people enjoyed having the greenery in the back of their yards. They tore that up. And now they're just causing all kinds of problems. I had a lady the other day who refused to sign my petition because she just said, "That factory." And so they don't know that I don't have any responsibility for that factory, that it comes from the Administration. And I want the Administration to do something about it. I want to action taken on it. I want you all to go over and talk to those people and I want you to try and find them another site. They have to go. Otherwise we'll be out there demonstrating, and it's not the time to do that. 2539 3/12/03 - FY '04 OPERATING BUDGET
We will talk to them, Councilwoman, and we will report back to you.
The other issue I want to talk about is the neighborhood commercial revitalization corridors. Mr. Jones. He said that have he would -- I'm looking upper end of Ogontz Avenue from Walnut Lane up to Cheltenham because that Ogontz Avenue is the gateway to the City from Montgomery County. Montgomery County is doing a lot of economic development on their side of the street, and we look very, very shabby. In addition to Ogontz Avenue which we've been having problems with for the last five or six years just trying to figure out when they're going to pave that street. And papers have for the three days had articles in the newspaper about the potholes on Ogontz Avenue and the terrible condition. But we want that area declared a Neighborhood Commercial Revitalization Area. And I asked about this. I keep asking about it. I get told that it's based on the census numbers. Well, I said, there are new census numbers. "Well, we don't have the detail." I think somebody must have the details on the census numbers. 2540 3/12/03 - FY '04 OPERATING BUDGET I will tell you until I met Eleanore, I just got nothing but the run-around in the Commerce Department. It's very frustrating when you're trying to do something for the citizens, not just my constituents, but the constituents who are the Mayor's constituents, for them to feel left out and not included in what's going on in this City. So I want to know what we're going to do about Ogontz Avenue in terms of declaring that a Neighborhood Revitalization Area so we can get some of the amenities that come along with that designation and help those businesses up there. I'm inundated with clubs that are opening. You can't get L&I to enforce the club opening in a residential neighborhood without the proper licenses. You have bars up there where you have drugs, you have take-outs. And it's just very frustrating for those people who live around there in that district.
Councilwoman, we will absolutely assign a corridor manager to Ogontz Avenue upper end. As you know, historically we've done some things with Ogontz Avenue Revitalization Corporation with the mall awhile ago. But we will revise that. And whether the numbers of the census 2541 3/12/03 - FY '04 OPERATING BUDGET dictate or not, we will have an involvement with that corridor and with that business association trying to work on a revitalization plan.
The ORC, the upper half is not a part of the Ogontz revitalization. We have another group that is responsible for that area. Not that we don't work with ORC and we've talked to ORC about that. I just want some action. People up there vote the highest rate in the City. They also work and they pay taxes. They ought to be able to get something for the money they invest into City. We shouldn't see the money going into all other neighborhoods and we can't get a small dose of return. We want some economic stimulus money for that area. I want some action Ogontz Avenue. I want some action on Vernon Road. We're working on Rising Sun, and I'm very appreciative to the young lady and Jim for assigning us working with Mark Ohouski up there on Rising Sun Avenue. Because that's the neighborhood, where unlike the neighborhoods, the businesses are moving and we have vacancies. In the other corridors, the business has just changed ethnic groups, this area and Rising 2542 3/12/03 - FY '04 OPERATING BUDGET Sun, so they have a plan and they're working that plan. But Ogontz, I've been talking about this I think ever since I became a Councilperson. We have stimulus dollars. We have other kinds of dollars. And we're not asking for a lot of money. We put a budget in, we've given it to the Mayor, and we want to see some results.
The good news is that we've been working with non-CDBG dollars to find a source of dollars that we could actually apply to corridors outside of the low and moderate-income designation. Congressman Fattah has worked with the American Cities Foundation raise some of those dollars. And we just were written in to the budget to be able to do some beautification, do some of the traditional things we do in low and moderate-income areas. So, again, my commitment to you is that we will indeed work with the upper end of Ogontz Avenue like we've done with the lower end to try to come up with a plan that businesses there, the business association there can live with and we work together on it. That is my commitment to you.
Now, you know that 2543 3/12/03 - FY '04 OPERATING BUDGET is the Congressman's district.
We do exist in the Northwest. It may not be West Philadelphia, but we still vote pretty high up there. MR JONES: Highest numbers in the City, 50th Ward, yes, ma'am.
Thank you very much. The other thing, I want to make a point. And I think we've talked about this before. In other cities -- you know, I'm very active with the National League of Cities. In other cities, community development block grant dollars are used for the elimination of blight and slums. And so we don't use that here in the City that way. We target and we say that the dollars are targeted to those areas come in some kind of economic guidelines based on the census track. They have built golf courses with this money in Tennessee. And they have built boat marinas in other cities. And when I talk to Congressman Fattah, he said that is not true; that the money can go outside of areas that don't have low-income designations. So I just thing we are 2544 3/12/03 - FY '04 OPERATING BUDGET misinterpreting or interpreting the laws based on our convenience or the convenience of certain parts of the City. And my constituents are asking what are they getting for their vote and for their tax dollars. There is an issue I want to raise on -34 of your budget. And this comes under the airport, because I have a couple questions for the airport. I know we require lobbying in Washington and Harrisburg. That is certainly necessary. I'm not asking about that issue. I'm asking about the 2004 appropriations. You go from $50,000 in 2002 to $200,000 in 2004, $200,000 for other lobbying services. What is that for? Also, why don't you address all of those areas? You have $100,000 -- you go from $25,000 in 2002 to $100,000 in bankruptcy proceeding. And then you go for Pepper Hamilton, 2003 you were up $192,500 in 2002. And in 2003 you had $10,000, but now you go to $150,000. So your budget has increased from 2002 to 2004, $710,000 from $320,000. What is the cause for the increase?
Councilwoman, I'm going to 2545 3/12/03 - FY '04 OPERATING BUDGET ask a little help from the Budget Officer, if I may, just for one second. He's right back here.
I apologize for the delay. If you want to go down that list that you did one item at a time, the first one, of course, there is no increase in the Washington lobbying services from 150 to 150.
The first one that's an increase is the 50 to 200,000. We had simply -- we were budgeting for what we anticipate will be additional needs for lobbying for two specific reasons. One is security funding from Washington. There's a great deal of competition, there's a great deal of uncertainty as to what Congress is going to do in terms of reimbursing cities both for operating fund typ security needs that have been mandated but not fully funded by Congress, such as additional police services and also some capital improvements that are required for the full 100 percent screening of baggage that's now mandated. We have temporary solutions in place for that right now, but the final solutions will be significantly more expensive and 2546 3/12/03 - FY '04 OPERATING BUDGET will probably involve both construction and funding over a period of years, I would say three to five years out. And the other thing is that we believe that within the next year we will have reached a conclusion about our preferred alternative for our new airfield and get federal approval for that. That will also require significant long-term funding. Our objective is to get a letter of intent from the federal government for a multi-year funding for airfield improvements. And our sense was that we would budget for additional lobbying services in order to achieve those goals. And we do not have a specific -- as it says here, "to be determined." There isn't a specific firm that's been identified as yet. That is generally done through the Mayor's Office.
And the services at Washington and Harrisburg, have those firms been identified? Who are you using now?
And in Harrisburg who do you use? 2547 3/12/03 - FY '04 OPERATING BUDGET
The Washington lobbying is split between Whitan & Diamond and Patten Boggs. And the Harrisburg I think is -- these are our contributions to citywide contracts, both for the Washington and Harrisburg lobbying. And I believe the Harrisburg is Wojack Associates.
So as you move to require the services to meet the needs of the areas you outline, you would probably have to have additional dollars for these companies, or would you hire other outside firms.
In some cases there are specific firms that specialize in aviation-type lobbying and have experience in that area. Again, whenever we hire outside counsel, it's actually done with the review and approval and I think it's done through the City Solicitor's Office. So we would work with the Commerce Director to identify appropriate firms. We will most likely recommend for specific funding objectives that we're trying to get for these security and capital program objectives. We would recommend probably a number of firms and then seek some consensus about which is the best, but that has not been done yet. 2548 3/12/03 - FY '04 OPERATING BUDGET
Now, what about the $100,000 for bankruptcy, what does that mean?
Well, there's been a tremendous increase in the legal services required for us to monitor and manage, from our perspective, the US Airways bankruptcy in particular. Also United Airlines is currently in bankruptcy. And it's quite possible that other major carriers will go into bankruptcy during the upcoming fiscal year, at least based on what we read. We use a combination of both in-house, City Solicitor staff, and some outside counsel for the bankruptcy expertise that we need. And I would say that they have done a tremendous job. The City Solicitor's Office in particular was successful in having the City named as ex officio member of the Creditors Committee that's been meeting on a regular basis during the US Airways procedure. And it's really put us in a good position, not only so that we are aware of what's being contemplated by US Airways for their entire network, but specifically for Philadelphia. And it's given us, I think, a leg up on some of the other airports who have been affected by the bankruptcy. So we think that that's been a 2549 3/12/03 - FY '04 OPERATING BUDGET good investment, and we anticipate that there will be some additional costs spilling into the new fiscal year. It's somewhat uncertain right now that US airways is publicly stating they intend to come out of bankruptcy on or about March 31st, but there will be some ongoing monitoring services that we'll require beyond that.
This specific item, I believe, is for outside counsel which, again, was hired by the City Solicitor's Office to defend the City. I think it's primarily for one specific lawsuit, but there may be some others that are part of the appropriation request. And I can confirm very quickly if you wanted to know which specific lawsuit that was for.
But again, the City Solicitor selects the firm, and we basically reimburse the Law Department for the cost.
You can give that information to the President. 2550 3/12/03 - FY '04 OPERATING BUDGET
No, not really. We have been -- obviously, from looking at the rest of the column, we have been using additional legal services, significantly more legal services over the last year or two then we have in the past. And we always have an appropriation for unanticipated litigation, unanticipated legal services. And again, this is done through the City Solicitor's Office, but we thought it appropriate in line some of the other increases we've been looking at that we wanted to be prepared to have some money in the budget, if needed, to fund that type of work.
Let's look up under item 250 where it says "To be determined, 600,000 for advertising contract," -34 at the top.
Our intention is to do an advertising program which is modeled after what some other airports have done around the country where they do joint marketing with the airlines. We needed to have an appropriation of money to do that. Before we got to this point, we needed a City 2551 3/12/03 - FY '04 OPERATING BUDGET Solicitor's opinion telling us that it was legal and that there are appropriate controls and policies over how we do that. For example, we can specifically work with an airline that offers new service to Philadelphia by doing joint promotion with them of that service so that we can be supportive of, not only obviously the hub carrier, US Airways, but any other carrier that wants to bring us some new service as well. In order to do that, we did need to set aside some advertising money, and that's what this appropriation is for.
How would you select the firms to do the work? Is there a process for doing that?
It would depend on whether we're talking about -- I think this particular class, 250, would be specialized services that you would get in an advisory capacity but it would also include within this allotment money for specific ad placements. And from our past experience, I mean, if we hired an advertising firm, we would do that through a competitive RFP or RFQ process. And as part of the negotiation for that contract, I think it would determined whether they would do specific 2552 3/12/03 - FY '04 OPERATING BUDGET ad placements for us. Or if we would do that, we always have the opportunity, I think, to do that also through the City, the City's own advertising agency in the Procurement Department. My guess would be ultimately you'd see some of each.
That is Communication and Information Systems Management contract which incorporates both management and some maintenance of all of our -- what we call our high-tech systems. The biggest single piece of that contract has to do with maintaining our access control system which is a giant computer network that essentially controls all the doors and access points to the airport from a central computer room. It's like a local area network, but it's, obviously, much more sophisticated. At the present time, I think we have about 350 doors. And with the new International Terminal opening, that number will be substantially increased. We also through that system we manage all the cameras that we have throughout the airport. With the opening of the new terminal, we'll have about a thousand cameras throughout the airport. 2553 3/12/03 - FY '04 OPERATING BUDGET Many people don't realize that because they're not obvious always to the naked aye. And also we digitally record all the activity that's captured by those cameras for review by law enforcement in the event of any incidents. That system, as well as our telephone systems, our own local area network for all of your staff that has computers and participates on network, and cabling is also a big piece of contract. We have massive cabling infrastructure at the airport. We inherited a number of problems some years back when the phone company abandoned the cabling they had installed and made it essentially a house maintenance problem. That's all been incorporated into this contract, and that's the kind of work that that Elliott Lewis has been doing for us.
Now, let's go on -33 and let's look at your budget for miscellaneous training. What kind of training? And you also have up there various contractor training services.
Are we looking at the $125,000 appropriation under miscellaneous training, or a differ line? 2554 3/12/03 - FY '04 OPERATING BUDGET
125,000 maintenance training and then you have another one for 158,000 contracted training service and specialized training. Just explain the training budget.
Well, we have -- obviously, we have about 800 employees, so there are a number of different training initiatives that we do. One of our big training initiatives over the last few years has been customer service training, which we do on a regular basis. And particularly, we've tried to tie that training in anticipation of the summer months when we generally have large conventions like the Republican National Convention and the National Baptist Convention. We also do a lot of specialized training for our maintenance staff that has to be familiar with some of the electronic systems that we have at the airport, as well as things that may sound simple, but doors, sliding doors, revolving doors. A lot of these systems currently are driven by software, by sensors and things like that. So there 2555 3/12/03 - FY '04 OPERATING BUDGET is an ongoing need for that type of technical training. We have an excellent HVAC staff at the airport that keeps us at comfortable temperatures throughout all kinds of weather with, obviously, lots of doors opening and closing throughout the facility all the time and garage doors left open by airline employees in the wintertime when it's 10 degrees outside. In order for them to do their job, 11 they do need to be updated periodically. 12 Right now, of course, with the 13 anticipated change, we're about to enter the City's 14 800 megahertz radio system. We're anticipating a 15 significant training requirement to get all of our 16 employees who have radios to be familiar with that 17 system and able to use it in a professional way. 18 We have emergency training that's 19 required by the FAA on an annual basis. You're 20 probably familiar with the public exercise that we do once every three years. A mass casualty type exercise. We had a major exercise like that this past fall where we christened our new fire training facility. We have a mock aircraft as part of that facility that literally catches on fire and has to 2556 3/12/03 - FY '04 OPERATING BUDGET be extinguished by the fire department unit which we call our Aircraft Rescue and Fire Fighting Unit. Those are some examples. I could get you more in-depth analysis.
That's fine. Thank you. I wanted it for the record. Could you just give me an update on where you are with your resolution of the labor issues that we talked about on the phone?
Yes. We are actually working on more than one front. Internally, we have reassigned the labor management responsibility to a deputy rather than higher level person than the human resource manager who was handling before. And at the same, we're going to use the services of the Philadelphia Area Labor Management Council to assist us in working with both District Council 33 and District Council 47 to improve the environment. We think that we have a very good relationship with our employees and with our unions. I'm aware that you received a letter with some specific complaints in it, from the phone call that you placed to me. I think that that's clearly the exception rather than the rule. But nevertheless, we will review all of 2557 3/12/03 - FY '04 OPERATING BUDGET those practices and try to do a better job of working with our people and our unions.
Thank you very much. And also, Mr. Cuorato, I think those are the end of my comments. While I highlighted Eleanor in helping us, I also want to talk about some of the staff in your department that have been helpful. And Jim O'Toole and Gillian Pollard, they certainly worked with us when we were doing the Wadsworth Avenue project. So we do have other staff over there who have been very helpful. Not that they're not cooperative. We understand some of the stuff goes on that may be beyond some controls that you have that things don't get done. But I just have to vent my frustration since you're the Commerce Director. But we still want to have that Mutual Industries dealt with. That's been my most frustrating issue in dealing with the department. The other one has to do with the whole issue of the neighborhood corridor on Ogontz Avenue. Thank you. Thank you, Mr. Isdell and thank you for the work you're doing at the airport. 2558 3/12/03 - FY '04 OPERATING BUDGET
Mr. Cuorato, Councilman Nutter asked you about Wal-Mart, and you said Wal-Mart was a engine of employment as our jobs, is that what you said?
I believe I referred to them as a major employer. They employ a lot of people.
At minium wage levels and with very few benefits, if any, and with a horrific labor situation in which many of the workers, if you have read the literature on Wal-Mart, are forced to work off the clock after the shift has ended and don't get compensated for it. Are you aware of those practices?
I am aware that union issues have been raised with Wal-Mart.
These are not union issues. These are issues about workplace conditions and the manner in which a worker gets treated. This is not union issues at all. There's people being forced to work off the clock for hours without getting any compensation. If they don't do it, they will loss their jobs. That has nothing to do with union issues. 2559 3/12/03 - FY '04 OPERATING BUDGET And do you also make an analysis of the impact that it has on other supermarkets around the area, the Acmes and the Pathmarks and so on?
Councilman, is there a specific Wal-Mart that's either built or proposed in the City to which you're referring?
I'm just following the questioning of Councilman Nutter. You were referring to a Wal-Mart that is being projected in the City of Philadelphia and you said that the issue was that it is a jobs engine or --
A major employer. But a major employer at minimum wage, minimum benefits, and exploitative job conditions. And then the impact that it has on the Acmes and Pathmarks who have workers that are well paid and have good health benefits, do we measure what it is? I mean, do we just give an okay because they're willing to come in, build something without us planning as to the ripple effects that it may have on other businesses around the City or in the area?
Councilman, I believe, other than the Whitman's site for which we requested 2560 3/12/03 - FY '04 OPERATING BUDGET and received a rezoning from this Council, I believe the other Wal-Marts in the City were done by Wal-Mart selecting sites and coming in and building stores.
I will fight that. I will fight that zoning for Wal-Mart. If it is a Wal-Mart, I will fight unless and if and when they begin treating their workers the way they should be treated. One Wal-Mart mistake we made down at Delaware. We made that mistake.
I think it had a very bad impact on the small retailers in South Philadelphia. And I think it was in the wrong place. But I think we have to look at work conditions, the policies that these people adhere to and follow. They're a giant, they don't need Philadelphia. In fact, I heard a statement by one of them that "we're above government." I like for us to generate jobs. But I like us to generate jobs that pay and give benefits and treat people decently and companies that treat people in a humane way. This company does neither. 2561 3/12/03 - FY '04 OPERATING BUDGET That's not the type of company we need. Thank you.
Thank you. Thank you, Mr. Cuorato. I'd like to have Mr. Isdell come back for a second, if possible. This initial comment and question -- actually more of a comment. I don't need a response to it, but I just want to make it very clear. I think that Charlie Isdell and the people who work for him are doing a tremendous job at our airport and have been doing a tremendous job since the first day you started. And I'm talking about operations, snow removal, keeping that place running as late as possible in bad weather and opening it up as soon as possible when the weather starts to clear. My experience there on an operational basis and even constrained areas like parking and other things, you've really done a great job in making everything work as best as possible, considering all the constraints, considering the proximity of the runways, delays that are caused because we're sandwiched between New York and Washington. All those things that really kind of reflect on the 2562 3/12/03 - FY '04 OPERATING BUDGET airport as a whole, I think are generally very well handled and very well done. And I commend you for your job. I hope you stay there as long as possible. I just wanted to make sure that it was clear for the record.
My only concerns and my only questions and criticisms has been as a result of, not at your operations at the airport, not of your people doing the day-to-day jobs there, but what I believe happens from the 2nd floor which is I believe a meddling in that airport, the use of that airport as some type of political play thing and it gets bandied based on political consideration more than operational consideration. And when I raise my voice regarding contract awards, vending contracts, other types of professional services, it is the result of decisions made on the 2nd floor, not made down at One Terminal Road. And I want to make clear that the record is clear on that also. Also I raised some issues in the past relative to US Air. And I want to just explore it a little bit, and that's why I want Charlie here from 2563 3/12/03 - FY '04 OPERATING BUDGET an operation standpoint. And Jim, you can also answer this question as it relates just the overall philosophy of this economic engine which is so important to the City of Philadelphia. And we know how important it is, and we don't really need to go through all the economic issues relating to that. I raised some issues relative to US Air and I recognized that years when this airport wasn't really on the map, we needed some ability to get a hub in there to have the investment opportunities and capabilities necessary to grow the airport and to make it into the world class airport it is today. But part of that problem has been, despite 911 and despite the economic problems that US Air and other airlines are having, the question is whether or not having almost exclusivity at a particular facility makes sense as it relates to the flying public. And not only the flying public, but how it relates to our commerce and ability to do commerce because our City depends so much on the airport. I mean, when I raised issues of route availability and pricing, I still can't figure out airline pricing. I can't figure out why it costs 500 to $600 to fly from one hub in Philadelphia to 2564 3/12/03 - FY '04 OPERATING BUDGET another hub Pittsburgh -- I mean, by the time the plane levels off, it's starting to descend into the airport. It's 500 to $600 to fly to between two different hubs. And when I raised issues about gate presence, a particular airline, not necessarily to demean or to damage US Air, but to simply talk about how we utilize this facility in the best way possible. Are we losing business to BWI and to Lehigh County? Are we losing business to Atlantic City? How do we create an environment there that allows US Air to thrive and to come back while at the same time opening up opportunities on the domestic side for some type of price competition and some type of competition in general. Because I believe that despite the fact that I think US Air is a great corporate citizen, I want them to be successful and I want them to stay here; I do think sometimes it's just by nature because "We're the only one here, you're going take these flights when we have them at this price and that's just tough. If you don't like it, you can go somewhere else," but there's really not that many places else to go. I just would like you to comment a 2565 3/12/03 - FY '04 OPERATING BUDGET little bit on the domestic side on what we can do to kind of make this airport more competitive from a price standpoint and from route availability standpoint. And in the worse case scenario, which we all hope never happens, US air does not make it, what do we do to try to replace that entity or to supplement that entity with carriers that are competitive, give good service, give good route choices, and give good prices? I just kind of want in a general philosophical discussion what you think about the future of our airport and where we're going and what constraints and problems we need to deal with.
I have a couple thoughts. One is that one of our main impediments to getting some viable competition in airport for a long time was simply the fact that we did not have any free gates. What gates we had, which was a relatively small number, about 63, 65 gates, were almost all exclusively leased long-term to a small group of signatory airlines on a lease that was signed back in the '70s. We have significantly increased our gate capacity at the airport. We added 38 gates in 2001. 2566 3/12/03 - FY '04 OPERATING BUDGET We just added additional gates in Terminal D in 2002. The international gates we're going to add next month will give us 13 additional. So that's one thing that we definitely needed to do. And we also are in a process right now, and it's been a multi-year process, but we're looking at what happens when the existing 32-year agreement expires on June 30th of 2006. In most cases, similar long-term leases that have expired over the last few years, and a number of them have at major airports, have been replaced with shorter-term and non-exclusive type leases. That's not going to solve your problem overnight, obviously, but we are moving in that direction and we clearly moved in that direction with the amendment to the long-term lease that was put together with Council support for the two new terminals because those two new terminals are not leased exclusively to US Airways. We have a lot more flexibility to take gates back and to get other airlines on gates based on usage primarily. The other thing that always comes to my mind when we talk about viability is what do we want to be as an airport into the future to serve our 2567 3/12/03 - FY '04 OPERATING BUDGET community in the ways that you have just described, by providing some reasonable fares and service to as many destinations as possible. And the model that we tend to look at is Atlanta, which has over the past 5 to 10 years grown in to be the busiest airport in the world. And Atlanta obviously has a strong hub presence from Delta Airlines, one of the strongest of the major carriers financially, but they also have had healthy competition over a relatively long term now from AirTran Airways which started out as Value Jet.
Yes. And we have information, which I could provide to the Council and yourself, specifically showing some of the major airports in the top 20, which is where we are, and which ones are dominated and to what extent they're 2568 3/12/03 - FY '04 OPERATING BUDGET dominated by what airlines. Relatively speaking, having US Airways dominate Philadelphia, 65 percent of our activity, roughly, is not anywhere near as bad as some of the airports like Minneapolis St. Paul being dominated by Northwest; Charlotte and Pittsburgh, for example, being significantly much more dominated by US Airways than Philadelphia is. But the model that we'd like to follow is to have an airport that has the benefits of a hub which generally means a huge network of easy access domestically and internationally, certain amount of financial stability -- although that might seem almost ludicrous at the moment. But relative to the small carriers, traditionally the majors have had more staying power, which is important for us to be able to have a long-term capital program and be able to get commitments so that we can meet debt service on new construction. But to have a low-fare carrier like AirTran -- and AirTran is here and we're trying to nurture them in Philadelphia -- that really presents some viable competition over the long term and disciplines the fare structure of the major carriers in the, let's say, the top 5 to 10 2569 3/12/03 - FY '04 OPERATING BUDGET destinations that the two airlines would compete on. AirTran isn't there yet. They're currently occupying three gates in Terminal F. We're ready to move them. It's really up to them at this point when they're ready to move over to Terminal D where we just built the four new gates. We've provided some great amenities in Terminal D so that their passengers, a lot of whom are families making Florida-type vacation travel arrangements, that they will have a nice experience. We have our Please Touch Museum in Terminal D now, a brand-new, very nice facility. AirTran, although I haven't read it in the paper, they've indicated to us that they're going to announce flights to Boston from Philadelphia, which is one of our top designations at -- I think the fare was $59. That's the kind of thing that we need from an AirTran, but we also need the community and particularly the business community to use that service when it's made available. We had a negative experience with Pittsburgh. It's something we can't really explain. But AirTran back in 2001 came out with service to Pittsburgh in competition with US Airways at very 2570 3/12/03 - FY '04 OPERATING BUDGET low prices, but the business community, which has in many case contractual relationships either with travel agents or US Airways directly, did not really jump into that and support it. So after about a year, they pulled out of the Pittsburgh market. That's a very bad thing and we don't want that to happen again if they start this Boston service. Those are some of the things that we consider. So facilities, gates is part of it. And the one thing I didn't mention, which I'm sure is on the tip of your tongue is the airfield. Low-fare carriers to be viable need to be able to get in and out of an airport quickly. It has a major impact on their cost structure. And our airport traditionally is one of the most delayed in the country. We have an airfield that was designed probably not in the best way. And right now, we're facing major decisions about whether to continue to tweak the existing runway structure or build some new runways in a different configuration ultimately to get planes in on out of here more quickly in all kinds of weather, even low visibility. That's another long-term fix. It's not going to happen overnight, but I think we will be moving in that direction over 2571 3/12/03 - FY '04 OPERATING BUDGET the next year or two.
How in this industry do we attempt to attract or to reach out to low-cost airlines or to any other airlines, that we have gates available or that we would like to talk to them about coming in it? Do we initiate it? Do they initiate it?
We make sales calls literally. We do put together, with some of the professional services contracts that we have, packages. There is a real specialty consulting area that has to do with analyzing markets for airlines. A lot of the people who work in that industry are former airline planners and schedulers. We have a really good one on board right now who's helped us to get the service to Ireland. You need to put together a package that shows the benefits of our market and the great things that we have in Philadelphia. But also, you really need to show the airlines that they can make money if they fly certain routes. That could be done in a very scientific way. The sales calls are the follow-up that we do. And we have within the last year we've had visits with every one of the viable low-fare 2572 3/12/03 - FY '04 OPERATING BUDGET carriers; frontier, Jet Blue, Southwest and AirTran, in fact. You need to keep your face in front of them just like in any other competitive industry. There are other airports out there vying for their service. But the real proof of the pudding is if they don't make money in a market, they're not going to stay in the market, especially these days. We have a great market here, a tremendous population mass around a single airport, very different from New York, very different from Washington. So it's both an opportunity to bring service here because they know that there is an origination-destination market here. They don't have to support service substantially with connecting traffic. The connecting traffic here is sort of the icing on top of very nice cake that we provide. But the downside of us being the only major airport in this metropolitan area is the congestion that we experience. So, again, those are my thoughts.
When the amendment to the leases was accomplished, I guess, freeing up or making the gates a little more free or less exclusive than they've been, what are the standards 2573 3/12/03 - FY '04 OPERATING BUDGET for usage that allows US Air or any airline -- US Air in this case -- to retain exclusive control of a gate? What are the benchmarks they have to meet on usage that would allow them to keep that gate under their control?
The preferential agreements that we've entered into for Terminal F and International Terminal and the new gates at Terminal D require a minium of four aircraft turnarounds per day.
B and C are the ones that are being negotiated will end when?
So B and C is the bulk that are in the process of starting to renegotiate for 2006?
So that the gates that were given a different designation are the ones in F and D, correct? 2574 3/12/03 - FY '04 OPERATING BUDGET
The new gates and the overseas terminal are the amended model?
So as long as they're moving four flights out of there a day, they can control that gate exclusively?
Yes. And one of your worst case scenarios is to have an airline -- for example, TWA which monopolizing gates but not using them effectively. It's basically a piece of real estate where you're not maximizing your investment and your not maximizing your return. So what we like to do is be able to monitor gate usage. And we actually are, as part of our capital program right now, we're installing a system as part of the new International Terminal that will eventually spread through the other terminals that enables us to monitor gate usage. Currently, that's done by a self-reporting by the airlines. So all we know, for the most part, is that for all the gates that US Airways has, they did X number of flights per day. We want to be able to monitor specific use of each gate so that we can target areas where we feel like our asset isn't 2575 3/12/03 - FY '04 OPERATING BUDGET being maximized.
These are four moves a day over what period of time? When would they theoretically hit the point where they would have to -- the consideration could be given to taking the gate from them? So it's four moves a day over a 30-day period?
In terminal F, it's a six-month review. Every six months, we look at US Airway's schedule and we look at their usage over the previous six months and we make allocations to them accordingly. And we have the right to take gates back if they're being under-utilized.
Would it seem natural that US Air playing the numbers game based on the scenario or constraints that we've placed on it in the amended version and self-reporting, wouldn't really be too thrilled about having additional competition and would either -- not miscount, not misrepresent, but count in a way that keeps those four moves a day over a six-month period in play. So that in though in effect there may be one or two gates that aren't being utilized hardly at all that they still can meet those goals or 2576 3/12/03 - FY '04 OPERATING BUDGET benchmarks to control the gate? To keep out -- if I'm providing a service, I don't necessarily want my competitor in the gate next door to me. I think it's a natural -- It doesn't make US Air evil, it just makes them competitive and trying to figure out within the contract that they're living under now how they maintain controlling as many gates as possible even though the traffic isn't going through it.
Of course, I know what you're saying is true in a business model, but the fact is that in the years that I've been at the airport, US Airways has repeatedly told us that they would like to have more gates, that they really don't have enough gates. We believe that they are -- our own audits have indicated that they're turning over gates between 7 and 8 times a day, which is very high for a major carrier. It's kind of up in the range that southwest does. And southwest is the best at turning a gate. I think one of the issues that we deal with is the notion that you're describing where obviously a major hub tenant is not encouraged to bring in competition for itself has to do with the 2577 3/12/03 - FY '04 OPERATING BUDGET construction of new gates, which in their opinion are not always needed if they don't need them. But we've been very successful. And I have to give particularly Dennis Bouey a lot of credit for this when he put together the deal in 1998 for the two new terminals. He did it in such a way that we were able to get this flexibility into the language of the leases. But also since then, there was an accept bond terminal for an expansion of Terminal E. Frankly, that was something US Airways did not want to support initially. It was clearly to build gates to bring in competition for them, but we used the leverage that we had in knowing that they had a desire to finish building the International Terminal and we were successful in getting their support for a bond issue. So you do have to be aggressive whenever you see the opportunity and work with your tenants to, at times, force them to enable you, the landlord, to have competition under one roof.
Just let me move quickly for a moment if I can to the Overseas Terminal. When it opens, how many new gates are going to be there?
Thirteen new international 2578 3/12/03 - FY '04 OPERATING BUDGET gates.
And how many will US Air control under amended contract giving us more flexibility?
And the other three are slated for anyone in particular, or they're flexible?
Not at this time. We've got to get the gates open. We've got to show that the building works, I think, and then you'll find that the foreign flight carriers will be --
Yes. And a single international gate is a significant commodity to have.
One of the things that happened today -- and I've experienced this in the past and I, again, want to in bringing this up commend Mr. Cuorato and the staff at the Commerce Department on the ceremony we had today at the Naval Shipyard with Rotim (ph), the railcar manufacturing that's going to be a significant benefit and 2579 3/12/03 - FY '04 OPERATING BUDGET addition to Philadelphia and to the naval base. One of the things I discussed with Mr. Kim who is the president of the company today at lunch was I asked him how he got to Philadelphia. And he flew in from Seoul to Chicago, from Chicago to New York, and then took a train down to Philadelphia. And I've had this discussion with other business people, international business people, especially in Ireland which is what raised one of the issues that raised in the Ireland discussions, one of the strongest economies in Europe in the last decade or more, great opportunities from a historical standpoint in having business relationships with Philadelphia, you can't get here from there. You can't get from the Pacific Rim or Central America or Eastern Europe or Western Africa where we have opportunities to really do business and to attract new residents because a lot of times we understand immigration patterns are based on where you can fly direct to. And I also understand from a business component, direct flight is a godsend when it comes to doing business in the area you're going to. Is there any discussion, consideration, or investigation into what our opportunities are in 2580 3/12/03 - FY '04 OPERATING BUDGET doing international business here in Philadelphia and then going out and attracting a carrier that can get people from where we're doing business with direct to Philadelphia without having to go through New York and Chicago? It really does seem that we're missing the boat sometimes. And again, I don't want to go back and pick on US Air, but the fact of the matter is that US Air flies internationally to locations that are great for business and for tourism, but not the kind and size of business we're trying to create or the type of immigration patterns we may be trying to create. I mean, flying to Berlin, flying to London, flying to Paris, it's a terrific opportunity to have daily flights to those cities, but when you're trying to get from anywhere in the Pacific here, it's a nightmare. And you really can't develop business opportunities in South America or Central America if you can't get here direct. Have we determined what our opportunities are from an international business perspective and then tried to match up those three gates or other gates with direct flights to and from those countries? 2581 3/12/03 - FY '04 OPERATING BUDGET
I would say not specifically as you've just described it. One thing that has happened in the last several months is that with the US Airways United cochairing arrangement, there's been a significant number of co-chairing applications submitted to the US Department of Transportation for US Airways to fly what essentially would be one-stop flights to some of the destinations you're talking about on the Pacific Rim, which is something we have not had before. You could, theoretically, if you were going to go to a place like Australia or Tokyo, Hong Kong, you would might have to fly US Airways to the West Coast and then change airlines. With the co-chairing with United, you do have some additional global opportunities there. As far as linking some of the business opportunities that you see around the globe that may either already be -- the seeds have already sown or perhaps haven't even started yet, I think that is an area that we'd like to work more closely with the Commerce Director and Innovation Philadelphia to find what some of those markets might be that we should be concentrating on. And then it is a bit of a challenge sometimes to figure 2582 3/12/03 - FY '04 OPERATING BUDGET out which carrier is the one that can serve the market. And then, as I said, you have to convince them that they can make money. What we have here that's been successful on the flights we've done to Europe and the flights we've done to the Caribbean, is you have this base of passengers that fills two-thirds of a plane and they can fill up the rest of the plane with some connecting traffic that US Airways brings in from other domestic cities. We have to put together packages like that for the designations that you're talking about. And if you have some in mind, I would be very interested in trying to pursue those.
I think this is a great airport, I think we have opportunities in the City to make the City more international than it is. Certainly, New York is what it its because it's New York. But I think cities like Boston and Chicago and other cities have really done a better job than we have in making themselves more international in flavor and in business attraction and some other things. And I think, again, there's a big market outside of this country that I think we're beginning to tap in -- just today in bringing a company the 2583 3/12/03 - FY '04 OPERATING BUDGET size of Rotim to Philadelphia. I just think we can utilize our airport as a resource to do that and to facilitate those relationships back and forth. The Ireland flights are tremendous. Hopefully, that seasonable business, basically tourism business, will be able to at some point in time be able to carry business opportunities also into Shannon and Dublin where people don't have to -- they can do business in Philadelphia without having to take an hour and a half train from New York from JFK down.
We need to put people in those seats so that the service grows.
I guess the question is, what comes first, the chicken or the egg? We don't do business with these places, don't have direct flights there. Is it cause and effect or is it component parts put together to make it attractive to both come here, use the air service, and to do business in Philadelphia?
We do believe, too, that the new management team at US Airways recognizes the value of this hub and its potential for international growth. Mr. Segal has said repeatedly that he would like to model once he's out of 2584 3/12/03 - FY '04 OPERATING BUDGET bankruptcy -- and of course we've got all the international economics to contend with right now. But once they're past that point, he was instrumental in the development of Newark as a continental international hub that now clearly rivals JFK, and he would like to use some of that experience and he has some ideas about some new international destinations for Philadelphia that we are pursuing with him.
Great. Thank you very much. Thanks for the dialog. I appreciate your insight. And again, please keep up the good work.
Thank you. Are there any other questions from Members of the Committee? Any comments? (No response.)
Seeing no one, I thank you. Thank you for your patience. Thank you for your testimony. The Civic Center is next. Good afternoon. Thank you for your patience. Please proceed with your testimony. 2585 3/12/03 - FY '04 OPERATING BUDGET
President Verna, Honorable Members of City Council, good afternoon. I am James L. Coleman, Jr., the Executive Director of the Philadelphia Civic Center. As I have indicated in prior testimony, the Civic Center has not been used for conventions, trade shows, athletic events or the like since shortly after the Pennsylvania Convention Center opened. It is currently set up as a sound stage and has been the location of many films which the Philadelphia Film Office works so diligently to bring to our City. This time last year I advised you that the Film Office was about to close a deal on a TV pilot which, if successful, would result in the whole series being shot at the Civic Center and around Philadelphia. That pilot was "Hack," and the series shown on prime time television on a weekend evening has been very successful. The series enjoys the highest ratings ever for CBS in that time slot. Although we will not know for sure for another month or so, we're very optimistic that series will be renewed. While the Film Office is working on a number of other projects, it is confident of also 2586 3/12/03 - FY '04 OPERATING BUDGET landing at least one other full-length film in the very near future. In fact, that film to be produced by Lee Daniels is almost a done deal. When I wrote this it was almost a done deal. It may have been done by now.
That's a full length film. Lee Daniels is a native Philadelphian, and I might say parenthetically his father was a police officer who died in the line of duty. And he produced "Monster's Ball," which won best actress Oscar for Halle Berry. Today, I'm here to address the Civic Center's Fiscal Year 2004 Operating Budget request. The total request is for $271,427 which is $15,937 less than the current appropriation of $287,364 and $1,569 less than the Fiscal Year '03 estimated obligations. This request breaks down to $124,000 to $128,000 for personnel service; $123,649 for purchase of services and $23,650 for materials and supplies. That concludes my testimony, and I will pleased to answer any questions that you might have 2587 3/12/03 - FY '04 OPERATING BUDGET at this time.
Thank you. How many employees are at the Civic Center?
The committee will stand in recess until Monday, March the 17th at 9:30 a.m. Thank you. (Council adjourned at 4:25 p.m.) - - - 2588 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 March 12, 2003, were reported fully and accurately by me, and that this is a correct transcript of the same. RE: COMMITTEE OF THE WHOLE ___________________________ Lisa C. Bradley, RPR and Notary Public