Committee Hearing, June 5, 2006

COUNCIL OF THE CITY OF PHILADELPHIA COMMITTEE ON PUBLIC PROPERTY and PUBLIC WORKS - - - Room 400, City Hall, Philadelphia, PA Monday, 6/5/06, 1:30 p.m. - - - Bill 060264 - Being held at request of sponsor. Bill 060314 - Authorizing Commissioner of Public Property to sublease bldg. at 5201 Old York Road... Bill 060336 -Authorizing Commissioner of Public Property to execute and deliver to PAID deed to City-owned land at 1213-19 South 15th Street... Bill 060338 - Authorizing Commissioner of Public Property to execute and deliver to PAID parcels of land at Third St. and Fairmont Avenue... Bill 060390 - Approving Lease Amendment between PGW and City for premises at 1137 Chestnut Street... Bill 060434 - Authorizing Commissioner of Public Property and Director of Commerce to purchase from La France parcel at 8425 Executive Avenue... Bill 060440 - Consenting to assignment from Area II Cable TV franchise from Time Warner to Comcast... Bill 060470 - Authorizing Commissioner of Public Property to deliver to PAID deed for 1327 Race St. for use in expansion of PA Convention Center... COUNCILMEMBERS PRESENT: Darrell C. Clarke, Chair Donna Reed Miller Frank DiCicco Michael A. Nutter W. Wilson Goode, Jr. Juan F. Ramos Jack Kelly Frank Rizzo James F. Kenney Marian B. Tasco Joan L. Krajewski V A R A L L O Incorporated Litigation Support Specialists 1835 Market Street, Suite 600 Philadelphia, Pennsylvania 19103 215.561.2220 215.567.2670 I N D E X WITNESS Bill No. 060470 - Joan Schlotterbeck, Commissioner-Public Prop. - Stephanie Nadoff, Director of Commerce...... Bill No. 060470 - Joan Schlotterbeck.......................... Bill No. 060336 - Joan Schlotterbeck.......................... 28 Bill No. 060390 - Randy Gyory, VP, Customer Affairs, PGW...... 34 Bill No. 060434 - Joan Schlotterbeck.......................... 43 - Joseph Messina, City Solicitor.............. 45 - James Tyrell, Director of Aviation.......... 45 Bill No. 060338 - Joan Schlotterbeck.......................... 47 - Henry Schwartz, City Law Department......... 52 Bill No. 060440 - Joseph James, Deputy Commissioner........... 54 Department of Public Property - Reginal Martin, General Mgr., Time Warner... 110 - John Fogerty, Esq., Attorney, Time Warner... 112 - Kathleen Sullivan, Regional Vice President.. 122 Government Affairs, Comcast Cable - Christian Meyer, Regional Vice President.... 128 Sales and Marketing, Comcast Cable - Sharon Power-Lee, Director.................. 134 Government and Community Affairs, Comcast Cable - Robin Proctor, VP-H.R., Comcast Cable....... 150 - Brian Lambert, Regional Vice President...... 173 Customer Service, Comcast Cable - Josh Brightbart, Grassroots Cable Coalition 190 - Edith Dixon, Southwest CDC.................. 198 - Alfred Brown, Point Breeze Performing Arts 201 - J. Stein, Gen. Counsel, Community Legal Svc. 204 - Gretjen Clausing, Community Access Coalition 206 - Joy Butz, Kensington Welfare Rights Union... 216 - Phyllis Gilbert, Peace Action............... 219 - Irvin Benjamin, Harmonious Volunteer Center 223 3 6/5/06 - Public Property/Public Works - Bill 060470

Good afternoon. Good afternoon. We will be starting the Committee on Public Property and Public Works. I please ask individuals who should not be on this side of the rail to please go on the other side of the rail so that we can proceed. Thank you. We have a quorum: Councilwoman Tasco, Councilwoman Krajewski, Councilman Rizzo, and Councilman Kenney. Would the clerk please read the title of the first bill.

Bill No. 060470, an ordinance authorizing the Commissioner of Public Property to execute and deliver to the Philadelphia Authority Industrial for Development a deed for nominal consideration conveying fee simple title to a certain tract of City-owned land with the buildings and improvements thereon, situated at 1327 Race Street in the City of Philadelphia for further 4 6/5/06 - Public Property/Public Works - Bill 060470 conveyance at nominal consideration to the Commonwealth of Pennsylvania or its designee for use in the expansion of the Pennsylvania Convention Center.

Thank you. (Witness comes forward.)

Good afternoon.

Good afternoon.

Please proceed and state your name for the record.

Good afternoon, Chairman Clarke and members of the committee on Public Property and Public Works. My name is Joan Schlotterbeck. I am the Commissioner of Public Property, and I am here today to testify in support of Bill No. 060470, an ordinance authorizing me, as commissioner, to execute and deliver to PAID a deed for nominal consideration conveying fee simple title to a certain 5 6/5/06 - Public Property/Public Works - Bill 060470 tract of City-owned land, with buildings and improvements thereon, situated at 1328 Race Street in Philadelphia, for further conveyance at nominal consideration to the Commonwealth of Pennsylvania, or its designee, for use in the expansion of the Pennsylvania Convention Center. This bill will enable the City to convey this property to PAID for expansion at nominal consideration. The Department supports this measure; and, accordingly, I respectfully ask that Council approve this bill. I also ask that the rules be suspended so that the ordinance may be passed upon the second reading at Council. Thank you.

Thank you.

The Commerce Director is here with me today.

Please proceed.

Thank you very 6 6/5/06 - Public Property/Public Works - Bill 060470 much. Good afternoon, Chairman Clarke and members of the committee. My name is Stephanie Nadoff, and I am the City Representative and Director of Commerce for the City of Philadelphia. And I too am here today to support Bill No. 060470, the ordinance 10 authorizing the Commissioner of Public Property to execute and deliver to PAID a deed for nominal consideration conveying fee simple title to a certain tract of City-owned land, with buildings and improvements thereon, located at 1328 Race Street, in the City of Philadelphia, for further conveyance at nominal consideration to the Commonwealth of Pennsylvania, or its designees, for use in the expansion of the Pennsylvania Convention Center. The State announced in 2004 that it would expand the existing center to Broad Street, extending it to the west. The size of the project is 7 6/5/06 - Public Property/Public Works - Bill 060470 estimated to be $700 million and will add approximately one million square feet to the existing building. To date, the State has authorized over $400 million for this expansion, and there is currently an additional $300 million line item in the State's capital budget for review at the end of June. A final financing plan for the center is being produced and will be completed shortly. The City has been clear with the State that it is necessary for the City to be relieved of its obligations for funding the Convention Center with respect to paying debt service and deficits arising from the operating budget, as it has in the past. It is imperative that they show this in their financing plan. The State has entered into an agreement with the Redevelopment Authority for the authority to act as the agent for acquisition, condemnation, and 8 6/5/06 - Public Property/Public Works - Bill 060470 demolition of the properties in the build path. Letters to building owners in the build path have already been sent out, informing them that the State will begin property acquisition sometime in June. There are about properties 8 that need to be acquired plus the 9 City-owned property at 1328 Race. 10 Relocation of tenants and residents has 11 already begun, including the Office of 12 Emergency Services and the Intake Center. 13 The current schedule calls for the 14 buildings to be acquired and condemned by 15 the end of 2006. 16 The Commerce Department has 17 been working with the State and the 18 Center and understands that this 19 ordinance is crucially to the success of 20 the expansion project. 21 When completed, the Center will 22 have the largest contiguous exhibit space 23 in the northeast region and will be able 24 to host large trade shows or two major 25 conventions simultaneously. The expanded 9 6/5/06 - Public Property/Public Works - Bill 060470 center will be the second largest convention facility in the northeast, which will allow the Philadelphia region to regain its place as a first-tier destination in the convention market. With passage of this ordinance, a clear indication will be sent to the State that Philadelphia is in full support of this great project and that we are not impeding their ability to pursue the expansion process. Thank you.

Thank you, Miss Nadoff. Miss Nadoff, you indicated in your testimony that the issue with respect to the City's relief of its contribution will be eliminated.

Mm-hmm.

Is that matter close to being resolved, or are you still negotiating?

We are in discussions, but we have every reason to 10 6/5/06 - Public Property/Public Works - Bill 060470 think it will get resolved.

All right. Is it prudent for us to proceed on the act of property conveyance before we get that done?

Yes. I think it's perfectly fine to do that.

All right. Who is actually -- who will be the first the -- largest facility in the northeast?

Oh, that I don't know. I think it's Boston at this point.

Boston?

Boston or Washington.

So our city will be larger than the Javett Center? Washington?

Mm-hmm.

All right. I was just asking. I mean, it's just...

I'll get that answer to you and I'll get it to you.

Number 2 is 11 6/5/06 - Public Property/Public Works - Bill 060470 not that bad.

Right. We try harder.

All right. Thank you. Any questions of these witnesses by members of the committee? Councilman Nutter.

Thank you, Mr. Chairman. Mr. Chairman, I just wanted to put on the record a note of thanks on behalf of the Pennsylvania Convention Center Authority, and my fellow board member Councilman DiCicco, I'm sure, can express his own sentiments. But I really want to thank Miss Nadoff and Miss Schlotterbeck, the Mayor and his Chief of Staff, Joyce Wilkerson, for all of the hard work and the City departments who are involved in this process. These are very important and yet rather complicated pieces of 12 6/5/06 - Public Property/Public Works - Bill 060470 legislation that are critically important to the future for expansion of the Pennsylvania Convention Center Authority, and we thank you deeply for the hard work and effort to bring this to us today to allow us to get this done prior to the legislative recess. Thank you very much.

You're welcome.

You're welcome.

Thank you. Thank you, Councilman. Councilwoman Tasco?

The City of Philadelphia owns this property at 1328 Race Street?

Yes.

Yes.

How large is the tract?

How large is the tract?

Mm-hmm. 13 6/5/06 - Public Property/Public Works - Bill 060470 It's 13th Street to what, Broad Street?

No, no, no. This is the fire station at 1328 Race Street.

Okay, all right. What is a nominal fee?

What is a nominal fee?

A dollar.

A dollar?

Mm-hmm.

Wow. And what is the purpose of just a dollar? Just for the record.

I think that's a legal matter. The representative from the Law Department could answer that, but I think you have to have some consideration for the transaction to be legal.

So is that the City's contribution to the expansion of the Convention Center?

It will be a part of The City contribution, yes. 14 6/5/06 - Public Property/Public Works - Bill 060470

Okay. Has that contribution been identified yet in terms of a total amount?

No. That's part of the financing plan that we're working with the Convention Center Authority and the State on defining at this point. So you will be --

So when you calculate the cost and the contribution to the City, you will calculate the full value of the fire station? Would be it be at its full value, or will it be at the dollar value?

It would be at the --

It's a dollar.

No it, would be the value, the fair market value of the property.

Has there been an appraisal done?

The think the RDA 15 6/5/06 - Public Property/Public Works - Bill 060470 is doing an appraisal of all of the properties in the build path.

So will -- I see where the Councilwoman's going on this. The question is: If this is going to be designated as the City's contribution to the project and we need to know what that number is as it relates to the appraisal so we can make note of that dollar amount as opposed to a nominal amount.

Okay. We'll get you that information.

Could we have that before the bill's passed?

I don't know. We well, have several weeks, so I think we can get that information.

You have until September?

Pardon me?

You have until September. 16 6/5/06 - Public Property/Public Works - Bill 060470

Okay.

Well, that again leads me to ask the question of the sponsor. Councilman DiCicco, are you the sponsor of the bill? Will there not be a request for a rules suspension?

Yes. We need that in order to move forward during the summer months. It's --

I just think that if we're going to use that property, which is City property, that the appraised value should be calculated towards the contribution that the City makes to the expansion of the Convention Center, and it should be certainly more than one dollar 'cause the land is valued at --

Yeah.

If you will permit me, at sometime I will get you more defined information about the way property is the valued for the City contribution, and if it's based on the 17 6/5/06 - Public Property/Public Works - Bill 060470 appraisal, I will get you that information as well.

Councilman Rizzo?

So what I'm hearing, I don't think that should hold up the suspension of the rules. In good faith, we'll get a value.

That's correct.

And the process will move forward.

That's right.

Well, you know -- and I know you're clearly cooperating in good faith. I'm just a little concerned that we send the inappropriate signal when, you know, time after time, we're asking individuals for appraisals when we convey properties to other individuals and private entities, and we are very insistent on that. And for us to pass a bill that would convey a property without us knowing what the appraised value is 18 6/5/06 - Public Property/Public Works - Bill 060470 somewhat inconsistent, particularly given the fact that you told the Councilwoman that that will be a part of the City's contribution to the overall project.

I think, if I can, Mr. Chairman, it's important to understand that this contribution --

Hold on, hold on. (Interruption by feedback from mic.)

I think it's important to understand that this contribution for whatever the value is is important to the City because the expansion of the Convention Center is certainly going to more than pay itself off, if you will, I mean times over. 20

Right.

That may be a low number 'cause it's important to the economic development of our tourism industry and other things that are related to the Convention Center. 19 6/5/06 - Public Property/Public Works - Bill 060470 So I think if it was a different -- if, under different circumstances, it was going to a private development, I think the argument could be made that we should not move forward with this until we had a definitive number, but it's hard to really put a number on this based on what the return will be for the investment on behalf of the City.

Well, that may be true, but when you calculate the cost, the contribution to the City, we ought to be given credit for the value so that the continued -- whatever else we have to contribute, okay, this is deducted from that contribution.

Right.

I understand, I understand.

Councilman Rizzo?

Well, that's fine, but it doesn't change anything. 20 6/5/06 - Public Property/Public Works - Bill 060470 It's still going to be conveyed for a dollar, and whatever that value is, it is, and it shouldn't slow the process down because I don't hear anyone suggesting that they may the fair market value. The transaction is going to occur for the dollar and whatever the value of the property is, it is, whenever the appraisal is completed.

I think the question that Councilwoman Tasco is posing is that on the City side of the ledger that that be given credit for whatever that future contribution is.

I agree.

Right.

I'm not talking about slowing down the process.

Oh, okay.

I just don't want them to get amnesia when they come back the next time so that we get credit. 21 6/5/06 - Public Property/Public Works - Bill 060470

Right.

There may be some other dollars we have to put in, and we just don't want you to forget to calculate the fair market value for this piece of property --

We promise we won't forget.

-- to be included in our contribution.

Right. And that's a reasonable request.

We're also giving up rights-of-way.

Right.

We'll be striking Cherry Street so -- and that's all a part of that --

That's two other pieces of legislation.

Okay, that's fine. You know, I hope you don't view the questioning to be a sense that we're 22 6/5/06 - Public Property/Public Works - Bill 060470 not interested in moving this project along, but I just want to be as consistent.

That's fine.

'Cause we do ask about the appraised value of properties.

I understand.

We'll get you that information.

Let me just say this. At least in terms of dealing with property disposition, you've been fair, forthright, and up front, and I appreciate that.

Thank you.

Thank you.

Thank you. Any other questions of these witnesses by members of the committee or any other Councilmembers present? (No response.)

There being 23 6/5/06 - Public Property/Public Works - Bill 060470 none, thank you very much. Thank you.

Thank you.

Thank you.

Is there anyone else here to testify on this bill? (No response.)

There being none, will the clerk please read the title of the next bill. * * * 24 6/5/06 - Public Property/Public Works - Bill 060314

Bill No. 060314, an ordinance authorizing the Commissioner of Public Property, on behalf of the City of Philadelphia, to enter into an agreement to sublease from the Philadelphia Municipal Authority the first and second floors of a building located at 5201 Old York Road, under certain terms and conditions.

Thank you. Before we proceed, let the record reflect that Bill 060264 is being held at the request of the sponsor. So if there's anyone interested in that bill, we will not be taking testimony today on that bill. Thank you, Commissioner. Please proceed.

Good afternoon, Chairman Clarke and other members of the Committee on Public Property and Public Works. My name is Joan Schlotterbeck, and I am Commissioner for Public Property. 25 6/5/06 - Public Property/Public Works - Bill 060314 I am here today representing Public Property to testify in support of Bill No. 060314, an ordinance authorizing me, as commissioner, on behalf of the City, to enter into an agreement to sublease for the Philadelphia Municipal Authority the first and second floors of a building located at 5201 Old York Road, under certain terms and conditions. This bill will permit the City to provide social services and temporary housing for women and children as well as provide office space for ODESSA, Office of Emergency Shelter Services. The Department of Public Property supports this measure and, accordingly, I respectfully ask that Council approve Bill No. 060314. I also ask that the rules be suspended so that the ordinance may be passed upon the second reading of Council. Thank you. I'm happy to answer any questions you may have. 6/5/06 - Public Property/Public Works - Bill 060314

(Off-mic, inaudible.)

The agency that's being housed in this facility is an agency of the Department of OESS.

Can I ask you a question off the record?

Absolutely.

Please proceed, Commissioner.

This facility is in the Ninth Councilmatic district, and we have had community meetings with the neighbors, and they do support this project, and I support it. Thank you.

Thank you, Councilwoman. Any other questions by members of the committee of this witness? (No further questions.)

There being none, thank you so much. Anyone else to testify on this 27 6/5/06 - Public Property/Public Works - Bill 060314 bill? (No response.)

There being none, will the clerk please read the title of the next bill. * * * 28 6/5/06 - Public Property/Public Works - Bill 060336

Bill No. 060336, an ordinance authorizing the Commissioner of Public Property to execute and deliver to the Philadelphia Authority for Industrial Development for nominal consideration a deed conveying fee simple title to a certain tract of City-owned land with the buildings and improvements thereon situated at 1213 through South 15th 11 Street in the City of Philadelphia for 12 further conveyance at less than fair 13 market value. 14

Please 15 proceed. 16

Good 17 afternoon, Chairman Clarke and members of 18 the Committee on Public Property and 19 Public Works. My name is Joan Schlotterbeck, I'm Commissioner of the Department of Public Property. And I'm here today to testify in support of Bill No. 0060336, an ordinance authorizing me, as commissioner, to execute and deliver to 29 6/5/06 - Public Property/Public Works - Bill 060336 the Philadelphia Authority for Industrial Development for nominal consideration a deed conveying fee simple title to a certain tract of City-owned land with the buildings and improvements thereon situated at 1213 to South 15th Street, 8 for further conveyance at less than fair 9 market value. 10 The bill will enable the City 11 to convey this property to the Authority, 12 to PAID, for further conveyance to a 13 nonprofit organization that will purchase 14 the properties at less than fair market 15 value. 16 Public Property purchased the 17 site in 1968 for use as a parking lot. 18 The Department of Public 19 Property supports this measure. And, accordingly, I respectfully ask that Council approve Bill No. 060336. I also ask that rules be suspended so that the ordinance may be passed upon the second reading of Council. 30 6/5/06 - Public Property/Public Works - Bill 060336 Thank you. And I'm here to answer any questions you may have.

Thank you, Commissioner. Commissioner, to be consistent -- and I don't want to ask you about the fair market value of this property. Is there any way in the future -- and I know appraisals cost a lot of money, and we don't want to appraise every piece of property if it's going to be -- if it's a relatively small parcel. But is there a way that if it's a large parcel that it could possibly be of considerable worth that we can get a sense of an appraised value or an estimated appraised value when we convey properties for nominal consideration?

So,k in other words, rather than pay for a formal appraisal --

Yeah, yeah.

-- have 31 6/5/06 - Public Property/Public Works - Bill 060336 some kind of a...

Yeah. I mean, I think internally we can kind of guesstimate. It's like they have a sense of, you know, some of the properties that we're conveying for nominal, what the cost is.

I guess we could, but I would probably have to go to Commerce and get support from folks over there.

If you can check, yeah.

Okay.

If it's not feasible, then that's fine.

Okay.

Councilman Rizzo?

Couldn't the Board of Revision help us? Wouldn't they have a pretty good feel for that?

The problem is, like Councilman Kenney said, it will 32 6/5/06 - Public Property/Public Works - Bill 060336 probably be old, and they basically give you the value for that property as last appraised, but in some cases, there are properties that are comparable, in the same neighborhood that have more recent appraisals because they're recent sales, so they have the --

It's a place to start, though. It's a place to start.

But I think at least internally, we should have some sense without it costing us any money.

Right. In other words, the place to start a discussion, as opposed to --

Yeah. If there's like a large parcel in a relatively -- in Center City or in some of the other areas where property values are rather high, I would be interested if we had a sense of what the fair market value would be.

Okay.

Okay, thank 33 6/5/06 - Public Property/Public Works - Bill 060336 you. Any other questions of this witness on this bill? (No response.)

Anyone else to testify on this bill? (No response.)

There being none, will the clerk please read the title of the next bill. * * * 34 6/5/06 - Public Property/Public Works - Bill 060390

Bill No. 060390, an ordinance approving the lease amendment between the Philadelphia Gas Works by the Philadelphia Facilities Management Corporation soley in its capacity as operating manager of the City-owned Philadelphia Gas Works and the City of Philadelphia, trustee under Will of Stephen Girard, deceased, acting by the Board of Directors of City Trusts for certain premises located at 1137 Chestnut Street. (Witnesses come forward.)

Good afternoon. Please proceed.

Good afternoon, Councilman Clarke and members of the Committee on Public Property and Public Works. My name is Randy Gyory. I am the Vice President of Customer Affairs for the Philadelphia Gas Works. I am here today in support of Bill No. 060390, which authorizes a renewal of an existing 35 6/5/06 - Public Property/Public Works - Bill 060390 lease agreement between PGW and the Girard Estate for the Center City Customer Service Center located at 1137 Chestnut Street. This renewal agreement pertains to a lease of approximately 4500 square feet of retail and commercial space. This agreement will extend the lease for an additional four-year term, beginning as of the beginning of August 1, 2006, at a rental of $11,391 per month, with all other terms and conditions of the lease to remain the same. In addition to the rent, PGW will continue to pay all utilities and maintenance associated with the leasehold. PGW may terminate the lease without penalty after the second year of the term upon 180 days' notice. We believe these to be reasonable rental terms for the property in this area and have obtained an estimate of value from an independent appraiser substantiating this belief. 36 6/5/06 - Public Property/Public Works - Bill 060390 PGW believes that the lease renewal is favorable to both PGW and its customers for a number of reasons. PGW provides over 36,000 customers with service at this location. And an additional 106,500 customers make payments annually at this site. Further, this location is convenient to public transportation. Moving to a new location would involve making changes to our bills, notices, messages, and our interactive voice response system and launching an advertising campaign updating the current publications at an inconvenience to our customers and foot traffic and worker transition. This renewal has been favorably recommended by the Gas Commission, and we would ask the Council to suspend the rules to permit passage at session. If you have any questions, I'm available to answer them.

Thank you. 37 6/5/06 - Public Property/Public Works - Bill 060390 Quick question somewhat unrelated but related. Do you have -- do you do an analysis of your customer base in terms of where they come from geographically throughout the City? The reason I ask that question is my age-old issue about closing the Ninth and Montgomery facility, and I'm trying to find out where the people from that particular community that use the Ninth and Montgomery facility go to use your services. Are they now going to inserts Center City, or are they now trekking all the way up to Erie Avenue?

Well, we've had this discussion before, Councilman Clarke.

And we're going to have it every time you come in here.

And I realize we're going to have it every time. And actually, we know that many 38 6/5/06 - Public Property/Public Works - Bill 060390 of our customers went up to 13th and Erie, some went to Center City. We do open the office during LIHEAP season, from November through the end of March so that the customers can come into that local center and apply for LIHEAP. We are in the midst of an analysis of all our customer service centers, making the determination of how we can better provide service for customers. For example, we now let customers provide us with mail-in applications for the customer responsibility program. They don't have to come all the way down to our offices. We realize it is difficult for some customers to get to the office. But we are in the middle of an analysis of looking at all our operations. We haven't reached any conclusions yet, but we are looking at it in detail. 39 6/5/06 - Public Property/Public Works - Bill 060390

Okay. Since the last time we had this discussion, we, the City, and the local nonprofits have actually received funding to build approximately 250 houses in that area, and I would ask that you look at that area again in the near future, given the increased population, and we anticipate hopefully in a position to get some additional population in that community. So I'd ask that you continue to look at that to see if it makes sense to open that facility on a long-term basis.

And we'll do that.

Thank you. Councilman Kenney?

Thank you, Mr. Chairman. Is it feasible, or has there been any consideration given to the possibility of doing something in a mobile? Way especially when it comes to LIHEAP applications and things of that 40 6/5/06 - Public Property/Public Works - Bill 060390 nature that the Gas Works could certainly benefit from by expanding its subsidized customer base. Is it feasible to do it? I know the equipment now is so high-tech that you can basically do anything from a mobile operation, but I'm wondering if you were to advertise appropriately with the civics and with the senior centers and stuff like that and you had a dependable day that -- once a month that the equipment would show up, could you do something in a Winnebago or in a mobile operation?

You may be aware of this, but we do move a mobile operation up to our northeast office, where our office location used to be in the Northeast. And, again, we do advertise at that site, and we haven't seen the kind of turnout that we would like to see to make it feasible. The technology is there. 41 6/5/06 - Public Property/Public Works - Bill 060390

Right.

It is feasible, it's getting enough people to show up to make sure it's not only convenient for the customers but it's efficient for the company.

Okay. And are you losing money on this operation? Or is it just not the type of response you were expecting?

Well, we haven't seen the type of response we were expecting. And, again, we'll continue with our outreach. If there is opportunity, we'll take advantage of it. We haven't turn our back to it 'cause we realize that there are some customers who our sites aren't convenient to, so we'll continue to look at it.

And is it one mobile unit or...

We have one mobile unit, that's correct.

How big is 42 6/5/06 - Public Property/Public Works - Bill 060390 it?

It's the size of, I'll say, of a small school bus.

Okay. Thank you.

Thank you, Councilman. Any other questions of these witnesses by members of the committee? (No response.)

There being none, thank you very much. Is there anyone else to testify on this bill? (No response.)

There being none, the clerk will please read the title of the next bill. * * * 43 6/5/06 - Public Property/Public Works - Bill 060434

Bill No. 060434, an ordinance authorizing the Commissioner of Public Property and the Director of Commerce, acting on behalf of the City, to purchase from La France Corporation any and all interests in the parcel of property known as 8425 Executive Avenue and the improvements and certain assets contained thereon, under certain terms and conditions.

Thank you. (Witnesses come forward.)

Thank you.

Good afternoon, Chairman Clarke and members of the Committee on Public Property and Public Works. My name is Joan Schlotterbeck, and I'm here as Commissioner of Public Property. I'm here today to support and to testify in support of Bill No. 060434, an ordinance authorizing me, as Public Property Commissioner, and the Director of Commerce acting on behalf of the City 44 6/5/06 - Public Property/Public Works - Bill 060434 to purchase from La France Corp. any and all interests in the parcel of property known as 8425 Executive Avenue and the improvements and certain assets contained thereon upon certain terms and conditions. This bill will authorize the City to acquire seven acres of land and 100,000 square feet of building space located behind an existing airport warehouse. This site will continue the contiguous expansion of the airport perimeter. The Department of Public Property supports this measure; and, accordingly, I respectfully ask that Council approve Bill No. 060434. I also ask that the rules be suspended so that the ordinance may be passed upon the second reading of Council. Thank you. We're here to answer any questions you may have. I have -- why don't you folks 45 6/5/06 - Public Property/Public Works - Bill 060434 introduce yourself.

Joseph Messina from the City Solicitor's Office.

Jim Tyrell, Deputy Director of Aviation.

Okay. What's the cost of the acquisition?

Sorry?

What's the cost of the acquisition?

The cost of the acquisition is 6.75 million.

That's coming from what particular fund?

It will be coming from the Aviation Fund, specifically from the use of pasture facility charges.

Okay. Councilman Rizzo?

Refresh my memory. This is not the facility that we once made an effort to purchase, we defaulted and lost a significant amount of money, a million or so dollars. Is 46 6/5/06 - Public Property/Public Works - Bill 060434 this the same facility?

No, Councilman, it's not.

Thank you.

Any other questions of these witnesses? (No further questions.)

Thank you very much. Anyone else to testify on this bill? (No response.)

There being none --

Councilman, could you accept Mr. Tyrell's written testimony as his testimony?

Certainly. Thank you. The clerk will please read the title of the next bill. * * * 47 06/05/06 Public Property/Works Bill No. 060338

Bill No. 060338, an ordinance authorizing the Commissioner of Public Property, on behalf of the City, to execute and deliver to the Philadelphia Authority for Industrial Development for nominal consideration a deed or deeds conveying fee simple title to five parcels of City-owned land with the buildings and improvements thereon situated at the corner of Third Street and Fairmount Avenue, and known as 700, 702, and 704 North Third Street and 309 and 311 Fairmount Avenue, for the purpose of conveyance, for nominal consideration, to the Northern Liberties Neighbors Association or its designee, under certain terms and conditions.

Please proceed.

Good afternoon, Councilman Clarke and members of the Committee on Public Property and Public Works. My name is Joan Schlotterbeck, and I'm Commissioner for 48 06/05/06 Public Property/Works Bill No. 060338 Public Property, and I'm here today representing the Department of Public Property to testify on Bill No. 060338. This is an ordinance 6 authorizing me, as commissioner on behalf of the City, to execute and deliver to PAID for nominal consideration a deed or deeds conveying fee simple title to five parcels of City-owned land with buildings the buildings and improvements thereon, situated at the northwest corner of Third Street and Fairmount Avenue, also known as 700, 702, and 704 North Third Street and 309 and 311 Fairmount Avenue for the purpose of conveyance, for nominal consideration, to the Northern Liberties Neighbors Association or its designee, all under certain terms and conditions. This bill will permit the City to convey the properties to the Northern Liberties Neighborhood Association or its designee for nominal consideration, whereby the Northern Liberties Neighborhood Association will make the 49 06/05/06 Public Property/Works Bill No. 060338 premises structurally sound and use the property for nonprofit community-related use. There are some specific issues we'd like to draw out in this ordinance. If the Third and Fairmount properties are not used for neighborhood offices and a community center, in conformity with an approved plan, or if any part of the Third and Fairmount properties are not transferred and conveyed to other properties other than nonprofits. In other words, we're trying to make sure that the properties are used for the purposes of nonprofit in any event, not that it goes back to the City.

Have you circulated that amendment to members of the committee?

Actually, I have a marked-up copy, and I'm waiting for the other to be entered into the record. This is a marked-up version I have. 50 06/05/06 Public Property/Works Bill No. 060338

First of all, I want to thank Councilman DiCicco. I know he's been working on this. As a Councilperson relatively new to the area boundaries of our districts, I know they are close to the facility, and I want to thank him for what he's done with that community to move this project forward. Councilman Kenney?

Thank you Mr. Chairman. Commissioner, in the amendment, I recognize the need to ensure that it's going to be used for nonprofit use. During the course of the control of the properties by the civic association in the event that the construction of a facility there is not feasible, could the properties be sold and the proceeds used to build or acquire a property for similar use at another location? We've run into this problem -- not problem but situation before in Queen Village when PennDOT conveyed a property 51 06/05/06 Public Property/Works Bill No. 060338 to the Queen Village Association as a headquarters and they really didn't develop it that way and wound up selling it but using the proceeds to do, I think, the parking area or some parking area under 95. So there was ultimately nonprofit use. However, during the course of their ownership, let's say they discover it's just not feasible to reconstruct or to renovate, could they then use the proceeds of a sale to a private person to do the same thing but at another location within the neighborhood?

I guess it's doable, but it would have to be a part of the amendment.

I don't want to play with the language. You can see the circumstance that may arise as you get into doing this kind of redevelopment. It may be economically unfeasible, and if a property becomes available down the street that they could 52 06/05/06 Public Property/Works Bill No. 060338 purchase for the resale of the current parcels to, say, a private developer.

Could that be done with a separate ordinance at the time or do they need to sell the property? I guess we should ask --

Actually, I think it could be done. I've never had this specific issue come before me. (Henry Schwartz from the Law Department comes forward.)

Could it be done in a separate ordinance?

It has to be done in a separate ordinance as well.

Thank you, Mr. Schwartz. Any other questions of these witnesses on this particular bill? (No further questions.)

There being none, is there anyone else who wishes to testify on this bill? (No response.) 53 06/05/06 Public Property/Works Bill No. 060338

There being no further questions, thank you very much. I don't even know if...

Do you want me to hand you --

We would like to have the adjusted amendment.

Okay. Thank you.

Could I ask one of the Sergeant-at-Arms to ... make copies. Do you have enough copies? I have five. Thank you, Commissioner.

You're welcome.

Okay, let's proceed. Mr. Carter, thank you. Will the clerk please read the title of the next bill. * * * 54 06/5/06 - Public Property/Public Works - Bill 060440

Bill No. 060440, an ordinance consenting to the assignment of Area II Cable Television franchise from Time Warner Cable, Incorporated to Time Warner NY Cable LLC to further assignment of such franchise from Time Warner NY Cable, LLC to Cable Holdco Exchange VI LLC and to exchange control of such franchise from Time Warner, Incorporated to Comcast, Incorporated, under certain terms and conditions.

Thank you. (Witnesses come forward.)

Please proceed.

Good afternoon. My name is Joseph James. I have my testimony and it's been circulated, and I would just like to read it into the record. I am Joseph James, Deputy Commissioner of the Department of Public Property. I'm appearing before the committee today to recommend that City 55 06/5/06 - Public Property/Public Works - Bill 060440 Council give its approval for the transfer of control cable television franchise for Area II from Time Warner Cable to Comcast Corporation. The plan transaction includes two parts: First, an internal transfer of the franchise to Time Warner subsidiary named Time Warner New York Cable, LLC; and second, a further transfer of the franchise to a new subsidiary named Cable Holdco Exchange VI LLC, which I will be acquired by a subsidiary of Comcast Corporation. These transactions are being done in the context of a larger transaction involving the acquisition by Time Warner and Comcast of the cable franchises of Adelphia Communications, which declared bankruptcy,and the swap of certain franchises between Time Warner and Comcast. Pursuant to the terms of the City's franchise agreement with Cable Television's provider, a transfer of the 56 06/5/06 - Public Property/Public Works - Bill 060440 franchise from one owner to another or a change of the control of the franchise requires that the City be notified of the proposed transaction and provided, consistent by ordinance of City Council to each of the proposed transfer. The Federal Communications Act also provides that information about the proposed transaction be provided to the local franchising authority and establish a framework for the review and consent of the locality. Time Warner Cable and Comcast notified the City of a proposed transfer and provided the City a copy of the required Federal Communications Form 394 in January of this year. The City, in February and April, issued requests to Time Warner and Comcast for additional information with respect to the transactions, and both companies responded to each request with additional data, which was reviewed by the Department as well as by the Law 57 06/5/06 - Public Property/Public Works - Bill 060440 Department and the City's cable television consultant, TCS International. This information has been provided to members of the committee of Council in white binders. And based upon the materials submitted and the discussions pursuant to this transfer and recommendations of the City's cable consultant, it is my recommendation that City Council give its approval for these transaction transactions. Bill No. 060440 was introduced May 18, 2006. The bill reflects terms for an agreement that will best serve the needs of the communities, provides for enforcement of performance obligation, and also incorporates commitments which have previously been entered to by Urban Cable Works of Philadelphia and Time Warner Cable. Time Warner and Comcast have agreed to maintain these commitments following each of these two consecutive franchise transfers. Warner and New York 58 06/5/06 - Public Property/Public Works - Bill 060440 Cable LLC and Cable Holdco Exchange VI LLC will accordingly enter Assumption Agreement, forms of which are Exhibit C and D to Bill No. 060440. Comcast Corporation has agreed to provide a guarantee of the performance of all franchise agreement commitments by its subsidiary, Cable Holdco Exchange VI LLC. A form of such affirmation of guarantee is Exhibit E to Bill No. 12 060440. Comcast Corporation is the nation's largest cable operator in terms of subscribers served. 4 million customers in 35 states and in the District of Columbia.

The information provided to the City on FCC 394 in January and the additional information submitted to the City during the past months is sufficient for the Department to ascertain Comcast Corporation's financial, technical, and 59 06/5/06 - Public Property/Public Works - Bill 060440 legal qualifications to provide cable services to the City's franchise area through its subsidiary. In conclusion, the terms to which Time Warner and Comcast Corporation have committed are acceptable to the Department. I respectfully ask the committee that the rules of Council be waived to allow this bill to be reported out of committee and have its first reading at the next Council session. Also, in addition to this, because of time, I was not able to reach all of the members of Council directly to explain that very large white binder, so I plan to meet in the next couple days with at least Councilwoman Blackwell to give her a direct briefing on the materials that are in the binder. And if any member I did not speak to directly wishes to have a similar briefing, I'll be glad to arrange that. 60 06/5/06 - Public Property/Public Works - Bill 060440 I'm available for any questions.

This franchise also lies within Councilwoman the boundaries of Blackwell's district?

That is correct.

Okay. Thank you. Commissioner, do you have any testimony on this?

No. 13

You'll leave it up to Mr. James, then, huh?

Yes. Delegating.

Okay, thank you, Mr. James. Are there any questions of Mr. James by members of the committee? Councilwoman Miller?

Thank you. Thank you, Mr. Chairman. Good afternoon, Mr. James.

Good afternoon, 61 06/5/06 - Public Property/Public Works - Bill 060440 Councilwoman.

I was wondering. I remember -- I was not a member of City Council, but I do remember reading and hearing about cable coming to Philadelphia. And back then, you know, they divided the City up into franchises, and I think one of the issues then -- and I want to get your opinion on this matter -- is that the City didn't want one cable company to control the entire city, correct?

That is correct. It was looking for a diversity of companies to operate.

Excuse me?

It was Looking for a diversity of companies to operate the franchises.

Okay. And why was that? What was the reason?

I think the intent 62 06/5/06 - Public Property/Public Works - Bill 060440 was to try to have -- and it was conducted through an RFP process, and it was to have companies -- at that time, it was still an emerging industry, to have competition and hopefully have companies that really wanted to target to a specific area and serve those constituents. It was hopeful that, you know, that the new companies would grow and, just like a lot of industries, and develop but. As we see, it's becoming more of a commonality today is that there is a consolidation of media, whether it's in telecommunications space or in other segments of the market.

So now we're moving into one company having all of the franchise areas in Philadelphia. And certainly we all know that Comcast has the ability to deliver the services and whatnot; they've sure been around long enough. So it never really had to do 63 06/5/06 - Public Property/Public Works - Bill 060440 with competition or price controls or any of that? Keeping prices down?

Again, I was not here at the time, but from what I read in the history of it, at the time, the idea was just to allow cable to happen. I mean, there was a lot of -- an interest by folks in the community that they were missing out on kind of an emerging part of technology that would allow people to have cable TV at locations where they were having trouble just getting, you know, regular over-the-air reception. And, of course, there was a lot of promises of new services and some new channels that were seen in other markets that eventually would come to Philadelphia. It didn't specifically target as its main goal competition or lower rates. It was the opportunity to have a service that was starting to appear in most major cities, and it was something 64 06/5/06 - Public Property/Public Works - Bill 060440 that was very important to see here in Philadelphia. And that's not to say that the competition will not arise. There is competition today, even though Comcast will probably be the company that's going to own all of the franchise, but through DirecTV and dish, and I'm sure Comcast will tell you, there's a number competitors who are offering similar products as well as talking at the federal level of allowing new competitors into the market to offer similar services.

All right. Okay, thank you. Thank you, Mr. Chairman.

Are we allowed to, as a city, allowed to offer an opportunity to another cable company in the City of Philadelphia?

Yes. The franchises are not exclusive. So if another company -- as you 65 06/5/06 - Public Property/Public Works - Bill 060440 remember a couple of years ago, there was a company, RCN, that wanted to enter into the market.

I remember.

And there is no 7 restriction to keep anyone out of the mark. That transaction did not work out, but these are not exclusive franchises.

Okay. Councilman Rizzo?

To the point, what will our constituents see once the transaction occurs? Will they see rate increases? Will they see changes in programming in the franchise area? What will the impact of the consumer be?

From the information that we understand from Comcast -- and probably Comcast is better prepared to answer your question. But I think what we will see is finally a consistency in the market, that 66 06/5/06 - Public Property/Public Works - Bill 060440 we will have a consistent level of programmings and channel lineups that's similar to the other three segments that the City currently experiences. I'm not sure if there will be a significant difference in rates. The rates are pretty much standard now in the industry. What you also will see -- and Time Warner has been working on this themselves -- is an proved level of customer service and responsiveness to the community. So I think for those areas, that you will see more consistency, probably a better standard of service, and a better responsiveness to the needs of the community.

So, in most cases -- that's where I was headed. In most cases, a current customer will not see a significant increase in their rates to continue with cable television?

I can't speak 67 06/5/06 - Public Property/Public Works - Bill 060440 directly to it 'cause I think Comcast should answer that question. But in the similar cases where Comcast has acquired other franchises in the City, there has not been a jump in rates. In most cases, as I said, in most of the these companies, the rates are really driven by the content providers and the programming that they receive, and their ability to deliver service. And I think what you will find out is that with Comcast having scale in the other three franchises, the areas that their cost for operations is probably not going to cause them a see a spike in the increase in their rates.

That's what I'm interested in, the basic cable, not all the bells and whistles.

Yes.

If it's $22.50 a month now, will it be somewhat 68 06/5/06 - Public Property/Public Works - Bill 060440 in that area and not a significant increase. I think we should know that, and we'll ask Comcast that question.

Okay.

Thank you, Mr. Chairman.

Thank you. Any other questions? Councilman Nutter?

Thank you, Mr. Chairman. Mr. James and Commissioner Schlotterbeck, the overall agreement, what's -- the Area II franchise was renewed in...?

In 2000.

2000?

Yes.

Took care of it in '99?

Yeah. Most of them started in '99, 2000. I think they were renewed in 2000.

Okay. So 69 06/5/06 - Public Property/Public Works - Bill 060440 in this situation, technically, there are still getting to be four franchise areas, notwithstanding the sole ownership --

That is correct.

-- by one company?

That's correct. And still maintain the four franchises.

And so if the transfer goes through, they would be picking up a franchise that has technically nine years left or so on its --

Right. All of the agreement, whether they started in '99 or 2000, they all expire around 2015, 15-year agreements.

2015?

Yes.

And is there any particular reason at the moment, or after this moment, to still maintain technically four separate franchise areas and four different 70 06/5/06 - Public Property/Public Works - Bill 060440 agreements as opposed to one consolidated agreement?

If you're asking my opinion, I mean, the original structure was created by City Council, and I think it was done that way because we wanted to be able to see the performance across segments of the community. I still think it's beneficial that they maintain the four-franchise structure 'cause it does allow, in the future, should there be an opportunity for competition or someone decide to enter into the market, that they won't have to build the entire city; they could go after a particular franchise area and be able to enter in the market and maybe achieve what Comcast has achieved.

Okay. All of the cable companies are at the moment too, are required to file a number of reports with us about performance, penetration rates, minority and female business opportunities, and employment 71 06/5/06 - Public Property/Public Works - Bill 060440 and the like. What are the array of required reports by the companies?

Well, the companies are required to, of course, file any kind of rate increase reports with us. And sometimes, you know, depending on your cable bill, they may come more frequently than we would like. But generally, we would see a rate (indiscernible) once a year, but they are required to submit to us minority participation goals to identify the --

Hold on for one second.

Sure.

They're required to file any rate increases with you, which are primarily for the purpose of notice? I mean, it's not like you can do anything about it, is there?

Well, most of -- you know, most of the rate regulation was 72 06/5/06 - Public Property/Public Works - Bill 060440 removed by Congress sometime ago. We still review the rate filings to make sure that, consistent with the federal regulations, that if the rates are being categorized in the right allocation as the federal regs are. So ours is more to make sure they conform to the compliance. We do review and check their calculations and make sure that as they calculate it, that the money that is the right amount of money for the fee that they are going to charge. And we still review it, and we still think it's beneficial for us to continue to review that.

Okay. What else do they file?

They file monthly reports with us that kind of explain to us their activities as far as the number of subscribers, their ads and deletions, the numbers of home paths, if that's increased. 73 06/5/06 - Public Property/Public Works - Bill 060440 And they also identify to us the number of complaints. They provide information on any training programs that they may have going on, the scholarship activity, their community involvement, their local origination programming, the amount of hours that they put aside for local origination programming, the amount of hours they had in a particular period of time on leased access programming of a particular market. And they also provide us an employment report to kind of show us kind of the demographics of their employee base.

Okay. And all -- and in this particular matter, for both companies, are all reports up to date?

Yes. We are double-checking that to make sure. The last review we have, they have submitted the reports. 74 06/5/06 - Public Property/Public Works - Bill 060440 We just received Comcast's annual report, which we hoped to have gotten it earlier, but we just received that today. But all of them file an annual report as well.

Can you forward for our review a copy of that to the Chair?

Yes.

Okay. Have you had a chance to review it?

It just came today. I have not had a chance to review it.

Okay. From your past experience, do you have anything to share with us with regard to specifically performance in either employment or contracting as it relates to minority and female businesses?

Just from our team. I mean, we've worked to try to meet with them either monthly or quarterly, depending on what amount of activity is going on with the different franchises. 75 06/5/06 - Public Property/Public Works - Bill 060440 And, for the most part, they seem to be on target in meeting their goals and meeting their performance. So, um --

The goals are contained within their franchise agreements?

Right. And the goals in their particular Appendix I, which lay out their performance areas and minority participation and subcontracting and small-business opportunities, community business.

Do you recall what the goals are?

I think I have it. In the Appendix I section, it lays out a minimum of 37 and one half percent of capital expenditures shall be placed through local businesses. A minimum of 38.5 and one half percent of capital expenditures, inclusive of capital related to the upgrade.

To the 76 06/5/06 - Public Property/Public Works - Bill 060440 what?

To when they do their upgrades.

Upgrades, right.

Right. And percent of capital, 9 inclusive of capital expenditures related 10 to the upgrade shall be procured through local female-owned businesses. A minimum of 32 and a half of the dollar value of non-intrinsic goods and services other than capital expenditures shall be procured through local businesses. 30 percent of dollar value of nonintrinsic goods and services inclusive of any other nonintrinsic expenditures shall be procured through local minority-owned businesses. And 10 percent of the dollar value of nonintrinsic goods and services other than capital, inclusive of any non-intrinsic goods and services shall be 77 06/5/06 - Public Property/Public Works - Bill 060440 procured through local female-owned businesses.

So -- and these goals are by franchise area?

That's correct.

Okay. And you can -- you would be able to take a look at the report you received today and forward us an analysis of that report?

Yes. And we are also preparing an analysis that we've conducted ourselves to kind of show the performance over last year and identify some of the top ten companies that they spend a significant amount of dollars in small and minority businesses.

Okay. Do you have any estimates on the use of, for lack of a better term, satellite television in the City?

No. I have no 23 information on that.

Okay. Can you give us an update on the situation 78 06/5/06 - Public Property/Public Works - Bill 060440 regarding public access from the City's side?

Well, from the City's side, we've been working on this issue with members of the Public Access Coalition for a number of years now, starting in --

It would be about now, right? 11

Well, yeah. This 12 issue is -- has been before the 13 Administration a number of times, and 14 different administrations have different 15 approaches to it. 16 But in this current 17 administration, in 2003, the Coalition 18 produced a business plan, which was 19 reviewed by the Administration, and there 20 was subsequently discussions that were entered with members of the Coalition to see whether or not we could come up with a viable plan to actually see public access happen. And those discussions have been 79 06/5/06 - Public Property/Public Works - Bill 060440 shared out of the Managing Director's Office and has members of my team and my staff and members of the Law Department and the Managing Director's Office has assigned people to work with the Coalition to kind of understand what are the legal and technical and operational issues to bring it about. And we've had some very good discussion, and we've put together some proposals that we would -- you know, we submitted to the Administration for consideration.

And so what's the status of those submittals?

We still have more work to do, as we -- you know, as we provide answers, we were asked more questions, and we continue to try to respond to the questions so that we can give the information to the Administration to make a decision.

Okay. Well, let me get a couple facts on the 80 06/5/06 - Public Property/Public Works - Bill 060440 record.

Sure.

What do you estimate to be the cost of operating a public-access entity?

Well, if we were to start -- and this is clearly, you know, speculation; this is not concrete 'cause we haven't produced an operating budget specifically. But based upon the information we've took from the operating plan that was submitted by the Coalition, and we reviewed it with our consultant, it's in the range of $100,000 to get started. And it's a sliding scale that could go up. But based upon the information we've taken from other cities, there is really no rhyme or reason to the amount of dollars that are spent. Some jurisdictions a million dollars in operating, and some spend as little as a hundred thousand in operating. 81 06/5/06 - Public Property/Public Works - Bill 060440 And it's not relative to the number of access channels, nor is it relative to the number of subscribers.

How many assess channels do we have?

We have five public-access channels.

And how are they being utilized at the moment?

Currently, the access channels are on loan to the cable operators.

Is there any fee for that?

No. 17

I'm sorry?

No, there is no fee collected for that.

Okay. And what do you think a budget is to have a full-fledged public-access corporation up and running? And what's involved in the programming side, the capital cost, and the previous -- or I guess the original 82 06/5/06 - Public Property/Public Works - Bill 060440 proposal for public access in Philadelphia had different entities paying certain dollars to make it happen. Can you give us those details, please.

Sure. The original franchise regret from '83 and '84 as well as what was renewed in the 2000 agreements are basically the same amount of dollars and the same configuration. The original plan was for the construction of one central studio and eight satellite facilities, in addition to providing for a van and equipment. The total amount of dollars was $900,000 from all four franchise contributions for the central studio and about $1.5 million for the eight satellite studios, including equipment. Another $300,000 was set aside for replacement for equipment. I believe it was in maybe three or four years out, after the initial outlay. So altogether, we're talking 83 06/5/06 - Public Property/Public Works - Bill 060440 about a $2.8 million capital budget for public access, with five channels. And the operating dollars was, as indicated in the franchise agreement, is in a arrange between 300,000 to 500,000 to be set by members of City Council.

Hold on for a second.

All right.

900,000 for a central studio.

Yes.

1.2 million for eight satellites.

1.5 million, I'm sorry, for the eight satellites. And 300,000 for replacement equipment.

Okay. So you have 2.7.

2.7, right.

And so, what's the current proposal?

The current proposal is the same as in the franchise 84 06/5/06 - Public Property/Public Works - Bill 060440 agreement. There's -- nothing has changed other than our discussions with the Coalition about the development maybe of one studio, the central studio. And maybe starting out with maybe one or two channels just to get started. And then build some momentum beyond that. Because in the original configuration, it's really not enough money for bricks and mortar. It's not enough money to go out and acquire land and build from the ground up. So a certain amount to our proposal is the City trying to help that by, you know, providing maybe a facility and providing space for them to get started. That way, they don't have to spend that money on capital. And maybe provide some additional in-kind to help that studio kind of get started for the first couple years and get rolling. And then the rest of that is 85 06/5/06 - Public Property/Public Works - Bill 060440 that the Coalition or the nonprofit needs to find out -- or needs to be able to put together their own funding plan to make it sustainable, assuming they have the operating dollars or assuming they didn't have the operating dollars, because it should be something that it could sustain itself. Based upon the level of interests that the Coalition says exists, there are plenty of folks out there who are willing to contribute, there's plenty of people who are willing to volunteer their services to make this happen. It should be something that should not be a big financial burden to get underway.

Now, is it my understanding that a nonprofit or what's generally been referred to as "a public-access corporation" has to be established to run this?

That's correct.

Okay. And 86 06/5/06 - Public Property/Public Works - Bill 060440 how will that get established?

Originally, there's a bill by City Council through ordinance 5 that creates the nonprofit, and the Mayor and City Council sign off and file 7 articles for the nonprofit to be formed. And once the articles are filed, the Administration and Council then assign the first initial set of directors to be -- to run the board and to start the operation.

Well, what's the status of that process?

Well, there was a bill in the past. The bill has not been signed. And there were original bylaws, and they have not been filed. So at this point in time --

I'm sorry. You were a little quick on that. Go back through that.

Back in '84 -- and don't hold me exactly to '84, but around that time, there was a bill authorizing 87 06/5/06 - Public Property/Public Works - Bill 060440 the formation of the nonprofit.

All right.

The bill was not signed by the Mayor at that time or by City Council at that time.

Whoa, whoa, whoa. Don't -- I think you're mixing the concepts together. I'm assuming the bill passed.

Yes.

Okay. And was signed by the Mayor?

It was not signed.

Well, did the Mayor veto it?

It -- it -- it -- from what I understand, the bill was never signed, and it's just sitting in abeyance. It's not --

Are you saying the bill wasn't signed, or the articles of incorporation weren't signed?

The bill wasn't signed and the articles of incorporation 88 06/5/06 - Public Property/Public Works - Bill 060440 were not filed.

Well, if the bill wasn't signed -- I mean, it either became law after ten days, or the Mayor vetoed it, so which is it?

My understanding -- and, again, I could be completely wrong -- is that the bill was never signed by the Mayor.

Your legal counsel is jumping up to help you. (Mr. James confers off the record with someone from the Law Department.)

The Law Department has cleared that up for me.

Right.

I had a complete misunderstanding. The bill was signed, the articles of incorporation were not signed.

Right, okay. So the bill was passed by 89 06/5/06 - Public Property/Public Works - Bill 060440 Council, the Mayor signed the bill, and then the articles of incorporation were never signed by the Mayor or the Council President at that time; is that correct?

That's correct.

Okay. So in the first instance, you could say that all that remains to have the articles of incorporation signed by the Mayor and the Council President. Or, in the second instance, since that was over years ago, you 14 might want to have a second look-see at 15 those proposed bylaws because a few 16 things may have changed since then. 17

That's correct. 18

Okay. 19 What's the City's position on the Mayor 20 signing the previously-created but never-signed articles of incorporation?

I really -- I'm not sure if I can answer the question. I understand there's been a review of the bylaws, and there has been some 90 06/5/06 - Public Property/Public Works - Bill 060440 consideration to signing the original bylaws, and there has been some consideration to proposing a new set of bylaws. I don't think a decision has been made one way or another.

So is it fair to say that without the bylaws being signed, whether it's old ones or new ones, you cannot have the public-access corporation or the required nonprofit under the previously approved legislation until certain action is taken by the City.

That's correct.

I'm sorry?

That is correct. I think that's where we've been over the last 20 years is that there has not been a decision to move forward either with new bylaws or with the existing bylaws.

And is it fair to say that even if, back at the time four companies, three companies, 91 06/5/06 - Public Property/Public Works - Bill 060440 presently two companies, possibly soon-to-be one company, if any of those companies were ready to move forward, without the necessary articles of incorporation being signed by both the Mayor and the Council President, you still could not have public access.

That's correct.

Okay. Thank you. Thank you, Mr. Chairman.

Councilman Rizzo?

Thank you, Mr. Chairman. When Councilman Nutter asked about satellite television, we didn't have any information about what the penetration is. Do we get a sales tax from the satellite providers?

I -- I don't know. I'd have to find out. I don't know if the City gets a tax. It think it may be federal or state tax; I don't know if the 92 06/5/06 - Public Property/Public Works - Bill 060440 City get a tax rids.

You know, I think, at some point, we really have to do some research on exactly what the corporate presence is of satellite providers. I think it's DirecTV and

And Dish.

And Dish Network. They have no corporate presence here from what I can see, other than NASCAR and other major national events involving themselves, I don't think they have much local participation, and I don't think we have much revenue. I did check on one of the issues. The company is outside the City that does their installations, and they do have a business privilege license, but I'm not sure they're protected by the FCC or what. But I understand that there are some cities throughout United States that have done some legislation to bring them into the cities that they serve. 93 06/5/06 - Public Property/Public Works - Bill 060440 So is there something that you could do to have the Law Department or whatever to see -- I believe we might be getting a state tax, and some of that is supposed to be coming back to us in some shape or form?

Well, I'd be glad to take that back to the Law Department, and we'll get you an answer on whether or not we get any type of tax and what efforts we could make on our part to try to engage them.

Because my point is, we're pushing the cable companies to provide public access, but not the satellite companies; am I right?

Well, they're governed by a different set of regulations by the Federal Communications. Because they don't use the public right-of-way, they're not held to the same requirement as the cable operators.

And as far 94 06/5/06 - Public Property/Public Works - Bill 060440 as you know, there's no revenue at all that we derive from any satellite TV company?

I'm sorry. Point of information.

We don't receive any revenue from --

Why do not the satellite or dish companies use the public right-of-way? They drive their trucks on our streets, they use our alleyways to install the dish. I mean it's not -- they're not hanging their wires on poles, but they certainly do use the public streets and thoroughfares to do their business. I mean, so they are in the public right-of-way in many ways.

Well, from the way the Federal Communications view it, their understanding is that it's all transmitted in the air as, which we don't know --

But my 95 06/5/06 - Public Property/Public Works - Bill 060440 point is --

Far as them driving the streets and whether or not they should be taxes for working in the City, I think that they have a business-privilege license.

I mean, I think a lot of these dishes and satellite hookups are done through the public alleyways; they need to access the alleyways. They got to put their ladders up on poles for fences or whatever. But, I mean, I certainly understand that there's not hard wire running through, but certain they're making a living and using public property to access their living. Is that fair?

That's fair. It's just the part that, you know, you mentioned is that they don't actually make their connection in stuff that's in the public right-of-way; it's all on private property, even though they may traverse our streets or go through our 96 06/5/06 - Public Property/Public Works - Bill 060440 alleys.

Thank you. Sorry.

Thank you, Councilman Kenney. One of the observations that I have that is that in most cases, Comcast or other cable companies make a real effort to do a clean, pleasing -- if you could have a pleasing installation. But what I see happening around the City right now with these satellite dishes is that they're nailing them wherever they can. So I think that we need to do start doing and maybe find out what other cities are doing -- don't reinvent the wheel -- to try to get them to be some type of -- like Comcast, you know, they're everywhere in the community, trying to do good.

Right.

I've never seen any presence from any of those 97 06/5/06 - Public Property/Public Works - Bill 060440 companies here in the City, trying to contribute to our city.

I understand your question.

You understand the question?

And I will certainly take it back to the Law Department and will try to get you a response.

Good. Thank you. Thank you, Mr. Chairman.

Councilman Kenney.

Thank you very much. Mr. James, what is the definition of public access? What is your definition, and how is it described in either the articles of incorporation or in the legislation? What do you view public access is?

Public access is 98 06/5/06 - Public Property/Public Works - Bill 060440 the -- I guess I would I describe it as -- it's the true electronic soap box. It's the open mic, it's the one non-commercial forum for the members of the community, of a community, to be able to put on programs that they find that's important to them, whether it's, you know, local legislators or it's people running for office or people wanting to do film and media.

Are there restrictions of any kind on the public-access subject matter? Or is it just wide open like a first-amendment issue?

Well, I think a lot of it has matured over time. I mean, over the time period that public access first came about, there was a lot of concern and a lot of programming that was somewhat either sexually explicit or somewhat offensive or maybe even more along the racially-hate-motivated type programming. 99 06/5/06 - Public Property/Public Works - Bill 060440 And much of that has kind of fallen off, as it doesn't have that kind of novelty anymore.

It's on the Internet now.

It's on the Internet. There's more opportunities on the Internet to do that type of -- and get to the audience that people want to get to. They are controlled by decency laws. I mean, you can't do just about anything you want on there. So there are certain decency rules. There are certainly time, place, and manner restrictions about when you can certain programmings on, that the nonprofit can control the type of programming.

Now, the nonprofit would theoretically accept applications from an individual or individuals who would want to do a half-hour show or an hour show, and then 100 06/5/06 - Public Property/Public Works - Bill 060440 they would make the decision on whether or not the studio time would be given to them to do that?

Yeah. What I've seen in the other jurisdictions who have run this successfully is that they generally require that someone file an application, sign up as a member, become a paying member, 'cause that's how they generate some of their revenue. And they also require them to kind of write out what they intended to put out on the air. And then go through training before they actually get into producing anything.

Who would do the training?

The nonprofit, the public-access corporation. So they require an individual to come in, kind of go through those gates, and make sure that they understand the training necessary to produce it, and 101 06/5/06 - Public Property/Public Works - Bill 060440 then have them produce it, and then they do a certain amount of review and editorial control over the type of content. And then they decide when that program is going to be aired.

When cable TV first came to Philadelphia, do you recall, or historically do you know the number of channels that were available, say, on the first franchise go-around?

The number of active channels?

The number of channels -- commercial, public television, whatever.

The total number of channels in the original channel lineup was about 70.

70?

Yeah. I think it was about 70. There was an original --

Let me try to clarify the question. 102 06/5/06 - Public Property/Public Works - Bill 060440

Sure.

Were there 70 channels that were available, or were there 70 channels that were programmed?

I'm saying that when cable TV first came about, when you looked at the original lineups of what was proposed, there was probably maybe 80 or 90 channels proposed in the channel lineup. There was A lot of different thing that was proposed in there. I think from what I read at in least in the initial, there was only about 65 to 70 active channels that actually had programming on them when they first --

So there was air space for, say, another to or 20 so?

Yeah, 'cause there was a lot of people proposing to do stuff.

During the course of the period of time that cable 103 06/5/06 - Public Property/Public Works - Bill 060440 has been in Philadelphia, anecdotally at least from my perspective -- and you can confirm or deny it -- there's been a larger number of what you would generally term "public-interest stations" that have common. I mean, for example, I don't remember in the early days of having the four or five universities in our city. I don't remember the School District being on there, I don't remember -- certainly PCN didn't exist and we could watch ourselves on TV.