How much is the cost of administering that program for employee?
Are you referring to the administrative cost, as opposed to the benefit cost?
Would you put that in writing first and then give it in writing to the Chairperson?
I understand that you have requested that. We are responding to the President in writing. However, in anticipation of the question, for the current calendar year the cost of 1538 2/21/01 - Operating Budget the plan benefit cost is about $506 per member per month. And that is actually a blended number. Since the City-administered plan is on a calendar year basis, as opposed to a Fiscal Year basis is the union plans we -- in costing it out for the calendar year or for the Fiscal Year, it would be the amount of the medical cost for the period from July to December, which I believe was $494 per member per month, and for the second six months of Fiscal Year is $518, so the blended average is $506.
Do you have a comparison of how that compares with, for example, the health plan administered or run by District 47 or the FOP?
I would like to see a comparison with the different represented employees run programs that we have. Can you do that?
Certainly. That's very easy to do. District Council 33 and 47 we're currently providing.
I always ask you a series of questions every year to gauge what is the 1539 2/21/01 - Operating Budget progress that we're making, if any, in terms of minority percentages in City employment. In terms of African -- not just at the commissioner level, but I'm interested in those levels in bureaucracy or those individuals that run the programs, directors and partners and so on. I would like to, again, see a breakdown by department, woman and African American, Latinos, in terms of those departments that we have in the City. I would like to see how many and if you have it at hand, overall, what is current, for instance, of Latinos in City employment? Do you have that?
An overall basis for the City work force, the percentage of Latinos in the work force for the year 2000 was 3.54 percent, which is an increase of from 2.08 percent ten years ago and .26 percent ten years prior to that. That's on the overall total full time.
In 20 years we have gone up two percent? 1540 2/21/01 - Operating Budget
Do we have a breakdown of the Latino employment in terms of by department?
Yes we do. We maintain that by department. As I'm sure you know, by reporting requirements to the Federal Government we do it by categories.
How many Latinos in the Police Department currently, and what percentage do they make in the Police Department and Fire Department?
Currently I think we have that information. The Police Department, the Latino 1541 2/21/01 - Operating Budget work force is slightly over five percent, 5.15 percent.
What about in terms of supervisory positions? How about sergeant and above?
I would have to do the calculation to put it together. We can provide it for you.
Fire Department, Latinos represent almost three percent. It's 2.86 percent.
Every year, Madam Chair, it doesn't grow. I think the census will speak quite loud as to how many Latinos that are in the City. Those figures are very dismal compared to what we have. I will ask in the next round.
Yes. Following 1542 2/21/01 - Operating Budget along that line, can you tell me, what is your program including the minority that would reflect the City of Philadelphia? As I noticed on several occasions, we have a large Asian population in the City. How do we go about recruiting members from that community to work with social services and housing, to work with this?
The recruitment of and order to work toward a representative work force -- and I think the City has made some significant strides along those lines in the course of the last several years -- in the uniform services, there are very active recruitment programs in the community. Both the Police Department and the Fire Department have very active recruitment units which target recruitment. Efforts in working with the School District, for example. One of the reasons we are so interested in establishing a program with the School District in terms of getting young people interested in coming to work for the City, we think it's going to be -- it's really helpful for us to identify qualified candidates. 1543 2/21/01 - Operating Budget The School District is a very, very good place to recruit. Also, we worked with community organizations and we made sure that community organizations that are representative of our community are recipients of our recruitment information. We have done this on an ongoing basis, as well as recruiting with the local schools, colleges. We do make every effort to ensure that we are targeting qualified candidates and they represent Philadelphia.
I would say we can always do better. There's always more we can do. But I think that we're making progress. I think if we -- I think we're making progress.
Could you give me the present breakdown on a number of minorities, other than African American, employed by the City and what departments they are in?
Any other 1544 2/21/01 - Operating Budget questions? (No response.)
Thank you. - - - 1545 2/21/01 - FY '02 OPERATING BUDGET HEARINGS (Proceedings now being stenographically recorded by Josephine Cardillo, Registered Professional Reporter.)
The Free Library is next. (Witnesses come forward.)
Good afternoon. A copy of your testimony has been given to the stenographer, and she will transcribe your testimony in full, and so I would ask that you summarize your testimony, please.
Yes, I will do that. Let me introduce myself and the people with me at the table. I am Elliot Shelkrot, the President and Director of the Free Library of Philadelphia. And with me, to my right, is Helen Miller, who is the Director of Public Services. And to my left is Bill Fleming, who is the Administrative Services Director of the Free Library. Mrs. Verna and members of Council, I am pleased to report to you that this past year has been an outstanding year, and I'm not going to be going through the written testimony in any detail, 1546 2/21/01 - FY '02 OPERATING BUDGET HEARINGS but I did want to tell you about some very special things that are going on and that we are asking for money in this budget, and I want to do that by way of example. I want to tell you little bit about Kaleef, a young man, a soft-spoken young man at our Cecil B. Moore Avenue Branch, who is now a freshman. He came to us about three years ago as part of the LEAP program, which is part of the TLA, Teen Leadership Assistance. And Kaleef had never considered going to college before going regularly to the computer library and joining the TLA Program, a program through which we hire young people, teenagers from community, which pays at this time to about $6 an hour, and we require a great deal of them and give them a great deal of training. Kaleef, as I say, had no idea of going to college before. He was trained on how to use technology and how to work with the younger children in our LEAP program, our after-school program for children. Not only did he then decide that he was going to go to Community College, but I am told that he now has an offer for next year 1547 2/21/01 - FY '02 OPERATING BUDGET HEARINGS from Drexel University for a full-time scholarship. And not only that, he has been quite a role model, not only in teaching other young people about computers in the libraries now, but he is showing other youngsters some of the college resources and has taken a couple youngsters to see Lincoln University and Temple, as well, and we have invited him to go to the American Library Association Conference in Chicago and talk about his work with the library. He is now considering perhaps being a librarian. And he said, Well, I promise that when I become a computer mogul, making over a million dollars, I will make a great contribution to the Free Library of Philadelphia. He has become quite an expert in using computers and we think he has a very bright future. We've also been working this year in our TLA Program with the Anti-Defamation League's program, (inaudible) for hate, and they will be taking several of our teenagers to Washington to make a presentation. So this program, the TLA Program, is a very special of LEAP, our after-school program. It is a group of 200 teenagers chosen at our 1548 2/21/01 - FY '02 OPERATING BUDGET HEARINGS branch libraries from across the City, not from just the cream of the crop, but also from the average young people, the young people who join our library every day at 3 o'clock to help us handle the first burst of youngsters coming in after school. And with the TLA Program, they get a great deal of training. They get training with computers: they get training on how to work with young children, how to discipline them in a very positive way, and they also get assistance in how they can go about planning their future. And these young people provide some 60,000 hours to our library, and it's really what I call a win-win situation for everybody. It's a win for the teenagers, a win for the library and, of course, it's a win for the community and the City. We are asking in this budget for six additional after-school programs to be run with City funds, and this will enable us to expand the program to more than 100,000 children, using adults, using Teen Leadership Assistance, and reaching over a 100,000 youngsters in FY '02.
Another program we've asked additional 1549 2/21/01 - FY '02 OPERATING BUDGET HEARINGS money for is the Books Aloud! program. Books Aloud! is the program that helps provide parents, as well as the leaders in day care centers, with the tools for working with young people (inaudible) preschoolers to enable them to use these materials for literacy programs. City funds will make it possible for each of these participants to also have free books and early literacy training. Council funded and the Administration funded a program last year that enabled us to work with charter schools, and I am pleased to tell you that we have already developed programs with (inaudible) charter schools, and we intend to reach the remaining seven by the end of this year. Our branch at South Philadelphia opened just last December after it was worked on for renovations. The Independence Branch, which is our newest library, will open later this month -- as a matter of fact, on the 28th of February, and it will serve certainly the communities of Chinatown, Old City, and Society Hill and Washington Square. The community itself raised over $200,000 to support the large (inaudible) 1550 2/21/01 - FY '02 OPERATING BUDGET HEARINGS because they expect this to be one of offer busiest libraries. I did ask invite to come to the hearing today the branch librarian for that new branch, and I'd like for her to just stand up. This is Jennifer Chang, who is here with us, and she'll be the branch librarian when that branch opens on the 28th. And I hope that all of you can join us at o'clock that morning. 10 Let me just conclude by saying that we 11 have challenges ahead of us. Of course, we are continuing to work on the four remaining libraries that have not been completely remodeled and, of course, the Central Library is in this budget. The overall budget that we have here is a modest increase but it is still serious dollars. It's a $36 million request from the City's operating funds, and it does include money, additional money, for the LEAP program and additional money for the Books Aloud! program, and we believe that with these funds, we can continue to see the increases in services to children, to young people, and to families throughout our libraries in Philadelphia.
Thank you. 1551 2/21/01 - FY '02 OPERATING BUDGET HEARINGS What is the status of the Central Library renovations? And does the Capital Program provide the necessary funding for this project?
In the Capital Program, there is funding for some of the repairs that need to be done. But we are now working with, under the direction of the Chief of Staff, working with the Finance Director, the Planning Director, and others on developing a plan for the Central Library's expansion. But there is no -- at this time, there is no specific money for that. We're working closely with the other cabinet-level people.
And that is to discuss any funding for future renovations?
Mr. Shelkrot, the Recreation Department indicated in their testimony that they are also offering computer training. Can you tell me if your agencies are coordinating this activity?
As a matter of fact, we're working very closely in a pilot site of theirs, which opened right across from our 1552 2/21/01 - FY '02 OPERATING BUDGET HEARINGS Kingsessing Branch, and we're working closely on the technology side, and we'll be working with them on the training side as well to make sure that they maintain close coordination. And they have been working with us because we have the technology up and available on training programs at branches all over the City. So we're happy to share information and work closely with them so that as they are moving along, they won't make some of the same mistakes that we've made and will also be able to offer the best possible programs.
Wonderful. And I certainly want to applaud you in completing the modernization project at the 48 libraries. That's wonderful. There are four branches remaining to be completed. When do you think those renovations will be completed?
Well, the Haddington Library is underway right now. There is some official money in the Capital Program to enable us to complete that in the budget next year. For the Widener Branch, there is money for the architectural and engineering part of that 1553 2/21/01 - FY '02 OPERATING BUDGET HEARINGS branch in the Capital Budget for next year. There's also money there for the architecture and engineering work for the branch at 40th and Walnut and the George Institute library. There is money for that also. I'm pleased to say that the acquisition of the neighboring property has been accomplished, and that neighboring property has been torn down so that we can have what we need in order to make room for the computers and the kind of programs that other branches have as well.
Very good. I see that in your testimony you say that you are currently assessing community training and that the library does not have a projection for FY '02 on the number of classes that you will hold. Will the current staffing that you have be able to address this for all of the neighborhood libraries? I think your testimony indicates that the technology training at Lehigh, (inaudible), and the Central Library has been a success. Do you anticipate expanding that into the communities? Because I think it would be very, very helpful. 1554 2/21/01 - FY '02 OPERATING BUDGET HEARINGS
Currently, those are the only labs that we have now, but we do have computers in every single library.
Do you have computer training in the libraries? And if you don't, would you need additional staff to address this in the neighborhood libraries not only for children but for adults as well?
I believe that we do have some training that goes on at every single one of our libraries, computer training for people, but the training that goes in the labs is more extensive. At this time, we are planning on the use of additional State money to support the growing need for the technology and training in our branches. I don't have a projection on the numbers part of that was because we don't have projection on the amount of additional State money that we're getting, and that's where the flexibility will come from.
Is the computer available during the evening also?
It just depends on what kind of training your neighbor might expect to get 1555 2/21/01 - FY '02 OPERATING BUDGET HEARINGS when he or she comes to the library. As Elliot mentioned, there's ongoing training per se to help people use the library; in other words, how to access our catalog and the various resources that we have. And there are other kinds of training that go on at various libraries. Some give training on writing resumes and that kind of thing. It just depends on the library and the staff. If we're talking about training that normally goes on all the time with the kids who work in the library, they help kids use computers, in addition to helping them with their homework. We do have some volunteer assistance. These are volunteers who have computer skills, from the neighborhoods who go in certain libraries and help out. So it just depends on what skills your neighbors would be looking for.
I might say, you know, that the demand is huge, the demand is enormous.
We provide some training to the best of our ability with the current staff, 1556 2/21/01 - FY '02 OPERATING BUDGET HEARINGS but we know that there is a demand out there -- need, I should say, that is -- that is very -- that is very significant. And we hope that with the working with the Recreation Department and the other programs that are being put together and are planned, that we will be able to have a full web, you might say, of training programs for people throughout the City. But it can't be just the library.
Yes. And we might mention that at our Central Library, we have just started to offer training classes in the evening for anyone who wants to participate in those classes.
That's wonderful. Thank you very much. The Chair recognizes Councilman Nutter.
Thank you, Madam Chair. Mr. Shelkrot and Miss Miller, first, let me express -- I don't want to destroy my reputation of seriousness -- but utter joy; I'm about to jump out of my seat, and it's all I can do to restrain myself, that we have finally made progress on the George Institute Library. It's 1557 2/21/01 - FY '02 OPERATING BUDGET HEARINGS been a long and tortuous time in coming, and I know we're just at the beginning, but I have every assurance that the project will now proceed fully on. And if we had not been held back by a certain individual in the community, the project would have been done a long time ago. But you have stayed on the case and I commend both of you for that. At the same time, the Haddington progress, I'm certainly pleased with. Those are two of the libraries in my district that are still to be done. The Widener Branch is not in my district, but close. And the President and some colleagues may recall that we had the pleasure, and I had the embarrassment, of hosting -- the hosting was not the embarrassment, but the pleasure of having the Widener Knights Chess Team come in from that library, because one of my constituents runs the program there, and I had the pleasure of trying to play many of the young people in chess and then realizing their enthusiasm for wanting to play me had nothing to do with me but had to do with my lack of skill level and the opportunity to just whip me 1558 2/21/01 - FY '02 OPERATING BUDGET HEARINGS continuously throughout the course of their time here, but we appreciate what you do over at the libraries. I have one main issue, and given the number of facilities that you have, and I've had this discussion with Recreation and with Fairmount Park, it goes to the issue of, we're going to continue to encourage and have strong demand at our libraries. As we have more service, hopefully, we will have more people, as we have more computers, Internet access, and just driving people to the libraries. And I think both of you know that I use the libraries primarily when I'm here in town, the Central Branch, and I have, you know, driven many of your staff crazy with my requests, but often I go into the library on my own on some research project. I have a continuing concern, as we're encouraging extensive use of our facilities, on the wear and tear on the facilities. I know we have money, and we have had money, for capital improvements for some time, but along with that comes the responsibility for maintenance so that we can keep them in top-notch shape, and whether 1559 2/21/01 - FY '02 OPERATING BUDGET HEARINGS it's, you know, cleanliness, leaking roofs, and kind of more of the day-to-day activities that go on. What's the library's plan? What do you do currently and what do you project to do in the future that ensures that we have good maintenance and upkeep on our facilities?
You have addressed an issue that we are also focusing on, and I might add, the Managing Director has also been in touch with me on because he too would like us to put together an overall plan for the maintenance of our branches so that we can maintain the investment that has been put into them by the City over the last five or six years as well as the private sector.
And we're working with him, we're putting a plan together. It is not in this current Operating Budget, but I am sure that you will see it in future operating budgets. We do have, with the existing resources that we have, we have a plan in place, and there is money allocated to that. If you want the 1560 2/21/01 - FY '02 OPERATING BUDGET HEARINGS details of that, I can, you know, Mr. Fleming can respond to that, but I think the most important thing is working with the Managing Director to put together a longer-term plan to make sure that the facilities are continually renewed rather than facing major, major capital renovation program projects in the future.
Right. Well, you know, from a governmental standpoint, often deferred maintenance has often meant no 12 maintenance, and it's only resulted in larger bills. So I would be interested in the Cliff's Notes version of the details. But as we had the Recreation Commissioner here last week talking about MS 2000, we had extensive discussion with Bill Mifflin from Fairmount Park. All of these departments and agencies that have multiple facilities, that have tons of people coming in and out using the facility there -- again, and they're open, you know, most of them. Just what do they look like, what's the presentation, who's responsible for it, what are the standards, who's checking, who's checking the checkers, all of that kind of stuff, 1561 2/21/01 - FY '02 OPERATING BUDGET HEARINGS I think, goes into our ability, again, to deliver a good, quality product. If we want people to come in and use our facilities, then it should be a place that we would want to come to, or that we would want to take someone to, or that we would want to take our kids to. And whether it's, you know, a little room off in the corner or some huge open space, I think that's really the next level for us. As we have spent hundreds of millions of dollars in capital improvements, and we will continue to have to spend capital dollars now in an environment of a tremendously shrunken Capital Budget for the next few years. And so the preservation and maintenance of our facilities, I think, now becomes paramount.
Yes, I agree with you 100 percent. And, as I say, the money that we have in the budget now, although small, is giving us the basis to do a plan for the future that will address all of those issues.
Okay, thank you. Thank you, Mr. Shelkrot. Thank you, Madam Chair. 1562 2/21/01 - FY '02 OPERATING BUDGET HEARINGS
Thank you. The Chair recognizes Councilwoman Brown.
Thank you, Madam President. Good afternoon. In the paperwork that you've provided, you state that there are 50 branches. Does that include the regional locations, the regional libraries?
No. The 50 would be branches, and then there are the 3 regionals, plus, of course, the Central and the Library for the Blind.
How many of those locations have the LEAP program? which is a wonderful program you speak so well about. How many currently have the LEAP program operating?
All of our branches and the regionals and Central have the after-school program. What we will be doing, however, some of those have been funded with private contributions from a foundation, and that funding is scheduled to end. That's why, in this budget, there are six requests from six more for City funding, and that 1563 2/21/01 - FY '02 OPERATING BUDGET HEARINGS still leaves, I believe, a handful that have another year of private foundation funding, but that program does exist in every single library that we have.
Okay, that explains it. Who are the lucky six and why were they selected versus any of the others? Is it because the private funding is running out?
And Helen has the -- the branches that will be moving from the private funding to City funding, Helen could address that.
Yes, I do. It's the Charles (indiscernible) Branch, the Independence Branch, Haddington, George Institute, Queen Memorial, and Southwark.
And, again, the primary reason is because the private dollars are coming to a close?
Okay, then. Last year, there was a lot of discussion and subsequent 1564 2/21/01 - FY '02 OPERATING BUDGET HEARINGS meetings between yourselves and members of Council around R-rated videos to minors. Give us an update on where you are with that.
Sure, I'd be happy to. There was a great deal of discussion, and we followed that up with several meetings with you and Councilman Rizzo, and we have come to a program that I think and I believe the Council people also indicated they thought would be very satisfactory if it were well publicized and that's a program that gives parents the option, the option, as to whether their youngsters can borrow videos from the library or not borrow videos from the library. We explained, and after we reviewed it with the library board and with the City Solicitor's Office especially, it was made quite clear that the rating system is a business decision that the motion picture industry uses, it is a business decision. It is not something, you know, by ratings that government can use. And, therefore, what we have done is we've said, okay, to parents, you are concerned -- some of you are concerned that your youngsters are getting videos 1565 2/21/01 - FY '02 OPERATING BUDGET HEARINGS from the library that have R ratings on them. What we can do is give you the option to indicate on the child's library card that they are not permitted to borrow videos. And we mailed it to every -- to the parent of every teenager in the City who has a library card and -- so that they could make that change, even though the youngster already had a library card. And we also -- every time a youngster signs up for a library card, we make sure that the parents indicate whether they can borrow videos or not borrow videos.
What have been your findings? Much resistance, good response?
I going to ask Helen. I know she has some information on approximately how many -- I believe she does -- on how many parents have said, No, do I not want. And they can either indicate yes or no. I mean, you know, they have to indicate one way or another.
I don't have an absolute number, but there's been no significant number of parents who have stepped forward and said, I don't want my child to have -- to be able to borrow 1566 2/21/01 - FY '02 OPERATING BUDGET HEARINGS videos from the library.
How does Philadelphia rank with other cities in the country that are experiencing this problem?
We are one of the very, very few cities that provide this kind of option, and I think it is appropriate for us. I mean, if there's a concern that the parents of Philadelphia youngsters have, then we need to give, you know, the parents that option. In other cities, to be quite frank, the library has a selection policy just as we do. It tries to buy the videos that are quality videos, the videos that people want to see. It's not in any way, you know, the kind of array that you would find in a video store, but they have not been asked by their communities, apparently, to make the kind of provisions that we have in Philadelphia. And we're happy to do that. I mean, the technology allows us to do it in a convenient way, and parents have an opportunity now to make a decision.
Well, let me seize 1567 2/21/01 - FY '02 OPERATING BUDGET HEARINGS the moment to thank both you and your board for hearing the concerns that were raised by Councilman Rizzo and myself and others, and going back to the board and taking a full and complete relook at that issue, and then coming up with a policy that is within -- doesn't offend the first amendment and yet honors some of the concerns raised by parents. Thank you. My final question is, the Governor -- it's been reported at least, that the Governor is putting more money for libraries in the State budget. Has Philadelphia experienced a sizeable increase in State funding as a result of that -- of the Governor's initiative?
We've experienced, you know, a modest increase over the last several years and expect to see an increase from the proposal that the Governor proposed for the State budget. It's that money that we've been using primarily to expand the hours of some of our libraries and also to support -- above all, to support technology.
You know, you may recall 1568 2/21/01 - FY '02 OPERATING BUDGET HEARINGS that much of the technology in our library was initially purchased with private money, and it is has been the State resources that have allowed us to keep that up to date and to keep the programs and the training programs and the other things that make the technology successful.
Well, you answered my last question: what would that money be used for? So thank you very, very much.
Thank you. I just have one last question. The LEAP program, does that extend into the summer months, or do you have some other program to replace it?
Thank you, thank you very much. The LEAP program runs about 4 to 6 weeks a 1569 2/21/01 - FY '02 OPERATING BUDGET HEARINGS year.
46, 46 weeks. And where the LEAP program ends is where the summer reading program begins, so there's something going on at the library all yearlong for kids in grades to and above that.
Are there any other questions from members of the committee? (No further questions.)
The next department is the Commission on Human Relations. (Witness comes forward.)
Good afternoon. 1570 2/21/01 - FY '02 OPERATING BUDGET HEARINGS
Please identify yourself for the record and proceed with your testimony.
I'm Lazar Kleit, I'm the Acting Executive Director of the Philadelphia Commission on Human Relations, and like to thank you, Madam President, and members of Council for allowing me to testify today.
And I also bring you greetings from Reverend James Allen, the Chair of the Commission, who, unfortunately, is unable to be with us this afternoon.
Thank you. We do have a copy of your written testimony, which has been provided to the stenographer. It will be transcribed in full. So if you would care to simply summarize, we'd appreciate it.
Sure. I really only want to point out three items very briefly. One is to ask Council to put its attention on the work that the Commission did during the Republican National Convention, 1571 2/21/01 - FY '02 OPERATING BUDGET HEARINGS including the couple years before the Republican National Convention. It highlights the quality of work that the staff of the Commission does, the kind of relationships that we have with all of the agencies that function within the City, and the level of respect that the City and the Commission have within residential communities. It was important work and it worked towards a civil response to the many protesters and activities within the City. The second is to inform Council that we're embarking on a very low-tech outreach effort this year, which includes stuffers in water bills and, hopefully, gas bills, if there's still a gas company. We find that our potential client population is not really reached by high-tech methods -- Web pages and that sort of thing. We also have a radio show, which we are paying for, and it seems to be bearing some fruit. Finally, I think the Council should show --
It's called "One City, Many 1572 2/21/01 - FY '02 OPERATING BUDGET HEARINGS Voices," and it's on WNWR 1540 a.m., at 2:30 on Wednesday afternoons.
Plus, it's -- each show is archived on the Web for a week. So when I can't sleep at night, which is more the case, I get up and I log onto the Web site and I listen to myself for a half hour, which is -- I wouldn't fall asleep but, nevertheless, it works. And next week's show is going to be on predatory lending, which I know is something that -- we have Ira Goldstein, who is an internationally known expert from Philadelphia. That was the last thing I wanted to say. I've been in this job for 33 years -- not the particular job, but something that I've learned recently from being head of this agency, you get to travel a bit and meet colleagues from all over the world. This is an extraordinarily well-respected City in the human relations/civil rights field. We are the only city in the country that has an agency that combines law enforcement and regulatory powers with a community relations service. And I think Council should be proud of 1573 2/21/01 - FY '02 OPERATING BUDGET HEARINGS itself. It has had the wisdom for many years to continue to fund this effort. We are used regularly -- our communal brains are picked by the FBI, the White House, the US Department of Justice to find out how we do the magic that we do in this City. So I wanted to thank Council for its continued support, both as a City employee and as a resident of this City. Thank you very much.
Thank you. Are there any questions? The Chair recognizes Councilwoman Brown.
Thank you. Good afternoon. During the hearings with the Department of Health, there was a lot of concern expressed around lead paint and what it is not happening with regards to homes and children in the City. And I notice that on , you give some discussion to lead-based paint training for members -- for the Commissioners. 1574 2/21/01 - FY '02 OPERATING BUDGET HEARINGS
Okay. I should have noted in my opening statement, we provide staff for the Fair Housing Commission, which, until 1993, was an agency independent of ours. It's a separate body of commissioners with a separate set of regulatory responsibilities. Their job has become much more complicated in recent years because of the expansion of code concerns in this city. So what we've been trying to do is get them as individuals and as a commission up to speed on the latest technology in understanding of all of the problems that affect tenants within the City. So that's not a Human Relations Commission item; that's a Fair Housing Commission item.
Yeah, it's a separate role -- it's a separate group of people. The Chair of the Fair Housing Commission is Reverend Ralph 1575 2/21/01 - FY '02 OPERATING BUDGET HEARINGS (indiscernible).
Thank you. Are there any other questions of this witness? (No further questions.)
The committee will have a ten-minute recess. We're waiting for a witness to come in to testify. (Break taken.) - - - (Proceedings resume.)
We're now back in session. The next department to be heard is the City Rep and the Director of Commerce. (Witnesses come forward.)
Good afternoon, Madam 1576 2/21/01 - FY '02 OPERATING BUDGET HEARINGS President.
Mr. Cuorato, we do have a copy of your testimony. It will be given to the stenographer and it will be transcribed in full. So I would ask you to please summarize your testimony.
I would be glad to do that, Madam Chair. Thank you very much.
Good afternoon, members of Council. My name is James Cuorato, and I am Director of Commerce for the City of Philadelphia. With me here at the table today are Mjenzie Traylor, First Deputy Director of Commerce; and Charles Isdell, who is Director of Aviation. Also present are Carol Lawrence, Deputy City Representative for Arts and Culture; and Bonnie Grant, Deputy City Representative for Ceremonial and Special Events; as well as other representatives of our economic development delegate agencies. 4 million Operating Budget for FY 2002. As you mentioned, Madam President, 1577 2/21/01 - FY '02 OPERATING BUDGET HEARINGS we have submitted testimony, and I will just mention several highlights as we go forward. There are several new initiatives which the Department of Commerce will undertake in the coming year. One is an extensive business outreach program. Utilizing existing staff and resources, the Department of Commerce staff, along with representatives of appropriate delegate agencies, will be visiting up to 30 businesses in each District Council District in the first phase of this program. We will inform the businesses of various incentives and programs that are available to them. We will also listen to their concerns in an effort to ascertain the problems businesses face that we may be able to overcome in the future. I would like to work with members of Council as we draw up the list of businesses that we will visit in each part of the City. We've also had discussions with the Finance and Budget offices, and are working on a questionnaire that our representatives can bring with them on these visits in order to gather information. This is, by no means, a revolutionary 1578 2/21/01 - FY '02 OPERATING BUDGET HEARINGS idea, but I really do believe this type of program gets to the heart of our commission, which is to support businesses in Philadelphia and see how we can help them. A second initiative will be a targeted marketing effort aimed at the high-tech and biotechnology sectors of the economy. " This entity will be responsible for coordinating all of the City's efforts to attract and retain these important sectors of our local economy. Another aspect of this effort will be student retention. We will rejuvenate and strengthen our Student Retention Committee and continue to promote new ideas and programs to keep our students here in the City. We are also partnering with the e-Philadelphia Alliance on a multimedia marketing campaign that will focus on a new Web site for students, ones which will contain information about Philadelphia, plus job listings. 1579 2/21/01 - FY '02 OPERATING BUDGET HEARINGS I will also be working with the Managing Director on a complete and thorough review of the process by which businesses can get started in Philadelphia and the ongoing requirements related to permits, fees, licenses, et cetera. As we our other efforts in this regard, our goal will be to make Philadelphia a more business-friendly environment. We will also take an overall look at all of our economic development organizations and entities to determine if the process of providing assistance to businesses can be streamlined. I will be undertaking this effort, including a comprehensive review of the operations of all departments and agencies involved in economic development and submit recommendations to the Mayor. Our goal is to create a more efficient process for delivering technical and financial assistance to businesses in Philadelphia. 7 million in the General Fund, $10 million is for the Department itself; the balance is for the Convention Center service fee. The $10 million for my department includes $5 million for economic 1580 2/21/01 - FY '02 OPERATING BUDGET HEARINGS stimulus funding and $5 million for our basic department operations. We will have the same staffing level as in the current year. Just a word or two about the economic stimulus funds.
That has been, and I believe will continue to be, our most valuable tool in our arsenal of incentives that we have available for businesses. I am looking at some new and creative ways that we can make those funds have more of an impact on the goals that we are trying to accomplish. We are exploring the idea of establishing a small-business -- a small-business fund which would handle improvements. These would be loans to small businesses for improvements in situations where there's job creation or retention but our other programs don't quite fit. The major advantage of economic stimulus funds is their flexibility, and our ability to set up a fund like that, I think, will help us a great deal. 5 million in Class 500 for the Cultural Fund, which has had another successful year of awarding grants to deserving arts and cultural groups. 1581 2/21/01 - FY '02 OPERATING BUDGET HEARINGS We will continue in our role as the focal point for economic development in the City. Our department directly manages the State Enterprise Zone Program, the Keystone Opportunity Zone Program, the neighborhood economic development programs, CDBG contracts, and economic development-related capital improvements. In addition, we manage international business development, the Sister Cities Program through the International Visitors Council, and business services through the Mayor's Business Action Team. We work closely with the Philadelphia Industrial Development and the Philadelphia Commercial Development Corporation, among others, to coordinate delivery of services, programs, and funds to businesses. Just a brief word or two about the airport. I would like to point out that in an article that was published in the Wall Street Journal last month, we were named as one of the top five airports in the country. I know you've heard us say that before, Madam President, but I like to repeat that as much as I can. 9 million passengers 1582 2/21/01 - FY '02 OPERATING BUDGET HEARINGS last year. There are a number of issues that we will be facing this year, including the completion of the two new terminals and garages, the regional terminal, which will open this June, and the international terminal, which will open next year. We are in active discussions, both internally and with United, over the proposed merger between United and US Airways. Our utmost efforts and our primary goal in those discussions is to make sure we protect the City's interests and our continuing improvements to airport operations, which will be funded out of the Division of Aviation budget. Finally, we are requesting an additional $5 million in community development block grant funds for neighborhood-based programs that will be consistent with the Mayor's Neighborhood Transformation Initiative. That request will be a part of our CDBG budget presentation. That is a brief overall summary of our operations, what we are doing now, what we hope to do in the coming year, and I would thank City Council for their support of our department in the 1583 2/21/01 - FY '02 OPERATING BUDGET HEARINGS past, and I'll be glad to answer any questions that you might have.
Thank you, Mr. Cuorato. What are the additional phases of the Business Outreach Program?
Madam President, I wanted to try to get this program started in the spring. With the staff that we have, my goal is to see if we can visit 30 businesses in each Council District by the summer, assess how the program is going as far as the reaction that we're getting from businesses, the feedback that we're getting. And then in the summer and then in the fall, just develop a new list of businesses that we can go out and continue the program. It's a pure outreach initiative. It's an effort to let businesses know that we're here, that we care, that we do have a number of incentives and programs that can help them that they might not be aware of, because we do have quite a bit of resources that we can bring to bear. Oftentimes, businesses --
Are not aware 1584 2/21/01 - FY '02 OPERATING BUDGET HEARINGS of what is available.
-- are not aware. And as I said, what I'd like to do is visit with each member of Council to see if there are any businesses that have contacted each of your respective offices, that a visit from us might be helpful. And I will also make the offer that if members of individual Councilmember staffs would like to join us in any or all of these visits, they're more than welcome.
Thank you. What is the purpose of the New Economy Developmental Alliance? And can you tell us, who are the people that serve on the Alliance?
This is a new entity that will be established to focus our efforts on attracting high-tech and biotech industries to Philadelphia. There are a number of initiatives that are undergoing -- that are underway right now. What we wanted was an effort that was more specifically focused on the City of Philadelphia and attracting businesses into the City. A number of the efforts that are underway now are regional and we support those 1585 2/21/01 - FY '02 OPERATING BUDGET HEARINGS efforts. For example, there is a $2 million program that is being developed. The leadership is the Greater Philadelphia Chamber of Commerce and the Eastern Technology Council. This is a $2 million national advertising campaign that will get the word out about Philadelphia's strengths as a high-tech center. That is very much a regional effort, and we support it because it will get people from other parts of the country interested in this area. What we wanted to do was have an additional effort focused specifically on the City, and that's what the New Economy Development Alliance will be. Its makeup is still is still under decision. Dr. Judith Rodin, the President of the University of Pennsylvania, has been named the Chair of the Board. There are -- there have not been any official announcements as to the rest of the Board members. The Mayor is working on that right now in conjunction with myself and Dr. Rodin. But, basically, the goal of this new entity will be to market Philadelphia to high-tech and biotech industries. And that will include 1586 2/21/01 - FY '02 OPERATING BUDGET HEARINGS policy recommendations for possible tax revisions or other legislative changes to make Philadelphia more conducive to such development, possibly setting up some sort of new loan pool that could be specifically directed at these industries, looking at issues like workforce, student retention, and some of those other issues.
Thank you. You state in your testimony that you will be seeking to establish a separate pool of funds that can be used creatively to attract more high-tech business to Philadelphia. How much money is included in the budget and in the Five-Year Plan for this purpose? And where do you propose to find the additional funding?
Well, the funding would likely have to come out of the Economic Stimulus Program. And what I would hope to do is dedicate a portion of the stimulus funds as seed money to get this fund started and see if we could get other entities to match our efforts. We have not approached anyone yet; I do have several ideas as to funding agencies that might be interested. I would like to take this 1587 2/21/01 - FY '02 OPERATING BUDGET HEARINGS idea to foundations. I would like to present this idea to the Delaware Port Authority as an economic development initiative that's very important to the City of Philadelphia. But I guess the idea would be to start it with a portion of economic stimulus funds and see if we could get others to join in.
You state in your testimony that Commerce directly manages the State Enterprise Zone Program and the Keystone Opportunity Zone Program. Does this mean that the Commerce Department, and not PIDC, will be developing the Navy Yard?
No, Madam President. The Keystone Opportunity Zone Program is a designation that applies to a number of areas citywide. A substantial portion of the Naval Business Center has been designated, or hopefully will be designated, as a Keystone Opportunity Zone. While we manage the program and the benefits that the program offers, PIDC will continue to be the lead agency in managing the development of the Naval Business Center. There's a very close working relationship between our 1588 2/21/01 - FY '02 OPERATING BUDGET HEARINGS staff, our KOZ staff, and PIDC on the Naval Business Center because that, along with Northeast Philadelphia, the industrial park in Northeast Philadelphia, are probably the two areas that get the most interest from developers.
Can you tell us what your economic development plans for the Navy Yard are? Can you tell us of your plans?
I will ask Craig Shelter from PIDC to address the specifics of that issue. My experience in the time I've been at Commerce is that we've got a very good base upon which to start. There are 40-plus businesses already in operation at the Naval Business Center. There continues to be a lot of interest. And for some of the areas to the east, we are getting a lot of calls for distribution and warehousing-type uses that create a lot of jobs and would be attractive to the Naval Business Center. But I'll ask Mr. Shelter to respond to the specifics.
That would be fine. And, Mr. Shelter, perhaps you could 1589 2/21/01 - FY '02 OPERATING BUDGET HEARINGS tell us, of the 40 businesses that we presently have at the Navy Yard, how many of them are in a KOZ area? If you know.
Madam Chairwoman, my name for the record, Craig Shelter, Executive Vice President of PIDC. In response to your last question, I do not know how many companies are in a KOZ. I would be happy to get that information for you.
Thank you. Now, can you tell us what your economic plans are for the Navy Yard?
Our plans for the Navy Yard are actually in numerous areas at this point. As I'm sure you're aware, until this past year, we did not in fact own the property at the Naval Business Center, and so we were only in a position where we could enter into short-term loans with companies, short-term leases. Now, as a result of owning the property down there, we can enter into longer-term leases where the Philadelphia Authority for Industrial Development now owns the land. So what we've got, I would say, is probably 10 to 15 additional 1590 2/21/01 - FY '02 OPERATING BUDGET HEARINGS companies that are interested on top of the 40 companies that are down there already. They are beginning to build off of the fact that production has now begun in the Kvaerner Shipyard. And probably the Prime Plate Company is the best example I can offer to you, where this particular company is one which has set up business there to see coat the steel that comes in before it goes on the production line at Kvaerner. It's turned out that they have a very efficient operation, so a couple of steel companies have actually made this the location where they send all of their steel to be coated before it goes out to the other areas. So what we're finding is businesses that grow off of that are interested in being at the base. So that's one area, that's the shipyard area. With regard to the area, which we refer to as the "Commerce Center," we currently have under construction League Island Boulevard, which will define that Commerce Center. ) project down there, now having an example of what's possible, and with the demolition of the buildings down 1591 2/21/01 - FY '02 OPERATING BUDGET HEARINGS there, we're able to show companies cleared sites so that we have people looking at new office development down there, which they were not doing that before. Additionally, we have a private developer who is looking at the notion of whether or not residential development should be at the naval base. Current, the deed restrictions which apply under the terms under which we took the land prohibit residential down there, but we're looking to see if there isn't a way around that, dealing with the environmental condition of the soil, et cetera, such that we could add residential in existing buildings that are down there. We're also still dealing with the DRPA and Norfolk Southern on expanding the intermodal capability through the Port of Philadelphia for a substantial portion. And, as Mr. Cuorato said, we have one major company, which I'm not at liberty to disclose yet, but it's talking about adding in one project 1100 jobs to the base. We have a high-tech company that's looking at putting its headquarters down there. 1592 2/21/01 - FY '02 OPERATING BUDGET HEARINGS So all of a sudden, I think the product is now seen as hotter than it was in the past, both because of the fact that it's a secure environment, it's not something that you drive -- you can get to from many places; you go in or out two gates. And it is something with the 40 companies down there that there's a substantial base that's already there and the fact there are military operations still in place down there. A lot of people think that they left when the base closed, but the propeller shop, the systems developed for the aegis class destroyers -- it's a high-tech Navy workforce that is down there, and we get companies interested in relating to that. So companies like Alston, which have come in, which is a propulsion system for specialty water craft, has recently come into the location down there. So we are very optimistic about interest in the base. At the same time, when we took the base over, we took over all of the utility systems. And in many instances, we're getting surprises, because you had the Navy that never had to go and 1593 2/21/01 - FY '02 OPERATING BUDGET HEARINGS get permits for things. They were in control and they did things as they thought they were needed.
And so we're trying to put that system in some good order, in such a way that we have the infrastructure that high-tech businesses are looking for, specifically where fiber optic cable are located and things such as that. So we expect another extremely busy year on the base. We're delighted that we have developer interest, and we're moving forward on some new developments.
I'm happy to hear that. Thank you very much, Mr. Shelter.
Mr. Cuorato, I have just one last question because I see a lot of my colleagues want to be recognized. How much funding is included in the FY '02 budget and Five-Year Plan for the stimulus program?
There's $5 million in the budget year FY 2002. And for the Five-Year Plan, I believe that number -- it's -- 5 million each year is, I believe, in the Five-Year Plan.
Thank you 1594 2/21/01 - FY '02 OPERATING BUDGET HEARINGS very much. The Chair recognizes Councilman Goode.
Thank you, Madam President. Good afternoon, Mr. Cuorato.
Let me first thank you for our meeting in August and following up on the issues that we talked about then. I want to direct my attention to the community development block grant program and the programs that Commerce administers. I see there's a $5 million increase this year that represents an 85.5 percent increase from last year's budget, but still -- calculating it, it just still represents about 10 to 15 percent of the overall CDBG program. As I'm sure you're aware, there's a bill pending in Council now, Bill 716, that would increase that percentage to percent. What is 23 your initial impression of that bill and whether 24 Commerce can handle 25 percent of community 25 development block grant programming? 1595 2/21/01 - FY '02 OPERATING BUDGET HEARINGS
Councilman, I'll give you my general impression, and then I'd like to ask Mr. Traylor to comment on that as well because he has district responsibility for a number of the neighborhood programs under CDBG. We walk a fine line. We have limited resources. I would always advocate that more resources be available for economic development. I know that there are pressures brought to bear which are related to the housing portion of the community development block grant fund. As I've said, I'd like to have Mr. Traylor comment on this as well. My distinct impression is that we have more demand for funds than we are able to -- we have more demand from a project standpoint and from planning grants that are requested upon us than we're able to fulfill. Mr. Traylor?
Yes. Keeping in mind the pressures that exist in establishing these priorities between housing and economic development activity, I would, however, like to answer your question by saying, yes, we could 1596 2/21/01 - FY '02 OPERATING BUDGET HEARINGS accommodate that level of increase to percent. The demand for Philadelphia activity that comes from the community development corporations alone would accommodate a tremendous amount of that increase. In fact, I would go so far as to say right now, all of it. And I just would like to put an additional concern, enter an additional concern around our ability to get additional funds at some point, and that is that with the neighborhood transformation activity that will be getting underway, even though in the first year or two, with so much of that activity being in site preparation, that is, by way of demolition and environmental work, and it won't be that long before there is going to be a tremendous demand from the development community for those parcels that will get cleared under the NTI Program. So that is one other instance where there is going to be a greater demand on us for producing funds to assist those projects.
Okay, thank you. 24 One of the reasons why Bill 716 was 25 introduced is not so much to create this battle 1597 2/21/01 - FY '02 OPERATING BUDGET HEARINGS between housing and economic development in terms of the use of CDBG dollars, but because, from the research that we've done internally, we believe that economic development leverages more private development. And, in fact, when questioning the Housing Director last year and as we will question him this year, he probably doesn't even have leverage ratios for housing development activity, which, I know in the economic development world, we always track those leverage ratios. To sort of make that case, could you provide to the Chair the leverage ratios for Commerce Department activity, PIDC activity, and PCDC activity over the last ten years?
And as a continuation to that question, do you have a dollar-amount in terms of public money, be it NTI, CDBG, General Fund money, that you see should be dedicated to community economic development?
Councilman, is your 1598 2/21/01 - FY '02 OPERATING BUDGET HEARINGS question, do we have a dollar goal in mind that we would like to see?
Councilman, I would say at this point, no, we do not have a dollar goal. I think that a lot of that is going to depend upon exactly how the NTI Program unfolds and what then will be the demand upon us. We would appreciate working with any other offices, including yours, in helping to put the appropriate formulas together for what those goals should be.
Thank you. And I'm coming actually from the standpoint that investment, whether it be in housing or economic development, most of the dollars are going to come from the private sector, and it really is a matter of how wisely we invest public dollars to leverage those private dollars. In terms of subsidizing private investment to develop emerging markets, be it housing or economic development, have you considered more directly subsidizing bank activities; i.e., the PIDC small-business micro-loan fund, where PIDC actually packages 1599 2/21/01 - FY '02 OPERATING BUDGET HEARINGS loans, micro-loans, for the private sector for the banking community? That's a direct subsidy in terms of we're actually taking care of the loan origination for banks. Are you thinking beyond that in terms of doing other types of loan origination, in terms of packaging for bank loans, or loan guarantees or loan loss reserves? Is there any thought in terms of expanding economic development resources and community economic development resources of trying to directly subsidize bank activities and engaging in that conversation with the banking community about how you might leverage more private investment?
I think at this point, we'd like to call Mr. Jones to the table. (Witness comes forward.)
Madam Chairwoman, Councilman Goode, to answer your question, the answer is yes. As a matter of fact, what we hope to do in having read your proposed bill is to leverage some of the bank activities, particularly under the, quote, CRA category, Community Reinvestment Act, to sit down along with the 1600 2/21/01 - FY '02 OPERATING BUDGET HEARINGS Commerce Director to dialogue with the banking institutions to talk about their ongoing commitment to micro-lending, which is small-business lending, which can be very helpful in complementing some of the other activities that we do. So the answer is yes. As a matter of fact, I met with the Commerce Director, Mr. Cuorato, as recent as last week to discuss bringing them in and particularly looking at not just there good-neighbor policy, but also the fact that the City of Philadelphia deposits money within those institutions that can be leveraged for such activities.
I was actually speaking beyond just micro-loans but in terms of small business loans and other CDC economic activity. Are we beginning to think about how to maybe change some of our programming, and rather than just doing subordinated lending and rather than trying to do the deals our -- just do the deals ourselves, positioning the City to invest. Rather than do public lending, also looking at doing public investment as a matter of looking at 1601 2/21/01 - FY '02 OPERATING BUDGET HEARINGS where the private sector wants to invest and finding ways in which we can create incentives, be it loan guarantees, loan loss reserves, those type of financial products?
Beyond micro-lending, there are a couple of things that I think that we need to look at. One is the whole -- and I don't mean to turn my back to you, but the mic is there.
One of the things that we are looking at is, we've been working with the Mayor's Neighborhood Transition Committee to look at what the $250 million and also the massive blight removal and what impacts that will have on neighborhoods. To that end, we've convened what is called "a developers round table," which are small developers, private-sector developers, and also inclusive of CDCs that do major development in inner-city neighborhoods. As a matter of fact, one of the developers is from Councilman Clarke's district, and I had an opportunity to go up and take a look at the facility at 17th and Lehigh as a model. We've always had ORC (ph.) and other places that 1602 2/21/01 - FY '02 OPERATING BUDGET HEARINGS have done that type of development, but these are folk that have received absolutely no government subsidy and have managed to transform that area to be one of the models, I think, for inner-city refurbishing of a old factory, bringing it into compliance with moving any hazardous materials. So we're beginning to sit around the table to discuss with them, along with the delegate agencies such as the Redevelopment Authority and the Planning Commission, to figure out ways that we can, as a unit, start to identify where the private sector wants to do this development. Now, the next phase of that, obviously, is to look at what we bring to bear, what the developers bring to bear, and then also some of the financial institutions in town to talk about some other larger developments.
Councilman, I might just add that we would be delighted to work with you and your office on developing some of these new ideas specifically as it relates to how we can do a better job or explore some different areas of outreach in the lending community. 1603 2/21/01 - FY '02 OPERATING BUDGET HEARINGS
Okay. 'Cause, actually, it's just my belief in general -- it doesn't sound nice, but in the end what we do is subsidize banks, we subsidize private investment, so we might well do it more directly and do it through more direct communication with the private sector. So I'm looking forward to including that process. My last question is related to streamlining business relations. I've talked with the Managing Director and with the L&I Commissioner about who's going to be involved in that process. Are you looking at involving the Chambers of Commerce and the small-business centers and all of those people that are actually involved in small-business start-ups to look at what impediments actually exist there in terms of regulatory burdens?
Yes, Councilman, we are. My intention -- or at least part of my role in that process will be to -- will be to involve as many people as possible. And I want to talk to -- I want to talk to as many people, particularly small businesses, who have had to go through this 1604 2/21/01 - FY '02 OPERATING BUDGET HEARINGS process to understand step-by-step what obstacles they have to overcome. I know it's a difficult process. I continue to believe that there's no reason why we can't make it easier. So my intention is to involve as many people as possible in that process.
Thank you very much. I have a couple questions. Some time ago, every two or three years ago, we asked Mayor Rendell to hire a Korean businessman for the Korean business strips. What is the status of that position? I know you did hire someone; is that person still on staff?