Committee Hearing, March 24, 2009

COUNCIL OF THE CITY OF PHILADELPHIA COMMITTEE ON FISCAL STABILITY and INTERGOVERNMENTAL COOPERATION - - - Room 400, City Hall Philadelphia, Pennsylvania Tuesday, March 24, 2009, 1:45 - - - Resolution No. 090178 - A resolution 9 authorizing Council's Committee on Fiscal Stability and Intergovernmental Cooperation to hold hearings regarding actions the City should take to stimulate the local economy and the City's preparedness for the targeted federal Stimulus Funds pursuant to the American Recovery and Reinvestment Act. COUNCILMEMBERS PRESENT: Darrell L. Clarke, Chairman Frank DiCicco, Vice Chair Blondell Reynolds Brown W. Wilson Goode, Jr. Curtis Jones, Jr. Joan L. Krajewski Brian J. O'Neill Marian B. Tasco Also Present: Bill Green and Jannie C. Blackwell - - - 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 2 3/24/09 FISCAL STABILITY COMM. - RES. 090178 I N D E X WITNESS Dr. Ed Schwartz............................. 7 Institute for the Study of Civic Values Mike Masch, School District of Philadelphia 51 Carl Greene, Exec. Director, PHA............ 61 Joseph Casey, General Mgr., SEPTA........... 71 Rob Dubow, Finance Director.................123 (for Mark Allen Hughes) Katrina Schwartz ECAD.......................133 Leanne Krueger Branake, Executive Director 140 Sustainable Business Network of Greater Phila. James White, Phila. Association of CDCs.....157 Kevin Corrigan, Energy Edge Technologies....179 Scott Holmes, Holmes Group Ltd. ............193 George Awad, VIIAD Systems..................206 Mark Rupp...................................219 Network Acquisition Company, LLC 3 3/24/09 FISCAL STABILITY COMM. - RES. 090178

Good afternoon. Thank you. This is the public hearing on the Committee on Fiscal Stability and Intergovernmental Cooperation. Those of you all who are having conversations on the side, could you please take it outside. Thank you. The committee has established a quorum. We have here today: Councilman Frank DiCicco, who's the vice-chair; Councilwoman Tasco; Councilman O'Neill; Councilman Goode; Councilman Jones; Councilman Kenney; Councilwoman Krajewski; and Councilman Blondell Reynolds-Brown. We also have in attendance are Councilman Green and Councilwoman Jannie Blackwell. Thank you. Thank you all very much. Briefly, today, we are here, which will probably be the first of potentially a series of public hearings. As you all know, if anybody has CNN, MSNBC, or any other cable channel, 4 3/24/09 FISCAL STABILITY COMM. - RES. 090178 the talk of the day is stimulus programs. There will be a substantial amount of money on the table for municipalities, states, and townships. One of the things that the City of Philadelphia wanted to make sure that we were first in line and receiving whatever revenue enhancements that could be available to ensure we stimulate our local economy. We also will talk about a number of initiatives that have been proposed on a local level because we believe that there are some things internally within the City of Philadelphia that we will be in a position to do to stimulate our local economy. For the members of Council, we have issued a report, as per the resolution's requirement. The Council President asked the committee to put together a report on stimulative issues both on the federal level and on the local level. We have officially 5 3/24/09 FISCAL STABILITY COMM. - RES. 090178 submitted the report today to all of the members, and reports will be available as soon as we can print some additional copies. We will have a number of people testifying. We're going to ask that individuals keep your opening statements relatively short and summarize them to a degree, 'cause I'm sure that members of Council will have some substantive questions, so we want to make sure that we maximize everybody's time to make sure that we get all of the appropriate information out here on the table. With that, I want to thank you all very much for coming. If anyone is here for the Parks and Recreation meeting, it is scheduled for 3 o'clock. We obviously have a time issue. So 2 o'clock, Councilwoman? Okay, 2 o'clock. Those individuals who are here to be -- to give testimony on your applications for parks and recs, that hearing will be moved to the Caucus 6 3/24/09 FISCAL STABILITY COMM. - RES. 090178 Room directly across the hall. I'm sorry for the inconvenience, but we're trying to get you as close as possible, and I think that's pretty close. Councilwoman Blondell Reynolds-Brown is the chair of that committee, and a number of these members also serve in that committee, so we'll be jockeying back and forth to ensure that everybody reaches his fullest accommodations. Okay. With that, Mr. Chair? I'm sorry, I elevated him to Mr. Chair. Mr. Carter, will you please read the title of the resolution.

Resolution No. 18 090178, a resolution authorizing Council's Committee on Fiscal Stability and Intergovernmental Cooperation to hold hearings regarding actions the City should take to stimulate the local economy and the City's preparedness for the targeted federal Stimulus Funds pursuant to the American Recovery and 7 3/24/09 FISCAL STABILITY COMM. - RES. 090178 Reinvestment Act.

Thank you. Today Ed Schwartz will be the first witness. The City Council have contracted with the Institute on Civic Values to put together some of the issues relating to some of the Federal Stimulus, and Mr. Schwartz will give testimony on that. That information in detail is also included in the document that was submitted earlier. (Witness comes forward.)

Thank you, Council President -- Mr. Chair, not President. No, I did not promote you.

Oh, no. We don't need any more confusion than we already have.

Actually, I'll begin this by saying that I want to thank you, Councilman Clarke, and I also want to thank Council President Anna Verna and all of City Council really for giving me the opportunity to develop this report. 8 3/24/09 FISCAL STABILITY COMM. - RES. 090178 The Economic Recovery Act of 2009 sets forth the most significant domestic agenda since at least the Great Society and perhaps the New Deal, and that you've asked me to assess the impact of this program on Philadelphia is a genuine honor, and I genuinely appreciate it. The Recovery Act itself presents itself to us in two forms. Nationally, the Obama Administration describes it in terms of broad goals that they are trying to achieve: Building a green economy around energy conservation and developing alternative forms of energy; improving our health system; repairing our fragile infrastructure; investing in education. Locally, however, throughout the country, the Stimulus Program has become a list of grants and projects announced every day with a price tag attached to each of them. Even though this is welcome and far from pork barrel- spending, it's hard to tell what impact 9 3/24/09 FISCAL STABILITY COMM. - RES. 090178 this will all have. Somehow, the national mission and the local projects have to come together, and that's what I have tried to do in the report that you have now received concerning the implementation of the Economic Recovery Program here in Philadelphia. I do provide information about the major activity supported by the Economic Recovery Act along with estimates of their fiscal and economic impact on the City. But the basic contribution this report tries to make lies in setting forth a series of goals that the program will help us achieve if we invest the resources available to us in a coherent, sensible way. Here, then, are the goals, with a brief summary of how we can use the resources of the Stimulus Program to achieve them. First, protect the safety-net economy. The Recovery Act extends 10 3/24/09 FISCAL STABILITY COMM. - RES. 090178 unemployment compensation benefits through December 31, 2009. With an percent unemployment rate, this is an 5 economic and moral imperative. I have no 6 doubt that the thousands of people who 7 are unemployed in Philadelphia are 8 already aware of this extension and taking advantage of it. 2 percent through December 31, 2010, so that the Commonwealth of Pennsylvania does not have to make the choice between helping people who need Medicaid and making draconian cuts in other State services. More than 478,000 residents of Philadelphia depend upon Medicaid, most of them senior citizens, so we have reason to be especially grateful for this increase in federal support. The Recovery Act also includes a $779 annual increase in food stamps. The benefit to people in need is obvious, but 11 3/24/09 FISCAL STABILITY COMM. - RES. 090178 this helps our businesses and our economy as well. A grocer in the Reading Terminal Market showed me that he might make as much as $250,000 more in food-stamp purchases, thanks to the Stimulus package. And this will be even more true for supermarkets Acme and Pathmark and neighborhood grocers all over the City. There are thousands of people eligible for food stamps in Philadelphia who don't use them. We need to reach out to these people, not only for them, but for the economic benefits that the entire city receives. Second, rehabilitate and repair affordable housing; that's the second goal. " I second that motion. The Philadelphia Housing Authority will now receive more than $90 million to invest 12 3/24/09 FISCAL STABILITY COMM. - RES. 090178 in an ambitious, comprehensive plan to rehabilitate scattered-site housing all over the City. The Pennsylvania Housing Finance Agency is receiving funds to subsidize tax-credit deals for rental housing that have been paralyzed for months by the near collapse of our financial system.

OHCD itself will benefit from an additional $14 million coming from the Community Development Block Grant. 4 million coming to the City to help people on the brink of homelessness, and even more money being made available on a competitive basis to extend our efforts to prevent foreclosures. After eight years of losing millions of dollars from federal support for affordable housing, we are finally beginning to get some of it back. Third goal. Weatherizing Philadelphia and creating green jobs and supporting the green jobs training. 13 3/24/09 FISCAL STABILITY COMM. - RES. 090178 Providing federal support to jump-start what is called "the green economy," is probably the most ingenious economic development strategy undertaken by the federal government since the Tennessee Valley Authority of the New Deal. Here, the federal government will help us reduce our use of energy through weatherization of homes and retrofitting public and commercial buildings. $258 million is now coming to the Commonwealth of Pennsylvania for commercial -- for weatherization alone. Philadelphia agencies could receive a significant portion of that, many times over what we have ever received in the past. The income eligibility for weatherization has now been reset to 60 percent of the median income -- roughly, $22,000. There is an enormous opportunity now for thousands of households in this city to cut their fuel billings. 14 3/24/09 FISCAL STABILITY COMM. - RES. 090178 And there's a related opportunity for hundreds of people to be trained to do the work of weatherization, using some of the $50 million in additional funding that Pennsylvania is receiving for adults and dislocated worker training. States are also given funds to help capitalize larger energy-efficient projects. Yesterday, Governor Rendell announced five major energy-saving projects funded in part by the Recovery Act, including Cisco Food Services, here in Philadelphia, that will be able to construct a 190,000-square-foot extension of its distribution center and warehouse in South Philadelphia in a way that will save them thousands of dollars in energy costs over the next several years. And Philadelphia itself will be receiving $27 million this spring to fund the first year of an Energy and Environmental Block Grant, parallel to the Community Development Block Grant but 15 3/24/09 FISCAL STABILITY COMM. - RES. 090178 focused on projects that help us save energy in all areas of city life. This is a four-win agenda: Households and businesses cut costs, the City saves taxpayer dollars, the country reduces its dependence on foreign oil, and the planet grows that much more environmentally safety. We all win this one together. And then there's Goal 4: Replace roads and highways and expand public transportation. Repairing highways is nothing new to the federal government; they've been doing it for years. But with the Recovery Act, we are now able to make a dent in repairing an infrastructure whose weakness threatens us all. There is also a significant increase in support for mass transit, spelled "SEPTA" here in Philadelphia. There will be 40 more hybrid-efficiency buses traveling through the City soon, and people who use the Girard and Spring 16 3/24/09 FISCAL STABILITY COMM. - RES. 090178 Garden stations, SEPTA stations, can look forward to repairs and modernization that is now long overdue. Goal 5: Strengthen Philadelphia health care. Beyond the City of Philadelphia's own health centers, there are also ten federally-funded health centers in the City, which offer free or low-cost service to people who need it. These are all eligible for federal grants under the Recovery Act. And Covenant House, in Germantown, has already received one. At a time when the financial strains on the City health system grow increasingly serious, these federally- funded community health centers can help fill the gap. Goal 6: Create public-safety and community-service jobs.

The COPS Program is back, and the City is already developing a proposal to add 200 federally-funded police officers to the force. 17 3/24/09 FISCAL STABILITY COMM. - RES. 090178 There is also $12 million available to Philadelphia from the regional office of the Justice Department, and another $43 million that will be put out to bid by the Pennsylvania Commission on Crime and Delinquency. 2 million, that's all. Wouldn't it be nice to be able to afford a reentry system that could help thousands of people, presently spending $230 million annually in the Philadelphia prisons, get out of jail once and for all and become responsible members of this community. That opportunity is there for us, along with increased support from Americorps and the Senior Volunteer Program, which helps people, young and old, perform community service in our neighborhoods. Goal 7: Helping small business. The Recovery Act creates a wide range of 18 3/24/09 FISCAL STABILITY COMM. - RES. 090178 new loan programs that will help small businesses gain new access to credit. Small businesses are the backbone of the Philadelphia economy. For them, as is now the case with financial institutions, relief is on the way. And finally, Goal 8: Strengthen youth development and improve education. The School District just told us that Philadelphia will receive more than $360 million to help our schools and bring new teachers into our classrooms and provide added help to kids in special education. Daycare and Head Start will both expand as a result of the Recovery Plan, and there are now youth agencies all over the City writing proposals to provide more than 8,000 kids with jobs this summer, the largest increase in summer jobs for youth in years. So these are the eight goals, from helping people at risk get through this difficult period without ending up 19 3/24/09 FISCAL STABILITY COMM. - RES. 090178 in the streets, to rehabilitating and repairing housing, to building a new economy around energy conservation, to repairing our roads and modernizing SEPTA, to improving health care and public safety, and creating new opportunities for community service, and investing in our kids in our early-childhood programs in our schools and in our summer jobs for youth. We are facing tough time in this city, as are cities all over America, but if we focus on these really great things that are about to happen, thanks to the Economic Recovery Act, this could be a terrific year in Philadelphia, a year when housing will get better, our fuel bills will get lower, our roads will be stronger, our buses will be newer, our small businesses will be more prosperous, and our kids will have the support that they need in our schools and in our neighborhoods to grow up as literate, effective, and responsible adults. 20 3/24/09 FISCAL STABILITY COMM. - RES. 090178 This is what the Economic Recovery Act offers us. And if we use it well, we will discover that we can beat this bleak economy and put the fiscal crisis of the City behind us. Thank you very much.

Thank you very much, Dr. Schwartz. Great report, good information. We hope we're in the position very shortly to be able to implement all of the programs that you spoke you and access as of money as possible. We have questions from the committee. Councilman Jones.

Thank you, Mr. Chairman, and thank you for having this important hearing. I think that under the current economic conditions of our city, our state and, I guess, the world, there probably isn't a more important committee in this Council than Fiscal Stability. So thank you for 21 3/24/09 FISCAL STABILITY COMM. - RES. 090178 having hearings and talking about the Stimulus package. I kind of equate it to a western movie, the calvary coming over to help the settlers with provisions and ammunition to help save the day. And my question becomes: That although it is important to go with shovel-ready projects, whether we talk about housing, whether we talk about the 300 bridges in Philadelphia that are in need of repairs, some of them over a hundred years old, and all of the potential in our infrastructure, whether it's water, 3,000 miles of piping underground, my question kind of comes to -- and I guess it's important to talk about it. How do -- I know Wall Street was bailed out, and I know Main Street's help is on the way, but I want to know when my street actually gets stimulated by the Stimulus package. And what I mean by that is. 22 3/24/09 FISCAL STABILITY COMM. - RES. 090178 There a lot of young, able-bodied persons that are unemployed; it's about an 4 percent unemployment rate in the City of 5 Philadelphia; and in the African-American 6 community, arguably just on those who 7 we're still counting, it's somewhere in 8 the neighborhood of 13 percent. What I need to know is: How do we translate that Stimulus, that rescue wagon coming from Washington to not just stop in traditional places, but that it stops in places in the inner-city, where the devastation is the most hard-felt? And how do we make sure that, in our processes, that this Stimulus package doesn't just wash over us and keep going? And how do we create baskets in neighborhoods and in communities that actually employ some people? So whoever comes up here from this point on, I'm going to basically ask the same question: How many jobs will it create in neighborhoods in my district: So if you could give me a sense 23 3/24/09 FISCAL STABILITY COMM. - RES. 090178 of the economic development potential for neighborhood-based jobs, I'd be interested in that.

Well, I wrestled with a number of jobs, and I tried in writing, you know, for anything, the report to be cautious not, you know, overstate. I would say two things. One is that the integration of a number of these things in the same neighborhood would have an impact that goes beyond doing them one at a time. So if we're talking particularly about occupied housing, which is something I think is a very big opportunity here, we have more money to repair houses that could be used to repair houses; we have more money for PHA to rehabilitate scattered sites; and we have this massive pile of money coming in to weatherize houses. I, for years, have felt that occupied housing should deserve as much 24 3/24/09 FISCAL STABILITY COMM. - RES. 090178 attention, if not more, than vacant houses. So to develop a citywide campaign, which I'm going to talk about later than this, to retrofit, repair, and rebuild the occupied housing in Philadelphia, that will have huge impacts on housing, on the people who live in the houses, and on jobs. And the other good thing about the jobs that are available through weatherization is that they don't really require a college degree. And job training has been created for it; it's being heavily funded, the systems are going into place. So that's a great opportunity. I also think that there will be some expansion of opportunity in transportation. There will be some expansion in the School District; Mike Masch is here, who is wrestling with how much that will look like. But to me, the green economy, if you're looking for what the most potent 25 3/24/09 FISCAL STABILITY COMM. - RES. 090178 medicine is here for economic recovery of the kind that you're describing, it is in the green economy. It's in weatherization, it's in the expansion of support for retrofitting. And it's also in how we are going to use this Energy Conservation and Environment Block Grant; $27 million will start this year. And that's not a Stimulus one shot; that's a beginning of a new thing. That, I think, is going to be a very good new avenue for economic development and growth in the City and its neighborhoods.

I appreciate your view of that. One of the things that -- when we had similar hearings in other areas was whether I talked to the union halls, whether I talked to people in development, they say the same thing: How do we create a pipeline of workers, considering that a lot of this Stimulus package and monies and revenues have a 3/24/09 FISCAL STABILITY COMM. - RES. 090178 sunset? That if we have to get these projects done in a -- I think it's in an 80-day window, a 150-day window, how do we match up the opportunity for shovel-ready projects to people who are kind of not in the mainstream of --

Well, I think in terms of training, the Philadelphia Workforce Development Corporation has already put the word out. You're going to hear from the energy conservation agencies today. So the training opportunities there are already being publicized. And I think in some of the other areas, there are mechanisms that exist. The energy areas, actually the one apart from weatherization which we've had is the newest for housing, community development, Head Start, daycare. All of these are things that have been operating, so it's a matter of asking, is there budget going to expand and are they going to be able to hire? 27 3/24/09 FISCAL STABILITY COMM. - RES. 090178 And in some instances, we know the answer; and in other instances, we don't. But the people who are on the case I know, sitting behind, me are keeping very close track of all of that.

Councilman, if I may. With respects to your question -- and it's a great question -- and in anticipation of that question, what we wanted to do today, we actually invited the individuals who we believe will be directly or in some way, shape, or form responsible for implementing the Stimulus dollars in the various categories, and we talked about the job training. Mr. Jones is here to talk about housing and development opportunities. Mr. Greene is here. Actually, Herb Wetzel might actually be here to talk about some other market-related (indiscernible). We have Mr. Casey from SEPTA. We have Mike Masch, Mr. Masch, 28 3/24/09 FISCAL STABILITY COMM. - RES. 090178 from the School District, to talk about very specific terms and what their strategies are in making sure that all Philadelphians have opportunities. 'Cause I do understand your concern. When this proposal initially came out and talked about infrastructure, that tends to be in particular trades, and there's always been some challenges in getting full participation of all of the citizens involved in those particular trades. So that's a very pertinent question, in addition to which, Thursday, we will be introducing something -- I wasn't going to mention it at this particular time, but we will be talking to the members in Council that addresses that particular issue as it relates to full participation.

And I look forward to hearing a response from subsequent testimony. But one thing. By way of the 29 3/24/09 FISCAL STABILITY COMM. - RES. 090178 capital projects, the shovel-ready projects, it's my understanding that within that window of time, if other national municipalities fail to achieve that goal to be ready within that window, then a lot of that money goes and reverts back to its original pot and can be reallocated to other municipalities that do have shovel-ready projects. And if that is true, is there a second round of the Stimulus package that we can look forward to?

Oh, I can predict -- I would answer it in a different way. I don't think that they're going to have another Stimulus package. The point that Obama makes, which is absolutely clear from his proposed 2010 budget, is that the Stimulus package is not a one-shot economic boost; it is the beginning of the ongoing strategy of the Obama Administration for economic recovery in 30 3/24/09 FISCAL STABILITY COMM. - RES. 090178 this country. And if you look at the preliminary releases of the 2010 budget, in each area, particularly the ones where funding is being made available here, he starts with the Stimulus package and then talks about what they're proposing this coming year in this. And in some areas, you can look at the five-year trajectory, 'cause they're without detail, and you see education funding goes up significantly, funding for energy goes up significantly; others, you know, at least hold their own and are more than what we got in the last decade. So I think the one other point that I would make that I didn't stress in the -- certainly in the remarks and even, you know, that is so much, there are an awful lot of grant opportunities that I'm not mentioning here because they're competitive. I'm only trying to deal with the things I think we can count on. 31 3/24/09 FISCAL STABILITY COMM. - RES. 090178 But the finance -- the current budget that's produced by the Finance Department lists a number of those, and there are others that they don't list. So I think that the City Administration the School District, and nonprofits and everybody else around the City who keep track of federal funding is going to be out there sharpening their grant skills to go off and get even more money available. And that's within the Stimulus package that is being proposed.

Thank you, Mr. Chairman. I'm going to run to my next hearing shortly. But I want to ask one other follow-up, and that is, the reason I mention all of this is because there's two opportunities here that will be consistent throughout: New development through business formation and jobs. Simply put, that's meaning that a contractor gets an opportunity to bid on a job, or someone gets hired from a 32 3/24/09 FISCAL STABILITY COMM. - RES. 090178 job. And what I want to do is, within this window of time opportunity stimulus, create pathways similar to (indiscernible) and PHA or at the Skills Center up on Wissahickon, that we create a pipeline to take advantage of these projects both from the entrepreneurial aspect but also from the job-creation aspect.

I think what you're proposing to do is a good thing, but I would have a different reason for doing this.

Okay.

This is not a one-shot program.

Right.

It is not a one-shot program. That's what was that originally proposed, and that specifically is what the Obama Administration said they weren't going to do.

Right. 33 3/24/09 FISCAL STABILITY COMM. - RES. 090178

Now, what we need to do in terms of what you're talking about, in building contractors and the rest, is developing our capacity to respond --

I think we agree.

-- to new opportunities in these areas that are definitely going to be clear. And one point I just want to make in general here: You know, we suffered Bush budget cutbacks for eight years, so you kind of get used to it, and you get the feeling that nothing in fact is ever going to get any better. Now, maybe it won't be as good as I want it to be, but we have a Democratic president who believes in public investment, we have a Congress that believe in public investment, we have three members of our House delegation and two senators with clout in the Congress, and we have a system of 34 3/24/09 FISCAL STABILITY COMM. - RES. 090178 priorities that Obama has put on his website from his campaign promises that are there to see. And if you look at those promises in this budget, he's sticking to what he said he was going to do. So we have a real opportunity here over the next four, maybe eight, years to rebuild a federal partnership with this and other cities that we have lost since the 1960s, really. And that's, I think, the way we ought to look at what we're doing. Position ourselves for what we can do now and to be able to take advantage of what's available in the future.

Ed, I appreciate your comments and your work on this, but let me say this: That I've lived through a whole lot of promises of prosperity, and I've seen it happen in this city. If we don't take advantage of it, if we don't prepare for it by 35 3/24/09 FISCAL STABILITY COMM. - RES. 090178 creating baskets that poor people can find an exit strategy out of poverty to the middle class, we'll be talking about the next Stimulus package and the next one after that without the results that are desired, which is creation of wealth in the inner-city and creation of jobs for a population that's percent 10 unemployment. 11 So I'm glad that the wagon train 12 is coming, but I want to make sure that 13 by the time it gets here, it leaves some provisions for everybody.

I agree.

Point of order, Mr. Chairman. I'd like to -- before my colleague leaves.

The Chair recognizes Councilwoman Tasco.

The wagon train, the calvary, probably rescued the pioneers, but they, in the end, didn't have to pay the money back. That's just a little jest here to kind of lighten the 36 3/24/09 FISCAL STABILITY COMM. - RES. 090178 day. But let me just ask -- can I ask a question on what you just said about this is not a one-shot deal? Would you explain that to me, to us, in terms of this economic stimulus? because the money is limited, is a one-shot deal. Are you saying the residuals from all the money that we're spending will continue the prosperity, or hopefully the prosperity or the activities that are generated? Because as I understand it, this money has to be spent within the next couple of years, and it's no guarantee that there will be another stimulus bill.

Well, the money has to be spent in the next couple of years or we lose it because the goal of the program is to have an immediate economic impact, and you can't do that if you're going to sit around and plan stuff for a decade. All I'm saying is that the areas in which this Stimulus package is 37 3/24/09 FISCAL STABILITY COMM. - RES. 090178 investing are priorities for the Obama Administration going forward. There is an energy agenda. There's a health-care agenda, which is far more ambitious, frankly, than anything that's being funded in the Stimulus package.

Mm-hmm.

There is an education agenda. And if you look at the projected budget that he's put out there, the education budget goes like this (witness makes upward gesture with hand). And then there are promises that he's made in relation to prisoner reentry, in relation to after-school and community-based programs for kids. So this lays -- gives us money, and it lays the foundation for building the kind of agenda that I've described in my remarks and in the report over the next four years. That would be different from a Stimulus package that says, at the first 38 3/24/09 FISCAL STABILITY COMM. - RES. 090178 one did, We're going to send you $250; please spend it.

Mm-hmm.

Or we're going to fix 400 highways, et cetera, this year, and then it's over. He specifically is not doing that. He's saying that this is the jump-start of a new economy and a new federal role in stimulating this economy. And we have to be creative enough to take advantage of it.

Thank you, Mr. Chairman.

Thank you. Councilman Goode was --

I'll yield to Councilwoman Brown if she will be brief.

Thank you. There have been mixed messages in the media on whether or not this is a one-time unprecedented endeavor. Regretfully, we have an unavoidable conflict of two Council 39 3/24/09 FISCAL STABILITY COMM. - RES. 090178 hearings being scheduled at the same time. And next door is the third of a series of hearings for persons who have applied to serve on the new commission. So 195 persons applied; thus far, we've heard from 95. So we still have a long list of folks to listen to this afternoon. So I have to step away from this hearing. And I would appeal to those who sit on both committees to stop over for a minute so that those who are interested in serving this commission can see the support of the entire committee. Thank you very much.

Thank you, Councilwoman. And, Councilwoman, please apologize for me for not being there. Councilman Goode.

Thank you, Mr. Chairman. Mr. Schwartz, two issues: One on the issue of jobs; the second issue of whether this is a one-time initiative. Councilman Jones referred to 40 3/24/09 FISCAL STABILITY COMM. - RES. 090178 infrastructure jobs. And we know there's a great debate in Washington over what the Stimulus package would look like and how much should be focused on infrastructure jobs, which, in some cases, are considered to be public-sector investment in jobs versus long-term private-sector job creation. And to the extent that this may not be a one-time investment, I would say that it may not be the only one-time investment, but to some extent, it still can be considered a one-time investment when you consider that it's not necessarily long-term, permanent job creation. Although my questions are a somewhat variation on Councilman Jones' question, to some extent, you never did provide a number related to jobs on his question, but my question is slightly different. My question is: Is there a projection for long-term private-sector job creation for Philadelphia? And where 41 3/24/09 FISCAL STABILITY COMM. - RES. 090178 are those jobs going to come from?

I think there are more projections within each of the areas of the report on what that might look like. In my report, I'm very cautious. I mean, I go through the employment -- there is for the Commonwealth of Pennsylvania, and I apologize to you that I don't have that in my head, 'cause I was focusing on the City, but there are some fairly substantial overall projection for the Commonwealth of Pennsylvania.

But my question is real direct and real simple: What's the projection for long-term private-sector jobs?

Well, I think the idea is about 15,000 -- my estimate was about 15,000 at the least, and that doesn't include multiplier-effect kinds of things; that is, we hire somebody, as know, and they go off and spend money 42 3/24/09 FISCAL STABILITY COMM. - RES. 090178 elsewhere. I think it's going to be better than that. And somebody else might have a better answer than that.

And where are the jobs projected to come from?

I think they're projected to come, in part, from the infrastructure-improvements. I think they're projected to come from the energy economy; that's the biggest part of the economic strategy. And I think some of the areas are in housing, where those jobs will come --

How does the infrastructure improvement create long-term jobs?

They do, but the way they're talking about the energy economy and the need to build support for weatherization, retrofitting, and all of the other areas that are associated with energy savings is actually a more dramatic and ambitious kind of effort to 43 3/24/09 FISCAL STABILITY COMM. - RES. 090178 create long-term, sustainable jobs. One of the groups testifying here today, the Sustainable Business Network, has received a grant from the Knight Foundation specifically to start identifying businesses that might benefit from this. So there's going to be a lot more money than just the Stimulus package to invest in companies and areas that are working in this area and --

So the suggestion is that a Stimulus package will spur other private investment.

Yes.

But I'm actually referring to the public investment.

Well, it will do both. I'm saying that the energy component -- and I'm not even getting into health care or education, but the energy component alone is projected to create hundreds of thousands of jobs and 44 3/24/09 FISCAL STABILITY COMM. - RES. 090178 invest significantly. You know, we got to --

I'm speaking about Philadelphia.

I'm talking about Philadelphia. I'm talking about Philadelphia. Actually, we are --

You say hundreds of thousands of jobs?

Oh, I don't know about hundreds of thousands of jobs in Philadelphia. I do not have a -- Councilman, nobody has got a precise there are some state estimates out here. I haven't seen anybody come up with a specific estimate for any given city. I can tell you that the estimates on the expansion into Pennsylvania, just on the energy thing alone, are significant. And you begin to see evidence of it. I mean, Rendell yesterday -- I mentioned one of the five projects in Councilman DiCicco's district; there were 45 3/24/09 FISCAL STABILITY COMM. - RES. 090178 four others. There are companies all over the State that are stepping forward with either plans for retrofitting and weatherization or something like Gamesa, which got the contract to do the solar energy and windmill energy system that Exelon is using. So I think that this is the beginning of something. You know, this is going to be the start of something big. And it's new and it's needed. And I think it will have as much impact potentially on the country as the Internet revolution, which, after all, began, what, in the early '90s and suddenly, you know, made whole counties like Silicon Valley. And we have got to be attentive, as I don't think we were really in relation to the Internet economy, to the opportunities available to us. But I'm pretty confident that we are. Mark Allen Hughes is on top of that case, a number of the groups are. 46 3/24/09 FISCAL STABILITY COMM. - RES. 090178 There are people all over the City -- I go through those networks -- that are just licking their chops about new opportunities that are available in this. And there will be others, but that's the biggest one. Obviously, if we can get a huge investment in national health care, that's going to help not only our citizens but our health-care industry. There will be some advantage and benefit for the increase of investment in education. But I come back to the energy and the green economy.

But we don't know how many permanent jobs.

Oh, I'm talking about permanent jobs now. If you're going to, you know, weatherize a place -- it's going to take a few years here to rebuild Philadelphia; that's not going to happen overnight. And there will be contractors all over the place created, 47 3/24/09 FISCAL STABILITY COMM. - RES. 090178 nurtured, et cetera, just to do that work. There will be lots more. The Gamesa -- Rendell made a presentation at the -- at Vice President Biden's summit. He talked about Gamesa getting one contract in Cambria County for 300 jobs. Now they've got another one in another county, a thousand jobs, two years. I'm telling you, I've been around economic development for a pretty long period of time, Councilman, as you know.

But that still doesn't sound like a business plan --

I'm sorry?

-- in terms of job creation. That still doesn't sound like a business plan in terms of job creation.

Well, I think the company sees a new market for the kind of energy they're providing. The federal 48 3/24/09 FISCAL STABILITY COMM. - RES. 090178 government is providing essentially the startup capital to make it work. Exelon is contracting with them to provide this energy, and they're building their business around it. I'm going to make a point.

It's possible.

I'm sorry?

It's possible. I don't disagree with you.

Well, yeah, it's possible. And I'm telling you, count this to be maybe, you know, the most important thing you hear out of this hearing. This is big. And, you know, I haven't even talked about the Energy Block Grant with $27 million coming in. This is an enormous commitment that the administration is making. It's only the beginning of the Stimulus package. You can see other evidence of it in the (indiscernible). 49 3/24/09 FISCAL STABILITY COMM. - RES. 090178 I have a website called communitiesmatter.org that, in fact, is tracking this. That links to a major study that was done by a think tank in New England laying out the blueprint for this energy economy. And the number of jobs they're talking about are in the hundreds of thousands. And they are the ones who suggest that it starts with weatherization and retrofitting and then build from there.

Thank you.

Thank you, Councilman. Any other questions? (No further questions.)

Okay. Mr. Schwartz, thank you.

Thank you very much for the opportunity.

We look forward to continue to work with you on this very important endeavor. What I would like to do is call 50 3/24/09 FISCAL STABILITY COMM. - RES. 090178 up a panel of quasi-government agencies. I'd like to hear from Mr. Mike Masch, from the School District; Mr. Carl Greene, from the Philadelphia Housing Authority; and Mr. Joe Casey, from SEPTA. And if it's okay with the members, to ensure that we maximize our time, I'd like for them to give their opening statements first, and then we can question the individuals, if it's okay with members of the committee. (Witnesses come forward.)

Good afternoon, gentlemen. Thank you for participating in what we believe to be a very informative and important hearing. I think I spoke to all of you earlier. We really appreciate you coming in and kind of giving some sense of what the possibilities are out there. And I know it's early on in the process, but I know that you have clearly given some thought as to how you can spend this money. 51 3/24/09 FISCAL STABILITY COMM. - RES. 090178 I guess we'll start on the left and then work our way down. Mr. Masch.

Sure. Councilman, good afternoon and good afternoon to the members of the committee. We've submitted written testimony to you, and with your permission, I'm just going to summarize some of the high points of it.

Okay.

One of the things that's striking to us about the American Recovery and Reinvestment Act is that it is one of the first times in many years, as has been noted earlier this afternoon, when investments in public education is one of the major priorities for a major federal initiative like this one. And we are pleased, gratified, humbled, and challenged, frankly, to figure out how to use this money wisely and well. As we've noted in the testimony that I've submitted, in this city, we have made real progress in public education in the past six years; and yet, 52 3/24/09 FISCAL STABILITY COMM. - RES. 090178 we have an enormous amount to do. We have doubled the number of students who are reading and doing math at grade. And we have 40,000 more students who are achieving at grade level than we did six years ago. And that's great. The problem is, that six years ago, only one out of five students was reading and doing math at grade; and now it's two out of five. We're moving up in math in particular to about half of our students. But that means that we're still not performing at the level that we need to. During this period of time, we've seen graduation rates increase, and we're gratified by that, but it's still true that four out of every ten students who begin high school in Philadelphia do not complete high school and then have no 22 opportunity to go on to post-secondary education. Now, in this period of time, in the past six to eight years, the City of 53 3/24/09 FISCAL STABILITY COMM. - RES. 090178 Philadelphia and the Commonwealth of Pennsylvania entered into a partnership with the creation of the School Reform Commission. And the goal of that partnership was to advance economic achievement and to restore the District to financial stability and to keep it within -- and to keep the District with a balanced budget. And we appreciate very much the fact that this Council and the previous Mayor and the current Mayor have made good on your commitment. We have seen the financial support for the District increase by an average of about 5 percent a year each year over the past eight years. And State funding, particularly in the last year of the Schweiker Administration and in every year of the Rendell Administration, has actually increased between 8 and 9 percent. But right now, because of the recession that we are in, it's not possible to maintain those levels of 54 3/24/09 FISCAL STABILITY COMM. - RES. 090178 support. We have no growth in local taxes for the School District this year and projected slight negative growth next year, using the same forecasts that were utilized by the City of Philadelphia by the Nutter Administration to construct their budget for the coming year. What that means for us is that we're going to see about $120 million less in local revenues than we would have expected to see this year and next year. Now, at the State level, last year, the State Board of Education put out a study. The goal of that study, which was commissioned by the legislature, was to determine whether we were investing an adequate amount of money in our schools to enable every student to reach grade level in reading and math. And the way that they did that study was to look at what successful schools invested in the education of students. And what they found in that 55 3/24/09 FISCAL STABILITY COMM. - RES. 090178 study that came to be known as the Costing-Out Study is that we need to invest an additional $4 billion a year from some source in order to adequately fund our public schools in Pennsylvania. 8 million students. But this one district, the School District of Philadelphia, educates 11 percent of all of those students: 1 out of 501 districts, 11 percent; that's 195,000 students. And we have particular challenges. Twenty-five percent of all low-income students in the State of Pennsylvania are educated by the Philadelphia School District.

Twenty-five percent of all English- language learners in the Commonwealth of Pennsylvania are educated by this one school district. Now, the Governor proposed last year that the State increase funding for the next six years, starting last year. 56 3/24/09 FISCAL STABILITY COMM. - RES. 3 billion in additional State funding. It was clear to us, when we looked at the revenue results for the Commonwealth in the fall, where the State's projecting that their revenues are actually going to be a billion-and-a- half lower this year than they were last year and with basically no growth next year because of the recession. We were very concerned about whether the Commonwealth could continue to support that level of investment. Thanks to the American Recovery and Investment Act, enough money has been provided to the State so that the State can make good on Year 2 of adequacy funding. The Governor has proposed an increase of $418 million to close the 57 3/24/09 FISCAL STABILITY COMM. - RES. 090178 adequacy gap, and this School District of Philadelphia would be entitled, under the formulas the Governor's proposed for allocating those funds, to receive $121 million, and that would be an increase of about percent in our State 8 funding. 9 In addition to that, under the 10 American Recovery and Reinvestment Act, we anticipate that the School District will receive about $244 million in additional federal funding: $81 million under Title I; that would be to improve instruction in high-poverty schools for low-income students targeted to those schools and those students. $21 million in IDEA Funds. These are federal special-education funds targeted to improving special-education programs and services to students with disabilities. In both of those categories, that basically represents a 50 percent 58 3/24/09 FISCAL STABILITY COMM. - RES. 090178 increase in funding over what we would normally be receiving. There's another $5 million we anticipate in additional funding for educational technology. And a one-time $137 million increase under what's called the State Fiscal Stabilization Fund, and that's basically to make up for increases that we otherwise would have received in local and State funding. And as I've noted, because of the weakness of the economy, out of local taxes, our school taxes levied here by you and the Council and the Mayor, we're short about $116 million, so that 137 actually helps us to replace that. Now, we will present our budget publicly in April. We recently briefed the Council on Imagine 2014, which is the School District's strategic plan. We've been asked, How will we use these funds? The answer is: We will use these funds to implement the School 59 3/24/09 FISCAL STABILITY COMM. - RES. 090178 District's strategic plan. The details of that we will make clear when we put our budget forward publicly in April. We will be here on May 11th and 12th to testify before you to present the budget and to show you where we are putting the Stimulus Funds into the budget. But I think you know already that our focus is on raising academic- achievement levels, especially for our lowest-performing students; raising our graduation rates; and increasing the equity and the distribution of our resources among our schools and neighborhoods. The challenge for us is the challenge that you've already noted in this hearing. The $137 million that I've identified to you is one-time funding. The other increase is in local funding for Title I and for special ed that we've been told we can count on for two years. And then the question is -- and for the increase in State funding that is 60 3/24/09 FISCAL STABILITY COMM. - RES. 090178 basically being supported by federal money provided to the State, all of that ends two years from now. Now, I heard Dr.

Schwartz say to you that he is optimistic that the Obama Administration will seek permanent increases in federal funding in many areas, including education, to basically pick up where the Stimulus funding leaves off. And that is certainly plausible. We would certainly support that. It is not a guarantee. S. Secretary of Education Arnie Duncan is: Spend this money quickly, spend it wisely, do not waste it, and understand that there is no promise that it is recurring. So that's the challenge for all of us. We think that what we need to do here in Philadelphia is spend this money in a way that will convince you on the Council, the Pennsylvania General Assembly, and the federal government in 61 3/24/09 FISCAL STABILITY COMM. - RES. 090178 Washington that increased investments in education will yield a return in terms of rising test scores, students staying in school, and rising graduation rates And for Dr. Ackerman and for the School Reform Commission and for those of us at the School District, that is the way that we're going to try to use these funds.

Thank you, sir. Mr. Greene.

Good afternoon, members of the Council. Let me begin by thanking Chairman Councilman Clarke and Vice Chairman Frankie DiCicco and other members of the Council for having me here today. And what I wanted to do is just talk a little bit about how we intend to spend the $90 million that we received in the Stimulus money. And I want to start off by saying, obviously, I thought that 62 3/24/09 FISCAL STABILITY COMM. - RES. 090178 Dr. Schwartz gave a good proposal, but I found it, you know, not quite accurate in many respects. And maybe at some point, we'll try to give Dr. Schwartz some corrected information to help correct the report to the Council that he provided. I think that there's a lot of excitement in the newspaper, and we're certainly, you know, excited at the Philadelphia Housing Authority to receive $90 million. But between 2001 and 2008, our budget was cut every year. In 2001, we had 2600 employees; today, we have 1150 employees. And in 2001, we served 50,000 clients a day; today, we serve 84,000 clients. And our wait list is just as long today as it was in 2001. So there still remains a long wait list for public housing, assisted housing, Section 8, the (indiscernible) tax credit program, and other programs. And we've been very fortunate. Over the last ten years, we've started 63 3/24/09 FISCAL STABILITY COMM. - RES. 090178 about two or three projects each year. Back in 2001, we started the Grays Ferry Redevelopment Project, which really was about a $200 million project. And in the same year, we started the Lucien Blackwell Project, in West Philadelphia, which was also a little over $200 million. So in that one year, we started $400 million in projects, a little bit more than the $90 million that we have here today. So I say that to sort of temper the argument. We were living off of some of the leftovers from the Clinton Administration, which, for its entire eight years, was very generous, you know, to programs that support low-income folks and that support our urban core. I say that in ten years, we've done about a-billion-5 in development. We're very fortunate. We've had to leverage our money. We raised about $300 million in private equity. We probably borrowed another $200 million 64 3/24/09 FISCAL STABILITY COMM. - RES. 090178 that's repayable by future federal appropriations. And we also were able to get various grants from the State and other folks and other private-investment partners that allowed us to leverage our funds that we were entitled to. So in that respect, we were able to demolish a number of developments across the City and rebuild others. But the inventory that we have is very long of old, outdated projects. We're one of the oldest housing authorities in the United States. We're the fourth largest, and we have the largest aged population of any housing authority in the country. So we have the highest on a national study of physical conditions of public housing done in the early 1990s. Philadelphia had the worst existing conditions, you know, of any other housing authority of its size, you know, in the country. And so, we start off with a tremendous amount of work before us. 65 3/24/09 FISCAL STABILITY COMM. - RES. 090178 And we have in our short-term plan -- and when I say "short-term," I mean about five years -- about $700 million in projects. And the $90 million we have today will help us in a lot of respects, you know, get started on those projects. It would certainly help us, but we do have about $700 million. We have a number of projects across the City in most of the Councilmatic districts, and we have some projects like Linfield in the Northeast that we want to, you know, demolish, and we were planning on having the private interest take over that site and do private-rate, market-rate houses in that particular site because that's what that community actually wanted and needed, and I concur. However, the market, you know, changed, and there's not a lot market- rate redevelopment being done.

But on the other hand, we have a number of projects in South Philadelphia, 66 3/24/09 FISCAL STABILITY COMM. - RES. 090178 West Philadelphia, North Philadelphia, where we still need additional money to do. So with the $90 million, we are able to do some of the priorities that have been laid out by the Secretary of HUD. And one is repaired vacant units. And we're going to repair about 300 vacant scattered-site units at about $100,000 apiece. Many of them have been vacant a long time. And we're going to also upgrade our infrastructure with respect to our heating distribution system. Many of our older complexes suffer from old boiler plants and weakened distribution systems for steam and hot water that heat these particular buildings. And so, we're going to upgrade those particular developments. And we hope to do some new construction of about 500 scattered sites and not quite funded with the $90 million, but we hope to be able to do 67 3/24/09 FISCAL STABILITY COMM. - RES. 090178 is that. So we have a number of projects at hand. We have another development at 22nd and Venango, in Donna Reed Miller's district, which is a development called Plymouth Hall that's been vacant for a long time, and we plan to repair that particular development. So, in addition to these particular projects, as I indicated, we have several other projects, which add up to about $700 million in projects, which, if we look at it, of course, between now and in 2016, could generate about 11,000 or 12,000 jobs. Now, do we have the money to pay for all those projects? No, we do not. But what we try to do at the Housing Authority is get the money we get, and then we try to apply for tax credits from the Pennsylvania Housing Financing Agency. We try to go through the government and get some capital dollars from the Governor's office. We try to go 68 3/24/09 FISCAL STABILITY COMM. - RES. 090178 to our state legislators and get some capital dollars from them. So we try to take our money and leverage it. We think that leveraging is the key to obviously making the most of this opportunity. So I want to sort of, I think, temper the remarks of the first speaker with respect to what we're doing at the Philadelphia Housing Authority. I want to say there's a great need. And I think that with respect to Councilman Jones' comments about permanent jobs, I think that -- I think it was Councilman Goode that talked about that too. I think that the only permanent jobs is through sustained long-term construction. You know, in our strategic plan, we have a number of projects. And we could start two or three of those projects every year for the next several years, like we've done over the last decade. Then obviously, each project produces 4 or 500 jobs during the 69 3/24/09 FISCAL STABILITY COMM. - RES. 090178 construction period. And that's the only way you have permanent jobs -- through permanent support from the construction industry. But the challenge is that this money is one-time money; it's not necessarily going to support a long-term construction program. So I think that from our perspective, we plan to spend the $90 million in short to repair and upgrade and enhance the vacant buildings that we own and improve our heating and air-conditioning distribution systems and to start partial funding for some new construction projects that we want to do with respect to vacant scattered sites that we're trying to do to support the Mayor's Initiative to move some of the homeless people off the street into other properties. And so, we think that we have a good opportunity, that it's a shot in the arm, but it will not restore us to the funding levels that we had in 2001, at 70 3/24/09 FISCAL STABILITY COMM. - RES. 090178 the end of the Clinton Administration. We will not be restored to those funding levels with a one-time $90 million, but I think it would allow us to feel the momentum and feel the participation in the President's Economic Stimulus Plan.

And with effective partnership and effective leveraging, we can do a lot more. But I think that only through and leveraging can we can gain more, but through the actual funding that's been provided here, it's just four or five basic projects -- upgrade, repair, we hire local contractors, they go in, they do the work, and those projects are over. But with respect to our strategic initiative that we have before us, with private partnership and proper leveraging, we can do a lot more through working with the State and the City and all of the other folks that support affordable housing and redevelopment. Thank you very much.

Thank you, 71 3/24/09 FISCAL STABILITY COMM. - RES. 090178 thank you very much. Mr. Casey.

Good afternoon, Councilman Clarke and other members of Council. Thank you for the opportunity to present testimony which SEPTA has taken to advance capital projects to be funded with the Stimulus dollars. The act approved by President Obama provided $8.4 billion for public transportation across the nation. The FTA has allocated -- the Federal Transit Administration has allocated these funds according to existing formulas. SEPTA will receive $191 million in infrastructure funding. And we knew at the time, back in the fall, that the Stimulus Program was coming down, but the numbers kept on changing. We actually have close to half a billion dollars' worth of projects ready to go. But with the 191 million, we identified capital projects. These 72 3/24/09 FISCAL STABILITY COMM. - RES. 090178 projects include: Station renovations and improvements; track and signal communication systems; upgrades; purchase of energy-efficient, environmental- friendly, hybrid buses. These shovel-ready projects 8 will rebuild and improve the existing 9 transit infrastructure, stimulate the 10 economy, create jobs, and advance the 11 Authority's environmental agenda. 12 Now, the projects within the 13 City of Philadelphia include: Girard and 14 Spring Garden Station renovation; the 15 Fernrock Yard, which is originally a yard 16 from the 1920s, total replacement of that 17 yard; 40 hybrid buses that will be 18 deployed throughout the City of 19 Philadelphia; replacement of the 20 right-of-way fencing along the R1 airport 21 line; replace the Fox Chase station on 22 the R8 Fox Chase line; a number of 23 station improvements throughout the R8 24 Chestnut Hill line; Telpehocken Station 25 building improvement; upgrade of the 73 3/24/09 FISCAL STABILITY COMM. - RES. 090178 signal-control system on the green line tunnel; and there's others many other smaller projects. In closing, SEPTA is well- prepared to advance these projects, I think the initial guidelines is to commit these dollars within 180 days. SEPTA will commit 90 percent of these dollars within that time period. So the total goal for SEPTA was if people were unable to use their allocation of dollars that we would be more than willing to step forward to advance projects to use those dollars, and we are prepared to do that. That's about it. We have a number of projects that are underway in our capital program, and we're just happy that these Stimulus dollars can help supplement our capital program. And thank you very much for the testimony [sic].

Thank you 74 3/24/09 FISCAL STABILITY COMM. - RES. 090178 very much, gentlemen. Mr. Masch, real quickly. It appears that based on the School District's portion, or proposed portion, of the Stimulus dollars, you have a little more flexibility than some of the other agencies. Most of these call for utilization and actual construction- related or capital-related projects, but it appears that you're able to apply to your operating budget; am I correct?

Yeah, Councilman, you are correct. And, of course, that presents us with even greater challenges. The State Fiscal Stabilization Fund money that I've referred to, that 137 million, school modernization is an option among other options through the use of those funds. But for the other monies, Title I monies are for operating, for services to low-income students. IDEA monies are operating monies for special education. And, certainly, the money that we have 75 3/24/09 FISCAL STABILITY COMM. - RES. 090178 received from the State in the basic education subsidy we've needed for our operating budget. And I hasten to add that we still need the Pennsylvania General Assembly to agree with the Governor's proposal.

Right.

And, as you know, that's a little nail-biter that we go through. Supposedly they get done by June 30th. Unlike you here, you finish your budget by the end of May, usually. They're supposed to be done by June 30th. As you know, I've had a little experience doing state budgets; none of the budgets I was involved with got done by June 30th. So it's very hard for us to plan. And will these monies be recurring or not? We have great capital needs, and we have great operating needs. We directly operate 261 schools. We have 320 buildings. 76 3/24/09 FISCAL STABILITY COMM. - RES. 090178 In the past six years, the School District of Philadelphia invested a billion-and-a-half dollars in improving those facilities. But the problem is, before that, before the School Reform Commission began in 2002 and Paul Vallas came as the school superintendent, the average level of capital funding for the School District was about $40 million a year, and that was completely inadequate. The average age of our building is 70 years. So we have a good $3 billion in additional capital projects that we would need to invest in in order to get our buildings up to a state of good repair. And that means we would really need to continue to invest 500 to $600 million a year if we were really to invest in all the buildings the amount that we need to get them up to the level that, well, they deserve to be at. So $137 million is a lot of money. But if we put it all into 77 3/24/09 FISCAL STABILITY COMM. - RES. 090178 modernization, it wouldn't begin to scratch the surface. And the problem is, normally, we would do school modernization with borrowed funds, with bond funds. Well, the impact on our operating budget if we borrow a dollar is about, you know, 8 cents a year for the next 30 years as we pay off the bond. If we use these funds for operating purposes; therefore, we get ten times the impact that we would get for using them for capital. On the other hand, capital is a one-time thing. You do it; it's one and done. You may have another building that needs repairs, but at least you've gotten that repair done. Once you've done it, you know, it's done and you can move on. So I will be honest with you: We are wrestling with the best balance in terms of using these funds between one-time expenditures and base building expenditures. If we use the Stimulus money and 78 3/24/09 FISCAL STABILITY COMM. - RES. 090178 put it into the base, the challenge is that three years from now, we may have to come here, to City Hall, and come to the State Capitol and the General Assembly and to the federal government and say, We've used this money, we've used it wisely and well, as you've ask us to. We've gotten the results. We have raised student achievement levels. I mean, if we don't do that, then we have not fulfilled our trust to you. That's our commitment, is to increase and accelerate the improvements in student performance that you've seen out of the School District in the past six years, but there is no guarantee that we will get replacement money. I heard Dr. Schwartz say that he believes -- and I won't dispute this. He believes that President Obama and the Obama Administration would want to maintain a higher level of federal support for public education than we have seen in the recent past. I have no 79 3/24/09 FISCAL STABILITY COMM. - RES. 090178 reason to dispute that. I also can't bank on it; it's not a guarantee. So when we come back to you in April and May and present to you our detailed plan for how we're going to expend these dollars, and then when we present our Five-Year Plan to you, which we intend to do in June, we're all going to have to look at, How do we leverage these dollars in the most strategic way possible? It's very challenging. Look, if it wasn't for the Stimulus, we would be looking at zero growth in the School District budget next year.

Neither the City of Philadelphia nor the Commonwealth would have the capacity, absent the Stimulus Funds, to permit us to make additional investments in our schools. So that's tremendously important. And that's why we say we are humbled, we are honored, we are grateful. But we're also challenged to figure out the best way, the best strategy, to make 80 3/24/09 FISCAL STABILITY COMM. - RES. 090178 the most of this opportunity that's presented to us.

Thank you. Briefly, Mr. Greene. Thank you, obviously, for your testimony and your continued great work in the City of Philadelphia. During the early stages of the proposals of funding being made available -- and one of the things that piqued my interest was the -- I think it's 90-something million on the PHFA and that the intent is to deal with some of the log jams associated with tax-credit deals. And I got in touch with Brian Hudson to talk about that, but I also wanted to talk to him about the possibility of working with the Housing Authority in your scattered sites initiative to build scattered sites throughout the City. And I see in your proposal that's in our document that you talk about essentially doing some 81 3/24/09 FISCAL STABILITY COMM. - RES. 090178 development across the City. And just to be very candid with you, I know that some of these areas -- and probably most of them, all of them to some degree -- would like to promote homeownership as the end of the game as it relates to providing an affordable unit for an individual. And in that conversation with Mr. Hudson, I had asked him about a model, that we had visited Cleveland a few years back about a lease-purchase program that involved tax credits. And to my surprise, he said they actually have two of them going on in the State of Pennsylvania. And I guess my question to you is: If we were schedule in initiating this scattered-site development strategy throughout the City, would you be interested in participating in, if available, tax credits that gave you an opportunity to provide a lease-purchase program that led to ultimate 82 3/24/09 FISCAL STABILITY COMM. - RES. 090178 homeownership for the tenant?

I have two comments. One, you know, we implemented the lease-purchase program as a part of our Grays Ferry program. We had units in that development which were a part of a lease-purchase program. So we have participated in the lease-purchase program before. And certainly we support that as a concept for -- as a creative financing vehicle for rental housing that can be converted into homeownership to create a more stable community and to give our home owners and the renters, until they become homeowners, a stake in the conditions of the neighborhoods, and that we believe that contributes to lower crime and lower maintenance costs, because people are out there, anticipating homeownership and keeping up their property. So we certainly endorse that. 83 3/24/09 FISCAL STABILITY COMM. - RES. 090178 With respect to our overall scattered-site strategy, it's a (indiscernible) strategy. It does contemplate a lot of coordination and cooperation with the City and the various City agencies and City-related agencies, where we have publicly-owned parcels and some additional acquisitions. And it's a program similar in scope to what we did under the NTI Program of acquiring parcels and assembling parcels. And a lot of parcels are already owned by the public sector, but then there are a lot of parcels, in order to create these developable parcels to make for nice projects, there's still a lot of parcels that need to be acquired. So we are sort of optimistic that with the good will of this committee and the City that we could do a number of those projects along with support from PHA and the federal government.

Okay, thank you. 84 3/24/09 FISCAL STABILITY COMM. - RES. 090178 So it sounds to me that as a part of your strategy, that in order for you to build out to its full capacity, we in the government need to ensure that we get our acquisition issues resolved as soon as possible 'cause that is time-consuming in itself.

Well, I think that that's certainly a part of it. But another part, you talked about the flexibility and the funds that they have at the Pennsylvania Housing Financing Agency. The Pennsylvania Financial Housing Agency has three things going: They can buy back existing credits from '07 and '08 at 85 cents on the dollar and cash them out at the Treasury window at the Treasury. So that's really something that none of us at this table have.

Right.

The ability to go and take a voucher down to Treasury and get cash on the dollar, you know. So 85 3/24/09 FISCAL STABILITY COMM. - RES. 090178 that's something they have. And also, they have the ability -- they got $95 million in money to deal with gap funding on deals that are underfunded. And in '09, they have -- 40 percent of their tax credits can be cashed out at a Treasury window. And one hundred percent in '07 and '08 deals that aren't closed can be cashed out at that Treasury window. So PHA has a lot more flexibility, and we think a more strategic view of how we tap into that certainly would be helpful. And sometimes for the Housing Authority, because we have projects that expand the entire city, people look at us as one developer, so one developer gets one project. Well, I have ten Councilmatic districts, and I may have at least projects in five or six of those districts at any given time. So if I do one project per year and they're only 86 3/24/09 FISCAL STABILITY COMM. - RES. 090178 have one funding round per year, we never really accomplish the strategic objective outlined in our document. So it's important that the PHA and, you know, in partnership, you know, with the City, be able to do more than one project at one time in order to accomplish these objectives. So that, along with acquisition, along with trying to make sure we're working closely to strategically get some of the PHA resources to help solve some of the funding gaps in our plan.

Thank you. Any questions? Councilman Goode.

I'll try to be quick. Back to the issue of jobs. And, Mr. Greene, in your comments, you testified that you view a construction job, if there's a sustained period of construction, as a permanent job. The purpose of my question is: One, to 87 3/24/09 FISCAL STABILITY COMM. - RES. 090178 isolate whether there's going to be a net gain in private-sector jobs, but how do you want to categorize it? It's a question that goes to all of the members of this panel and the other people that may come before us. Is this meant to produce, the money that will flow in Philadelphia, a net gain in jobs? Or is the purpose of this to put people back to work? And if it's meant to create a net gain in jobs, how many new jobs will it create?

Well, in the proposal that I passed out, there's a detail, a job estimate on each one of the projects. And I can certainly go through that. But to answer your question, in short, you know, I think the way you structured the question, initially, does this program produce long-term, permanent jobs? Then the answer is no. 24 And -- and -- but if -- if in our strategic view -- and I think even 88 3/24/09 FISCAL STABILITY COMM. - RES. 090178 Mike Masch talked about it, how he has a lot of work to do over many, many years. So we all have a lot of work to do -- at least we do at housing -- over many, many years and so if are -- if we have projects that we start this year and we leverage our dollars and we start projects next year and next year and next year, I mean, what we've seen in all the construction projects we have, it's great permanent private-sector jobs or the construction companies that do work and their suppliers that do work and the law firms that put together the deals and the financial folks that do the analysis of the deal and all of the support personnel, the restaurants and the places where the people go to eat and so on and so forth while they're doing the job. So there's really two answers. One: In a single project-basis, then the project starts, the project's over, no 24 long-term permanent jobs. But in a realistic world, where we have a lot of 89 3/24/09 FISCAL STABILITY COMM. - RES. 090178 deferred need, we have a lot of capital -- unmet capital needs, then we can find a way, as we've done over the last decade, of continually doing one project this year, two projects this year, two projects next year. One of our philosophies here has been that we try to conclude two projects and start two projects every year. If we are able to continue with that, then there is permanent employment and private-sector employment through all of the folks, from legal to financial to suppliers to construction companies to the service industry, restaurants, and food preparers and all uniformed companies and all of the folks that can support a large-scale construction program.

But my question, Mr. Greene, was whether there is a net gain or whether we're simply putting people back to work. I'm extremely appreciative of 90 3/24/09 FISCAL STABILITY COMM. - RES. 090178 the work that the Philadelphia Housing Authority does. I'm appreciative of the work that's done in terms of new construction and what it means to the City's economy and the State and national economy. I would be even more appreciative of it if those construction jobs were going to Philadelphia residents and reflecting the demographics of Philadelphia. And that's an issue in and of itself, because even if you're simply putting people back to work, in many cases that may mean that Philadelphians are not getting the jobs in terms of these construction jobs. But I'm even asking in terms of workforce hours. Is this going to reflect a net gain in terms of workforce hours?

Well, you know, I mean I could -- you know, it's a tough question for me to answer. You know, if I were doing the analysis of all 91 3/24/09 FISCAL STABILITY COMM. - RES. 090178 construction in the City of Philadelphia, I would be in a better position to answer that.

I'm asking about the dollars that your agency will receive, if they will actually produce a net gain in jobs and workforce hours. 'Cause as we're holding the hearing today -- and this is federal money coming to the State and money going to a State agency. But we're sitting in City Hall, and my constituents want to know whether that's going to mean new jobs for them or the potential for new jobs for them. And so I'm simply asking the question as simply as possible: Are these construction jobs, are these permanent, private-sector jobs? At the end of the day, will this mean a net gain in jobs from last year?

You know, I think that the dynamics of that question are beyond my ability to give you a short 92 3/24/09 FISCAL STABILITY COMM. - RES. 090178 answer because it is a multi-dimensional question because there are several -- (Indiscernible; parties talking over each other.)

Let me finish here, Councilman --

A net gain --

-- because there --

A net gain is actually a number.

No, because you're talking about construction that starts and stops, and you're talking about new employment, and you're talking about reemployment. So there were several dimensions to your question, and so there are several dimensions to the answer. There's not a simple answer to that question.

And I tried to simplify it by saying if you wanted to calculate it in terms of workforce hours, do you believe there's a net gain in terms of construction workforce hours? 93 3/24/09 FISCAL STABILITY COMM. - RES. 090178

Well, the $90 million will be a net gain for that $90 million. But then I did three projects last year. I did three projects close to $200 million last year. I mean, so will it be a net gain if I don't do the $200 million in projects this year? It will be a net decrease if I don't do $200 million worth of projects this year. Last year, I did a project in North Philadelphia called Ludlow, one called Nellie Reynolds Gardens, and one in West Philadelphia called Marshall Shepherd Square. And those four projects probably had 4 to 500 jobs apiece. And this year, I've started one project in North Philadelphia called Warnock Street.

Mr. Greene, Mr. Greene, do you know how many construction work hours were worked in 2008 through PHA projects?

I mean, I don't 94 3/24/09 FISCAL STABILITY COMM. - RES. 090178 think I can give you a report on how many construction-work hours, but I still think your questions are much more -- the answers to your questions are much more complex than you pretend they to -- than you propose them. (Indiscernible; parties talking over each other.)

It's a much more complex situation.

If you don't know, then you can submit through the chair how many construction workforce hours were worked last year for PHA projects for 2008, how many workforce hours were worked by Philadelphia residents, and how many are projected to be worked in 2009. And that would tell you whether there's a net gain, and that would definitely also give us probably some sense of whether there's going to be a net gain in terms of workforce hours worked by Philadelphia residents. 95 3/24/09 FISCAL STABILITY COMM. - RES. 090178 Thank you. Thank you, Mr. Chairman.

Thank you.

Thank you. Councilwoman Tasco.

Well, it seems to me that you answered the question in your testimony. You talked about all of the work that you did in 2001 and 2002 on the Clinton Administration in terms of the dollar-amount and the workforce. Then your workforce was downsized from 2000. I don't know if it was to maybe 1100 people. But with $90 million, you're going to have less funds, so you won't have a net gain 'cause you're probably going to call some of those people who were laid off back.

That's correct.

Right. That's not my question. I'm us just trying to be smart, showing my 96 3/24/09 FISCAL STABILITY COMM. - RES. 090178 intelligence. (Laughter.)

Let me just announce this: Those people who were here for the Parks and Recreation hearing, that's across the hall, if you're here for the Parks and Recreation hearing. You talked about Section 8 and restoring those buildings. Do you own buildings that you rent out through Section 8? I thought basically the Section 8 housing was provided by private owners and rented out through you, you know, whatever that process is. I didn't know that PHA owns those buildings, those houses because you talked about rehabbing them.

Your statement is correct. We -- the buildings that -- we -- your -- as you stated, the Section 23 8 pro -- described the Section 8 program, that is correct.

Mm-hmm. 97 3/24/09 FISCAL STABILITY COMM. - RES. 090178

The scattered-site properties that I talked about rehabbing are actually buildings that we own.

Scattered- site?

Right.

Okay.

These are scattered-site, these are individual rowhouses located mostly in West Philadelphia and in North Philadelphia.

I'm sorry. I thought you had said "Section 8." I can understand scattered-site. Okay. Thank you very much. Mr. Casey, how many jobs do you think you will generate through -- you generate new positions through your activity with the Stimulus dollars?

Yeah. The Stimulus dollars will directly create 1900 construction jobs and about 900 manufacturing jobs. On top of that, there's about 28 flow-down jobs, whether 98 3/24/09 FISCAL STABILITY COMM. - RES. 090178 it's restaurants, you know, other, you know, other industries supporting, you know, those jobs, that job creation.

Well, I know that this is not the forum for my comment, but I -- while we have you here in this captive audience, I do want to express my concern about the design -- some of the designs that you have -- SEPTA has put forth on these terminals or some of these covers. I think they could be a little more creative and really tied into probably the solar panels or green or something, but they're just -- they're just unattractive.

Are you talking about along Broad Street?

Yes.

North broad?

Yeah. So if you're going to do something, I hope that you all would be a little more creative in the design of the -- of whatever you do. 99 3/24/09 FISCAL STABILITY COMM. - RES. 090178

I'll have to talk to my engineers about that. Thank you.

You know, you need to get a more hip architect, you know. I want something to not look so ugly. Thank you.

Thank you.

Thank you, Councilwoman. Councilman Green.

Thank you. Thank you to all three of you for coming to testify today. Mr. Masch, it's nice to meet you. You mentioned that your revenue, based on the City's assumption for the real-estate tax receipts for 2010, is going to be down 120-or-so million dollars less revenue from the City than you were calculating as you were looking forward last year or the year before. Do you agree with the City's estimate of those receipts, or do you 100 3/24/09 FISCAL STABILITY COMM. - RES. 090178 have your own opinion about what might actually occur in the next year and the year after, et cetera?

We have not formulated our own independent opinion yet. Let me clarify, first of all, that we receive about $800 million from what I'm going to call "local City sources." Of that amount, about $600 million is from the property tax, the real-estate tax, our share of that tax; that's a tax shared between the City and the School District. We also receive funds under what's called the business-use and occupancy tax; that's about another $105 million. Both of those taxes are dependent on property-tax assessments. The other local funds that we receive, thanks to this Council, are the liquor-sales tax, the school income tax, and then the grant that comes directly from the City budget. Those sources in 101 3/24/09 FISCAL STABILITY COMM. - RES. 090178 total make up about $800 million. As I said, the growth there has been about percent a year, so we would 5 have seen about a $40 million growth this year, and then next year, another 40 -- that 40 repeated, and then another 40 on top of it. So that's how I get about 120 million --

Okay.

-- as what we would normally expect in a non-recessionary economy. In terms of what we receive from the two major sources -- the real-estate tax and the use-and-occupancy tax -- is dependent on two factors: The assessments, which are carried out by the Board of Revision of Taxes, and then the collection rate. Well, we know that assessment growth was very minimal this year. The Board of Revision of Taxes did not assess properties upwards net, and that's not 102 3/24/09 FISCAL STABILITY COMM. - RES. 090178 surprising, given the real estate market. Now, I've been looking at these numbers for the past couple of years, and we clearly have not suffered as much as some other cities. We didn't see the dramatic appreciation in property values that other cities did, so we're not crashing as much. But it's a very slow period in terms of appreciation of residential, commercial, and industrial property values. So we don't see growth there. And the numbers that we got from the City, which we only received last week, when they finalized their numbers to do the City budget, were slightly more pessimistic in terms of collection rates. That does not seem to be an inappropriate assumption, given the economic conditions that we are facing right now. When the economy gets tough, then tax delinquencies go up. We know that some -- unfortunately, some of our property 103 3/24/09 FISCAL STABILITY COMM. - RES. 090178 owners -- and, you know, we have about a half a million separately-assessable properties in the City of Philadelphia. A small fraction, just a couple of percentage points in terms of property -- specific properties account for about 50 percent of the value, the big skyscrapers and all of that. But the other half is all of those individual homeowners. And some of those people are obviously under stress. And when they're under stress, they're not going to make their payments; and when they don't, we are going to see an increase in foreclosures. Now, we have been praised here in the City of Philadelphia appropriately for being one of the leading cities in terms of mortgage distress mediation. And the Sheriff's Office and our courts and, frankly, the private sector deserve a lot of credit for that, but it's still -- what it's doing is meaning that we're not seeing as weak a property 104 3/24/09 FISCAL STABILITY COMM. - RES. 090178 market as in some other cities, but certainly weaker than we've seen in the past. Frankly, if anything, I'm concerned that the numbers that have been presented to us by the City could be overly optimistic. The numbers that I think have been presented now will hold up if we see economic recovery in the near term. Now, that's everyone's goal. The federal government, the State government, and I know you here in Council and Mayor Nutter, our goal is to do what we can in the public sector and partnering with the private sector to turn the economy around, to end the recession, and to see growth in jobs, in property values, in sales transactions. All of that. But if that doesn't happen, then we could see even worse numbers in terms of what actually happens with property tax collections, 'cause we're talking 105 3/24/09 FISCAL STABILITY COMM. - RES. 090178 about the collections that will occur next February on the bills that will be sent out next fall on the assessments that will be carried out by the BRT this coming summer. So all of that is speculative to some degree.

So following up on that, would you foresee that a percent increase in overall 12 real-estate taxes in the City of 13 Philadelphia, which is proposed for next 14 year, will increase delinquencies or 15 collections, which would impact the 16 School District greater than if we left 17 real estate property taxes where they are 18 today? 19

I have to be candid with you and say that those policy matters are ones that the School District does not believe it's appropriate for us to be opining on. I would just note in a --

I'm just 106 3/24/09 FISCAL STABILITY COMM. - RES. 090178 asking you a numerical -- like whether or not, in your experience at the State level, at the City level, an increase in taxes of percent will result in 6 increased delinquencies, and then I can, 7 I guess, make the logical conclusion that 8 that will negatively impact the School 9 District's revenue. 10 I'm just asking you to answer 11 the -- 12

I want to answer it 13 at a very, very high and general level. 14 The challenge that you face 15 here, in this chamber, is which -- in a 16 period of economic recession, which thing 17 will hurt the prosperity of the City, the 18 well-being of the citizens and the tax 19 base more: cuts in services or increases in taxes? Our citizens are dependent on the services that you vote for and that the City government provides, including the services of our public school system. And we have some of our citizens who have 107 3/24/09 FISCAL STABILITY COMM. - RES. 090178 a choice in terms of whether they continue to reside in the City or relocate. So these are -- you know, the members of the Council know that I used to work for the City Finance Department, I used to work for the Office of the Budget in the Commonwealth. I understand that these are excruciatingly difficult decisions. In general, my view is that the public services that we provide are essential to the citizens that we serve. Cutting back services is not a trivial matter and can have an impact on residential location, particularly when people have options. And yet, we also know it's no 20 secret that in the aggregate, the tax burden on Philadelphians is higher than anywhere else in the Commonwealth, not primarily at this point on the property tax. And even with the cuts that have been made -- both the cuts that have been 108 3/24/09 FISCAL STABILITY COMM. - RES. 090178 made unilaterally by the City and now the cuts that are made possible by the gaming revenues that are starting come in from the gaming economic development and tourism funds and property tax relief, that results from that, we have, still even with everything that's been done from 1994 to the present on reducing the wage tax and reducing the business tax, we still have a relatively higher tax burden in Philadelphia than we have anywhere else in the Commonwealth. So these are tremendously important decisions for the City's future, and I understand that you're wrestling with it and why you're asking for the advice that you are. But we, in the School District, are a partner with you, in the City, a partner with the Mayor and a partner with the Council, and we are simply grateful that in this very difficult period, thanks to the Stimulus funding, both channeled through the Commonwealth and directly received by the 109 3/24/09 FISCAL STABILITY COMM. - RES. 090178 School District from the federal government, we will be able to make additional investments in public education. We will not have to cut back on the schools. We will not make your problems worse here in the Council as you wrestle with what to do with the City budget. We will not have to ask you for a tax increase in order to avoid cutbacks in our investments in public schools. And I think we're all relieved for that.

Okay. Well, thank you for the answer to my question. Next time that you don't want to answer a question, if you could just say, "I don't want to answer that" rather than spend five minutes saying the same thing, I think we'd all appreciate it. (Laughter.)

So I won't press you on the point. I appreciate that. 110 3/24/09 FISCAL STABILITY COMM. - RES. 090178 So there will be -- so based on your testimony, I was confused by the two numbers. There will be a net increase in spending by the School District as a result of what the Governor and the General Assembly is doing for us of, say, that 137 minus the 40, based on City projections. So you're actually going to have 97 million more dollars a year to spend next year; is that --

Right. We basically have zero growth from local sources where, normally, we would have growth. We'll have about a hundred million increase net in State funding because of about 120 million increase in the basic education subsidy, an increase in charter school subsidy, but a cutback on alternative-ed funding in some of the smaller programs in the State budget, Classrooms for the Future, and some of the others that the Governor's cutting back on next year, and then about $240 million in nonrecurring, as far as 111 3/24/09 FISCAL STABILITY COMM. - RES. 090178 we know, Stimulus funding. So it nets for the School District to about $320 million, a 5 percent increase in revenues next year. 6

That's 7 fabulous. Use it well, use it wisely, as 8 wisely as you can. 9 I also wanted to point out to 10 you that you have many of your employees, 11 as you know, that work for the BRT. The 12 BRT did like 18 or 30,000 assessments 13 last year. The year before that, they 14 did over 300 or 400. 15 There are many homes in this city that, even though the general market is off, are under-assessed. So if you could get your School District employees to start doing reassessments of those homes that are undervalued rather than having them wait, I think we could also make sure that there's an actual local increase. In other words, part of the problem is a management problem, not a 112 3/24/09 FISCAL STABILITY COMM. - RES. 090178 revenue problem. We should be doing many more assessments every single year, in fact. I mean, so you do have employees there. Hopefully maybe you can have an influence on the BRT in terms of getting people to actually do assessments again. While I recognize we're going to go to a different system next year or the year after at full value, but we still need to continue with the assessments while we wait for that process, and that means real money. The second --

Councilman, I want to be clear. It is true that about 40 percent of the employees at the Board of Revision of Taxes are funded out of the School District budget; the other 60 percent of the employees are funded out the City budget, because the assessment function is of benefit to both the City and the School District --

Right.

-- since we both 113 3/24/09 FISCAL STABILITY COMM. - RES. 090178 receive the property taxes.

Right.

But we do not supervise those employees.

I understand, but you send them money so maybe you can talk to them about that. People generally respond to -- except, I guess, the BRT doesn't seem to respond to City Council, and we give them money, too. But the other thing I will note is, there are many, many, many properties where the business and use tax has not been increased because -- and some of these properties are quite valuable. They received a 10-year tax abatement. And, for some reason, the assessors, because there's a tax abatement on it, didn't increase the business and use tax. Obviously, that was not abated. I'm aware of just several properties that mean millions to the School District. They're in Center City and elsewhere. 114 3/24/09 FISCAL STABILITY COMM. - RES. 090178 So I would suggest that you should be pushing the BRT to go back and look at every abated property for the past ten years and see whether or not they can reassess based on the current fair value of business-and-use taxes. It's my understanding that you can go back to property owners for six years and recapture that money. And I think that would be a significant source of revenue for the School District. It doesn't impact the City at all because that's not your tax. But there's lots of money there, and all you have to do is look at the properties that have been abated and see whether or not the business-and-use tax has been set at the new value. They just haven't been doing the assessments on those buildings. And that's affected you negatively in terms of significant income, probably on the order of in excess of $10 million a year.

Thank you, 115 3/24/09 FISCAL STABILITY COMM. - RES. 090178 Councilman. That's a very useful suggestion, and we will look into it. I do want to tell the Council that the Nutter Administration and the Ackerman Administration have agreed that because we jointly fund the board, we've agreed that the City Finance Director, Rob Dubow, and I are going to do our budget reviews with the Board of Revision of Taxes jointly with the City and the School District together. So when we meet with the board and their executive director, this is an issue I'll be sure to bring up. Thank you.

Great. Thank you. I just want to commend SEPTA for the great job you've done. You're a national model, you're getting national press for the way you've stepped in front of the Stimulus Program. And I think all of Philadelphia and the surrounding counties should be proud of the job 116 3/24/09 FISCAL STABILITY COMM. - RES. 090178 you're doing getting as much money as you're getting here to the City of Philadelphia. Similar kudos to Mr. Greene. Thank you.

Thank you, Councilman. Gentlemen, I'm going to have to run across the hall to my other obligation as a member of the Parks and Recreation Committee. Before I do that, I just want to say that the next witness will be Mr. Rob Dubow, the Finance Director for the City. Mr. Dubow is here because the point person for the City, who is Mark Allen Hughes, is unavailable for this hearing. And as I said earlier in my testimony, we'll probably do some follow-up -- well, not probably. We will do a follow-up hearing to discuss in levels of details that I think that we are all interested in hearing about the City's response. 117 3/24/09 FISCAL STABILITY COMM. - RES. 090178 But the Administration wanted to make sure someone was here, so Mr. Dubow is going to come up, and I guess I'm kind of asking us to take it easy on him, because this is not necessarily his field of expertise as it relates to the Stimulus. And I'm going to right now turn it over to Councilman DiCicco to vice-chair the committee. And I'll be back.

Thank you, Mr. Chairman. I do have one question for Mr. Case as it relates to the question that was posed by Councilwoman Tasco. I wasn't clear. When you talked about the 1900 construction jobs, there were 700 other jobs? I don't remember.

I said about 900 manufacturing jobs.

Okay, manufacturing jobs. What's the connection when you say "manufacturing 118 3/24/09 FISCAL STABILITY COMM. - RES. 090178 jobs"?

Well, the construction is actually, you know, building, and the manufacturing is the support for building, the supplies.

Okay.

For instance, part of the order is for buses, 40 hybrid buses. Well, those would be considered manufacturing jobs.

Okay. So those are great jobs and there's a good number of jobs, but they go away once the project is complete, once the construction is done, once the building of the buses is done. You mentioned something about restaurants?

I'm just saying there's induced jobs. You create jobs, you put money in people's pockets, they're going to spend money at restaurants, they're going to --

Understood. 119 3/24/09 FISCAL STABILITY COMM. - RES. 090178

-- buy houses. And there's a side effect.

Okay, I understand that. My question was -- and I think this is where the Councilman was going -- are there any sustainable jobs that will be created as a result of the improvements, which are needed? And I agree with Councilman Green about the job in getting ahead of a lot of other transportation authorities in this country. But are there any sustainable jobs? And in addition to hybrid, which are environmentally-friendly -- and I'm not going to bring up the line, which 19 I always do, but I'll bring it up at a 20 context of electrified vehicles. Are 21 electrified vehicles, whether it's the 22 trolley or the trackless trolley -- I 23 always forget the number which is on the Morris-Tasker Street line, as an example. Are they not more energy-efficient in the 120 3/24/09 FISCAL STABILITY COMM. - RES. 090178 long run as opposed to the hybrid? And would they create sustainable jobs? Because if memory serves me right, when you have the electrified systems, the trackless trolley, there are substations --

Yes.

-- which employee people to operate 24/7. So, again, I'm not being critical of what you've done and the good work you plan on doing. I'm looking for things that may be more sustainable and creating jobs that will continue to be within SEPTA and within the City of Philadelphia.

One of the things that we did is -- two of the projects, the Girard Avenue and Spring Garden projects, those are already in the capital (indiscernible). And what that will do, we're using Stimulus dollars to create that project, and it will create funding to advance other capital 121 3/24/09 FISCAL STABILITY COMM. - RES. 090178 projects. To ask about the trolleys and the trackless trolleys, I know it's an interest of Rina Cutler, Deputy Mayor of Transportation, to advance some of those projects. And I've agreed to work with her to support her efforts in that area.

Good luck. I'm sorry. So there's a possibility, then, that there may be electrified vehicles, or is that --

Yeah, none in the Stimulus Program, but --

None in the Stimulus, but going forward.

Our board, a couple years ago, voted not to exercise the option on the trackless trolleys for South Philadelphia, but I agree to revisit that topic.

I would appreciate that. Thank you. Any other questions? 122 3/24/09 FISCAL STABILITY COMM. - RES. 090178 Councilman Goode.

Just quickly. Mr. Casey, for the job numbers that you gave us, are they for Philadelphia, for the region, or broader than the region? And are there Philadelphia projections in terms of job numbers?

I don't have Philadelphia numbers, but I will tell you, when the federal government -- all of the rules apply for the federal governments as far as DBE requirements and some of the other rules. And what we had is, we had a -- so all of the jobs have DBE goals. And what we had is a get-together with all the DBE community and also the prime builders, construction builders. And we tried to, you know, describe the jobs and let 'em know when it was coming up. And it was more of you will a meet-and-greet so can form partnerships to bid on these jobs. In addition, we're working with 123 3/24/09 FISCAL STABILITY COMM. - RES. 090178 the Philadelphia Urban League, Philadelphia Urban Affairs. And what we're looking for is assistance in helping us. We'll handle the DBE portion, but we're looking for assistance to help get the jobs where the people need them on these construction projects.

Thank you.

Any there other questions for these witnesses? (No further questions.)

Thank you, gentlemen, appreciate your time. PANEL MEMBERS: Thank you.

As mentioned, the next witness will be Rob Dubow, the Finance Director. (Witness comes forward.)

Good afternoon. I'm Rob Dubow, the City's Finance Director, pinch-hitting here today for Mark Allen Hughes. Thank you for the opportunity to report on the efforts of the City to make 124 3/24/09 FISCAL STABILITY COMM. - RES. 090178 the best use of President Obama's Recovery Act. The act, formerly known as the American Recovery and Reinvestment Act, often called the Stimulus, or, as we do, the Recovery Program, is designed to reserve and create jobs and to prepare for a greener, smarter, and fairer future when the economy improves. Mayor Nutter was in Washington on the day the Recovery Program was passed at a conference committee in Congress and (indiscernible) final form of legislation. From that day forward, we have actively prepared for the new opportunities and responsibilities that the recovery presents. Here are a few of the things we did. We worked closely with White House staff and, as a result, Philadelphia was selected as the site for last month's meeting of Vice President Joe Biden's Middle Class Task Force focusing on green jobs and recovery. Last week, we participated in a 125 3/24/09 FISCAL STABILITY COMM. - RES. 090178 briefing for cities at the White House with over a dozen federal agencies, who will be distributing the dollars. And this week, we're convening government and other partners from across the region to prepare the strongest possible applications for the competitive grants being allocated in coming months. But as significant as the recovery is, these funds will not solve our General Fund budget challenges. There are a number of reasons for this. All of the money is for one-time funding that is best suited for one-time investments that will return years of value rather than for expenditures that will continue to be local obligations once the recovery money is used up. A majority of this money goes for programs that are paid for by budgets other than the General Fund. And we've heard about some of that today -- the School District, the Housing Authority, and SEPTA. 126 3/24/09 FISCAL STABILITY COMM. - RES. 090178 The majority of funding opportunities for the City and the recovery are competitive or discretionary programs, which means that we cannot be certain of what funds come to us. And many details remain undecided for the use of these federal funds. We will know more in April and May, but we must proceed now with responsible budgeting based on reliable sources of funding. Let me offer one example related to one of the most talked-about in the recovery: weatherization. S. Department of Energy's Weatherization Assistance Program has traditionally provided small amounts of funding to the Pennsylvania Department of Community and Economic Development to provide grants to Philadelphia agencies and nonprofit providers such as the Energy Coordinating Agency. The Recovery Act increases the amount of funding available for weatherization dramatically. 127 3/24/09 FISCAL STABILITY COMM. - RES. 090178 The $250 million that Pennsylvania is expected to receive for weatherization is more than all of the states together usually receive in a typical year. At the same time, the dollars have increased, and the rules for dispensing the dollars are likely to change, too. In Washington, the Department of Energy is considering making direct grants to cities rather than sending all of the money to the states for their discretionary allocation. Harrisburg is deciding whether weatherization funding should be expended through a different department and under different rules from how it's done now. The bottom line at this time is that no one knows enough about most of the recovery dollars for cities to budget around them. This is especially true for us where we must justify our budgeting assumptions under five years to PICA. What is also clear is that 128 3/24/09 FISCAL STABILITY COMM. - RES. 090178 recovery dollars will have the most demanding reporting requirements ever placed on federal funding.

Even new money added to existing programs such as CDBG will have extensive new accountability measures attached to every penny. An inspector general has been assigned to each federal funding program in the Recovery Act, all 198 of them. com website so that every project supported by Stimulus dollars can be monitored by watchdog groups and citizens. We have assembled a working group and a working estimate of local funds that we may expect through formula allocations. 5 million under five formula allocations. However, most prohibit supplantation, which means that we're not allowed to reduce local or State funds for an activity specifically because 129 3/24/09 FISCAL STABILITY COMM. - RES. 090178 federal funds are available to fund that same activity. Instead, federal funding generally must be used to supplement existing State or local funding, and then you can see the testimony has a table showing the various pockets of funding. In addition to these formula grants, we've identified competitive 10 or discretionary funding opportunities 11 for which the City is an eligible 12 applicant. Of course, these funds cannot 13 be counted on in the budget processes 14 'cause we can't guarantee that we will 15 win the competitions. 16 For example, the COPS Recovery 17 Program dollars will be awarded through competitive grants. The program has been specifically redesigned to prevent layoffs and allow rehiring of police officers due to local economic conditions. We will apply for the maximum number of officers to replace our attrition and maintain our force levels. In addition, more than 130 3/24/09 FISCAL STABILITY COMM. - RES. 090178 $150 million will be invested in Philadelphia's transportation infrastructure. The majority of these dollars come to the City, SEPTA, and PennDOT through existing formula programs. These formula dollars will be invested in City, transit, and regional rail, critical maintenance of our regional assets the Girard Point Bridge on I-95, and repaving streets. Additional competitive dollars are available for airport projects and some transit projects. 6 million is being used to repave City streets. And the airport is prepared to submit applications for competitive funding. We are also not allowed to use this money for supplantation. Finally, there was one incident where government-related agency budgets helped us to restore our spending cuts 131 3/24/09 FISCAL STABILITY COMM. - RES. 090178 that was made in the current proposed budget. Recovery funding for additional employment and training through the Philadelphia Workforce Investment Board allowed us to use $500,000 per year for two years for summer youth employment that otherwise would have gone unfunded. Those funds were added to our Five-Year Plan largely because the funding formula for (indiscernible) was done quickly and under existing guidance. These funding opportunities will become clearer over the coming weeks and months. 5 million may be used to supplant, and even that's unclear pending State and federal guidance. However, it's already clear that while the Recovery Act will ultimately help the City to get through the biggest recession in at least a half a century, it will not solve our recession-related budget crisis. 132 3/24/09 FISCAL STABILITY COMM. - RES. 090178 Thank you. And I'd be happy to answer any questions I can. I understand that we'll be coming back next week, and there may be more details that Mark can provide at that time.

Thank you, Mr. Dubow. Any questions? Councilman Green.

I just want to thank you for coming over to testify today, Rob.

Thanks for having me.

Thanks, Rob.

Thank you.

The next panel will be Ernest Jones -- UNIDENTIFIED SPEAKER: He had to leave.

He left. Katrina Schwartz and Leanne Krueger Branake, is it? And James White. 133 3/24/09 FISCAL STABILITY COMM. - RES. 090178 (Witnesses come forward.)

Who will be first on your panel to go?

Sure, I'll go. I'll go.

You are?

Katrina Schwartz.

I was reading your written testimony.

Mm-hmm.

It's rather lengthy and I'm certain that it is very important. If you can summarize, though, that would be greatly appreciated on each of the topics as you go through them. That might be helpful.

Sure. First, I'd just like to send Liz Robinson's apologies for not being able to be here. She's the executive director of ECA, and she had to be in Harrisburg today, talking with other weatherization assistance program directors about how to ramp up that program, and you've heard a 134 3/24/09 FISCAL STABILITY COMM. - RES. 090178 little bit about that already today. ECA is one of the administrators of the WAP program, which you heard, it's -- the income guidelines have been increased to 60 percent of median income, which means that we're reaching well into the working poor as people that we can reach with the program, which is wonderful, especially because of the increased funding. The program has been funded at $5 billion nationally under the Recovery Act, and ECA expects that expansion to be considerable. So we're working really hard to make sure that that happens well and efficiently. And the benefits of that obviously are financial stability for the homeowners who have their homes WAPed. It lowers Philadelphia carbon footprint and also creates green-collar jobs, which, I think, is probably what you're more interested in. ECA is anticipating doubling our 135 3/24/09 FISCAL STABILITY COMM. - RES. 090178 staff, so that means hiring another hundred people to be auditors, air sealers, insulators, carpenters, heating technicians, inspectors, and intake staff. And these are all the people that make this program happen. So additionally to WAP, there are several areas in which energy efficiency in buildings is really important. There are opportunities for that in the retrofitting of public housing, Section 8 housing, the Neighborhood Stabilization Program, Title I, the Energy Block Grant, and the State Energy Program. So I would encourage you to consider energy efficiency as an element to all of those other programs too. So the Stimulus Fund is an unprecedented opportunity for Philadelphia to invest in retrofitting and improving our housing stock and to prepare for the era of expensive energy in which we now find ourselves. In order 136 3/24/09 FISCAL STABILITY COMM. - RES. 090178 to maximize the potential benefit to the City, we need to meet all of the following challenges simultaneously: The most important one is training. So there are simply not enough skilled energy-efficiency technicians and installers. And this is a problem that we're facing across Pennsylvania. S. Department of Energy, for the past year-and-a-half, ECA has been training energy auditors and raters to the national certification standards BPI and HERS. Currently, there's only one weatherization training center in Pennsylvania, and that's in Williamsport. This facility is currently completely oversubscribed. To meet the rapidly expanding need for training in energy efficiency and renewable energy, Philadelphia needs to become a center of training industry that mobilizes 137 3/24/09 FISCAL STABILITY COMM. - RES. 090178 technical schools, vocational schools, community colleges, and private training centers to incorporate energy efficiency and sustainable building practice into their curricula. So ECA received a grant from the John S. and James L. Knight Foundation to renovate our warehouse in Kensington into a green jobs training center. And we plan to train people at all levels, from the entry-level positions of the WAP program on up through technically difficult BPI and HERS and including solar installers. We see this training center as a vital part of a much bigger gap that must be filled in the region. We are prepared to work together with other institutions to make Philadelphia the place to go for training and for energy efficiency and solar careers. But the Knight Foundation Grant is approximately half of what we need to renovate this facility; thus, we are 138 3/24/09 FISCAL STABILITY COMM. - RES. 090178 applying for Recovery Act money to help us complete the project.

So then, the other sort of -- I'll glaze over this, although it's really important, is the importance that we have consistent standards met nationally, which is why we are putting so much emphasis on training BPI and HERS raters, which are national certifications. We want to make sure that any retrofits that happen to the Energy Star standard, which is an EPA-approved standard for both new construction and existing homes. The third point in my testimony is about the need for Philadelphia to innovate in what we're doing. And there's one suggestion for passive homes or zero-energy homes in Philadelphia. And the way that if we demonstrate, we can do that in Philadelphia, that will bring manufacturing, it will bring qualified installers to Philadelphia, and create the job market that we're looking 139 3/24/09 FISCAL STABILITY COMM. - RES. 090178 to create through green-collar jobs. , that this can happen and that this is a viable industry. But the point that I really do want to focus on is training, because that's where the jobs are going to be coming from. And we really need to build the infrastructure in order to make this happen. And ECA is prepared to do that. We're prepared to partner with a lot of other organizations and groups in the City to make that happen. I mean, we're a small organization comparatively, and so we're going to need lots of partners to make that happen, but we're definitely on the right path, and we're hoping that the recovery money will only galvanize people to join us in that. Lastly, I just wanted to invite 140 3/24/09 FISCAL STABILITY COMM. - RES. 090178 you to the first training for entry-level training, which will be happening on April 20th, at our Clearfield warehouse. And this is in partnership with the Philadelphia Workforce Development Corporation. , and you're welcome to come and see us.

That's on Clearfield?

106 Clearfield Street.

Thank you. And, again, another reminder that the hearing of the Parks and Services Committee is across the hall, in the Caucus Room. Thank you.

Good afternoon. I am Leanne Krueger Branake, Executive Director of the Sustainable Business Network of Greater Philadelphia, and we're a business organization that brings together local leaders who share a common 141 3/24/09 FISCAL STABILITY COMM. - RES. 090178 interest in growing local successful companies that have a positive social environmental impact. I will also summarize my testimony today in the interest of expediency, but a few highlights. For over eight years, the Sustainable Business Network has provided green technical assistance for small businesses in Philadelphia through training programs, and we currently have 450 member-companies. So I was invited here to speak out of our position of expertise to the Green Economy Task Force, which is a coalition that the Sustainable Business Network convened last February. It has now grown to include over a hundred partners that include workforce development agencies, green businesses, local-government officials, and labor partners. And this is important because cross-sector approaches will be 142 3/24/09 FISCAL STABILITY COMM. - RES. 090178 particularly important as Philadelphia looks to maximize our opportunities with Stimulus funding. So the question that's been asked over and over again this afternoon is: How many jobs are we talking about, and where will they be created? We're specifically talking about green-collar jobs, which is the area that we've been working in most. And for definition's sake, a green-collar job is a blue-collar job in a company that improves environmental quality. So we're talking specifically about solar panel installers, auditors being as being trained by ECA, people who are manufacturing green-building products, et cetera. There's different sectors 20 that fit into green-collar jobs. 21 So how many jobs? We don't know 22 yet, but we will know soon. There are currently six or seven different organizations that are simultaneously working on research to get to the core of 143 3/24/09 FISCAL STABILITY COMM. - RES. 090178 how many jobs we're talking about here in Philadelphia. The funding that we've received through the Knight Foundation, the funding that the Office of Sustainability has received through the Knight Foundation, the funding that's already been allocated through the Philadelphia Workforce Investment Board, we're all working collectively right now to get to the answer as soon as we can of how many jobs and what do they look like. To give a potential piece, there is a study that came out in the fall from Center for American Progress that talks about if there was a $4 billion investment in the State of Pennsylvania -- which the Stimulus Plan will come close to -- then 83,000 new jobs would be created. And since Philadelphia is about 10 percent of the State population, we believe that we're talking about at least 8300 jobs, new jobs created in Philadelphia. 144 3/24/09 FISCAL STABILITY COMM. - RES. 090178 The bias of the Sustainable Business Network and the Green Economy Task Force is pretty clear: We care about creating job opportunities for low-income communities and for small businesses. So whereas, a lot of the talk that's happened about green jobs at the State level doesn't necessarily include low-income communities, that's very much the vantage point that we're coming from at the Green Economy Task Force. So our concerns about the Stimulus -- let me just jump right into those. Shovel-ready projects cannot leave out low-income communities, and this is something that will happen if local government and City Council and local agencies don't push for an alternative. Transparency. If decisions are made in backrooms, then money is going to go to the usual suspects, and we will not get different results, which is what 145 3/24/09 FISCAL STABILITY COMM. - RES. 090178 we're all hoping for through the Stimulus dollars.

At the federal level, President Obama established the Recovery Accountability and Transparency Board to look specifically at transparency and how dollars are being allocated. We recommend a similar board be created at the local level to make sure that dollars in Philadelphia are being distributed fairly. Any projects must be going -- particularly within the environmental piece of the Stimulus Plan, which is a pretty significant piece of it, we have to consider how the Stimulus money will help our region improve air quality, water quality, energy usage, and habitat preservation for all Philadelphians. So looking at emerging local clean or renewable-energy companies, that can create hundreds of thousands of family-supporting jobs and reduce or energy independence. So the 146 3/24/09 FISCAL STABILITY COMM. - RES. 090178 environmental piece is important. Second is fair labor practices. We need to be stressing the creation of good jobs, not just any jobs. So jobs that include prevailing-wage, adequate benefits, family-sustaining wages, and also strong safety standards. And preference should be given to contractors who will hire local residents and contracts going to small businesses that are headquartered here in the City. One of the cautions of the Stimulus Plan is that only a certain percentage of these jobs can go to people without college degrees. And so, because of that, there was a study recently that showed about, I think, only 14 percent of Philadelphians have a college degree. So because only a portion of these jobs can go to the people who most need jobs, we need to be very careful in directing resources to those populations; and that is training resources as well as 147 3/24/09 FISCAL STABILITY COMM. - RES. 090178 business development resources. And then, lastly, on the accountability piece, there is an opportunity to have public meetings to make sure that people out on the street are getting information about how this money is being spent in Philadelphia, who is benefiting from it. And so, we would advise both the City Council and the Administration to make sure that, again, the public is being informed about this. And, lastly, just to clarify the money that the Sustainable Business Network has received through the John S. and James L. Knight Foundation: We have not received money to attract green businesses; rather, we have received money to design a Philadelphia green jobs corps that will train low-income people with various (indiscernible) employment for positions in existing green companies. And that work -- that historic work in organizing green business is one of SBN's strengths that 148 3/24/09 FISCAL STABILITY COMM. - RES. 090178 we bring to the table, but we have not been given money at this point for business attraction. And, lastly, Philadelphia's ability to get the largest portion of money and to target where we need it really is going to come down to our ability to influence decisions that are being made at the State level as we speak about where the money is coming -- where it's coming from. So advising the State and being loud in what we ask of them is also very important. Thank you.

Thank you. I just want to follow up on that portion of your testimony, the fair- employment practices, where you just mentioned about -- because many of these jobs created by the green economy won't be suitable for people without college degrees?

There was a study that was done last month by the Center on 149 3/24/09 FISCAL STABILITY COMM. - RES. 090178 Education and Workforce at Georgetown University that concluded that more than half of the jobs created by the American Recovery and Reinvestment Act, the Stimulus Plan, will require some college education.

Okay. Understanding that, has there been any conversations with the School District of Philadelphia? You know, oftentimes, there's a lot of emphasis about post-high school, kids going to college, but that's really not for everybody. I mean, not everybody's going to be a doctor or a lawyer or what have you. And a lot of the fields that will be secondary education may not appeal to someone in college.

Mm-hmm.

Is there any discussion about what the green economy would mean?

Yep.

And maybe 150 3/24/09 FISCAL STABILITY COMM. - RES. 090178 excite people in high school to want to become a part of that economy.

Right.

Which may require a college education but not to the extent that the sciences and other types of educational levels would require.

Right.

Is there any conversation going on with the School District?

So your question is: How are we getting youth pulled into this?

Yes.

And getting excited about it?

Yes.

And then also going back to that pipeline question that I heard before from Councilman Goode. So in terms of the youth piece, the Stimulus dollars that are coming down 151 3/24/09 FISCAL STABILITY COMM. - RES. 090178 for youth job training are already here. The Philadelphia Youth Network just a few weeks ago issued a request for proposals for summer internship programs for youth. Because Philadelphia Youth Network has been engaged with the Sustainable Business Network on the Green Economy Task Force from the very beginning and because our Green Jobs Training Committee is chaired by a vice president at Philadelphia Youth Network, we've been in dialogue with them for a while. As a result, we were able to put together an orientation for the training providers who are seeking that $7 million in funding. So last week, we put together an orientation on "What Is A Green Job?" because one of the gaps that we found is on the training providers that both the adult and the youth level, the questions are: What is a green job? what are the opportunities? what are we training kids for? So there's still a 152 3/24/09 FISCAL STABILITY COMM. - RES. 090178 lot of education that has to be done.

Mm-hmm.

So we were able to do some education with the providers and then point them towards resources in partnerships with each other that we think will lead to more successful internship placements. Philadelphia Academies was also at that meeting as well as a number of different youth-serving organizations. We have not had a direct conversation with the School District yet, but I would certainly invite that conversation.

I think that might be helpful. Any questions? Councilwoman Tasco. And then Mr. White can proceed.

Can I ask her something before he testifies? 'cause I don't want to lose this discussion on the -- 153 3/24/09 FISCAL STABILITY COMM. - RES. 090178

Nothing personal, James.

Nothing personal. And then I'll... You are the -- now, how did the -- how will these dollars flow? I think when we talk to our Sustainability Office, Mark Allen Hughes, will the dollars flow to our office or individual groups? You know, because if -- well, just first answer that question.

Sure. So it really depends on which piece you're talking about.

I'm talking about this piece, this weatherization and the green.

The weatherization is one component. The best resource that I can point you to is one that's from: Green For All Prepared: Bringing Home the Green Recovery, which is a user's guide to the 2009 American Recovery and Reinvestment Act. And I cite this in my 154 3/24/09 FISCAL STABILITY COMM. - RES. 090178 testimony.

Mm-hmm.

They have broken down piece by piece on the green aspects of the Recovery Plan: Which dollars? how many dollars? where are they coming from? who are they coming from? are these earmarks? are they competitive bids? et cetera. So this is the best research that we've seen. So the answer is: It really depends on which piece. A lot of it is coming straight from federal. A lot of decisions, again, are being made on the State level. So Philadelphia needs to continue the conversations that I know Rob Dubow alluded to, advocating in Harrisburg for money to come into Philadelphia in a way that will be most useful to the people who need it most.

Yeah, and we agree with all of that, but have you given any suggestions as to who it should 155 3/24/09 FISCAL STABILITY COMM. - RES. 090178 flow through? I mean, if you got all this money coming in -- and I certainly have some concerns about the weatherization program that we don't get these fly-by-night shysters coming in and telling people they're going to weatherize their homes and charge these fees.

Right.

But what is the central location where the dollars will flow from and then go out to groups like yours or some of these other groups that are doing weatherization and/or green jobs? Who's going to pay attention to the dollars?

Well, I'm going to recommend that Energy Coordinating Agency answer the weatherization question because they've been doing this work for 20 years and our national leaders.

Now, will you get all of the dollars, the weatherization dollars? 156 3/24/09 FISCAL STABILITY COMM. - RES. 090178

No. In Philadelphia, PWDC and ECA administer the weatherization assistance program, and that money comes through... what are they called? CWEP? What is the acronym for the --

Community Development Block Grant?

No, the DECD, DECD, the Department of Economic and Community Development at the State level. So that's -- somebody else alluded to the fact that maybe that will be changing right now. They're talking about that in Harrisburg as we speak. So, again, we don't really know how a lot of this money is going to be coming down, but I do know that currently, ECA and PWDC are the ones that administer it in Philadelphia.

Mr. White, let me hear you 'cause you seem to have the information that I'm asking for.

I'm always amazed 157 3/24/09 FISCAL STABILITY COMM. - RES. 090178 how my colleagues read the same stuff on policy (indiscernible). I'll send you the PDF for the -- for Bringing Home the Green for Green for All, which is an excellent manual. First of all, let me identify myself. I'm James White. I'm the policy coordinator at the Philadelphia Association of CDCs, and we are -- we have about 75 community development organizations and nonprofit organizations that have extensive experience accessing and utilizing programs to create job opportunities and building stronger communities. That being said, the first thing I want to address before I really get into my testimony is that there's also groups like Youth Build -- since we're talking about youth -- that work with youth that are from low-income environments, who have often fallen out of school, to prepare them for journeyman jobs. 158 3/24/09 FISCAL STABILITY COMM. - RES. 090178

We know all about that.

Yeah, but the point I'm getting to is that beyond weatherization, some of the things that are available and some of the strategies here -- I'm going to re-work this. In housing development, there's a low-income tax-credit program that will get a number of dollars to fund rental and low-income development in distressed neighborhoods, which will include such things as retrofitting of homes.

Let me just ask you a question. We have all of that, we know all of that.

Okay.

My question is: The young lady raised the issue of accountability --

Mm-hmm.

-- and of the usual suspects who seem to be negative coming about. How do we 159 3/24/09 FISCAL STABILITY COMM. - RES. 090178 control -- who controls the flow of dollars? how do you access those dollars? and how do you account for those dollars? and to whom do you account for those dollars?

Well, she's correct in identifying the Community Economic Development -- (Indiscernible; parties talking over each other.)

So if she wants a program, she has to apply to the State for those dollars?

Some of it will be formula, some of it will also be through grants, competitive grants.

Mm-hmm.

It will come out of the Stimulus package.

Mm-hmm.

The other thing --

Point of information.

Councilman 160 3/24/09 FISCAL STABILITY COMM. - RES. 090178 Green.

I think the real answer to that question based on recent conversations I've had with the Director of Sustainability and others is that nobody knows the answer to the Councilwoman's question. And it's okay to just say, "I don't know where the money's going." (Laughter.)

Yeah, I understand, Councilman. Thank you. I mean, there's a number of -- I think there's a number of places it could go.

But I'm saying: Who's going to work to coordinate all of this?

Mm-hmm.

There needs to be a coordinating system to make sure that the dollars are not wasted, don't go to shysters.

Right. 161 3/24/09 FISCAL STABILITY COMM. - RES. 090178

And you seem to be -- are you a nonprofit?

Yes, we are.

You all need to get together and figure it out.

Right. And our recommendation -- we know that Mark Allen Hughes, of the Office of Sustainability, is also the Mayor's point person on the Economic Stimulus Plan. We believe that's the right channel because he's already tied into where the money could go, where it should go, where the needs are, where the greatest impacts would be. But there needs to be some sort of an intermediary that's making sure that the linkages happen. Without that happening, the job training money's going to go here, the business-development money is going to go here, the weatherization money is going to go here, and these three parties will never talk to each other.

Exactly. 162 3/24/09 FISCAL STABILITY COMM. - RES. 090178

And so it's those new linkages and cross-communications that the Green Economy Task Force working to facilitate, and the City needs to put pressure on the fact that these conversations have to continue to happen.

And Mr. Schwartz has a -- since he prepared the report for us, let him -- we're going to come back to you, James. We're not going anywhere. (Ed Schwartz returns to witness table.)

Yeah. I just want to affirm something that was said here and emphasize it, you know, 'cause we've been around for a few years. The weatherization money has come to Philadelphia primarily through two sources: One of them you have direct authority over really, and the other indirect. In the Philadelphia Housing Development Corporation, weatherization 163 3/24/09 FISCAL STABILITY COMM. - RES. 090178 has been run since I was housing director and before. It's had a tiny little bit of money. And we, during those years, consolidated the Home Repair Division and the Weatherization Division. They are the ones -- the director of that program has been going to Harrisburg for these various meetings and getting briefed. That money, if you look at the CDBG plans, always states that it comes from the State.

Mm-hmm.

A hell of a lot more is going to come from the State. So that's the direct accountability. The Energy Coordinating Agency has been out here for, you know, a lot of years, 25. They're celebrating their 25th anniversary.

Mm-hmm.

And they have had their own relationship with the Department of Community and Economic Development. And they have built a 164 3/24/09 FISCAL STABILITY COMM. - RES. 090178 weatherization operation of their own that is built around teams. So they independently have also been going to Harrisburg. So those two are clear.

Mm-hmm.

I believe PGW is making some kind of effort to get into this; I understand that from a couple of people there.

Mm-hmm.

So that's a third area of accountability. So that the weatherization money you're going to see fairly clearly. Now, as far as the job training goes, Ernie Jones was here. They're already ramping up job training for weatherization so that the money that is going to the training programs is coming out of there. And, frankly, he was saying to me while he was here that they're short. This is a new area that's suddenly exploding, and they don't have enough 165 3/24/09 FISCAL STABILITY COMM. - RES. 090178 folks. The individual kind of economic development incentive of projects such as the one that I mentioned in my testimony that Rendell announced, that is coming out of the State Department of Energy and whatever other instruments Rendell has created for development. And that's going to be huge. And, frankly, the City of Philadelphia is not going to have much to do directly with any of that.

Mm-hmm.

The challenge -- and I've said this actually to Councilman Kenney since he chairs the environmental committee, and I mentioned it. The Energy and Environment Community Development Block Grant is coming to the City of Philadelphia. This was initiated two years ago by the U.S. Conference of Mayors, and it was passed last year with no money; now it's got money, and it's going to come here. And 166 3/24/09 FISCAL STABILITY COMM. - RES. 090178 in my report, you will see that I list some of the objectives that this grant can perform. I believe -- and I've said this to Councilman Kenney and to Councilman Clarke -- there should be a hearing here about preparing for that block grant. I'm not clear who's going to administer it. There are various things it's supposed to be able to do. I think the Council and citizens ought to have some opportunity to talk about this block grant before an entire package gets put together. So I think what I've just said is about all you could know at this time about that.

Mm-hmm.

The exciting thing beyond whatever the City is getting is that there are a lot of grant opportunities and loan opportunities for companies, some for nonprofits, that are in this field. And people, I can assure 167 3/24/09 FISCAL STABILITY COMM. - RES. 090178 you, in the business community who are depending on this, or hope to, are already out there trying to figure out what they ought to be applying for. And I'm sure that guide that you mention, which I certainly want to see, is probably the best source available to figure out what to do.

Thank you.

Thank you. Mr. White, I understand you haven't testified yet.

No, Mr. Chairman, and thank you for giving me the opportunity to testify. This is a very exciting time, I think, for all of us in the nonprofit sector because of the opportunity the president has provided for us. That being said, I think I'll just summarize some key points here, and I would concur with a lot of folks on the panel, with a lot of what they said. I really believe that there are 168 3/24/09 FISCAL STABILITY COMM. - RES. 090178 several objectives that are important to advance the stimulus in the City that we need to look at times. The City should use the resources strategically to leverage neighborhood assets, investments and plans, as well as additional private- and public-sector resources to strengthen neighborhood markets and preserve neighborhoods in danger of decline Furthermore, we should align Stimulus revenue streams with other resources to support integrated approaches to community development that advances sustainable neighborhoods development. To accomplish this task, I think we need to look at ensuring equity, transparency, collective prosperity, sustainability, and energy efficiency. Philadelphia must have a clear, transparent process for its residents to provide input and track where the money is going. With Philadelphians pinching every penny in their own household budgets 169 3/24/09 FISCAL STABILITY COMM. - RES. 090178 and lacking confidence in government, residents must be assured that they are receiving benefits of their hard-earned tax dollars. Philadelphia must meet or exceed the high level of federal oversight President Obama has set. The City must focus on creating jobs that create economic stability for Philadelphia residents and business owners, improving the environment, building up communities, especially those that are at high risk during the economic downturn We must seize the opportunity to put our communities on the path of sustainable progress. Reducing our energy use and cutting greenhouse gas emissions is a smart long-term economic growth strategy. While hard times have fallen all over the State and the Commonwealth, here in Philadelphia, several of our neighborhoods are experiencing extreme suffering and are looking to the City 170 3/24/09 FISCAL STABILITY COMM. - RES. 090178 Council and the Administration to provide Stimulus funding and programs and opportunities. We have put together a list of some opportunities that we think are available for community development corporations through either CDBG, job training, weatherization, energy efficiency, or conservation. First of all, we haven't talked too much about housing development, but we need help to fill the financing gap in affordable rental development, utilizing the low-income tax credits, creating jobs and leveraging significant public- and private-sector, while addressing critical housing needs, and linking this with energy efficiency, such as retrofitting or green roofs or doing basic home-system repairs and some targeted housing preservations with some products and programs that we already have in place, but matching them with some of these Stimulus dollars to maximize what they can 171 3/24/09 FISCAL STABILITY COMM. - RES. 090178 do for affordable housing. I think we've heard several folks, including Mr. Greene from PHA, testify on what type of stimulus and what type of economic bang we get whenever we do construction or repairs in housing. Next, we need to invest in transit-oriented development. And that these key developments linking, whether it's SEPTA dollars with local dollars or federal dollars from the transit, are a reauthorization bill that's yet to come down the pike. This will provide new money to convert our communities into gateways, make them more walkable, transit-friendly, and also provide such amenities as pedestrian lighting, safer neighborhoods, and help to improve our commercial corridors. We talked about a lot about weatherization, so I won't say too much there, as well as greening.

But lastly, what I would like to 172 3/24/09 FISCAL STABILITY COMM. - RES. 090178 leave this committee with -- and I do want to thank the committee for moving forward with this hearing and any future hearings -- is that PACDC is always going to come to the table and work with whatever community partners as well as the Council and the City Administration to move this agenda forward to improve the lives of Philadelphians and to revitalize our neighborhoods. Thank you for the opportunity.

Thank you. I, like you, Mr. White, I'm a little concerned about the tone of all of this as it relates to housing opportunities, because I believe fundamentally, although all of these initiatives are equally as important, but as it relates to pure job creation, be it short-term or long-term, I believe that the housing industry at this point, until we get a clear sense of the green technology and the green jobs has the best opportunity to create more jobs in a 173 3/24/09 FISCAL STABILITY COMM. - RES. 090178 much broader category of trades simply by the virtue of the nature how it works. I mean, you purchase materials, you build it, you sell it the, City collects tax, all of the things associated with construction is beneficial to the City of Philadelphia, and I think that there is a golden opportunity, given the fact that this Stimulus package alone will provide probably more than $150 million for housing-related activities initially. Some people like to characterize this particular Stimulus Program as a proposal that does not necessarily equate to a short-term solution to the City's budget problems, but I disagree. Because the reality is, every initiative that you heard here today during this testimony created a job, and that individual will pay wage tax and that individual will pay other types of taxes, and any company associated with building or purchasing will pay taxes. 174 3/24/09 FISCAL STABILITY COMM. - RES. 090178 That will have an immediate impact on the City's budget. Will it solve a $1 billion problem? Absolutely not. But will it contribute to solving it? Absolutely so. As we have this discussion, I disagree with all these people who continue to characterize this as something that cannot affect our short-term problems. So again, I just want to thank you. All of you have testified; am I correct?

I think that you're correct in that construction can definitely help the City, but I would also emphasize that we have a lot of existing structures in Philadelphia and over 400,000 rowhomes that could be weatherized, and, you know, that employs a lot of people to do that as well. So while we think about new construction, we should also be thinking 175 3/24/09 FISCAL STABILITY COMM. - RES. 090178 about making the houses that we already have more efficient and making it more affordable for people to stay in those houses. We've actually used our weatherization program as a homelessness prevention program as well because we find that often, utility bills are the single most -- one of the biggest chunks of money that a family is paying out. So if those are significantly decreased, then they have a much higher chance of being able to stay in their homes. I just wanted to add that in addition to what --

No, I absolutely agree. And when I say "construction," I didn't want to minimize existing structures. I think that particularly as it relates to the entry-level opportunities for people in our communities, that affords us the best possibilities of making sure that people can benefit throughout the citizenry 176 3/24/09 FISCAL STABILITY COMM. - RES. 090178 across the City of Philadelphia. So thank you so much for your testimony, and we look forward to continue to work with you.

I just had one other thing, Councilman, before we leave. We had talked, I think, earlier and I just wanted to finish my point on housing development and even rehabbing housing. There are a number of CDCs and groups. One group I want to point out that has an opportunity, I think here, is Youth Build that isn't here today and I'm -- but needs to be at the table because it does so much in providing opportunities for young people that are lost and sometimes need to be -- find a new way to have access and opportunities, whether they're journeymen jobs or carpentry. And in your district, they've done a lot of tremendous work, as you know. 177 3/24/09 FISCAL STABILITY COMM. - RES. 090178 But I just hope that there's a move forward that we make sure that we are inclusive of everybody, especially those who suffer the most and have the least.

Absolutely, absolutely.

One closing comment on the construction piece. Youth Build is a member of the Green Economy Task Force, so they're a part of the coalition of a hundred organizations that we're currently working with, and they will be receiving significant funding that's allocated specifically to Youth Build in the recovery plan. On the construction piece, just one question that we need to continually raise is: Who will be doing the building? who will get those construction jobs? We know that the challenge between labor and low-income and minority community inclusion has been a challenge historically in Philadelphia as well as 178 3/24/09 FISCAL STABILITY COMM. - RES. 090178 in other cities. One of the models we're looking at is better pre-apprenticeship programs that will truly move people into union positions. And one of our staff, our green jobs coordinator, is actually out in Oakland right now, visiting a training center set up for that purpose. And, you know, we're following the green jobs stimulus dollars at the federal level and the state level, and we're happy to continue to be a resource for Council on this issue.

Thank you. I agree with you wholeheartedly. I've always said -- and this is some of my conservative roots -- that I think the best social-service program is a good job.

Mm-hmm.

And a person can take care a lot of things on their own if they have a good job. So I agree with you. 179 3/24/09 FISCAL STABILITY COMM. - RES. 090178 Thank you.

Thank you.

Thank you all very much.

Thank you.

I'll call the next panel. I believe we have Rob Holdsworth, Scott Holmes, Tom Cooper. And, Mr. Carter, this last name is -- George Awad. Thank you, sir. (Witnesses come forward.)

Good afternoon, gentlemen. Thank you very much for making yourselves available for this very important issue today. Please proceed, state your name for the record, and we'll go from the left to the right.

Good afternoon, Mr. Chairman.

Good afternoon.

My name is Kevin Corrigan, and I'm here in Rob 180 3/24/09 FISCAL STABILITY COMM. - RES. 090178 Holdsworth's stead. I'm managing director for Energy Edge Technologies/Rob regrets not being able to be here. He was en route, got caught up in traffic, and didn't make it. I appreciate --

Point of information, Mr. Chairman.

Sure.

That may have worked three hours ago, but I'm not sure we buy that now. (Laughter.)

Councilman, I guess we really have to improve that infrastructure anytime it takes you three hours to get to here.

Well, I do intend to take this up with Rob as soon as I leave here because I am here, and I'm sure he's engaged in something worthwhile, but I will try to serve in his stead here. I would like to thank everyone 181 3/24/09 FISCAL STABILITY COMM. - RES. 090178 here, Mr. Chairman and all the other Councilmembers, for the opportunity to speak with you today. As I say, my name is Kevin Corrigan, and I'm the managing director for Energy Edge Technologies Corporation. We are an engineering firm specializing in guaranteed electrical cost reduction. We have LEEDS-accredited professionals and a client list of over 200, ranging from midsize companies to mom-and-pop or sole proprietorship manufacturers up to and including Fortune 500 companies and everything in between. After hearing the issues raised today and the resolution presented, we at Energy Edge Technologies feel that we can help the City of Philadelphia shore up their budget shortfall as well as meet their goals to modernize infrastructure by reducing their electrical consumption and greenhouse emissions. Time Magazine recently wrote about our approach when they said, and I 182 3/24/09 FISCAL STABILITY COMM. - RES. S. has a renewable energy resource that is perfectly clean, remarkably cheap, surprisingly abundant, and immediately available. " And in the same article, President Obama called energy efficiency the cheapest, the cleanest approach with the fastest payback. And he is absolutely correct. There are several things which distinguish our approach from others. We take first the whole facility look; we don't just focus on what we term the low-hanging fruit in the industry such as lighting; we do do that, of course. But we also look at heating and air- conditioning, refrigeration, equipment and motor loads. And we look at the entire electrical distribution system, in fact. 183 3/24/09 FISCAL STABILITY COMM. - RES. 090178 And it's by gaining small to moderate savings in all of these different areas, the aggregate of which can add up to something pretty substantial -- anywhere from to 30 7 percent savings overall. 8 All of the engineering approaches and technologies that we employ are recommended and approved by the Institute of Electronic and Electrical Engineers (the IEEE), as well as the Department of Energy and Energy Star. As I mentioned, we are an engineering firm; we are not a technology manufacturer. So, we are not limited to using only one type of technology or one approach; we do not have to be concerned with adapting our technology to your environment or to your facility or, worse yet, adapting your facility to our technology. We have the opportunity to pick from the best and we do. And it is the facility in question that will 184 3/24/09 FISCAL STABILITY COMM. - RES. 090178 determine what it is we use and how we use it. These technologies that I speak of are passive in nature. There's no 6 turning off loads, there's no changing of equipment or monitoring or maintenance costs associated with that. And they are completely reliable, with a proven minimum ten-year track record of success in the field. We will not take the professional risk, nor will we ask our clients to take the operational or financial risk, by putting in anything that is not untried or unproven into your facility. We are oftentimes asked, If this is so great, why isn't everybody doing it? The short answer is, They are. We oftentimes don't get the press coverage because it's difficult to explain energy efficiency in one or two sound bytes. The other reason is, we don't advertise. Our business model provides for the fastest payback possible. And if we had 185 3/24/09 FISCAL STABILITY COMM. - RES. 090178 to incorporate and advertise an expense into that, it would not be to our clients' best interests. And as Time Magazine did say, it's boring. It doesn't have the "wow" factor that solar power or wind generation has.

But that's okay because, without a doubt, we can provide the fastest payback and return on investment of any energy-savings measure that you could possibly undertake. And the same goes for reducing your greenhouse emissions. And I think you will agree, you know, we would gladly trade off a little bit of "wow" factor for a 24- to 36-month pay back. And I think that's where the real "wow" factor comes in. With respect to the City of Philadelphia and how the City can take its best advantage of the Stimulus Plan, we provide all of the information that you could need to decide whether or not this project is right for you. 186 3/24/09 FISCAL STABILITY COMM. - RES. 090178 This information we provide at no cost or obligation, and it includes a guaranteed savings percentage, a guaranteed project cost, a guaranteed payback and return on investment, and capital leasing options as well. All of the above numbers, as I say, are guaranteed in writing and backed by a surety bond underwritten by Lloyds of London to remove all of the financial risk to you. S. Department of Energy. The world is finally catching on to what we have been quietly doing and have known about for a good number of years now; and that is, investing in energy efficiency is the first best way to helping your own bottom line by saving money. It's a win for the client, it is 187 3/24/09 FISCAL STABILITY COMM. - RES. 090178 a win for the environment, it's a win for the taxpayer, and it's also a win for the electric utility, because the cheapest power plant is the one you never have to build. And in closing, I'd like to just share one small story with you. A few years ago, one of our network affiliates did an installation at a General Electric plant up in upstate New York. And this was at a time when New York State was going through their electrical deregulation. They confided that they were facing a 16 percent electrical rate hike, and that if this went through without any adjustment to their operating cost, that this would effectively wipe out their profit for that division and put some 2500 jobs seriously at risk. Well, when they left, they were able to save them a bit more than 16 percent; but more importantly, those 2500 jobs were not put at risk. 188 3/24/09 FISCAL STABILITY COMM. - RES. 090178 Now, does this happen all of the time? No. But I don't think it takes any stretch of the imagination to know that in today's environment, these kinds of, you know, crises situations are happening more and more in companies of all size and in municipal entities as well. Energy cost reduction has never been more sorely needed, nor have the benefits been greater. I appreciate your time. And I'm willing to take any questions that you might have. Thank you.

Thank you so much. Councilman Jones.

First of all, thank you guys for your patience. And the number of Council people here is no 21 reflection on the importance of this testimony. We are multi-tasking; we have over 50 applicants applying for Parks and Recreation, and our chairman here had to go spend time over there to give 189 3/24/09 FISCAL STABILITY COMM. - RES. 090178 Councilwoman Reynolds-Brown some relief. So we've been kind of shuttling back and forth. But you're absolutely right. As chairman of the Transportation and Public Utilities Committee, I am concerned, and I'm glad the chairman of Fiscal Stability is looking at the impacts possibly of deregulation of electric on our operating budget. Every streetlight out there that keeps our streets lit at night is paid for out of the electric rates that the City has to pay. So efficiency is not only in our buildings but in all the bills that we pay to the electric company is of paramount issue. Now, when it comes to these audits, are we -- I mean, you know, I mean, how do we guarantee at the back end the successes that are recommended and paid for at the front end? I mean, simply put.

Well, that's a 190 3/24/09 FISCAL STABILITY COMM. - RES. 090178 good question. We provide all of the information that you might need, Councilman, to make that financial decision; that's what we bring it down to. I mean, all good ideas aside, it has to be -- it is a financial decision. You know all of that information up front without cost or obligation. Our work does eventually include audit work; it has to. We have to evaluate each facility individually on its own merits. But you know what the minimum savings is that you're going to have in that facility, you will know what the minimum payback and return on investment is, and you will know what the maximum cost is before we ever get to that point.

Who gives us the money? Sorry, Mr. Chairman.

Go ahead.

Thank you, Mr. Chairman. 191 3/24/09 FISCAL STABILITY COMM. - RES. 090178 Who gives us the money back if your estimates are not correct?

If, say, we have a shortfall between our initial investment and what the audit turns up; let's say, for example, we go in and say that we can guarantees you a minimum of ten percent. You pay for audit, the audit reveals we can only deliver -- guarantee 9 percent. You are refunded in full the cost that have audit, regardless of what you decide to do.

Okay. But, I mean, if we go ahead -- and there are companies, and yours may not do this, that guarantee the savings and bond it and do other things like that so that you can actually effect the savings that they project you're going to get.

If you go ahead -- if I understand your question, Councilman Green, if you go ahead with the project, okay? We do the 192 3/24/09 FISCAL STABILITY COMM. - RES. 090178 installation and the M&V reveals that you're not getting percent, you're 4 getting 9 percent -- 5

Right. 6

-- our guarantee 7 is backed by Lloyd's, and you will be 8 made whole. 9

That was 10 Councilman Jones's question.

We will make up that difference, okay? Typically, there is nothing in our -- we have a very conservative bias to this.

No, you answered the question. I appreciate it. Thank you.

Thank you, Councilman. Thank you, sir.

Thank you.

Please proceed with your testimony.

Thank you. My name is Scott Holmes. Thank you very much for 193 3/24/09 FISCAL STABILITY COMM. - RES. 090178 the opportunity to be here today. I've been trying to think how I can position my presentation, because it's so totally different from everything that everybody's talked about today. One thing I thought that's been interesting is that nobody has mentioned the single item in the budget that has to be solved and that will be solved and that the president has allocated an extra $19 billion to solving it: And that is, we've got to have a health care system that keeps our people safe and that pays for itself. And they're going to spend -- the government is going to spend a heck of a lot of money figuring out how to make that happen. And I'm here today to tell you that I believe that Philadelphia has the wherewithal to pull that off. And then I'll tell you what the financial consequences of that could be. But there are essentially two 194 3/24/09 FISCAL STABILITY COMM. - RES. 090178 issues that stand behind solving it and not solving it. One is a technical issue, which we happen to have a small company in Malvern that I'm close to solve that issue, and, you know, the appropriate people can easily validate that. And it has to do with inter- operability. For those of you who know health care, you that the lab systems don't talk to the lab systems, hospital systems don't talk to hospital systems. You carry your paperwork with you when you go to the doctor or the hospital because the paper doesn't get there automatically. That's called "interoperability." And that problem's been solved very nicely by this Philadelphia company. I think the second issue that stands between the solution to this problem is the political will to make it happen. Do we have leaders who will make it happen? And I would say to you, 195 3/24/09 FISCAL STABILITY COMM. - RES. 090178 having read the T. Rowe Price report talking about the consequence of unfunded employee benefits, that we can take the savings that come from implementing this new system and use those to apply to cover those benefits. So there's an enormous financial incentive in terms of ongoing jobs; jobs would go on forever. This program -- this country's going to need to continue providing health care, safe health care forever, and that's going to be an ongoing thing. So I guess what my point to you is, is that we can put together a team that can beat the cities that we'll be contending with for this money. How much money we go after depends on whether we bring Rendell into the program or whether we bring the School District into the program; it depends on how many people we want to provide better health care and less expensive health care. That's just a calculation. I've done a calculation that 196 3/24/09 FISCAL STABILITY COMM. - RES. 090178 shows if we just covered -- if we only covered the underinsured City employees, we would save close to $450 million a year, one heck of a lot of money. So I will, I think, at that point close and ask if there are any questions. But this is a -- this is all about a lot of money, and I think we're good enough as a city to and as a state to beat the others that we'll be contending with.

I'm sorry --

Councilman, did you have a question?

Yeah, thank you. I'm sorry. Thank you, Mr. Chairman. You believe that the City of Philadelphia can save $450 million per year from its current health care costs by implementing technology?

Better and safer health care systems. The whole trick is simple: When the patient arrives at the 197 3/24/09 FISCAL STABILITY COMM. - RES. 090178 doctor's office or at the hospital, his or her current information is available. They don't have to, you know, ask -- send a cab down the street for it.

Would you please provide the chairman with written information about exactly how the City can --

Absolutely.

-- achieve these savings and what we would have to do specifically in terms of grants or other requests we'd make with the federal government for --

Absolutely.

-- this money?

Absolutely. I --

And who the team would be that you would propose? And I think the chairman would forward this to the Administration and recommend that we have to meet.

It's actually been 198 3/24/09 FISCAL STABILITY COMM. - RES. 090178 submitted. So it will not be difficult for me to do. But it's --

Thank you.

It's close to a no-brainer, but in terms of what we need to do on an ongoing basis as a city, I mean, it really deserves to be looked at, I think.

Thank you.

Thank you. Do you have a question, Councilman?

Thank you, Mr. Chairman. We have a situation in the 4th Councilmatic District where I do not have a public health center sponsored by the City of Philadelphia. We do, however, have an excellent, excellent health-care provider located at 57th and Haverford that is federally funded and subsidized, handling a lot of the needs of the 24 percent population below the poverty guideline. 199 3/24/09 FISCAL STABILITY COMM. - RES. 090178 When I took the tour, one of the things that struck me almost as very archaic was the fact that we walk out of their space into an outer room, into another room where there was a room maybe a eighth of the size of this that had nothing but physical files. In fact, they had the old revolving files that, you know, almost looked like a dry cleaner's rotating file system. And I asked them, "Well, if a patient who is on subsidy needs an operation, an emergency operation, how does the file get to the University of Penn or whoever is providing the procedure?" and they said, "A courier." Now, the difference between that file being instantaneously available to a physician and the four or five hours it may take to finally get it and move it to its proper location and get it into the hands of the physician might be a matter of life and death, life and death.

Absolutely. 200 3/24/09 FISCAL STABILITY COMM. - RES. 090178

So particularly, I don't know who in the City of Philadelphia has a plan to take advantage of these kinds of updating of files and systems and getting us up to speed on the electronic transfer. Second, to what degree does telemedicine play in this? And how can we inculcate that into the Stimulus package? Example, I mentioned earlier that I do not have a health district paid for by the City, and under today's economic climate, it doesn't look like I'm going to get one in the near future. However, there are telemedicine products available that you can take a rec center in your district or my district, and within a hour, convert it and be able to actually plug people into an apparatus that is incentive enough to qualify for insurance, and insurance companies have accepted this method of examination as legitimate and be able to 201 3/24/09 FISCAL STABILITY COMM. - RES. 090178 take medicine to where people are. So the question becomes: Does the Stimulus package allow for those kinds of innovations through technology?

The Stimulus package in health care really calls for almost anything because the federal government threw up its hands and said, We've not been able to solve our health care problems in this country. We're going to make this billion available; 13 you come back to us with what works. 14 So I believe there will be 15 technology coming out of the system. I 16 think that I would solve your first 17 problem first: Connect the systems. I 18 mean, right now, we can go to HUP and 19 Lankenau; they have their own systems. The technology exists to branch those together. So I probably would suggest that we connect that which we have and then look in the second phase, would be my guess, as a professional. 202 3/24/09 FISCAL STABILITY COMM. - RES. 090178

Thank you for that comment. But one of the things that that telemedicine aspect allows you to do is to advise a specialist that is in California. That medical record goes to him. We're on a split screen talking to each other and conferring about a person's lung that may be in another city. And so, you know, it seems that we might want to take advantage of this opportunity. Instead of piecemealing it, design something.

But the real savings today is for your members and Blue Cross's and everybody else's for either kids who have a chronic illness, for them to be able to be seen, using teleradiology to identify that there's an overweight condition, there's a blood condition. And so I don't want to completely -- I think there are less 203 3/24/09 FISCAL STABILITY COMM. - RES. 090178 sophisticated uses of the technology that are immediately available today. Blue Cross has got a project going here in Philadelphia. So there is stuff going on. It's got to be pulled together. But that's clearly going on.

All right.

And we can get out and talk to the guys at Blue Cross; they'll tell you exactly -- I mean, I know it's going on.

I mean, Blue Cross is a great Philadelphia firm. I mean, tradition, and a lot of kids in my district have benefited and grown up and had kids of their own based on the good work of Blue Cross. But I don't want that to be the only vision. I want there to be a comprehensive thought so that we get ahead of the curve, not run to catch up to the crowd, but get ahead of the crowd by way of being -- Philadelphia, this is a core industry. Medicine is one of 204 3/24/09 FISCAL STABILITY COMM. - RES. 090178 the --

If we get everybody networked in, all of the -- everybody networked -- the providers, the patients, we're going to have an asset that we can really leverage and use to hire more people. I mean, that's your leveragable asset that grows for five and ten years. I mean, that's really -- and I think that's, in a way, what you guys were searching for today.

Right.

And that's ultimately where this comes down. And we -- this little company, they've got like 40 different, 50 different facilities in East Bay and Oakland that they're all connected, sharing information. I don't know, like 2300 doctors.

Thank you, sir. Thank you very much for the recommendations. 205 3/24/09 FISCAL STABILITY COMM. - RES. 090178 Just one thing for the record, that one of the invitees was the Deputy Mayor Dr. Schwartz, because we understood that there was going to be a significant contribution that's related to health care, and we had anticipated that he was going to be here to talk about that, but he was not available today. And we anticipate in a follow-up session that we will be focused soley on the Administration's readiness as it relates to all of the Stimulus opportunities, and that he hopefully will be there at that time.

And we would be very pleased to come back for that specific hearing as well.

Please proceed.

Sure. Good afternoon, Chairman Clarke and committee members. Thank you for inviting us today to speak about improving the substantial inefficiencies currently experienced in 206 3/24/09 FISCAL STABILITY COMM. - RES. 090178 the delivery of health care by the City of Philadelphia to its beneficiaries. I would also like to thank Councilman Bill Green for his leadership and vision in seeking technology solutions to address efficiencies in health care as well as across all of City government. My name is George Awad, and I represent VIIAD Systems, a Pennsylvania- based technology development services company providing a patent-pending health-care information solution that has been proven to substantially reduce costs and significantly increase reliability in the delivery of health care services. Sitting behind me are John Zuback, CEO of VIIAD Systems and Harvey Mitgang, president of VIIAD Systems. And they are also equally pleased to have this opportunity to speak to you today and to also answer your questions. It is our understanding that the City of Philadelphia has requested 207 3/24/09 FISCAL STABILITY COMM. - RES. 090178 funding to be provided by the American Recovery and Investment Act of 2009 to support programs aimed to substantially decrease health-care efficiencies through the deployment of various health-care information technology solutions. Specifically, the City aims to reduce itself of the cost expenditure currently required to track and monitor health-care services provided to prisoners incarcerated at Philadelphia prisons to the deployment and management of electronic medical records. Additionally, it is our understanding that the City will participate in the CARES Project, which is a statewide electronic health-care initiative aimed to unify the messaging of electronic health-care data across various participating agencies to reduce overhead costs, increase reliability, and improve quality of health care. With respect to the CARES Project, having over three decades of 208 3/24/09 FISCAL STABILITY COMM. - RES. 090178 experience in managing data surrounding health-care transactions, VIIAD Systems has developed various data-interface systems as part of its overall health- care transaction data-processing platform that allow for data-agnostic communication of health-care transaction data, including, but not limited to, claims data, patient history data, benefit-plan description data, billing data, patient-identification data, whether it's electronic or non-electronic. VIIAD has successfully deployed this platform to aggregate data from numerous health-care benefit payers, claims processors, and patient information databases to facilitate the generation of what we call the VIIAD health ticket. It's an on-demand real-time electronic health-care identification and direction document that can be transferred electronically or carried by the person as the first step 209 3/24/09 FISCAL STABILITY COMM. - RES. 090178 in the gateway of actually starting the health-care transaction at any given health-care provider. Governmental agencies can tremendously benefit from the deployment of the VIIAD health-care data interface, the aggregation of management processes and platform. VIIAD's platform of technology solutions can operatively interface with numerous legacy systems to retrieve various data regardless of data formats for communication between and among these legacy systems. Such capability can significantly contribute to various cost-savings, including lower overhead costs and administrative costs. Specifically, with current practices, a number of administrative personnel might be required to manage the manual aggregation of health-care data across various cooperating agencies. Further, additional personnel might be required to manually manage the communication of such 210 3/24/09 FISCAL STABILITY COMM. - RES.

090178 data across and between these cooperating agencies according to prescribed health-care-data-reporting protocol. VIIAD's technology solutions can eliminate these unnecessary administrative and/or overhead costs for these cooperating agencies, allowing for improved health care and overall reduced costs. With respect to the prison system's health-care initiatives, VIIAD Systems has developed a comprehensive technology solution allowing for the management and use of electronic patient-subscriber data, including patient-history and medical-records data in the context of performing health-care transactions. As mentioned, VIIAD's technology solution includes the use of the VIIAD health ticket, an electronic (indiscernible) direction document that is generated in realtime and contains up-to-date data, including, but not 211 3/24/09 FISCAL STABILITY COMM. - RES. 090178 limited to, the patient subscription data, the benefit plan, the patient medical history data, and the provider network data, as well as other data representative of all of the contractual obligations, whether it be private or public collaboration, between the parties of a health-care transaction. Additionally, the health ticket can act as a unique key to access a patient's electronic medical record that can be generated, stored, and managed from the VIIAD platform. The VIIAD health ticket operates part and parcel (indiscernible) V network, which comprises the nationwide (indiscernible) health-care network, offering substantially deeper discounts that aren't currently available by nationally deployed health-care networks much like the Blue Crosses and the Aetnas of the world. VIIAD has successfully deployed its platform to aggregate data from 212 3/24/09 FISCAL STABILITY COMM. - RES. 090178 numerous health-care benefit payors, claims processors, and patient- information databases to facilitate the generation of what we call the VIIAD Health Ticket. VIIAD can service Philadelphia's prisons by deploying the VIIAD technology platform across these prisons to generate health tickets, which can be used to, among other operations, identify prisoner-patient benefits, direct prisoner-patients to proper medical facilities, track health-care transactions, convey prisoner-patient medical history, and retrieve prisoner electronic medical records from VIIAD data source. Additionally, VIIAD can work with the prisons to convert existing prisoner medical records to electronic formats for storage on the VIIAD electronic medical data source. Prisons can tremendously benefit from the deployment of the VIIAD health 213 3/24/09 FISCAL STABILITY COMM. - RES. 090178 care data the aggregation and management processing platform. Specifically with current practices, a number of administrative personnel, much like the CARES opportunity, may be required to manage the manual aggregation of health care data -- and in this context, it would be medical records -- across various data repositories. Additional personnel might be also required to manually manage the communication of such data across and between these cooperating parties of the prisoner-patient health-care transaction according to prescribed health-care data-management and storage protocol. VIIAD technology solutions can eliminate these unnecessary administrative and or/over overhead costs with its cooperating parties, allowing for improved health care at a substantial cost reduction for prisoner-patients. In summary, the VIIAD (indiscernible) successfully deployed in 214 3/24/09 FISCAL STABILITY COMM. - RES. 090178 numerous markets nationally and has been fiscally proven to provide an immediate to percent in cost-savings for the 5 delivery of health-care services for each 6 covered person. 7 As a proven technology that's 8 readily available for deployment with 9 nominal capital expenditure -- I'll 10 repeat that, it's nominal capital 11 expenditure -- for the City's side.

12 VIIAD's Health Ticket can be 13 utilized within 30 to 60 days from the 14 program's inception, which translates 15 into immediate cost-savings, job creation, and establishes a baseline of savings which continues as a residual cost-savings in the future. I'd like to thank you for the opportunity to testify today. And I, at this point, would be happy to answer any questions that you might have about our testimony.

Thank you so much for your testimony. 215 3/24/09 FISCAL STABILITY COMM. - RES. 090178 Councilman Green.

Thank you for coming in today. Do you have any sense of how much the implementation of your technology would save the City on an annual basis in the prisons and then separately in our health-care system?

Sure. Our research has indicated -- specifically, you know, the idea of trying to offer the VIIAD solution in the context of the Stimulus package, we looked at two very specific projects that the City of Philadelphia requested funds for. One was the CARES Project, which basically goes across State agencies. We don't really have a metric type to really say how much in actual dollars that we'll save, but we realize that any type of interoperability of data among cooperating agencies will reduce overhead toward administrative personnel. With regards to the prisons 216 3/24/09 FISCAL STABILITY COMM. - RES. 090178 specifically, it is our understanding that there's about 10,000 Philadelphia prisoners in the Philadelphia prison systems. If you look at the average cost of health care per person in the private sector, it's about $1300 per person. Our numbers indicate that on a 10,000-per-person population basis, we can save anywhere between and 40 11 percent of that cost savings per year. 12 So immediately in the prisons, 13 we're looking at 25 percent of $1300, 14 which is about $400. So at $400 per 15 patient, so then automatically, we can 16 probably translate that to almost 17 $4 million in savings; that's 18 per-prisoner population. 19 The reason that we focus our 20 target right now on specifically the 21 prisons in CARES is because, again, we 22 find that it's going to be nominal 23 capital expenditure from the City's 24 budget. This is money that's going to be 25 allocated -- by that's already been 217 3/24/09 FISCAL STABILITY COMM. - RES. 090178 allocated by the Stimulus package for these projects. And we're going to come in and try to give you the cost-savings immediately by that capital expenditure. That said, we believe that VIIAD has a significant cost opportunity across the City of Philadelphia as a whole. There are a number of specific opportunities that we can actually go to for the community health centers, which Councilman Jones has alluded to, as well as for the specific opportunities in helping the City try to understand their specific spending on benefits for their units as well. We understand that those specific contracts are in place, that your specific budget is also somewhat locked from a year-to-year negotiation process. However, with this tool in hand and requiring those specific unions to use this tools, you can actually reduce your specific expense from anywhere from 15 to 40 percent. 218 3/24/09 FISCAL STABILITY COMM. - RES. 090178 And we're very happy to offer that specific solution on a citywide basis as well.

Thank you. Have you presented this service or product to the unions themselves who currently run their own health-care plans?

We have not had the opportunity, but that's actively on our agenda, and we're looking to provide that specific information to the unions.

Thank you. I'd be happy to try to make an introduction.

Thank you very much.

Thank you, Councilman. Thank you. Our last witness -- oh, please make room available for this gentleman. (Witness comes forward.)

Good afternoon.

Good afternoon. 219 3/24/09 FISCAL STABILITY COMM. - RES. 090178

My name is Mark Rupp. I'm the one of the founders and the chief operating officer of Network Acquisition Company, LLC. You know, as you're all aware from your testimony heard today and your own readings, the broadband funding under the Reinvestment Retirement Act of 2009 represents an unprecedented opportunity for all stakeholders in Philadelphia to benefit from the improved quality of life and enrichment of the economic conditions within the city that will result from a comprehensive broadband strategy. The broadband funding in the RRA will provide the resources to coalesce various information driven across various resources in the City, transforming the City of Philadelphia of Philadelphia into a true information-driven community for all of its citizens. By way of background, Network Acquisition Company, you know, has extensive wireless network, and it's 220 3/24/09 FISCAL STABILITY COMM. - RES. 090178 well-suited to become the foundation of this comprehensive broadband initiative. We maintain and run the largest wireless WiFi and fixed wireless network in the United States, here in the City. We provide service to over 150,000 unique users each month here in the City, and our WiFi services are actually free to all consumers -- residents, tourists that visit the City -- saving an estimated millions of dollars already, and, you know, it's our belief that those savings from not having to procure your own broadband service is being reinvested back into the community. With additional funding for enhancing our network and commitment by all key stakeholders to use the network service, the network can evolve from a unique consumer broadband access point to a true innovative sustainable community information network. And I want to give you a couple examples of the benefits, and these are 221 3/24/09 FISCAL STABILITY COMM. - RES. 090178 live examples. In Oklahoma City, they use a very similar network to the one we have here in Philadelphia for productivity of its field service -- the city itself uses for its field service personnel. They estimated that they save 9300 hours of field service time, which is a 30 percent increase in productivity. There is a dedicated broadband wireless resource for public safety that could reduce crime and save money and increase efficiency. And in that particular initiative in Greensberg, Texas, police officers spend one extra hour per day on the street as a result of being able to use a very similar WiFi network, which is about percent 20 savings on time, you know, and translates into reduction of overtime and increased time on the street for public safety. You know, in our vision, the City -- the WiFi network that we have here in the City could be used as a base 222 3/24/09 FISCAL STABILITY COMM. - RES. 090178 of access to Philadelphia's public library system, which, as you know, is being reduced in size. But our ability to extend the Free Library system into communities where they don't have a library or one is being closed can be tremendously enhanced by being able to bring broadband services into those community centers which could effectively substitute for free libraries. On the emergency response time, in Milpitas, California, they estimate on their WiFi network that they have a 16 percent faster response time in terms of 17 emergencies, and we've talked a lot about 18 health care here in this particular 19 panel. 20 One of the technologies that 21 we've been testing with a number of the 22 health care institutions here in the City 23 and some of the gentlemen here today is 24 telemetry, which is, you know, the technology side of telemedicine, where 223 3/24/09 FISCAL STABILITY COMM. - RES. 090178 we're using mobile devices off of our network to be able to place on ambulances so that emergency-care attendants in the ambulances themselves are immediately sending data back to the health care practitioner in the emergency room so that before the ambulance pulls up, they have very basic information.

It's not telemedicine, as Councilman Jones, you were talking about. There's not a video screen coming in, although that is a potential down the road. But you have all of the basic information so that you know what the patient's condition is as they're rolling, and there are tremendous efficiencies as well as lifesaving opportunities there. A continued offering of the free service to all residents, tourists, and commuters will have an overall impact in closing the digital divide that still exists in this city. So, you know, just in 224 3/24/09 FISCAL STABILITY COMM. - RES. 090178 concluding, here the cornerstone of the broadband programs under the RRA is sustainability and job creation. And they call for innovative funding proposals that will have a high impact on all of the constituents in the community. And we certainly encourage the City and all of its stakeholders -- not just the City government itself, but all of the colleges, universities, health- care institutions, and public-service institutions to use this network. It is a network that exists today; it just really needs to be used. And we are very, very encouraged and have been working with the Administration and with some of its members on various programs to try to better leverage this network that is citywide. That's it. Thank you.

Thank you. Councilman Jones?

Thank you, 225 3/24/09 FISCAL STABILITY COMM. - RES. 090178 Mr. Chairman. And thank you for your commitment to the City of Philadelphia. By way of increasing access to the Internet through WiFi and moving into communities that otherwise would have a wider digital divide and not be able to access all of the wealth of information that's on the Internet. Do I understand your infrastructure for this system is about, what, 80 percent complete?

Yeah. Our current network is comprised of 4300 nodes which about sit on 4300 lamp posts. It covers about 80 percent of the geography of the City.

And you, as a private concern, can apply directly for some of these Stimulus dollars to complete that 20 percent?

We can. And to enhance the existing 80 percent.

And when you 226 3/24/09 FISCAL STABILITY COMM. - RES. 090178 say "enhance," how would that -- how would these funds allow you to enhance the --

I'll give you a very good example. Our current wireless network uses unlicensed frequencies, which are suitable for broadband Internet access but may not be very suitable for things like public safety, particularly police. The City owns 4.9 spectrum to be able to use our infrastructure and our back hall facilities which, you know, we have high-tower sites scattered 16 throughout the City, we have about 17 a-gig-and-a-half of back hall that exists 18 in that network today to do a 4.9 19 gigahertz overlay onto our network which, 20 you know, would cost money to do. 21 We would be able to enhance that 22 80 percent of the footprint that we're 23 already looking at and provide a public 24 safety overlay for the police and fire. 25

And the 227 3/24/09 FISCAL STABILITY COMM. - RES. 090178 implications would be to not only the health-care industry but the Police Department and others. You gave specific examples?

Yeah. It spans from health care, police, fire, public safety, licensing and inspection by, you know, trying to eliminate paper in the processes. Being able to take PDAs out into the field, a licensing and inspection field service technician would be able to carry probably in their entire database in what is the equivalent of an iPod touch out into the field, being able to talk right back to their local-area network and their existing database. Ticketing, meter-reading, very mundane things as well as the more sophisticated services like police, fire, and health care.

So are you coordinating with the Administration to look at where the applications --

We are. We're 228 3/24/09 FISCAL STABILITY COMM. - RES. 090178 working with the Administration, we're working with various other institutions in the City and as well as other vendors that are looking to provide service to see them.

Would you say Philadelphia is more uniquely positioned because of your private investment --

Oh, absolutely.

-- to take advantage of this?

This is the largest wireless network in the country, right here in the City. We were fortunate to get it from EarthLink, who walked away from it, as you know, but we've been maintaining it since June of last year, when we acquired it. We are now looking to be able to enter into some partnerships with the City as well as the other key stakeholders, not just the City government that we would think should be 229 3/24/09 FISCAL STABILITY COMM. - RES. 090178 using this network but everyone else to truly take advantage of it. It is a phenomenal asset that needs to be taken advantage of.

Well, I would only ask that you provide other applications and other aspects of it. As we go into the budget process over the next intensified 90 days, it would be helpful for the chairman to dispense to members of this committee how your efforts will impact the bottom line, the budget of a department like L&I, who will then be able to send more people into the field and get reports back quicker. You also mentioned how the application would help policemen possibly stay on the street another hour. All of those things have a fiscal impact on our budget-making decisions, so that information, that data will be helpful to us.

I'll be happy to provide it. 230 3/24/09 FISCAL STABILITY COMM. - RES. 090178

Thank you.

And I just want to add, these applications that I'm talking about are not applications that we need to invent; I mean, they're already in place in various markets throughout our country as well as in Canada.

Thank you.

You're welcome.

Thank you, Mr. Chair.

Councilman Green.

Thank you. Thank you very much for your testimony today. And to this panel, especially as Councilman Jones said, we're sorry it took so long. We really appreciate your patience. But collectively assembled, based on your testimony -- and, you know, we'll have to look into it -- you know, you can save you the probably $500 million a year. That's real money. 231 3/24/09 FISCAL STABILITY COMM. - RES. 090178 Assuming you're only percent right, it's real money. Assuming you're only 4 percent right, it's real money, okay? 5 So we appreciate this. These are very important things. And I just want to thank all of you for that. Mark, specifically -- and I'm going to kind of -- and I know people understand this, but I just want to relate what you're saying to savings. Thirty percent more time in the field because you're not filing paper reports or other things means 30 percent more citations you can write, whether that's for Dumpster violations, whether that's lack of business-privilege licenses, whether it's for the Health Department or Streets or whatever, that means either the same number of inspectors and lots of additional revenue because people are out in the field; or it means fewer people. And we've just re-tasked a bunch of people from L&I and other places and 232 3/24/09 FISCAL STABILITY COMM. - RES. 090178 other places, and some of us are not confident that that's going to result in the same level of revenue in L&I with fewer inspectors. This could make up for that. And in other cases, it could enhance revenue because people are more productive; they don't have to go back. I'll give you one specific example. Right now, to write a Dumpster permit violation, you go look at the paper permit on the Dumpster, if it has one. You then call back to the Streets Department, and you find out who owns the Dumpster and you find out who the person is. You then write a paper ticket, which you then have to -- like who do you send it to? Or you go back at the end of the day and you write tickets and you mail them out, which means you're spending not much time on the street. They only spend half their time on the street, the other half of the time 233 3/24/09 FISCAL STABILITY COMM. - RES. 090178 writing tickets. Instead of having everything in a database, pushing a button, and having the ticket, like the PPA can do, and track it. So that's just one example. And then with respect to police, what we're talking about is one hour more a day or percent more time on the 10 street, which correlates nicely with 11 24 percent faster response times, which 12 are all different data points that tell 13 us the same thing. 14 What they tell us is that we're 15 basically, through the implementation of 16 this kind of technology and use in Tulsa, 17 Oklahoma and Texas and elsewhere, is we 18 are increasing manpower by 15 to 20 by -- 19 not by increasing the number of men but 20 by making them more productive. We're keeping them on the street and we're keeping our citizens safer. And that's why this is a very important thing for us to look at, I believe. So thank you very much for your 234 3/24/09 FISCAL STABILITY COMM. - RES. 090178 testimony.

You're welcome.

Thank you, Councilman. Gentlemen, I want to thank you so much. Again, sorry for having you wait so long, but when there's a lot of good information, you know, it takes some time to put it out in the public. So I just want to thank you, and we look forward to continuing to work with you on these very important endeavors. Thank you. Okay. There being no other witnesses, this will conclude the public hearing of the Committee on Fiscal Stability and Intergovernmental Cooperation. We will recess till the call of the chair. (Proceedings end at 5:05 p.m.) * * * 235 C E R T I F I C A T E I HEREBY CERTIFY that the proceedings of the City of Philadelphia Council Committee on Fiscal Stability and Intergovernmental Cooperation are contained fully and accurately in the stenographic notes taken by me on Tuesday, March 24, 2009, and that this is a true and correct statement of same. __________________________________ JOSEPHINE CARDILLO Registered Professional Reporter (The foregoing certification of this transcript does not apply to any reproduction of the same by any means, unless under the direct control and/or supervision of the certifying reporter.)