No. The way the act is written is, they get to deduct that from the revenue that they submit to the City.
So then all that really is the subscribers are the ratepayers are paying the bill since the franchise fees are listed as a line item on your bill in the first 1148 2/22/99 - WHOLE COMM. - Bill No. 990023 place, I mean, it's not money that the cable companies are putting up; all they do is collect the franchise fee and pass it on to us.
And that is most common throughout the nation, though, were cities that have public access, they either set aside a small fixed coin amount -- anywhere from cents to 50 9 cents just for public access; or they split the 10 franchise fee to 5 percentage -- 3 percent and 2 11 percent, or some percentage of it, to fund it. 12
The franchise agreements 15 call for five public access channels. 16
Today, those access 19 channels have been loaned back to the cable 20 operators, and the cable operators must carry 21 programming -- retransmission of broadcast 22 transmissions. 23
That means that they really 1149 2/22/99 - WHOLE COMM. - Bill No. 990023 are not -- on the channels that they have for public access, they are non-revenue-producing channels; they are not pay-per-view channels and they're not --
You would have Channel TV 69 from Allentown, TV 51 from Reading, C-Span, the Eternal Word Television Network.
What do they show? COMMISSIONER PEREZ: Religious programming, I believe.
Yeah. MSNBC, you know, they're local programming, you know, or retransmissions of programming.
Okay. And you're saying that these are not broadcasts that are revenue-generating. 1150 2/22/99 - WHOLE COMM. - Bill No. 990023
As the cable operators have identified them, these are non-revenue-producing channels.
And the agreement is if public access is established, what do we need, 30 days or 60 days' notice to get the channels back?
Okay. How many cable subscribers do we have in Philadelphia?
Our report -- I'm just looking at the reports that were submitted by the cable operators just recently, and it's 170,000 in Comcast's two areas, 78,000 in Greater Media, and 60,000 in Wade.
Okay. Do we have a 1151 2/22/99 - WHOLE COMM. - Bill No. 990023 way of verifying how many cable customers there are?
Independent of the numbers they provided, not to my knowledge.
Okay. And we have approximately a half a million households in Philadelphia; is that correct?
So cable is about -- what is that about 60 percent? COMMISSIONER PEREZ: Approximately.
Okay. Lastly, in your document, which, again, was received by all of us, you indicate that your cursory review is of five cities across the country -- from Boston, Chicago, New York (you refer to as Manhattan), Pittsburgh, and Sacramento have public access, and their operating costs range anywhere from $300,000 to $2.1 million. Again, your testimony is that all of that money comes from franchise fees in those cities? 1152 2/22/99 - WHOLE COMM. - Bill No. 990023
The money that we've identified, to the best of our knowledge, that's where it comes from.
Okay. And for Philadelphia, you're estimating somewhere in the range of $500,000 to $1 million will be required to run Public Access Corporation?
And, again, your testimony is that by way of the Cable Act of '84, if a Public Access Corporation established both by ordinance and then the filing of articles of corporation, we would then be able to start accessing dollars to operate the Public Access Corporation, but those dollars would come directly out of franchise fees.
Right, we would be able to access the capital dollars to build the facilities, which -- 1153 2/22/99 - WHOLE COMM. - Bill No. 990023
Which are separate from the operating dollars, and I believe it's half a million dollars.
And did you leave the capital costs at the same dollar amount in the recent franchise renewals? Those were coming up on the end of 15-year franchise renewal agreements?
Well, I mean, the value of $1.2 million 15 years ago is certainly less today, 15 years later, isn't it?
I would agree. I think in our discussions on the renewals and in the negotiations that there was -- a sense of it was that there was not a strong sense that public access had already been done in Philadelphia, and it would be done in the short term, at least in our understanding of it. We felt the best thing we could do as far as provisions that we were negotiating, we 1154 2/22/99 - WHOLE COMM. - Bill No. 990023 went after the ones that we put our interest. And, at best, we wanted to protect the public access provision to at least have it in the renewal so that if, in fact, Council got to that point, at the provisions would exist.
Well, when you say you wanted to protect it, that would give me the impression that you thought it was in danger. Was it in danger?
Well, it was certainly something that the cable operators would like to have removed and not have that obligation on the books. And, again, our sense was to at least maintain it and keep it intact and not effect a change in the dollar amount but at least maintain it, which was something that they preferred not to have at all.
Well, again, it's negotiated -- you negotiate it, and in the original franchise is a provision that's something that public access, we could have certainly negotiated something much less than five public 1155 2/22/99 - WHOLE COMM. - Bill No. 990023 access channels and certainly a commitment on the number of channels, the number of dollars, and the number of locations to something much smaller, a minimum commitment -- which we did not do.
Or we could have negotiated something much larger since this is a negotiation, right?
But there are Councilmembers that have been waiting and, you know, you have far exceeded the five minutes.
You're welcome. The Chair recognizes Councilman Rizzo. 1156 2/22/99 - WHOLE COMM. - Bill No. 990023
Thank you, Madame Chair. Commissioner Perez, during the Capital Budget, we got a pretty good feel for the condition of City Hall, the building. Could you give -- could you just give an overview of the condition of this building? And could you restate the dollar amount that it will take to fix the roof and appearance of this building and the structural integrity of this building, how much money we have and how much money it will take? Also, there are some safety hazards in this building, fire hazards, you know, panic bars on the exterior doors. They're dead-bolted so that people would be trapped in this building in the event of emergency. Could you comment on some of those issues, please. COMMISSIONER PEREZ: I'm at a disadvantage in that I don't have the capital documents and the CPO people here to help me handle the relevant details. But my recollection is that in the Fiscal Year 2000 budget, there's -- there's a 1157 2/22/99 - WHOLE COMM. - Bill No. 990023 request for funds in the -- I believe it's in the range of $70 million to be added to the existing funds already appropriated by Council for City Hall renovation of approximately $35 million. As you probably are aware, the Department of Public Property's approach to the renovation of City Hall was considerably more elaborate than the current approach, and it was done on the basis that the entire building would be fully renovated in all aspects except for historic -- extensive historic preservation. Our intent was to upgrade all systems, replace and upgrade all systems, and do floor, wall, and ceilings renovations where needed, minimizing the expense as much as possible. The roof, of course, was one of the primary elements in that more long-range planning. That plan, however, required about 15 years and roughly $45 million per year -- I'm sorry -- yeah, roughly $45 million of spending in order to do it. The other critical aspect of getting that approach accomplished was agreement by all parties in the building to vacate quadrants for 1158 2/22/99 - WHOLE COMM. - Bill No. 990023 several years at a time so that all of you who are residing in this quadrant of the building at some point would leave, go to another part of the building, and we would redo it from top to bottom, all systems. That was the approach. That was going to take too long and not address of the most urgent needs of the main building systems. In the interim, while it was being retooled, the approach to the renovation of the building being retooled, it became apparent to us on the maintenance operations side that the roof was deteriorating at a greater rate than had been forecast in that longer-range plan, that we had to get CPO planners refocused on attacking the problems in the roof. The court has suffered, and I think some Council people have suffered from unrepairable leaks that were the result of decaying and degrading of the roof deck, the associated cast iron, which is all intricately interconnected. It's not a house roof; you can't peel it off and put it back on and then caulk the edges, you know, to make everything nice and tight. That approach is intended to preserve 1159 2/22/99 - WHOLE COMM. - Bill No. 990023 really the building, and all of its other key elements are to be addressed more gradually over time. Now, regarding the issue of public safety, however, from the very beginning, millions were spent on those public safety issues identified by the combination of L&I and Fire Department -- the Fire Marshal in advance of the general rehab. And it was done for, obviously, the sprinklerization of the building, fire doors were installed, smoke-rated doors were installed and tied into the City's -- the building's alarm and detection systems. My understanding is that those required public safety issues have been completed. They were done on a timetable that was approved by the Board of -- is it the Board of Safety Review? I forget the exact title. But we were granted a number of variances.
The variances were principally time-related because of the size of the building and the extent of effort in doing it. To the best of my knowledge, with the concept of Fire and L&I, we've done what's appropriate under the circumstances in advance of 1160 2/22/99 - WHOLE COMM. - Bill No. 990023 a general renovation.
Commissioner, with the -- COMMISSIONER PEREZ: Now, if I may, some of the those installations are now three and four years old, and there are maintenance problems that we will run into from abuse or from just normal wear and tear, where we on our end -- not the capital side, on our end, have to respond and replace and restore certain items in the building.
Well, I'd appreciate you looking at the first-floor doors in this building. After hours, there's only one way out of this building. All the doors are dead-bolted shut. If in the event of a fire in this building or smoke, people would be unable to exit this building 'cause they're locked at night other than the northeast corner. And if this building became full of smoke, full of smoke, to try to find your way to an exit a block away I think would be very, very difficult. There are some people that have keys to those doors, but not all staff in this building, as you know, and this has been something 1161 2/22/99 - WHOLE COMM. - Bill No. 990023 that I've had an interest in for a couple years. I don't believe there's another building in Philadelphia, a commercial building, that would be given a variance where a condition like that exists. COMMISSIONER PEREZ: We'll certainly look into it, Councilman.
You're welcome. The Chair recognizes Councilman DiCicco.
Thank you, Madame Chair. I have two quick questions. On in the Operating Budget book, there's an item, Free Library of Philadelphia site to be determined, $1,028,000. Is that the money that's being allocated for the East Philadelphia branch or what? COMMISSIONER PEREZ: Sorry to say, I don't know which branch. I know that I've been parenthetically involved. It is? Yes, it is. 1162 2/22/99 - WHOLE COMM. - Bill No. 990023
It is? Okay, I just wanted to make sure for the record that the money was there -- not that I doubted that, but I just wanted to double-check that. Going back to the questions that were being raised by Councilman Nutter earlier concerning Greater Media and Comcast, is there anything in the -- any legal description presently? And if not, can we look into the possibility of having some language included when we do enter into long-term negotiations with a cable company or other entities, which I just can't think of at the moment, where we may have an escape clause saying that if a long-term extension to your contract granted, you can't get out of that contract for a certain length of time. I think that may have gone a long way in helping us with this matter concerning Comcast and Greater I was directly involved with Greater Media. COMMISSIONER PEREZ: Certainly.
'Cause I was directly involved with Greater Media in some of the discussions that were going on prior to the public hearing and some of the various local 1163 2/22/99 - WHOLE COMM. - Bill No. 990023 unions that interacted with Greater Media, and I was given assurances by everyone, the labor people of Greater Media, that they all came to some resolution as to some of the issues. As the District Councilperson where Greater Media is located, I instructed the people on the Public Utilities Committee that it was a go, and the next thing I knew -- and, again, I'm not faulting anyone here, but maybe we need to look at something going forward -- COMMISSIONER PEREZ: Well, I'll certainly bring that to the attention of Law Department.
-- to prevent that because it just has -- the appearance to this whole transaction leaves a lot to be desired. And I kind of feel rather foolish that I'm telling my colleagues that everything's okay -- well, at least I thought it was okay for Greater Media -- and then less than two months later, the deal is sold from under us. COMMISSIONER PEREZ: Well, in the context of not getting the advanced notification or discussion that we've all been talking about, 1164 2/22/99 - WHOLE COMM. - Bill No. 990023 certainly, we can bring that issue to the Law Department. This isn't over. I mean, Council gets its shot at this because we'll have to bring it to you for final approval anyway under the current agreement terms.
You're welcome. The Chair recognizes Councilwoman Blackwell.
Thank you, Madame President. Commissioner, did the Greater Media indicate, or was there any indication at all that it would have any difficulty in meeting its infrastructure upgrade obligations that it committed to under the new agreements?
Councilwoman, currently, Greater Media is in the throes of their upgrade, and their plans are to have the upgrade completed by March of next year. As far as the issue of them not fulfilling that part of it, it doesn't 1165 2/22/99 - WHOLE COMM. - Bill No. 990023 appear to be a concern, and it will certainly be something that we're going to have to monitor closing to make sure that the progress doesn't stop. But as the Commissioner said, at any part of this process, for them to consummate this transaction with Comcast, they're going to have to come before Council to get Council's approval.
You're welcome. The Chair recognizes Councilman Ortiz.
Thank you, Madame Chair. Commissioner, in terms of the Comcast-Greater Media merger, what is -- what has to happen for this to come about? What are the following steps that need to be taken? And what is the City's role going to be in the approval or disapproval or furtherance of this merger?
If I can answer the question, Councilman, our understanding of the process was that it was very similar to what we 1166 2/22/99 - WHOLE COMM. - Bill No. 990023 started to experience earlier when Time Warner and Wade talked about a possible sale or transaction is, the first aspect of it is, they have to provide us the written notification identifying the transaction so that we clearly understand whether or not it's a merger, an acquisition, a joint venture, or what is the realm of the controlling interests in the transaction. There is also a form that has to be completed. It's an FCC Form 394, where they have to provide us the specific information regarding the structure of the new entity, the transaction, the parties, if there's any funding, how all of that's going to be accomplished, as well as their ability to meet the obligations in the franchise. And I assume we would be concerned about whoever -- if it's going to be Comcast, their ability to meet the obligations of the renewal as well. We go through process where we have approximately 120 days to do our due diligence, at which point in time, we reach a conclusion that we then bring before Council to either approve or disapprove the transaction. And assuming that we would come before Council for a ordinance to 1167 2/22/99 - WHOLE COMM. - Bill No. 990023 approve it, Council will have conducted its own due diligence and have Council hearings on the fact and have the principals come in and --
Is there any timeline along those lines? As the Chairperson asked before on another issue, are we just going to get a huge document to be able to approve very quickly without any sort of deliberate thinking on the issue?
The only timeline that I'm aware of is the 120 days from the day we actually receive written notification to make a ruling to either approve or disapprove. Within that time frame, we need to conduct our due diligence, and I assume we would need to have enough time to prepare Council and provide Council with some sort of briefing prior to having the bill introduced.
I would hope that any part of the agreement that we have -- as Councilperson Nutter was asking you, and I don't want to be repetitive, but I would hope that the Public Access Corporation and the establishment of a public access TV sort of system within the city be a part of any new contract in terms of the 1168 2/22/99 - WHOLE COMM. - Bill No. 990023 merger or acquisition of these franchises.
There is a transfer provision in the Greater Media franchise. And under the Comcast acquisition, at this point in time, they will be obligated, under the old agreement, to the renewal agreement. So in the old agreement, that franchise provision for public access is still there as well as, as I said before, it is preserved in the new agreement as well. And it would be significant for us to make sure that Comcast, as part of their acquisition, is going to fulfill all of the terms in both the existing agreement and the renewal.
And I know this last question is sort of rhetorical at this point because the barn door has been opened and the wolf has entered into everything else, but we had a public-policy position when we approved cable back in '84, '85 that we wanted to promote competitiveness and so on, and that's why we divided it into four different areas. Obviously, that has flown the coop and that is no longer the public-policy position of the City at this point. But that's just a rhetorical statement 1169 2/22/99 - WHOLE COMM. - Bill No. 990023 that I wanted to make because it seems that we're going towards a monopoly system within the city, and I don't know whether that's good or bad at this point.
Well, if I can just speak to your question, the issue of competitiveness as far as cable is concerned, that the franchise agreements as they are structured now are nonexclusive, which means there is an ability that if someone was so inclined to get a franchise in the same area that an incumbent already exists, it's very similar to the, as you say, a backwards slant if you're watching the telephone industry deregulate. But at the same time, you see in many cases, they are becoming larger parties anyway and end up buying back into this monopoly fashion. But as the Telecommunication Act from the federal side mandated as well is that the marketplace should really drive competition, not regulation. So that their competitors are other cable operators who are willing to offer that same type of service. There's also the direct-satellite competition, which is having a large effect on the 1170 2/22/99 - WHOLE COMM. - Bill No. 990023 cable operators. And I would, at some point in time, assume that the telephone companies will get back into that business as well.
I just want you to -- 'cause I asked Councilman Nutter, but I want you to reiterate for the record once again, there was a commitment with the original contractors of cable in terms of a contribution that they were supposed to make to the public access and the maintenance of Public Access TV Corporation. That's still a part of the overall, and that money is still there, also though we haven't used it.
Yes, that money is still identified and dedicated for public access.
The money that's in the appendix -- all of the franchise agreements have an appendix that deals with public access funding, and it spells out specifically the amount of capital dollars that each cable operator must commit to fund cable-operating public-access studios and equipment. And there's also a provision in those same agreements for them -- 1171 2/22/99 - WHOLE COMM. - Bill No. 990023 based upon what Council decides, for them to commit a certain amount of funding for the operating fund costs of public access, with the understanding that they can deduct the money that they give us for operating costs from the revenues that they turn in to the city for their franchise fee. And in some cases, as recently, they've been -- you know, it's either a percentage of the 5 percent or it's a specific dollar amount that they put on each subscriber's bill.
So all that we have to do is -- I think that Councilman Nutter established and you detailed the process. Because of changes in federal law, we have to redraft a bill and then restructure -- pass an incorporation bill in Council and new bylaws.
And then the Mayor would have to appoint, with the consent of Council, the board of directors of that corporation.
Thank you, Madame 1172 2/22/99 - WHOLE COMM. - Bill No. 990023 Chair.
You're welcome. The Chair recognizes Councilman Cohen.
Coming back to the last question of Councilman Ortiz's, then we're back at the same stage we were before we had ever passed any legislation? I mean, do we have to start all over again to -- I thought we had passed the legislation which authorized, we thought -- COMMISSIONER PEREZ: With the passage of time and the change in the pertinent FCC regs and telecommunications law, the advice of Council is that the corporation has to be reauthorized and presumably is to recognize whatever obstacles, problems, issues, or restrictions may have come out of the those laws that have been passed and regs that have been passed in the interim. But the assumption is that once there's a policy decision to move forward, we've already preserved our option through the franchise renewals to do public access, and we preserved the financial commitments that have been there. The only real difference is it methodology by which 1173 2/22/99 - WHOLE COMM. - Bill No. 990023 the corporation gets create and enabled is what changes, and technically speaking, that brings you back to the drawing boards only in that one regard.
Well, I'm not sure I understood that, but is there a City Solicitor's opinion that states that we have to start all over again on forming the articles of incorporation?
Councilman, we do have an opinion from the City Solicitor on what is the process and what needs now to be put in place to move forward, and that includes a drafting of a new ordinance and a drafting of a new set of articles of incorporation to establish the nonprofit.
Do you have a copy of the City Solicitor's opinion in your department?
I would like very much if that was sent to the Council President so that we can study it and see it instead of having a long discussion here. 1174 2/22/99 - WHOLE COMM. - Bill No. 990023 But now onto finances. As a result of inactivity of the City since this act was first passed, can you tell us how much money we have lost in potential fees from the various cable companies since, I think it was 1983, when we first passed the legislation? Have we lost any money irreparably, or are the contractual obligations entered that were into by the cable companies that we gave their franchises all still there so that the City -- COMMISSIONER PEREZ: The specific financial obligations are still there. And I believe Councilman Nutter, who's not in the room 15 right now, was at least suggesting that the passage of time cost us the value of cost-of-living increases or other such things that change the value of a dollar the from the '80s to the '90s. The counter point to that would be that equipment in 1999 is different than it was ten years ago, and it isn't necessarily as expensive nor as huge as it used to be. And the mechanics of installing and implementing and maintaining are probably more simplified by technological progress 1175 2/22/99 - WHOLE COMM. - Bill No. 990023 than it was then. So we're left in that quandary of, you know, what would the $88 have bought then versus that same number, which doesn't carry the same value in 1999? What does it buy now?
Apart from that inflationary aspect -- COMMISSIONER PEREZ: Right.
-- just talking numbers of dollars, are we in a position to recapture any that we have not gotten to date? Because I understood that -- COMMISSIONER PEREZ: The agreements were not structured to provide us funds; the agreements enabled the franchise operators to spend the capital funds in order to establish the studio locations. That's the one side. The other side is the maintenance and support and continued operation. That presumably was going to come from either the franchise fee deduct or from Public Property's appropriations for staffing and operating expenses.
Well, just so I understand, can we deal with the capital funding? Did you say that capital funding did not involve 1176 2/22/99 - WHOLE COMM. - Bill No. 990023 any money; it involved the requirement on the cable companies to create from their own funds the necessary structures that a public access -- COMMISSIONER PEREZ: Up to the limits specified.
What's that? COMMISSIONER PEREZ: Up to the limits that were specified in the appendix.
Do we know what the limits were? COMMISSIONER PEREZ: Yes.
The initial capital contributions required for the cable operators are $125,000 for each of the neighborhood access facilities, and $50,000 for a mobile production van for a $300,000 total for each franchise area for an aggregate of 1.2 million. In addition, there's $150,000 obligation co-fund from each of the franchisees to fund a central studio for a total of $600,000.
And would those dollar numbers change at all in the new agreement?
No. The dollars are -- the 1177 2/22/99 - WHOLE COMM. - Bill No. 990023 same dollars that were in the original agreements are in the renewals.
And the new contract did not take into account the inflationary aspect?
No, it not take into account -- I think we answered that before. We preserved them as they were in the original agreements in the new agreements. Again, their consideration on how you actually do public access, whether you need to have five television stations in a city of this size. In some cities where they only have one or two, do you need to have nine studios, or is it more appropriate to have a smaller number that still accomplishes the same goal of public access. And like anything, if you're talking about a product that is untested in a marketplace, you don't want to spend all of the dollars up front without at least building up the momentum to see whether or not you have the demand and the capacity to provide hours of programming that 24 people see value in, and then you make the appropriate expenditures. 1178 2/22/99 - WHOLE COMM. - Bill No. 990023 So the dollars are there and they're preserved, but there is some management aspects of how you actually do it, and there is even some aspects on how some of the people who feel strongly about it help co-fund to help defray some of the operating costs as well.
Well, what's the City's attitude toward it? What's Public Property's attitude toward it? It seems to me there was a clear public mandate back in 1983 that we move ahead with this. And since then, the City has been sitting on its hands. Now, what's the City's position? The City's against public access? If so, let's state it and we'd like to hear why. Why has there been no access in the last 15 or 16 years to promote what we in City Council believe was an adopted policy? It was a bill passed by City Council, signed by the Mayor? Why hasn't there been action? Do we have a new kind of veto, in which it's veto by inaction? (Laughter.)
I mean, don't 1179 2/22/99 - WHOLE COMM. - Bill No. 990023 understand. We pass bills and nothing happens. Does anybody hear? And if not, Madame President, I would like to have the Mayor here to find out what is the City's policy on public access? We passed an action -- you were here, I was here, you were here. You know, it's a long time, and nothing has happened. Was it a separate private deal arranged for the purpose of creating more profits for cable TV? Were they fearful of competition? I mean, if so, maybe they even had a legitimate reason to be fearful or maybe they didn't, but at least we ought to be discussing it. We ought to find out what the policy is. I don't want to embarrass anybody here; has there ever been a discussion, to your knowledge, as to why we have not moved ahead with public access? Commissioner, you're a fine man, but just tell us. I don't want to waste the time of the Council or your time. COMMISSIONER PEREZ: I can't escape the fact that I've been commissioner for seven or 1180 2/22/99 - WHOLE COMM. - Bill No. 990023 eight years now and I've had to continually try to appropriately respond to that question over and over again in its many variations. Historically, historically, the cost of supporting it was not something that could be accommodated in my budget. Obviously, when I first came to the Department in the near-bankruptcy years, where every penny counted, the request for -- in the internal process before coming to Council, requests for funding never held up against the higher priorities of public safety agencies and other aspects of Public Property operation. At the same time, you know, as commissioner, am I going to ask for this continuously when I can't fund year after year in those earlier years all of the priorities that we thought were pertinent for the Department and for the agencies that we support? You know, it's a new era. We have financial stability. The discussion in that context has been that we're still very tight. My department has reduced its operating expenses by the millions of dollars year to year -- not 1181 2/22/99 - WHOLE COMM. - Bill No. 990023 increased operating expenses. I can only answer for it in the context of my department and be, you know, be perfectly honest that I'm not going to ask the Dean Kaplans of the world for something that doesn't appear to have broader support as an expense that ought to be incorporated in my department.
You're indicating -- and I don't mean this to be critical, but I'm just trying to find out where the situation is because there is a strong demand and I think the demand did not express itself publicly because it had confidence in the City Administration that it would move forward we do that. And we do that. You know, we expect that when Council passes a bill, the administration proceeds to act on the bill, and I think the community relied on that. And nothing has happened. And it just seems to me that what you're telling us is that there hasn't been a sufficiently expressed public support for cable TV so that you would feel that you would want to incorporate it into your budget, so you have not 1182 2/22/99 - WHOLE COMM. - Bill No. 990023 incorporated it in your budget. Is that about right? COMMISSIONER PEREZ: That's essentially correct. I mean, we've recognized the fact that there has been interest out there, obviously, or maybe that aspect would not have been preserved in the renewals. So we do feel that it's still a public policy expectation and that there is some public expectation at some point in the future that, you know, that there will be public access activity. And so, in our negotiations with the Law Department as our partner in that, in the renewal process, we've at least preserved the City's option. We've preserved the original intent of Council to provide public access.
But when we started, your hair wasn't even beginning to turn gray. COMMISSIONER PEREZ: No, it wasn't.
And now, it's on its way. Maybe you're lucky you still have it. (Laughter.) COMMISSIONER PEREZ: You know, I'm losing my Conway Twitty look. 1183 2/22/99 - WHOLE COMM. - Bill No. 990023
Let me ask you, has the Mayor's Office ever said, How come you don't have any money in here for public access? COMMISSIONER PEREZ: I think --
Because I don't really think it's Public Property's major responsibility; I think it's the top people's major responsibility, because it's a top-policy question. Whether or not there's enough money in Public Property largely depends upon how the Mayor makes his decisions on the budget. If the Mayor thought public access was important -- COMMISSIONER PEREZ: I think the other significant development -- notwithstanding everything else that's been said -- is the PICA management and control of City income and expenses. And in our submission to Council President Verna, we made it very clear that if we spend a million dollars here in a way that hadn't been previously programmed into our five-year plan, it's got to come from somewhere else, whether it's a deduct on the franchise fee and, therefore, a deduction in revenue or a change in 1184 2/22/99 - WHOLE COMM. - Bill No. 990023 my only internal budget operations or some other department's operations.
So then you're saying Council basically made a mistake -- COMMISSIONER PEREZ: So the balancing -- the five-year balancing act which has now layered over us for many years --
But, Commissioner, you're saying what we basically did was to make a mistake in City Council when we decided to accept the good faith of the city mayors, that they would move ahead? So you said that if the funding isn't used for public access, it will go into, I guess, the General Fund? Is that where the money's going in. COMMISSIONER PEREZ: Their final commitment, the commitments are still there.
So you're telling us it's the City that has to pay for the cost of public access? COMMISSIONER PEREZ: No. I believe --
We thought it was the cable companies that were paying. COMMISSIONER PEREZ: The subscribers 1185 2/22/99 - WHOLE COMM. - Bill No. 990023 end up paying.
What's that? COMMISSIONER PEREZ: The subscribers end up paying.
The Chair recognizes Councilman Mariano for a point of information.
Sure, we know the subscribers pay, Commissioner -- and they've been paying all along, but where is the money that was put away? I mean, did you just tell Councilman Cohen that -- COMMISSIONER PEREZ: Money has not been put away.
Well, since '83. Now, in '83, I wasn't here; I was in high school or something, but what happens is --
No, it wasn't grade school; it was high school. But we put this money away and they enter a contract. Now, correct me if I'm wrong. That money comes down to 1186 2/22/99 - WHOLE COMM. - Bill No. 990023 Public Property -- to the City, and Public Property gets it? Was the money ever put away? COMMISSIONER PEREZ: No. 5
No. Apparently, the City just confiscated the money. The City decided instead of having public access, the City wanted to hold on to the money itself.
But is it sitting in a room somewhere, this money? Or has it never existed 'cause it was never taken? 'Cause they took my cable money every month when I paid the bill. So from now on, I can deduct 5 percent off that was supposed to be for --
Councilman Mariano, they tell us the franchise fee was paid, which means that payment was made by the cable companies. Then it was up to the City, and the City decided they'll put it in their General Fund 1187 2/22/99 - WHOLE COMM. - Bill No. 990023 pocket rather than make it available for public access. They conned us, that's all. We were conned in City Council. We thought we passed a bill to, you know, to provide for public access, and people in the Mayor's Office have been smiling all the time.
Councilman, they conned us again when we just renewed the --
They just conned us again apparently too because they liked the language so much, they just kept the same language.
I can't believe they could con my esteemed colleagues.
I can't believe that they could con my esteemed colleagues year after year? They just conned us again?
So, no, seriously, the money was never collected? Or it was collected? COMMISSIONER PEREZ: It was -- the 1188 2/22/99 - WHOLE COMM. - Bill No. 990023 franchise fee, the percent allowed and capped by the federal government, is collected, I think, quarterly per franchise area, and it's deposited in the General Fund. The other costs that some of you are labeling "fee," were spending agreements, spending agreements to capital support, provide capital support and, I think, limited -- limited normal daily operation support of public access.
So in the plain world of the people that we happen to -- COMMISSIONER PEREZ: But if the expense occurs --
There's no money for access. COMMISSIONER PEREZ: -- it's deducted from the 5 percent.
There's capital money to be spent to build the studios and provide the equipment.
Right, but there's no operating money. 1189 2/22/99 - WHOLE COMM. - Bill No. 990023
There's operating money that gets deducted out of the franchise. If Council says we want you to take half a million dollars out of the franchise fee for public access for them to do the operating costs, then that will come out of the franchise fee.
But if I hear Commissioner Perez right, the reason -- now, I may have heard this wrong 'cause I have a cold this morning, but did I hear that the reason we didn't do this was because someone decided no matter what contracts we entered into, no matter what bills that Council's been passing since 1983, they really don't mean diddly here, right? Is that it? COMMISSIONER PEREZ: No, I don't --
Because somebody downstairs decided that we don't have public access? In layman's terms. COMMISSIONER PEREZ: I've tried to respond in layman's terms as best as I can. I don't think my responses are making anybody here feel any better or understand the history or the problem any better. But the fact is that now in 1190 2/22/99 - WHOLE COMM. - Bill No. 990023 1999, as a consequence of various things that have happened since Council passed the earlier ordinance, this Department and the City doesn't have the corporation enabled to implement and activate the public access programming activity. If and when it occurs, when it occurs, the franchise-holders have the ability to take the funds before we ever get it and appropriate it for the support of the corporation and take it out of the 5 percent. So we will receive less than 5 percent. That's what I'm trying to say. When it's activated and it passes the capital start-up and it's ready to roll, the daily operating expenses are going to come -- or can come as a deduct from the fee. One way or the other either. They either give the City less than 5 percent, and the difference will be the cost of the studio operations; or they'll tack on a surcharge to the subscribers -- a quarter, 50 cents -- to cover the costs.
Of course. Why do we have such difficulty with a system or a mechanism that we set up ourselves, and other cities seem to be able to pull this off? I mean, 1191 2/22/99 - WHOLE COMM. - Bill No. 990023 I've been in other cities north of here that have some real decent community access. I just don't understand it. I just think -- I mean, these aren't facetious questions. Obviously, we're not blaming you 'cause you come here as the commissioner and you obviously answer to someone, and I think Councilman Cohen just wanted to know what the stance is for this. I mean, are we for this or aren't we? You wouldn't seem to think that Council, as a whole, because they kept asking us since '83. But, you know, we could talk about operating budgets, capital budgets. Is this thing going to happen or not? You know, I don't mind people telling me things that I don't like as long as they tell me the truth. And I'm not saying that you're telling anything but the truth here, Commissioner, but I think that sometimes, the way this whole scenario is set up, we get tired of hearing the same answers all the time from the same departments that are practically just another way of not telling the truth. You know, and I don't think you sit down and you're going to 1192 2/22/99 - WHOLE COMM. - Bill No. 990023 deceive us. You have things you have to say because you work for people that want you to say certain things. Thank you, Madame President.
If my colleagues agree, I think that we have been discussing this for some time now. I think before we actually put the budget to bed, so to speak, we ought to have a briefing with the Commissioner of Public Property so that we can actually address this very one issue that everybody seems to have concern about. Would you all agree?
Madame President, may I add one thing? I think we've got to have the Mayor present because I don't think a commissioner has the power, under the present administration, to make any decisions on it. I think the only that could have the power would be the Mayor or the Chief of Staff. I have yet to hear Councilman Nutter's idea that Councilman Nutter --
We'll be more than happy to extend an invitation to the Mayor 1193 2/22/99 - WHOLE COMM. - Bill No. 990023 and the Chief of Staff.
Thank you. Councilman, I don't have any problem with your suggestion. I think, though, what might be helpful, beyond the letter that the Commissioner wrote to the Council President laying out -- in response to questions that were raised by Councilman Ortiz and I back on February 9th, I think what also might be helpful prior to that meeting, whether you invite the Mayor or don't invite the Mayor, is if the Department could provide to us in a step-by-step fashion what needs to take place, which I actually thought was the original question back in early February. But if you could give us a detailed explanation on a step-by-step basis of what needs to happen to have full implementation, from the ordinance creating the Public Access Corporation to new bylaws. As a part of that memo, give us the old ordinance that was passed and the only bylaws, and tell us what the problems are as created by changes in federal law that caused those bylaws not to be implemented, what the costs 1194 2/22/99 - WHOLE COMM. - Bill No. 990023 are associated -- you've mentioned that in the memo. But what I'd also like to know as a part of that is a year-by-year accounting for the 5 percent franchise fee. If you tell me that it's $8 million today, it certainly was not $8 million 15 years ago 'cause they were just getting started then. COMMISSIONER PEREZ: Right.
And you're only now up to 60 percent penetration. But you should be able to tell us on a year-by-year basis what the franchise fees to the City of Philadelphia have been because what I really want to know is the total amount of franchise fees that have been collected by the City over the past 15 years, none of which obviously have been devoted to public access, all of which have been going into the General Fund, and I'd like to see on a year-by-year basis what we have missed over the past 15 years. So I think we need another document that lays out what the process is. And then, you know, Councilman, in you want to pursue the Mayor, 1195 2/22/99 - WHOLE COMM. - Bill No. 990023 Chief of Staff or, you know, anybody else, that's certainly fine with me but I think we have to have as much information as possible.
Madame President, I would agree with Councilman Nutter. I think before we have a briefing or meeting with the Mayor, I do think we do have to have all the facts at our command. We don't want to spend time trying to get the facts at that point.
Commissioner, when do you think you can provide that information? COMMISSIONER PEREZ: It will probably take a couple of weeks. Obviously, some of it's, you know, readily available, but we'd have to do some research on the other aspects of the question and put it together and respond to you by way of the Administration.
Well, I think that that may be too late. I don't know when we 1196 2/22/99 - WHOLE COMM. - Bill No. 990023 have our first reading does anybody know? March 10th? I think it's March 10th or 11th that we have our first reading. We report them out when? When do we report the bills?
We don't have to act on the budget until, actually, the end of May so there would be ample time to --
If we could get this information before March the 9th, I don't see any reason to hold the budget back if we get this information. Would you be able to provide this information to us before March the 9th? COMMISSIONER PEREZ: Yes, we would. We just conferred with Mr. Kaplan, and we will do that.
Very well. Thank you. Any other statements? Councilwoman Tasco?
I'm sorry. You don't have your mike on, do you? 1197 2/22/99 - WHOLE COMM. - Bill No. 990023
I wasn't clear on the setup of the access channel. What triggers the setup of the access channel? Council has to do that? If the money is there, what did you say? I didn't hear you. COMMISSIONER PEREZ: Well, very generally, and I don't think we have Law Department representatives here with us, but Council is action to be followed by Mayor's action because the Mayor will appoint in concert with Council the members of the cooperation. Anything that happens from that point forward will be based, I'm assuming, on whatever detailed operations plan is adopted for how the corporation will function and how soon the target dates are set for a studio or other studios to be set in place. But the key thresholds are Council action and Administration action. Reauthorizing the corporation and then "staffing" it, for lack of a better word, with members appointed by 1198 2/22/99 - WHOLE COMM. - Bill No. 990023 Council and the Mayor's Office.
Councilwoman, you just brought something to my memory. We were told last year that we would be getting a new microphone system in Council. (Laughter.)
What is the status of that request? COMMISSIONER PEREZ: We voided a bid. Got as far as bidding for the new system. I believe there was only one interested party in submitting the bid. We didn't think that that was a good bid, nor did it cover the scope of service we wanted. It was rebid. And the rebid will occur in order for the new system to be installed during the recess.
You're not saying which summer. (Laughter.) COMMISSIONER PEREZ: This summer, this summer, I'm sorry. 1199 2/22/99 - WHOLE COMM. - Bill No. 990023
Thank you. The Chair recognizes Councilman Rizzo.
It's the same bid with the 800 megahertz radio system, I bet. I have a question in reference to the way we do business, day-to-day business, buying services and things that are bidded. Commissioner James, Deputy Commissioner James indicated that we spent -- we contracted with Bell Atlantic to do this computer technology. Was that a bid?
The original pilot for the mobile data terminals was done with Bell Atlantic Mobile. After we kind of did a proof-in-concept test of it and we found that the technology did meet our requirements, we then did do a bid between the two providers who were provided at that time, and that was Comcast Metrophone and Bell Atlantic Mobile, and Bell Atlantic Mobile won on the bid.
Could you just take a minute and explain what services you bid and 1200 2/22/99 - WHOLE COMM. - Bill No. 990023 what you don't bid. I understand in especially the communications industry, within Public Property, there's a premises amount of money spent that is never bidded. Could you describe for me an example of something that you don't bid?
Well, a lot of the traditional telecommunication services prior to the Telecommunications Act have only been provided by one incumbent local exchange provider, Bell Atlantic. So a large amount of the services that are provided by the city are purchased from Bell Atlantic Telephone Company off of their regulatory tariffs. That service traditionally has not been bid because there has not been competitors in the market who could provide similar services of the same value.
Well, that is something that we're assessing. I think, as you can see, we're trying to structure ourselves to be prepared for more competitors into the market who are willing and able to provide similar services of the same complexity, and bid those services out.
Other than telephone 1201 2/22/99 - WHOLE COMM. - Bill No. 990023 and other services provided by Bell Atlantic, day-to-day operations of the Department of Public Property more so in the communications and with repair and all the things that keep our Police and Fire, are they pretty much competitive bids?
No. There are competitive bid. There are long-distance services that are competitive bid, our equipment that we provide, the phone systems are all competitive bid. Paging is competitive bid, wireless services is competitive bid. Just about the whole gamut, other than the traditional Bell Atlantic services that we've been providing are competitively bid.
Commissioner, I have one very brief question. In reading your testimony, I see that we're proposing a Women's 1202 2/22/99 - WHOLE COMM. - Bill No. 990023 Correctional Facility be constructed. Can you tell me where that will be located? And when do you expect construction to begin and end? And where do we presently house the women? COMMISSIONER PEREZ: The women are presently housed in a facility. I think it's referred to as a Module I, II, or III -- I'm sorry I don't remember which one -- at the prison complex on State Road. The proposal is to carve out a portion of the existing complex out there, which will require demolition of some small buildings to clear it and construct -- is it 400 beds? -- a 400-bed facility for women inmates only.
And when will that construction begin and end? COMMISSIONER PEREZ: Let me ask Joan Schlotterbeck, our Building Services Director, to try to respond to that. (Joan Schlotterbeck comes forward.)
Councilwoman, I'm Joan Schlotterbeck, Department of Public Property. 1203 2/22/99 - WHOLE COMM. - Bill No. 990023 We're anticipating that the female facility will be completed by the last quarter of Fiscal 2000.
Is the District Councilperson aware of this? And do we have approval from -- are there area residents in that -- COMMISSIONER PEREZ: To the best of my knowledge, I'll say yes, for a number of reasons. Obviously it's not a Department Operating item; it's a Capital Program Office Capital Project request, so it's in all of the projects that have been provided to each of you in general, and is pending Council's action for appropriation and approval. It is tied to the consent decree, which has been influencing everything that happens out there for the past 10-plus years. Unfortunately, the prisons are in a better position to respond to that, and CPO is in a better situation to respond to that than I am.
Okay. I 1204 2/22/99 - WHOLE COMM. - Bill No. 990023 don't think there are any further questions, but if you would send us the information requested, we would certainly invite you to a briefing. COMMISSIONER PEREZ: Thank you.
Thank you very much. At the request of the stenographer, we'll take a ten-minute recess. Thank you. (Short break taken.) - - - (Proceedings resume.)