We're now back in session. The next department to testify is the Office of Fleet Management. (Fleet Management panel members come forward.)
Please identify yourself for the record and proceed with your testimony. We have a copy of your testimony, which will be given to the stenographer to be transcribed in full. If you would abbreviate your testimony, it would really be appreciated. 1205 2/22/99 - WHOLE COMM. - Bill No. 990023
President Verna and distinguished members of City Council, my name is Riley P. Harrison, Fleet Manager for the City of Philadelphia. With me today is Robert Fox, my Director of Administration Services; and Nadine Glover, my Budget Officer. And we thank you for the opportunity to present testimony in support of our FY 2000 Operating Budget request for the Office of Fleet Management. 5 million less than its FY 1999 budget because vehicle acquisition funding has been reduced to a more normal level. This budget also reflects an increase of nearly $500,000 in Class 100 for negotiated wage increases. 4 million. 4 million dollar. 1206 2/22/99 - WHOLE COMM. - Bill No. 990023 OFM continues to develop and implement the effective Fleet Management policies and practices that govern the acquisition, assignment, utilization, and maintenance and relinquishment of all City vehicles. S. Conference of Mayors. This aware recognized the City's work with the 3M Corporation, which manufactures the materials used to create the graphics used on City vehicles. This effective partnership led to the development by 3M at no coast to the City of standards of application of graphics on over 180 different classes and models of vehicle. The City's fleet is very diverse in terms of its size, complexity, and function. It has an asset value exceeding $220 million, and that is including the Water and Aviation Fund. This represents a significant investment of public funds in the delivery of City services. OFM's ongoing preventative maintenance 1207 2/22/99 - WHOLE COMM. - Bill No. 990023 program is essential and is key to the reliability and cost effectiveness for the operation of the City's fleet. The effective Fleet Management is informed by accurate operational and cost data, and since FY 1995, OFM relied on an innovative information management system titled "FACTS" (Fleet Accounting Computer Tracking System). " This information from FUMES is allowing OFM to measure vehicle usage and predict costs of repairs and maintenance. And during the remainder of FY 1999, we will analyze fleet utilization data and will be able to develop recommendations regarding the optimal size and configuration of the fleet. Annually, increasing continuing education and supporting the high-school internship program annually since 1994, all OFM employees have received the equivalent of one week of training that is tailored to their level of expertise and career development. In FY 1998, 232 employees attended 526 courses. In addition, we 1208 2/22/99 - WHOLE COMM. - Bill No. 990023 conduct in-house seminars three times a year, covering our basic missions in preventive maintenance, right-to-know safety standards, personnel policies and procedures, and customers relations. We also support and continue to develop in our diagnostic skills for our technical employees the ability to obtain their master's certification in automotive or truck technology. And I'm happy to report that percent of our 12 technical professional workforce is now certified 13 as master either auto or truck technicians. 14 That's quite an accomplishment in our industry 15 with the changing in technology. 16 Before City vehicles are acquired, we 17 develop design specifications with the client 18 departments, including the most current 19 technological advancements to ensure optimal 20 operational performance, extending their life 21 cycles, and maintaining cost efficiency. For 22 example, we have recently purchased equipment for 23 the airport of a highly-sophisticated airport 24 rescue and fire-fighting truck that is designed to 25 subdue fires that occur within the fuselage of an 1209 2/22/99 - WHOLE COMM. - Bill No. 990023 airplane.
We've also recently taken delivery for the Department of Recreation an innovative mobile performance stage which has a self-contained power-generation unit, sound system, theatrical lighting system, and this mobile stage has reduced the time-consuming and labor-intensive manual preparation of this stage, which travels from district to district, and community to community. Since OFM's conception, the creation of a central repair facility has been acknowledged as advantageous because it would facilitate expansion of our delivery capacity and would provide the space needed for large-scale in-house vehicle rehabilitations. Although there is a commitment to go forward with such a facility, OFM is completing a study to determine its operational impacts on the General Fund. In conclusion, Fleet Management will continue to provide quality service and a fiscally prudent manner. Again, thank you very much for the opportunity to appear before you, and I will be 1210 2/22/99 - WHOLE COMM. - Bill No. 990023 happy to answer questions you may have.
Thank you very much, Mr. Harrison. Could you tell us why you are projecting scheduled repairs to decrease and unscheduled repairs to increase in FY 2000? I believe that's on of your testimony.
One thing we've recognized in FY 1999, we have a vehicle replacement budget for the General Fund of $21 million, and our request for FY 2000 is $18 million. With those funds, we'll be able to inject newer equipment in the fleet. And from previous testimonies, the majority of that funding goes to Public Health and Safety equipment, approximately 80 percent. But as the fleet continues to age, there is a necessity to do more repairs to that equipment. We've intensified our preventive maintenance efforts. And, again, as the fleet ages, more focus is placed on replacement of parts prior to failure, and we are projecting that unscheduled repairs, as a result of some of that aging, will increase modestly in FY 2000. 1211 2/22/99 - WHOLE COMM. - Bill No. 990023
You stated that your budget contains $18 million for vehicle purchase in FY 2000.
Would you provide with us a listing by department and by type of vehicle that will be required in FY 2000. Will these be additions to the City's fleet or replacements?
The majority are replacement vehicles. And, again, 80 percent of that normally is allocated to Public Health and Safety.
Yes, 80 percent of that funding is generally allocated or used by the Public Health and Safety Departments. And it's used for replacement vehicles within those departments.
I can't give you an 1212 2/22/99 - WHOLE COMM. - Bill No. 990023 exact number, but it would be approximately 300 vehicles across the board.
Why are you projecting increases of approximately 27 percent in diesel fuel and gasoline in FY 2000?
The fuel industry is a very volatile industry right now. The cost of gasoline today, the cost of a cup of coffee that we spend today is more expensive than what we pay for one gallon of unleaded diesel fuel. That's very good for us today. But looking at FY 2000, we have to project that the cost will go up. I'm not in the industry to know what's going to happen with the OPEC countries or the supply of oil. So realistically, we have to project more than what the low is today, which is 34 cents a gallon for unleaded gasoline. So we are projecting for a more realistic cost of fuel. And 18 months prior to today the fuel cost to the City, less its taxes an everything was almost doubled. So we're projecting FY 2000 to bring it back into a more realistic projection on the cost of a gallon of diesel fuel and a gallon of 1213 2/22/99 - WHOLE COMM. - Bill No. 990023 unleaded gasoline.
Excuse me a minute, please. What did we spend this year for diesel fuel and gasoline?
I believe that I have the page before me. Yes, please, for the record, would you please respond. (Robert Fox comes forward.)
My name is Robert Fox, with Fleet Management. For FY '98, we did $1.5 million for diesel fuel and $2.9 million for unleaded.
Thank you. Mr. Harrison, you are reducing your overtime budget in FY 2000 by approximately 35 percent. How do you plan on achieving these reductions without impacting your service levels?
Two ways, Madame Chair. One is that we are projecting hiring ten persons for FY 2000 from our FY 1999 head count. And we also implemented citywide through the labor agreements that we have what we call "shift changes." We identified 3 major facilities within 1214 2/22/99 - WHOLE COMM. - Bill No. 990023 the 18 facilities that we're operating where we announce to the District Council that we want shift changes to give better coverage to our client departments. In other words, shift from a Monday-to-Friday schedule to go Tuesday through Saturday and Monday through Friday. We're allowed that once per year as long as we give proper notice. So with that shift changes that we've already implemented at our Public Health and Safety facility Front Street and Hunting Park, the continued shift changes that went into effect January 1st of this year at three other major facilities, we think we can manage down our overtime expenditures and better support our client departments.
If they are hiring ten additional people, are you filling vacancies, or will these strictly be ten additional people added from this year's budget?
It would be 10 positions 1215 2/22/99 - WHOLE COMM. - Bill No. 990023 -- there would be positions in the 3 administrative area and 7 positions in the professional technical area.
Is it reflected in the budget in the way you're describing? If you look at -27? Are you getting less people than you were budgeted for this year?
Robert Fox, Fleet Management. Our increment run as of 11/98 was 466 and --
Right. But we didn't fill anywhere near 488. Right now, we're at 464.
So you're still funding less people than you did this year. I don't know how you get the 10 additional. I don't see that.
Madame President, I may have spoken on additional. There are ten replacement persons.
They're existing vacancies -- 1216 2/22/99 - WHOLE COMM. - Bill No. 990023
-- that you want to fill, but I don't see that reflected in the budget. This year, you were budgeted for 488 positions. For Year 2000, you're budgeted for 476 positions.
Madame Chair, this fiscal year, we didn't fund too 488, and we used more of those funds for overtime. Next year because of the shift changes, we do not believe we'll have to use as much of that point, and with adding an additional 10 people from the increment run of today, we'll be able to reduce the overtime.
Well, my interpretation of -27 does not indicate to me that you are getting 12 additional people, whether they be new or they're simply filling vacancies, would you agree?
But listen to me, would you look at the page with me, 45-27. In FY '99, you were budgeted for 488 positions, correct? 1217 2/22/99 - WHOLE COMM. - Bill No. 990023
For the Year 2000, you are budgeted for 476 positions. Yet, you tell me you are filling vacant positions. 7 I don't see that. Why wouldn't that figure be 486 8 positions budgeted for that year 2000? Can 9 somebody explain that to me, please? 10
Yes. If you take the increment run that appears there at 466 and we fill those vacancies of 10 positions, that would bring it up to the 476, which is still under our budgeted positions.
It's your department. And if you're satisfied, so be it. I was just trying to help you. Are there any questions or comments from anyone? The Chair recognizes Councilman Mariano.
I'm sorry, Madame Chair, I just came in. And these questions may have been asked, so if they were, please forgive me and tell me they have been. 1218 2/22/99 - WHOLE COMM. - Bill No. 990023 Motorcycles for highway patrol, did you ask anything about that?
We purchased two motorcycles in FY 1999. They were full-size motorcycles with side cars. We're developing specifications for our next fiscal year purchase, and we're working with the Police Department through, you know, their sources to try and inject a few motorcycles to replace some of our 1985 and '86 vintage bicycles, if you will, or motorcycles.
They may be worth more as (unintelligible) as than the ones you can buy at this point, yeah.
At this point, they may be close to antique, but they're well-maintained and you know. . .
Is there a game plan next five, ten years to replace all of them?
That is correct, yes, there is, Councilman. 1219 2/22/99 - WHOLE COMM. - Bill No. 990023
Does anyone else have any questions or comments? (No further questions at this time.)
Thank you very much. I would suggest you look at the budget again.
The next department to be heard will be the Water Department. (Water Department panel members come forward.)
Good afternoon, Commissioner. Thank you for your patience. And, of course, I want to thank you for all of the help that you give my office year-round. COMMISSIONER KISHINCHAND: Thank you, Madame Chair.
Your office really is always very, very responsive, and I want you to know how much we appreciate it. COMMISSIONER KISHINCHAND: Thank you 1220 2/22/99 - WHOLE COMM. - Bill No. 990023 very much for --
Thank you. COMMISSIONER KISHINCHAND: -- letting us know. And good afternoon, President Verna and members of City Council. My name is Kumar Kishinchand, and I'm the Water Commissioner for the City of Philadelphia. And thank you for the opportunity to come and testify on the Fiscal Year 2000 Operating Budget for the Water Department. We are seeking your approval for an Operating Budget of $199.7 million. In addition to that, we are requesting $222.7 million for payment to other agencies such as Water Revenue Bureau, Law, etc. as well as payments to the debt service for the capital borrowing that we've done. So the total budget is $422.4 million. I've provided you with a detailed testimony, so I'll try to keep my testimony very brief and to the key points that the Council is generally interested in.
Thank you, Commissioner. COMMISSIONER KISHINCHAND: And the 1221 2/22/99 - WHOLE COMM. - Bill No. 990023 first point is, our drinking water is extremely safe. It's probably one of the highest quality in the nation. And all of our three plants have been recognized by the US EPA for their participation in the Partnership for Safe Water, which has established goals that are five times more stringent than the federal regulations required. And we've met those goals and we've done better by 30 percent on those. And in fact last year, all three of our water pollution control plants received gold awards for compliance with all the regulations for every sitting hour of every single day of 1998. All this has been done at a cost without any rate increases for the past two years. As you may recall for the last three years, I've come before you and said we will not have a rate increase until the year 2000.
And I see we're not going to have a rate increase in FY 2000. I'm not going to ask you about 2001; we'll be satisfied just with knowing that we're not going to get one in FY 2000.
(Inaudible, off 1222 2/22/99 - WHOLE COMM. - Bill No. 990023 mike.)
Do you really want to know? COMMISSIONER KISHINCHAND: Perhaps I should --
Commissioner you, can you answer the question that Councilman Kenney just asked? Be very soft and kind, please. COMMISSIONER KISHINCHAND: Okay. We're, at this point, projecting a rate increase in 2001, but we want to keep that as low as possible. As you know, in the past, we projected in our five-year plan rate increases which we worked very hard to minimize and make it disappear. I'm not suggesting that in 2001, we'll be successful in eliminating all of it, but we'll work very hard to bring it down from the projections that we show in our five-year plan at this point. But in the year 2000, Fiscal Year 2000, we are not requesting any rate increase, and this is something that I do not believe there are too many agencies or utilities in this region that can say they are not increasing their rates. 1223 2/22/99 - WHOLE COMM. - Bill No. 990023 If you look at the rates that are being charged in the surrounding counties, and surrounding neighborhoods and neighboring towns, they're paying almost twice as much for just water. Our rates are the lowest in this region, and many of those townships, etc., do not have storm-water rates incorporated into them. And some of the agencies have in excess of $50 a month for their water and waste-water services, whereas ours is less than $40. So our rates are low, and I think we've accomplished this because of the very hard work that our employees in the Department have done and the partnerships and the team work that has been built up between both labor and management to keep our costs down and continue to keep our costs down. And perhaps I think, having made those points, perhaps it might be best that I get prepared to answer your questions to cover some more detail that you might want to have on this. Thank you.
Thank you,. Councilman Kenney. 1224 2/22/99 - WHOLE COMM. - Bill No. 990023
Thank you, Madame Chair. This relates in some ways to the potential of the proposed increase for 2001, however minimal you might like to strive to make it. What's the total outstanding money that's owed to the Water Department, both commercial -- first commercial and then residential arrearages that are owed to the Water Department for service? COMMISSIONER KISHINCHAND: Our total receivables are approximately in the $170 million range, and we have Denise Garrett here, who's the head of the Water Revenue Bureau. Perhaps she can give you -- or my Deputy Water Commissioner, one of the two probably has a number that's more accurate than the one I gave you.
And additionally as it relates to that question, how much of that money would you deem uncollectible that we're just never going to get? How much do we lop off of that that we'd have to either write off at some point in time? COMMISSIONER KISHINCHAND: I wouldn't 1225 2/22/99 - WHOLE COMM. - Bill No. 990023 be --
So it's $170 million outstanding? COMMISSIONER KISHINCHAND: Yes, 170-plus, it's 176 approximately, but I -- (Mike Nadol comes forward.)
My name's Mike Nadol. I'm Deputy Water Commissioner. To give you a little better quantified sense of what our receivables look like, as of December 31, -- I'm sorry, with our February data, our outstanding total receivable, which includes bills that have just been issued and aren't even yet delinquent, is approximately 195 million. If you subtract those current bills that are within their first 30 days of issuance, that number comes down closer to the level the Commissioner indicated. There are about 29 million in current receivables outstanding. So that brings you down to approximately $165 million, $170 million. Of that, however, nearly 100 million is two years delinquent or longer. Under City accounting policies, we carry our receivables out 1226 2/22/99 - WHOLE COMM. - Bill No. 990023 years, and much of that long-delinquent receivable, unfortunately, is likely to be very, very difficult to collect upon. So if you subtract the current delinquent receivables and those receivables that are more than two years in age, you're left with something on the order of to 60 to $70 million. And of that, a significant portion is over one year old and is also going to be difficult to collect in full.
Of that one -- 13 let's see, of the 170 total, even though 14 $100 million is more than two years or older, how 15 much of that is commercial accounts and how much of that are residential accounts?
Okay. Out of -- well, to do the math most simply, much of it is -- the majority is certainly residential.
It's more than 80 percent. And we do have a detailed breakdown, which we'd be happy to submit in writing to Council, if that would help. 1227 2/22/99 - WHOLE COMM. - Bill No. 990023
Of course, please. And of the $100 million two years or older, are all of those inactive accounts?
The balance of that receivable, those customers are still receiving water service today?
Correct. Some may be under payment agreements whereby they're gradually paying down that delinquency, but yes.
Yeah, I don't count active current payment agreements in the delinquent receivable category. I think that the people come in, make an agreement, abide by the agreement, they should be segregated out of this chronic delinquent group. But of the chronic delinquent group, you said about $47 million out of $100 million are inactive.
So the balance of that money is still -- those customers are still receiving water service. But in that group are 1228 2/22/99 - WHOLE COMM. - Bill No. 990023 also people who have active and current delinquent-account payment programs.
But there's also a percentage of that group that have nothing but are still receiving water service.
I'm sure there may be some. COMMISSIONER KISHINCHAND: Mm-hmm, yeah. More than very likely, they are.
We need to find -- I'd like to find that out. As all of the things I've asked for, if you could just kind of get them through the Chair to us in writing so that we have a clearer picture of what our delinquencies actually are.
Is there any values in the $100 million two years or older vis-a-vis the value that was in the outstanding liens, property tax liens that we recently sold? Is there any similar value in those delinquent accounts? (Denise Garrett comes forward.)
Good afternoon. My 1229 2/22/99 - WHOLE COMM. - Bill No. 990023 Denise Garrett, Bureau Chief of the Water Revenue Bureau. The way our accounts receivable is captured, each one of these categories may represent a property. A property may have a receivable that spans current to years, and 8 that property may have value. 9 To give you an example, the Department 10 of -- 11
Yes. That delinquency 14 may have value. To give you an example, apartment 15 buildings, which we recently began the Utilities Services Tenants Rights Act Program, and we found a lot of large, occupied viable buildings that the owners are receiving income from, and we subsequently were able to generate close to $60 million worth of revenue from all categories of our accounts receivable. So, yes, I would answer there is value in some of those properties.
Could those delinquencies be sold or the liens for those 1230 2/22/99 - WHOLE COMM. - Bill No. 990023 delinquencies be sold at a reduced rate for us to capture dollars now and to allow servicing companies and collection agencies to go after those delinquent accounts?
Well, we are using servicing agencies and collection agencies, though we have not sold the lien. And we have a subordinate lien position with the City. We do not have a first lien position, so we would have to consider all of the financial impact of factoring out those receivables before we could make that decision.
I would appreciate, in addition to what I've requested, to see whether or not there's a profile of this entire universe of accounts and whether or not there's value in our attempt, as we did with the tax lien sale, to try to capture money up front and sell off the value of those delinquencies.
We did do a profiling of our delinquent accounts against the real estate tax lien accounts to see if there was a match between the two of them, and we did find the -- I won't say "significant," but there were quite a 1231 2/22/99 - WHOLE COMM. - Bill No. 990023 few matches. Recently, we began a sheriff's sale program, and we again discovered that there were correlations between the tax lien and the water lien in close to 50 percent of the cases that we prepared for the sale. So we have to consider and look at this very closely because it may, on the surface, appear to have value from the sale, but because of other competing receivable mandates, it may not necessarily have it.
All right. You had testified during the course of the Capital Budget hearing that there were approximately 120,000 delinquent accounts?
In Philadelphia for water? And approximately to percent of them 19 were identified as truly needy individuals who 20 were involved in some type of low-income program, 21 some wraparound service or some program provided 22 by the Water Department for people who are 23 indigent and in need of help for -- 24
Approximately 20,000; I 25 didn't say it was 20 percent. 1232 2/22/99 - WHOLE COMM. - Bill No. 990023
So the other 100,000 either have come in to make arrangements or are intentionally delinquent or are inactive accounts?
Well, we have -- the categories that would come under that would be those that are in payment agreement, which are also reflected in these receivable balances. Those that have not come, those that have no 14 intentions of coming in, vacant properties -- no, vacant properties aren't listed here. But those that are vacant that we are not aware of may be listed here, meaning the newly-vacant properties.
Is there some reason why there would be a moratorium in the winter for water service? I can understand the gas because part of it. I mean, when we have a moratorium on gas shutoffs for the winter were months, to me, it makes kind of rational sense. Is there some rational sense for the winter months precluding 1233 2/22/99 - WHOLE COMM. - Bill No. 990023 shutoffs for water?
Personally, I see no 8 reason for a winter moratorium for shutoff. I do think that there needs to be a safety net in place for those customers who have difficulty paying and who have other situations, such as elderly and handicapped or long-term medical illnesses. That's a 12-month issue; that's not a winter issue. Apart from that, I really don't see that present that there's a need for a moratorium for the winter for water. I mean, our season usually -- the Commissioner can respond to this -- we have heat warnings that trigger us to stop shutoffs in the summertime. COMMISSIONER KISHINCHAND: There are very few properties that are essentially heated by steam. I think for steam-heated properties, you need some water, but at the same time, I think what we need to do is develop a process whereby we 1234 2/22/99 - WHOLE COMM. - Bill No. 990023 can identify the folks who are in need and cannot afford to pay, that there heat is not cut out. But for most of the properties, you do not have steam heat. It's --
Does the moratorium also apply to commercial accounts? COMMISSIONER KISHINCHAND: No, it does not, just residential accounts.
Just residential accounts. COMMISSIONER KISHINCHAND: Just residential accounts.
And all of that information, I'd appreciate it if you could provide it to the Chair so that it can be disseminated to us, but I will say that unless and until we get a clearer picture of this entire delinquent-account situation, we shouldn't be considering rate increases for the year 2001. I mean, you want to and I know you want to minimize the hurt that comes in 2001 with the rate increase, but you can minimize it directly by getting your arms around this group as best you can. Because, again, working-class people are 1235 2/22/99 - WHOLE COMM. - Bill No. 990023 really tired and have a difficulty in carrying this burden for the rest of the city. I mean, when you have people who are paying their bills, working to and three jobs, paying their taxes, raising their kids, it really is unfair for them to carry the burden of people who refuse to pay or commercial accounts that know the system well enough that can maneuver around it without paying. And with $170 or so million in potentially-delinquent accounts, I think it's unconscionable to ask people to pay more money when we haven't been able to collect what it is we need to collect that's delinquent. COMMISSIONER KISHINCHAND: I couldn't agree with you more. In fact, if you look at our budget, we're going to be adding a few more people in our shut-off crews. I think that is one of the strongest tools we have to force people to come in and at least make payments agreement or pay up.
See, from my perspective, if you can come in and make a payment agreement, I think you've met us halfway and you're making an effort. If you're ducking us or 1236 2/22/99 - WHOLE COMM. - Bill No. 990023 you're making a payment agreement and as soon as the moratorium comes, you fall delinquent on that payment, I think that, you know, maybe one or two shots at the apple is fine, but after that. . . Is there any public utility commission restrictions on our ability to shut off? COMMISSIONER KISHINCHAND: No. 9
There aren't? COMMISSIONER KISHINCHAND: We are not under the Public Utility Commission's jurisdiction.
Okay. And just finally and I know I've gone over my time a little bit, on a positive side, I think our Water Department is one of those unheralded jewels in City government. I think that it is a model for water departments throughout the country. You're right about our drinking water quality. It gets a lot of criticism and jokes but it's probably the cleanest and safest water in the country. And I think that, you know, we ought to promote and thank you guys for the work you do because the Water Department is one of the top-notch departments in the city and certainly in 1237 2/22/99 - WHOLE COMM. - Bill No. 990023 the country. COMMISSIONER KISHINCHAND: Thank you very much. I really appreciate that on behalf of the whole Department.
Thank you. The Chair recognizes Councilman Rizzo.
Thank you, Madame Chair. I'd like to add to why there's a winter moratorium for water customers. Thousands of homes in the City of Philadelphia are heated with hot-water systems that require makeup water during the heating season or there could be boiler failure, so the reason for the winter moratorium is to provide water service to the boilers; they don't necessarily are heated with steam but anyone that has a radiator in their home needs water to heat the home. COMMISSIONER KISHINCHAND: Right. They generally tend to be closed systems so water or the little makeup water you need is a very small quantity if you have leaks in the radiators, etc.
You still need an 1238 2/22/99 - WHOLE COMM. - Bill No. 990023 active water service to safely operate a hot-water heating system in a residential application. COMMISSIONER KISHINCHAND: In some instances, possibly. In my home, no, I don't. I fill up my heating system once, and for the next three years, I don't need to. I agree with you, but sometimes, it does need it.
I have a radiator system in my house also and I haven't put any water in that system in a number of years. And I'll bleed the radiators to get a little air out of it to stop the banging sometimes, but I haven't put any water in the system. COMMISSIONER KISHINCHAND: Right. It just needs a very small amount.
Councilwoman Clark has a point of order. The Chair recognizes Councilwoman Clark.
Thank you, Madame Chair. I don't like to speak in favor of coddling people who refuse to pay their water, but I'm at a loss to think of any utility that is more 1239 2/22/99 - WHOLE COMM. - Bill No. 990023 universal to maintaining an acceptable quality of life than water. Now, I speak not of heat. How do you flush your toilet? If you don't have water you can't occupy a space. So when the water goes, the next step for that family is homelessness. So we want to be very careful that on the one hand, we don't appear to be frugal, on the other hand, increasing a social problem by forcing people onto the pavement. I don't think that anybody who can pay should be exempted from paying. That's what your job is, to determine the difference from those who cannot versus those who will not. Those who will not, I think you should do everything that the law permits you to do. But I want you to get very careful before you start using the tax register for that. If person cannot pay his or her water, and there are legitimate reasons, which you must have some process in place for checking on, do not be stampeded into forcing those people onto the sidewalk. COMMISSIONER KISHINCHAND: We agree 1240 2/22/99 - WHOLE COMM. - Bill No. 990023 with you completely. In fact, Denise Garrett's staff has a process by which they reach out to the delinquent customers to find out, in fact, whether they can or cannot pay, whether they can make a payment agreement and how much they can pay. She goes to a very extensive and exhaustive process to make sure that there is a safety net for those people. Now, perhaps Denise can add to this and explain it a little bit further.
One other comment, please, before you speak, Denise. I have great respect for Denise and the work that she does. And I know that she is he humane in her approach to this job. But I do think we have to distinguish between $167 million in collectibles and dollars that you can bank. Some of those dollars are not dollars. You can put as many zeros behind them as you want to. If they are delinquent water bills on abandoned properties where you have not been able to locate an owner, you can carry them on your balance sheet till you get tired, and pretty soon, you're going to have to write them off. That's just good accounting practice. It's also a 1241 2/22/99 - WHOLE COMM. - Bill No. 990023 good way to run a city.
Thank you, Councilwoman. And I'd like to respond to your first comment as well as your second. In your first comment, I agree that we cannot, as a water operating utility, discount the fact that it's our responsibility to maintain water services, not to discontinue them. Also, I would say that for those people that I think the winter moratorium was carved out to protect, those people need 12 months of support, not 4, and we are proposing a means to ensure that they get that continuous 12 months. We've also identified other people in our base where we need to be much more sensitive. And we've developed computerized programs to support this, and those are the elderly who have diminished capacity, that rely on third parties to support them, as well as people with long-term illness, some of which have just come up in the last 10 years. So we are speaking to people in hospices and so forth that are trying to manage and support our customers' utility services, so we know that it is not just a winter issue; it is 1242 2/22/99 - WHOLE COMM. - Bill No. 990023 definitely a 12-month issue. We did segregate accounts receivables, looking at the second issue. We identified our bankruptcies, our vacant properties, as well as the receivables that we've set aside for low-income customers. And we've separated them out of the base. What we have in the base presently are those that we have not identified, who have not come forward, whom we need to come forward. And we also have in the base tenant-occupied properties, and these are landlords who are not paying water bills. We have a great deal of residential homeowners who have allowed delinquencies to accumulate because they may be marginal, they may have some financial difficulties, but we need to hear from them.
And I don't disagree, and I think you should hear their stories. People who can pay should pay. You have to distinguish the difference between those who cannot and those who will not. For those who cannot, the City should not be responsible for pushing them out on the sidewalk. 1243 2/22/99 - WHOLE COMM. - Bill No. 990023
There is no "ism" that rises to the level of justifying the City forcing people into homelessness. Now, if your system is not fine enough to determine the difference, then you protect them all.
Absolutely. COMMISSIONER KISHINCHAND: In fact, Denise has a number of programs that help the low-income customers, and she has -- the program really has --
We have the Utilities Emergency Services Fund, of which I sit on the board and participate in that process to ensure that our customers are -- have other services available to them. And some of these programs are in jeopardy. I just wanted bring that to your attention as well. We have our own Water Revenue Assistant Program, which is a long-term agreement program. And in addition to that, we have a Water Fund grant credit which we give customers, low-income customers up to $200 a year towards their bill. If those customers have exhausted everything 1244 2/22/99 - WHOLE COMM. - Bill No. 990023 that's out there in terms of utility assistance, we will still bring them into the program. We really will not deny anyone water service who wants water service, but if you do not --
I appreciate that, and won't burden the record any further. I think my point's been made. Thank you for the grant.
Thank you. Councilman Kenney, he just wants to piggyback.
I'm piggybacking on what Councilmember Clark has said. I am in total agreement with her position and I think we need to reach out and protect all of those people who are deserving of protection, and do what we can do from being put out of their homes. I do think that once, however, that cohort of people are identified that have not come in, that have refused to pay, that have had a history of breaking agreements, that have a history of ignoring requests for payment, that once we get to that cohort group, we have to shut them off. Or no one, no one will take us 1245 2/22/99 - WHOLE COMM. - Bill No. 990023 seriously. I mean, people starting getting shocked where you could see the look on their face when we towed their car for not having auto insurance. They never thought that day was coming, so more and more people didn't have it. And I go back to my PECO argument. When we've looked at properties that have been problem properties, nuisance properties, we have large amounts of money due and owing on real estate taxes, on water bills, on gas bills, and zero on PECO and zero on cable television. So there are people making life choices beyond the issue of indigency and other issues. They're making life choices not to pay us 'cause they know we're probably not coming after them. And one of things I might suggest is to take a look at maybe our cable TV lists to see who's making a choice of HBO versus water and maybe shut them off first as an example.
Thank you. The Chair recognizes Councilman Rizzo.
Thank you. I would hope that before we would shut 1246 2/22/99 - WHOLE COMM. - Bill No. 990023 people off, and maybe I have an opportunity to ask L&I, when a property receives a certificate of occupancy, there are certain criteria that's needed to get a certificate of occupancy. Once some of those services are taken away, can a certificate of occupancy be revoked? But my question is, before we start shutting people off, shutting water service off, I hope we would have established a process where, if Mr. Smith lives at this particular location and owes water, I understand that the system does not protect Mr. Smith from owing $1,000 at this location, then moving two blocks away and establishing service when he already owes $2,000 from location A. Until you establish a process that prevents a person that owes the Water Company money from opening up a second account, running up the tab there, opening up a third account. What do you do to protect the Water Department Revenue from what I've just described? COMMISSIONER KISHINCHAND: Well, our billing system -- in fact, our rate structure is based on property billings not on individuals. In 1247 2/22/99 - WHOLE COMM. - Bill No. 990023 fact, property is the one that's responsible, and this is one of the areas, as you point out, a person can have delinquency in one home and not in other home and move back over there. I'm not sure what we can do in that case other than deal with the property that is delinquent and do shut that off and take --
You would hope that -- and there are people that that's a system that they'll keep moving to maintain electricity, water service, but I'm -- are you familiar -- or should I ask L&I, does water service in a property -- is water service required for a certificate of occupancy, electric service? COMMISSIONER KISHINCHAND: I don't know for sure, but I would think that it would be required, yes.
Well, once you shut water off, that properly basically is not fit for habitation; is that correct? So L&I could, from what I'm seeing from head-shaking back --
Do you notify them you're shutting the water off? COMMISSIONER KISHINCHAND: Do we notify 1248 2/22/99 - WHOLE COMM. - Bill No. 990023 L&I? I don't believe there is a --
(Off mike, inaudible.). COMMISSIONER KISHINCHAND: There is not a process to notify them, but we can look at that, mm-hmm.
My point, Commissioner, is that we need to identify -- we have $100 million of revenue that's two years old on the street, and I would bet that those -- that that customer base is someplace else using your water. You need to maybe look at this differently -- not by the house, maybe by the house and a responsible party. But, boy, if you have a system that allows people to move from point A to point B, from point B to point C, and continue buying your water and not paying for what they used in the past, that would solve the problem there. COMMISSIONER KISHINCHAND: I will consult with the Law Department and seek counsel from them and see what kind of options we have for something that you just painted for us. 1249 2/22/99 - WHOLE COMM. - Bill No. 990023
I'd appreciate you getting back to the Chair with that after you get that research, so I'm aware of your findings. COMMISSIONER KISHINCHAND: I'll check and see as soon as I can get it, mm-hmm.
You're welcome. The Chair recognizes Councilman Mariano.
Thank you, Madame Chair. Along the lines of Councilman Rizzo's question, so we don't notify L&I that you shut a water off at a particular address? COMMISSIONER KISHINCHAND: No. 19
After you shut off water, is there a process? Is there a 30, 60 days where they can get it turned back on again if they -- what happens? COMMISSIONER KISHINCHAND: No, they have to come in and pay their bills before the water would be turned on or get into a payment 1250 2/22/99 - WHOLE COMM. - Bill No. 990023 development.
And what if none of that happens, Commissioner? I mean, it's obvious people may still be living in these addresses, and they're living without water, so they're either doing an illegal hookup or they're getting water someplace else. COMMISSIONER KISHINCHAND: We don't enter the homes. However, the Water Revenue Bureau does have a reinspect program because there are some properties that we find are turned back on, whether they're done by the homeowner or whatever means that they utilize to turn those back on. And the Water Revenue Bureau does have a reinspect team to confront that but we do not enter anybody's home see if there's anybody living in there or whether they moved out after the water is shut off.
Now, if you suspect that someone that you've had turned off for a quite a while is living somewhere -- and you said you don't notify L&I, maybe we can change that. You know, I'm thinking of people that have to live somewhere because they can't help where 1251 2/22/99 - WHOLE COMM. - Bill No. 990023 they're living, you know, they're living without water so they're either hooking it up illegally or -- and I know you just turn it off at the street if it gets to that. That's were you go out and you do that. COMMISSIONER KISHINCHAND: Mm-hmm.
But there's no 9 follow-up process ever, say six months later. You know, your water's been turned off six months, Mr. Mariano, we don't hear from you. Is there anything? COMMISSIONER KISHINCHAND: Mm-hmm. Well, let me sort of step back and tell you some of the things that we are doing that might help resolve some of those problems. As you know, we are installing the automatic meter-reading programs. So that particular program will require -- in fact, it is mandated to take readings once every month at every single property. And by doing that, we will be able to tell whether the water's been turned on or not. By that, we will be able to identify some of the properties that may be illegally 1252 2/22/99 - WHOLE COMM. - Bill No. 990023 turned back on. Those that are not turned on, I'm not sure exactly what we would do to --
The ones you turn off, you know, if you know anything about plumbing, you can hook the water back up. You could just do away with that automatic meter-reader. I mean, if there's a will, there's a way. I have one in my house and I think it's just -- you have that after the service and the line. You know, so I mean, I'm not really concerned about you getting cheated. You're going to get cheated, I understand that. You have no 15 way of going into people's houses. My main concern is that people are living in houses where -- and I don't want to throw anybody out on the street or anything like that, but they need some kind of assistance and we don't follow up. I think there's a way without much more cost 'cause I think Miss Garrett and your department does a great job like Councilman Kenney said, but is there some people that we're just losing? Like once you turn them off, you keep sending them bills? You never hear from them 1253 2/22/99 - WHOLE COMM. - Bill No. 990023 again. And for whatever reason, I mean, maybe they just don't have the wherewithal 'cause if they contact Miss Garrett, I'm sure -- and she's done it through my office many, many times. She sets up payments that makes it easy. I'm just concerned about someone -- I'm sure you've had 'em, Denise, somebody who, you just never hear from 'em again.
Well, we do have people who we never hear from again, but we have what we call an annual reinspection where we go back to the property once a year to see if we have service back on.
And we find a high percentage of those have restored themselves. So at that time, we try to get them back into the billing status. That's our first goal 'cause we don't want to shut them down.
We'd rather they just pay the water bill. And a good percentage of them respond to that because they're already caught. 1254 2/22/99 - WHOLE COMM. - Bill No. 990023
What I'm getting at is I'm more concerned about the human service part of it. I mean, the revenue part's great. But if you come back in a year and you think, God, these people really haven't had their water on or they had it illegally, and I know there's possibly five kids living in that house, do you like report it to anyone, you know?
We call the customers before we shut them off. We send them notices before we shut them off. We go out and inspect them after we shut them off maybe a week or two weeks after that, and we do periodic programs where we try to reach out to the customers. And then we do the annual reinspection. We're really trying to keep water service. I mean, there's a lot of talk about shutoff -- that's not our objective. We're trying to keep water service and get paid because that's what runs our system, the dollars that those customers pay. For our large apartment buildings, when we shut those off, if the landlord refuses to respond, we bring them back on within 24 hours. 1255 2/22/99 - WHOLE COMM. - Bill No. 990023 And we do notify L&I on those cases. And in some instances, I know we did a pilot program -- I'm I not sure if we're continuing to run it. It's establishment serving food, we notify L&I when we bring those down. And from time to time, we'll do a bar project where we'll go out with L&I, the Law Department, and a few departments working together to try to get those agencies to pay, those businesses to pay. So we do quite a few things -- some standard, and others we do more ad hoc.
And the last thing I want to say, and this is very anecdotal, but it's what Councilman Kenney spoke about. My first year as a Councilman here in '96, there was a big apartment complex with over 200 residents in there, and the electric power went down, and they didn't have a backup generator through some fault of own. So when we got out there, the State representative myself and the State senator, the first question they wanted to know is, When can I get my cable put back on? They weren't interested about electric, water, or anything else, so the 1256 2/22/99 - WHOLE COMM. - Bill No. 990023 Councilman's right, there has to be some life choices here. I mean, watching Jerry Springer may be important to them but it may be more important to their children that there's water and electricity so their refrigerators are cool and they're, you know, receiving their proper nourishment. Thank you.
How would you know they have cable? How you would you know that a person that doesn't have water has cable?
If you're asking me that question, Councilwoman, they asked us, so you know, it was their concern. I don't know how we would know because the cable is a private agency.
And obviously, they don't have the right to discuss my affairs with you.
So I think you may be speculating that people have electric and cable, but I don't know how you would know.
Well, I think in that case, they told us that was their priority -- when's my cable getting put back on? -- as opposed to the electric for the refrigerator. You know, there's all different kinds of stories, but that was just one where that one just amazed me.
But you wouldn't ascribe that to all the people that have their water cut off.
You know, Commissioner, we're talking about shutoffs. Last year when we had Section 8 hearings -- and I truly believe that Section 8 was initiated to help 1258 2/22/99 - WHOLE COMM. - Bill No. 990023 the needy and not the greedy. I checked our computer and found that in one given area in my district, an individual had 29 Section 8 properties. Of the 29 Section 8 properties, 28 of them were delinquent in taxes, they did not renew any license, rental license, and they owed $83,772 in water bills. Now, this gentleman apparently came from Bala Cynwyd. So last winter, when we were considering the Section 8 hearings, I'm sure that this gentleman must have been basking in the sun in Florida somewhere, nearly collecting 29 checks on a monthly basis. I think that's a sheer disgrace. And when I looked at our computer to check, it was amazing. And he had quite a scam going. If he bought the property in, say, 1989, of course, he made certain that all of the utilities were paid, and that everything was as it should be. He never paid a dime thereafter for taxes, for water -- I don't know about the electrical. And as I said, in many of the instances, he didn't have a license, a rental license. 1259 2/22/99 - WHOLE COMM. - Bill No. 990023 How does an individual get away with -- to me, this is sheer corruption, in my view. How does an individual get away with something like this? COMMISSIONER KISHINCHAND: I'll have Denise Garrett respond because I'm not familiar with Section 8 revenue collection.
I know I wrote to your department, I wrote to the Mayor, I wrote to the Law Department, and I know that liens have been placed against these properties now. But I don't know we can allow something like that to exist year after year after year. I mean, as far as I'm concerned, somebody was sleeping at the wheel. And I -- as I said, I'm sure this gentleman never drove by the vicinity to see what condition these houses were in. They could have been falling apart as far as he knew. He could have cared less because he was on the gravy train, Hon, and he was going all the way. I think it's disgraceful, I really do.
(Inaudible, off mike.) 1260 2/22/99 - WHOLE COMM. - Bill No. 990023
What I'd like to ask is, is there a procedure in place that when a person applies for a water account, for a building they take from some City program, do we look at whether that person presently has an account? Not just his residential account, but any other business accounts, and does his present performance in any way guide our thinking as to his future?
At present, Councilwoman, we have several programs in place but they don't address that particular issue because we don't have the legal authority to stop a customer from getting a water account.
Okay. When it comes to your attention, what do you do? Do you send out a signal to anybody that here is probably a scofflaw and we ought to do something now rather than permit this person to take us down further. We need to lay in place right at this point a procedure. Don't just pretend you don't know it, because once you know it, you can never again not 1261 2/22/99 - WHOLE COMM. - Bill No. 990023 know it.
Councilwoman, we actually drafted some modifications to our regulation, which we have not submitted which would, one, stop a person from purchasing a property and having a delinquency at an additional property. We've worked with the Controller's Office to stop vendors from securing our vending services unless they were current on all City taxes and water. And we've met with HUD to discuss the Section 8 issue. But, clearly, we're not going to get any support from them, so the Water Department and the Water Revenue Bureau have met to devise a means to identify these accounts so that we can approach them as a group. Now, from the Water Revenue's perspective we have targeted what we call "group landlords." These are people who own multiple properties in the City, who have delinquent on multiple properties. Some of our hurdles are that they use various names. In fact, I can recall one gentleman who had 14 aliases.
I know, but these are liens that run with the land. So what do is 1262 2/22/99 - WHOLE COMM. - Bill No. 990023 lien the property.
We have liened the properties; all the properties are liened, we lien twice a year. But we have to work in conjunction with the Law Department because our authority only goes to a certain point.
I think this is an area that needs study. Madame President, I would suggest that here's where we ought to get tough -- not on individual homeowners who are clinging to a small unheated house perhaps, but for people who are working us -- and this is just outright working us. We ought to do something about that, and we ought to start with a process that notifies everybody. We could be the bump in the road to that smooth getting of Section 8. If you owe us money, you can't get past this point, no matter what name you do business under. Now, we all know how to pierce corporate veils. We know how these interlocking boards and these names that flow in and flow out. By whatever name you are known, this property can't move forward until somebody comes and pays 1263 2/22/99 - WHOLE COMM. - Bill No. 990023 us. And when people are trying to do a land transaction, time is of the essence to them. It is amazing how much more of their attention you have when they're trying to tack that property down than when they have the service and you're talking about taking it back. So, you know, they're thinking about how many dollars they're going to make on it. They're going to make not one cent until they pay every dollar of delinquent taxes and water bills that are already due. I think that's what we need to do, Madame Chair, and would suggest that the Law Department and the Water Department and City Council and any other City agency get together on a policy to which we would all agree and adhere. And I thank you and yield back.
Thank you. Excuse me, can I just recognize Councilwoman Miller for a minute because she has another commitment. Councilwoman?
Thank you, Madame Chair. 1264 2/22/99 - WHOLE COMM. - Bill No. 990023 Good afternoon. I want to raise the issue of the contractors that are hired to perform the work out in the neighborhoods, maybe -- whatever they're doing, relaying pipes and what not. And I talked to you this summer about one contractor in particular that just seems to just go through the neighborhood, wasn't sensitive at all to tearing up and destroying people's properties. With his crane, he pulled down awnings, he broke steps. And when people tried the get information from him regarding his name, they had to really call the Philadelphia Police Department to get them to come out to get the information that they needed to file a complaint with this particular contractor. And your department handled all of the complaints very well. But I guess where I'm going, maybe that type of contractor does not need to be a contractor on these projects because he's causing a whole lot of havoc in these neighborhoods, leaving big holes in people's property without adequately providing proper barriers that become a safety issue for the 1265 2/22/99 - WHOLE COMM. - Bill No. 990023 children that are playing on that block, leaving piles of dirt to the extent that in order for a woman to get out of her house and get into the sidewalk, she had to climb over her neighbor's banister. And it was just a horror story all summer with this particular contractor. COMMISSIONER KISHINCHAND: I'd like to get the name of that contractor. We can contact your office, but generally, we have at every construction site an inspector who's there all the time, and he's available to the public and, of course, if you can call my office, or they can call our offices and we'll take care of it.
We did call your office. And I went out there too and I met the inspector, and the contractor was not there on that day, or maybe the owner of the company. I mean, people had problems trying to get their awning replaced, and they eventually got it replaced, but it just seems to me that he took a crane down the block and didn't care what he destroyed. COMMISSIONER KISHINCHAND: The contractor is responsible for restoring the 1266 2/22/99 - WHOLE COMM. - Bill No. 990023 neighborhood as he found it before he started work, and we would then enforce that. And if we have not done so, I'll contact your office and see if there's any remaining work that he needs to do over there.
And I know you take before- and after-pictures, so pictures those pictures support what the neighbors complaints were. COMMISSIONER KISHINCHAND: Right, we do take pictures before the contractor starts, yeah, mm-hmm.
I have a question too regarding the flood control. Your unit cleans out the sewage system, sewage drains right there on the corner? COMMISSIONER KISHINCHAND: The inlets, yes.
Right. Well, what's when we have repeated flooding at the same sight? COMMISSIONER KISHINCHAND: We generally go out and check those inlets to see if, in fact, there is a structural problem with it or not if 1267 2/22/99 - WHOLE COMM. - Bill No. 990023 it's repeated very soon. Many of these inlets are blocked because there's trash in them, etc., and we clean them out, but if it happens on a repeated basis, then it's sort of an indication that perhaps the underground infrastructure is in some way defective. Sometimes the pipe that connects the inlet into the sewer might be cracked and mud washes into it and blocks it up. In that case, we have to dig up the street, open it up, and see what the issue is, and correct it at that point.
Well, how many years does it take to assess whether it needs additional work 'cause I know there's one corner in my neighborhood that flooded for about five years. It doesn't flood now. We kept calling about it and, you know, you did come out and do whatever it is that you did. So that stopped that flood, but it was years and years and year that it continued to happen. COMMISSIONER KISHINCHAND: I see. My Deputy Commissioner, Richard Roy, is with me. Perhaps he can answer that question. I don't know 1268 2/22/99 - WHOLE COMM. - Bill No. 990023 which location that is. (Richard Roy comes forward.)
My name is Richard Roy, Deputy Commissioner for Operations. We have in the past six months been focused on the inlets that won't take water. We have just about knocked that backlog down to zero, and we have a program in place so that we will continue to keep that backlog at zero. Basically, it was a responsibility divided between two units -- one cleans the inlet, one fixes the pipe. And there was a lack of communication between those units, and we fixed that program, we think, to take care that now.
So we need to call the office whenever it's not working, whenever it's still flooding there.
Right. If we have an inlet with repeated flooding complaints, then we'll go put it in the (unintelligible) water pile and get it looking at the pipe between the inlet and the sewer.
Okay. I have one other question. 1269 2/22/99 - WHOLE COMM. - Bill No. 990023 There is a block in reply district. It's the unit hundred block of East Walnut Lane, and there appears to be these little leaks that keep popping up at different locations within that block. I think the block captain told me it's maybe little small leaks. And I did talk to 8 Arthur, and I know that your department is 9 investigating. But the neighbors are saying that 10 they're being told that they have to pay for the 11 repairs, even though I haven't been able to get from them what specific repair they are being billed for. Now, they seem to think 'cause the XH bus runs on that route, they seem to think that the bus is maybe doing something in the street that causes these little leaks to come up in front of people's homes. And because I don't really know what's wrong, I can't expect, you know, an adequate answer. However, it's a problem that's been going on for about five or six years now. The Water Department will come out and, you know, do whatever repair and then, maybe three or four months later, they're right back out doing the 1270 2/22/99 - WHOLE COMM. - Bill No. 990023 same thing over and over again. COMMISSIONER KISHINCHAND: I'll look at it personally.
It's the unit hundred block of East Walnut Lane. COMMISSIONER KISHINCHAND: Right. Well, generally, the water service line, it's the homeowner's responsibility if it's leaking, then they would have to pay. But if the water main itself is broken, then, of course, it's the responsibility of the City to repair that, and we would do that.
You're welcome. The Chair recognizes Councilman Kenney.
Thank you, Madame Chair. I'd just like to just go back for one moment to this issue of Section 8 and the landlord 1271 2/22/99 - WHOLE COMM. - Bill No. 990023 that Council President Verna described. Is there anything that you're aware of that would preclude us from making arrangements with PHA, both the Water Department, the Water Revenue and Gas Works to attach in some way the rent payments being sent to the landlords when an individual gets into a certain level of arrearage to immediately subtract those dollars, have them sent to the Water Department and Gas Works, and then send him out the balance of what the rent subsidy is?
Well, yes, Councilman. We did meet with -- well, I personally meet, but I sent a representative and provided information. We met with HUD, and that is not possible.
PHA has been very supportive of us, and they, in fact, remit through something called "a group billing program" for their properties, so we don't have the problem with PHA, it's with the HUD homes.