Committee Hearing, May 23, 2001

COUNCIL OF THE CITY OF PHILADELPHIA PUBLIC HEARING AND PUBLIC MEETING BEFORE COMMITTEE ON PUBLIC PROPERTY, PUBLIC WORKS - - - Room 400, City Hall Philadelphia, Pennsylvania Wednesday, 5/23/01 10:18 a.m. - - - BILL 010228 - Amending Title of the Philadelphia Code, entitled "Contracts and 11 Procurement," by requiring Council approval before the City may enter into certain long-term 12 contracts, and requiring the Administration to report to Council concerning such contracts; all 13 under certain terms and conditions. 14 BILL 010303 - Authorizing and directing the change 15 in the Northwest Regional Branch of the Free Library of Philadelphia, located at Chelten Avenue 16 and Green Street, to "The Joseph E. Coleman Branch of the Free Library of Philadelphia." 17 PRESENT: COUNCILMAN JAMES F. KENNEY, Chair COUNCILWOMAN JANNIE BLACKWELL, V. Chair COUNCILMAN DARRELL L. CLARKE COUNCILWOMAN DONNA REED MILLER COUNCILMAN MICHAEL A. NUTTER COUNCILWOMAN BLONDELL REYNOLDS BROWN COUNCILMAN FRANK RIZZO - - - VINCENT VARALLO ASSOCIATES, INC. Registered Professional Reporters Eleven Penn Center, Suite 600 Philadelphia, PA 19103 (215) 561-2220 2 5/23/01 PUBLIC PROPERTY & PUBLIC WORKS COMMITTEE I N D E X Bill 010303 Augusta Clark, Secretary. . . . . . . . . . Agencies, Boards and Commissions 6 Elliot Shelkrot, President and Director 11 Free Library of Philadelphia Jay McCalla, Director . . . . . . . . . . . 15 Redevelopment Authority Michelle Washington, City Council Employee 17 Gregory Coleman, son of Joseph E. Coleman 19 J. Coleman-Pew, daughter " " " 22 Wesley Pew, son-in-law of " " " 25 Alex Woodley, neighbor " " " " 27 Jessie Coleman, wife of " " " " 31 Bill 010228 Linda Berkowitz . . . . . . . . . . . . . . 43 Deputy Secretary of Financial Oversight and M. Neeson, Deputy Procurement Commissioner 82 Richard Tustin, Director. . . . . . . . . . 87 Capital Program Office 3 5/23/01 PUB. PROP. PUB. WORKS - BILL 010303 P R O C E E D I N G S

Good morning, ladies and gentlemen. The Council Committee on Public Property and Public Works is now in session to hear testimony on two bills, the first of which is Bill No. 010303, which is an ordinance 8 authorizing and directing the change of the Northwest Regional Branch of the Free Library of Philadelphia, located at Chelten Avenue and Green Street, to "The Joseph E. Coleman Branch of the Free Library of Philadelphia." The Chair calls -- I'm sorry, the Chair recognizes Councilwoman Miller for an opening statement.

Thank you, Mr. Chair. Good morning, Councilman Kenney --

Good morning.

-- and other members of the Committee on Public Property and Public Works and witnesses on behalf of this bill 22 and the general public. When I was approached earlier this year to sponsor and move for the passage of this bill, I felt both honored and excited about the 4 5/23/01 PUB. PROP. PUB. WORKS - BILL 010303 opportunity to honor a man who has a legacy within the neighborhood that I not only grew up in and still live in but am now honored to serve as the Councilperson. The 8th Councilmatic District is a diverse district that encompasses a variety of people and organizations. Serving the interests of such a population is, to say the least, challenging and fraught with ever-changing priorities and objectives. The flexibility necessary to effectively advocate on behalf of the district's constituents must also remain constant in the face of ever-changing variables. From the time that Joseph Coleman stepped into these very chambers and rose from junior Councilperson to the first African-American City Council President in the County of Philadelphia, he was constantly evolving and receptive to change in both himself and the direction that a constituency at any given time called upon him to concentrate his efforts within. That the branch of Free Library of which he was instrumental in securing funding for and situated within the district that he served for many years be renamed in his honor is a befitting 5 5/23/01 PUB. PROP. PUB. WORKS - BILL 010303 tribute to the former Council President Joseph E. Coleman, a true northwest native son. Mr. Coleman exhibited really good leadership here in the legislative branch of this municipality during the late 1980s and the early '90s. I really need to put my reading glasses on -- I can't see. I am sure that I speak for other current Councilmembers as well as myself when I say that remnants of his leadership style and initiatives begun under it are still evident with our transactions of Council business. I would like to thank the witnesses who have graciously accepted the invitation to speak with regards to this bill. Your willingness to provide testimony no doubt bears to the high esteem in which this elder statesman is regarded. Mrs. Coleman, Gregory and Stephanie, you have truly been blessed with a husband and father whose impact on a community that he chose to call his own will long be remembered. I take this opportunity to personally thank you for allowing us to share in honoring his memory. Thank you, Mr. Chairman. I request 6 5/23/01 PUB. PROP. PUB. WORKS - BILL 010303 that we begin these proceedings.

Thank you very much for your comments. At this point in time, I'd like the record to reflect that we have a quorum with the attendance of Councilmembers Miller, Blackwell. Councilman Nutter was in the room. Councilmember Rizzo, Councilmember Clarke, and myself as chairman. The Chair now recognizes the Honorable Augusta Clark, Secretary of Agencies, Authorities, Boards and Commissions of the City of Philadelphia, for testimony in regard to this bill. (Witness comes forward.) SECRETARY CLARK: Good morning.

Good morning. Before you start, I just want to say what a privilege and pleasure it is to have you here. I think this is the first time that you've testified before the committee, which you formerly chaired, and it's an honor to be the chairperson of this committee to hear your testimony today. SECRETARY CLARK: Mr. Kenney, I cannot 7 5/23/01 PUB. PROP. PUB. WORKS - BILL 010303 tell you how pleased I am to be here today to sit opposite my colleagues and friends and speaking on behalf of a mutual colleague and friend. It's an odd position to be in and I'm trying to get used to it. Thank you for the kind words.

Thank you for being here. SECRETARY CLARK: Today I am pleased to speak in favor of Bill No. 010303. In 1980, shortly after I arrived in City Council, green as grass and raring to go to solve all of the City's problems by noon the next day, Joseph E. Coleman ascended to the presidency of Philadelphia City Council. Amid unprecedented political and legal strife, loud voices and anger, Mr. Coleman stood out. Cool, calm, collected, unhurried and in control. The seamless transition of power was so smooth that even veteran Joe Coleman watchers were astounded by its grace. Effortlessly, he assigned chairmanships and committee appointments, ever with an eye toward fairness and inclusion, disregarding such irrelevancies as race and gender and political party affiliation. 8 5/23/01 PUB. PROP. PUB. WORKS - BILL 010303 Quiet dignity, that was Joe Coleman. A self-effacing man, who never boasted of his outstanding accomplishments as a chemist, a research scientist, a patent attorney, a legislator, an author. He was indeed an innovator. His love of learning and his support for literacy, education, the arts and culture make this bill to rename the Northwest Regional Library "The Joseph E. Coleman Regional Library" all the more appropriate. Decades from now, men and women, boys and girls will use its vast literary treasures. I have to correct that typo. Did you see that in there, Jim Kenney? Did somebody drop that S? Will use its vast literary treasures, books, records, computers, tapes and periodicals. All will be -- all will benefit from Coleman's given spirit and his erudition. Mr. Coleman's family is here. His wife, Jessie, who he loved openly and unabashedly. Theirs was to me a modern Romeo and Juliette, or Tristan and Isolde. Classic lovers, always and always. I have to tell you a story. If ever 9 5/23/01 PUB. PROP. PUB. WORKS - BILL 010303 you were in Joe Coleman's office and the phone rang and Miss Jessie was on the phone, I don't care what you were talking about, you became second, third, or one-hundredth because he gave every bit of his attention to her on the phone. The only colder shoulder you could get was if Miss Jessie came in the room. Then you ceased to exist, because he did really respect, appreciate, and love her. I only wish every husband and wife could see and use the model of Jessie and Joe. And if you ever heard Jessie talk about Joe, "my Joe, my Joe," it was just wonderful the way they related to each other. Back to the script. Today, a grateful city takes the first step in acknowledging and recognizing Council President Joseph E. Coleman's significant contributions to the emergence of Philadelphia as a renaissance city by so naming this library, which is located in the section of the city that he served so well for more than years. By this 23 bill, the Council honors the man we admired so 24 much. I'll be happy to answer any questions. 10 5/23/01 PUB. PROP. PUB. WORKS - BILL 010303

Thank you very much, Councilwoman. Councilmember Blackwell.

Thank you very much. Good morning. SECRETARY CLARK: Good morning.

Councilwoman Clark, certainly let me thank you for your testimony and certainly I see Greg, Jr. I see Jessie over there. And, oh, I see Jennifer. I look and I'm seeing everybody, I'm seeing your husband certainly and others who will testify, Elliot and Jane McCalla. And let me say certainly that I am proud to join you in your support of this overdue honor. It's an honor for us to support it. As you know, I've been here since 1976 myself. And certainly, it was an honor and a pleasure to work with former President Coleman. And he absolutely was always a gentleman, absolutely just a kindhearted, loving person. SECRETARY CLARK: Yes.

And we were honored to have him as a leader because it takes 11 5/23/01 PUB. PROP. PUB. WORKS - BILL 010303 tough decisions, and a man so full of love had to make tough ones, but he was also good. He was good to us and good for the city and we're proud to support him and just honored to see his family here and to let you know we always support you. And it's an honor for us just to be able to do this. Thank you. SECRETARY CLARK: Thank you.

Thank you very much. Councilmember Clarke. Oh, I'm sorry, I thought Councilmember Clarke had comment. If there's no other comment or no other questions, thank you for your testimony and thank you very much for coming in. SECRETARY CLARK: Thank you.

The Chair now calls Mr. Elliot Shelkrot. Is Mr. McCalla in the room? Okay, thank you. (Witness comes forward.)

Please identify yourself for the record.

Good morning. I'm 12 5/23/01 PUB. PROP. PUB. WORKS - BILL 010303 Elliot Shelkrot. I'm the President and Director of the Free Library of Philadelphia. And I'm here to testify in favor of the bill to rename the library, the Northwest Regional Library to rename it as "The Joseph E. Coleman Regional Library." While it is the general policy of the board of trustees of the library to have a library named for the community, the board has authorized me and the staff, certainly enthusiastically, to support the renaming of this library as "The Joseph E. Coleman Regional Library." It was Council President Coleman's vision of a more informed and educated and empowered citizenry, something that libraries stand for, that inspired the establishment of the Northwest Regional Library. His commitment throughout his tenure as a Councilperson and as President of Council was one in which he stood firmly behind the growth and the use of libraries throughout the City. In looking at our notes, I realize that it was in -- that the land had been acquired just at the year, 1972, just at the year that -- that then-Councilman Coleman was placed on Council. 13 5/23/01 PUB. PROP. PUB. WORKS - BILL 010303 But we all know that just acquiring of land doesn't move things very quickly and necessarily towards the completion of any public facility. And he was steadfast in his support through the appropriations process and through the various other processes to be sure that this regional library was built and was built as soon as possible. I can tell you that it is personally one of my favorite buildings. It's a multilevel building. It is very, very child- and family-friendly. Has a wonderful dinosaur -- or excuse me, a dragon, as though right out of the fairy tales there. And now with the renovations that were completed just a few years ago, the computers that are there and all of the modern technology and ways for people to learn and to grow. It is a very exciting regional library. And I, therefore, want to support this very much. I do suggest -- and this is perhaps a technical change. I know that Council is already aware of it, that the bill states that it should be the Joseph E. Coleman Branch, when it truly is the Joseph E. Coleman Regional Library. 14 5/23/01 PUB. PROP. PUB. WORKS - BILL 010303 And if you have any questions about any of my testimony, I'd be happy to answer.

Councilmember Rizzo.

Thank you. Mr. Shelkrot, could you tell me, when we name this library after President Coleman, in the library itself will there be information? I go to so many buildings and you don't have a clue who the person is. So could I suggest that there's something at the library that will tell the story about the person it's named after?

We would be pleased to do that; that's an excellent suggestion. We will make sure that there is a plaque as well as a brochure that is available that explains the significance of the naming of this building for former Council President Coleman.

Because the young people, especially the young people that might not identify with President Coleman, to explain the good work maybe, maybe it will motivate them a little bit and they can get a library some day named after them. 15 5/23/01 PUB. PROP. PUB. WORKS - BILL 010303

Absolutely.

Thank you, Mr. Chairman.

Thank you, Councilmember. Any other questions or comments? (No further questions or comments.)

Thank you very much for your testimony. Mr. Jay McCalla, please. (Witness comes forward.)

Good morning. Please identify yourself for the record. MR. McCALLA: Good morning. I'm Jay McCalla, and I'm a director at the Redevelopment Authority. Mr. Chairman and members of the committee, I'm here to support this bill that would serve to honor the memory and public service of a former president of City Council, Joseph Edward Coleman. Undoubtedly, Mr. Coleman will be remembered by future Philadelphians as having been the first African-American to serve as president, 16 5/23/01 PUB. PROP. PUB. WORKS - BILL 010303 but others will recall the skill and sincerity with which he restored civility, integrity, and public confidence to a branch of government that was torn with personal acrimony and unprecedented scandal. Almost with uniformity, he was understood to be a gentleman. As an assistant to Mr. Coleman in the early 1980s, I am keenly aware of his steadfast and decisive support for public education, which manifest in his decision to champion the creation of the new Northwest Regional Library. It is, therefore, fitting that this facility be renamed as a reminder of his commitment and good works. I appreciate the opportunity to encourage this committee to look upon this bill 17 with favor.

Thank you very much for your comments. Any questions or comments for Mr. McCalla? (No questions.)

Thank you very much. MR. McCALLA: Thank you. 17 5/23/01 PUB. PROP. PUB. WORKS - BILL 010303

Miss Michelle Washington, please. (Witness comes forward.)

Good morning, Councilman Kenney.

Good morning.

I am Michelle Washington, an employee of City Council and board member of the Friends of the Free Library and a personal friend of the Coleman family. It is a pleasure and honor to address this committee on Bill No. 010303. I became an employee of City Council under the presidency of the late Joseph E. Coleman, Esquire. He saw in me a young person who could help develop his vision for an informed technical and planning staff for City Councilmembers. He blended idealism with practicality. He believed that a good foundation made for the development of character and destiny. Mr. Coleman was a pillar of this Council chamber and a remarkable, trusting, and honorable man in the community. The northwest community would be greatly advanced by having the 18 5/23/01 PUB. PROP. PUB. WORKS - BILL 010303 memory of President Joseph E. Coleman marked by the renaming of the Northwest Regional Branch Library to the Joseph E. Coleman Regional Branch Library. There he will continue to stand tall in our mind and in the development of a vision for others. I strongly support Bill No. 010303 and request that you report this bill out of committee with a favorable recommendation. Thank you.

Thank you very much for your testimony. Any comments or questions for this witness? Councilmember Blackwell.

Thank you. Let me thank Jay McCalla and Michelle. You're still young; you were young then, you're still young, okay?

Thank you.

But certainly we know of your commitment to the family and thank you both for coming in and testifying in support of this project. 19 5/23/01 PUB. PROP. PUB. WORKS - BILL 010303

Thank you kindly.

Thank you very much. Thank you for your testimony. The Chair now has the honor of recognizing the representatives and family members of the late Joseph E. Coleman. Those in attendance who would like to testify, please present yourself to the witness table. (Witnesses come forward.)

I believe that Mr. Woody, Mr. Alex Woody is also here. Please feel free after their testimony to come forward. Thank you, sir. Good morning. Please identify yourself for the record.

Good morning. My name is Gregory Coleman and I have been selected by my family to be the first witness among the four of us sitting here.

Good morning. Please proceed.

Good morning, members of the Committee on Public Works and Public Property. It is indeed an honor for us to be 20 5/23/01 PUB. PROP. PUB. WORKS - BILL 010303 here. It is both comfortable and comforting to be here. It is comfortable because this is the place where our father and my mother's husband spent so many hours, so many days, and many of you can testify to that. It's a comfortable feeling being where your father was and spent so much of his life's energy. It is comforting because his friends are here, his colleagues are here. So that comforting feeling puts us at ease as we testify on behalf of this bill. I'd like to personally thank several persons who have been responsible for putting this bill before us. For those that I miss, please accept my apologies. I would like to thank Councilwoman Augusta Clark, who testified earlier. I would like to thank Councilwoman Miller for sponsoring this bill. I'd like to thank Naomi Williams for drafting this bill. I'd like to thank Jay McCalla, Bill Miller, Heidi Gold, Elliot Shelkrot, and all others that have played a part in this. I think that it's extremely important to mention that the selection of this particular 21 5/23/01 PUB. PROP. PUB. WORKS - BILL 010303 facility has importance to us and I think that this facility was selected with care. First of all, its location in the northwest section of our city, the section of the city that my father represented diligently for twenty years. The location is the right location. The building itself, I believe, is the right type of building. Being a man that believed in education, a scientist, an attorney, and I think we all know his educational background, certainly his children do and his wife does. Having a library named after our father and my mother's husband is truly visionary that would be done. Thirdly, the clientele that this particular library serves is a clientele, for the most part, of those that are poor and do not have other facilities, be it computers or books or personal libraries in their home. My father was always one that cared for those that are disfranchised, those that are poor, and those that have no other means of educational facilities. So we believe that the location, the type of facility, and the people that will be 22 5/23/01 PUB. PROP. PUB. WORKS - BILL 010303 using it certainly is a remarkable testamentary to my father. That being said, I guess at this point, we're going to let my mother, who I think that you want to hear last -- is going to go to my sister at this point, if that's okay with you, Mr. Chairman.

Thank you very much. Could you just please pull the microphone closer to you and identify yourself for purposes of the record.

Certainly. Good morning.

Good morning.

My name is Jennifer Coleman-Pew. And I want to say good morning to many of my friends here -- older friends, and new ones as well. It's my pleasure this morning to testify on behalf and in support of Bill 010303. I've made a few notes because in speaking about my father, and he is such a diverse man, I probably would be speaking for a very long time. So I want to keep on task today as we speak about renaming 23 5/23/01 PUB. PROP. PUB. WORKS - BILL 010303 the Northwest Regional Library. Ever since I can recall, my father has always stressed the value of education and particularly the necessity of accessibility for everyone. Now, I suppose that's why he had an affinity for the free library system, because, of course, when he was growing up, libraries and different outlets for information were actually based on racism, kept away from many blacks. And many blacks never really had the opportunity that they were so deserving of to receive and to get the education and information that they were deserving of. So when given the opportunity to make a difference, first in his family, he seized that opportunity and he established a home library for us. But as his influence grew from his family to his community to the city, he ushered through and facilitated what I think is one of the major accomplishments of the northwest with the establishment of the Northwest Regional Library. That library today is as vibrant as it was over twenty years ago. It's a place where people come to learn, to discover, to dream, to 24 5/23/01 PUB. PROP. PUB. WORKS - BILL 010303 improve their skills, and to advance their scholarly pursuits. And it continues today to keep that pace in the ever-growing and demanding needs of a community through computer technology, through homework help, through inviting authors and poets in and cultural activities and just plain fun. As a Councilmember and as Council President, his support for the free library system was unwaivering, which at times was not an easy task, considering the years of fiscal challenges here in this city, but he never waivered. Now, there are many, many reasons, hundreds perhaps, why this name change is so warranted, and I'm sure you'll hear many, but from a personal point of view, perhaps the most compelling for me was my dad's love of his community, was his love of this city and his insistence that everyone, especially children, have access to information and knowledge, that their dreams not be not be deferred but be developed into real-life possibilities, that they be grounded in a reality of achieving their continuing lifelong goals. 25 5/23/01 PUB. PROP. PUB. WORKS - BILL 010303 And so I urge you, I urge this committee, to support this bill. My father's name is associated with humanitarianism, achievement, scholarship, and commitment. And I think and I know it's a fitting honor for a very special human being. And I thank you.

Thank you very much. That was very well done. Thank you. Next witness, please. Good morning.

Good morning, Chairman Kenny and distinguished members of City Council. My name is Wesley Pew, Ph.D. I am currently dean of the School of Education at Cheyney University. I've been in the Coleman family for 28 years. I think that's right.

You better get it right. (Laughter.)

And I'm here to testify in support of this bill, wearing the hat of a not just a son-in-law but I have been one of the founding members of the Friends of the Northwest Regional Library. More than twenty years ago, prior to the library being opened, I was asked by 5/23/01 PUB. PROP. PUB. WORKS - BILL 010303 my father-in-law if I would be interested in serving on a committee that was set up to support the library as a friend and support group outside of the normal channels. I accepted that responsibility, and over the last seven to ten years, I served as the president of that group. As a person who was in the family, I obviously had access and I utilized that to lobby for the library system, the entire system, and particularly the regional library. And I can tell you with all sincerity and honesty, the requests or the considerations that I would ask of my father-in-law, Joseph E. Coleman, before I could get the words completely out or finish the thought as I would say to him, "I want to talk to you about the libraries" or "I want to talk to you about what needs to be done at the regional library," before the thought would come out, he would be nodding his head in affirmation and approval. And the request that I would ask that he consider were issues of supporting more books for the library, putting a roof on -- a new roof on the regional library, providing programs for young people to learn, to support their 27 5/23/01 PUB. PROP. PUB. WORKS - BILL 010303 education. And I say that point of how he would nod before the thought was completed to indicate that he was that supportive of education and libraries. And I sincerely believe that the naming of this library is one way of thanking him and honoring him. And it is not only, I believe, an opportunity for this Council to do that but to represent the citizenry of this city that he's worked so hard and served so well. Thank you very much.

Thank you very much for your testimony. Dr. Pew, would you mind if Mr. Woody took your seat and went next so that Mrs. Coleman could be the last to testify. Thank you. (Witness comes forward.)

Good morning, sir please identify yourself for the record.

Good morning my name is Alex Woodley.

I'm sorry, sir. It was written here wrong. I apologize.

And I'm here to support 28 5/23/01 PUB. PROP. PUB. WORKS - BILL 010303 the bill that would name the building at Sedgewick and Germantown Avenue "The Joseph E. Coleman Regional Library." And I am a neighbor of Joe and Jessie and represent the 400 block of Upsal Street. I must say that this morning has been a touching and moving experience already, not only from the Coleman family, which we all know, but from the committee and the harmony that exists this morning in this building. It envelops and enraptures you, and you can't help but feel it. And I'm sorry if I'm off the given track.

No, I think it's appropriate. Thank you.

I'm Alex Woodley and I've lived in Philadelphia all of my life. I lived in Germantown, on (indiscernible) Street and I haven't gone but 15 blocks away, in homes that my father and I used to tend. And it's an honor to be here this morning. I'm an educator -- or was an educator, I'm sorry. I retired after 37.6 years. And I was also involved in athletics, as some of you probably know. The Philadelphia Pioneer Club was 29 5/23/01 PUB. PROP. PUB. WORKS - BILL 010303 my team. And this morning, you know, I don't need to read you what Joseph Coleman was about -- the chemist, the lawyer, the wonderful person. All of you seated there know what he was about. All the things that he had just to remind you that it was a long list of accomplishments, but the one thing that I would like to say is something that hasn't been said, and that is the wonderful relationship that Joe had with our block. We could depend upon him, we could call upon him, and things would be done for us and that we need not ask. The second thing has one to do with Joseph Coleman and his family, Joseph Coleman and his wife. I would go out each day to retrieve my newspaper. And at that time, Jessie was going out also, on her way to work. And before Jessie could come out, Joe Coleman was out there opening the car, heating the car, preparing the car -- you didn't know I had watching you, did you Jessie? Every day, cold, especially in the winter time, or in the summertime if it was hot already. He was a throwback to the old gentleman, as trite sometimes 30 5/23/01 PUB. PROP. PUB. WORKS - BILL 010303 as that might be. And my wife used to say to me -- (Laughter.)

I can imagine what she said.

"Do you see Joe?" (Laughter.)

"Do you see what he's doing?" And I'd say, "Yes, but it's degrees 11 and I'm in my pajamas." 12 (Laughter.) 13

But he -- this is just a 14 reflection of him. He was a wonderful man and I 15 know that this body today will pass that to make 16 sure this is done, that we in the community will 17 have something that is left that we can go to that 18 will represent Joseph E. Coleman. 19 Thank you. 20

Thank you, Mr. Woodley for your testimony. Ma'am, please identify yourself for the record.

Thank you very kindly.

You're welcome. 31 5/23/01 PUB. PROP. PUB. WORKS - BILL 010303

First of all, I must say in my life, I seem to have always known Joe, and I think it's because maybe I never started living until we got together. He was much of a part of my life. He's a man that I could always trust, a man that was compassionate, a man with integrity, a man with honesty, and a man that loved people and a man that loved people and the right of people to express their opinion. This, I think, the Council can relate to it quite well. I am reminded of the time Gregory, Jennifer and Stephie went off to college. I would always say to them protect my interest investment, always protect my investment. So for some reason, they knew what I meant because if it meant money, they would know that I would say "protect your daddy's investment." I am touched by this honor. I want you to know that. And all the things that Augusta Clark said about our relationship is truly true, and I thank her for that. Once Joe said to me that, you know what, Jessie, a midget, which he felt himself as growing up in the south, can become a giant if he 32 5/23/01 PUB. PROP. PUB. WORKS - BILL 010303 arrives on time. I think Joe became -- was a giant -- was a midget who truly became a giant in Philadelphia. And I thank him for that. I thank you for the honor and I thank you so very much for naming the Northwest Library after Joseph E. Coleman. I can't thank you enough. I appreciate it. I am filled with joy. And, again, thank you so very much.

Thank you very much, ma'am. Are there any comments? Any comments from the committee? Councilmember Miller.

I just want to again personally thank everyone for coming in to testify. And, Mr. Shelkrot, I will be in touch with you and maybe we can coordinate the plaque or whatever it is you're going to get and plan a renaming celebration there at the library. So, again, just thank everybody for coming in.

Thank you all very much for your testimony. Thank you. The Chair now recognizes Councilmember 33 5/23/01 PUB. PROP. PUB. WORKS - BILL 010303 Miller for the purposes of offering an amendment to this bill.

Okay, thank you, Mr. Chairman. I am amending Section 1 of the ordinance to read as follows: Section 1. The Northwest Regional Branch of the Free Library of Philadelphia, located at Chelten Avenue and Green Street, is hereby named and designated "The Joseph E. Coleman Regional Branch of the Regional Free Library.

So the word that's being added is the word "regional."

Right.

Okay. And the stenographer will be presented with a copy of that amendment. (Copy of amendment not ultimately provided to stenographer for attachment hereto.)

I'm taking out "branch," am deleting "branch."

The word "branch" will be deleted and the word "regional" will be added. 34 5/23/01 PUB. PROP. PUB. WORKS - BILL 010303

Yes.

Thank you very much anyone.

You're welcome.

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

What I would like to do is to recess the public hearing and go into a public meeting for the purpose of the passage of this bill prior to the Coleman family leaving. - - - 35 5/23/01 PUB. PROP. PUB. WORKS - PUBLIC MEETING

So we are now in a public meeting and the Chair recognizes Councilmember Miller for a motion to approve the amendment to Bill No. 010303.

I move that the amendment to Bill 010303 be approved. (Duly seconded.)

It has been moved and seconded. All in favor? There are none opposed. The amendment is adopted. The Chair now recognizes Councilmember Miller for the purposes of making a motion for the approval of the amended Bill 010303.

Okay, thank you, Mr. Chairman. I move that Bill No. 010303 be reported out of this committee with a favorable recommendation, as amended, and that the rules of Council be suspended so as to permit first reading at our next scheduled Council session. (Duly seconded.)

It's been moved and seconded. 36 5/23/01 PUB. PROP. PUB. WORKS - PUBLIC MEETING All in favor, aye? There are none opposed. Bill No. 010303, as amended, will be reported out of this committee with a favorable recommendation and a request will be made for a rules suspension to allow for first reading at our next Council session. Thank you. We will now recess the public meeting and return to the public hearing. (Applause.) - - - 37 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228

We are now back in the public hearing for the purposes of hearing testimony on Bill No. 010228, which is an ordinance amending Title of the Philadelphia 6 Code, entitled "Contracts and Procurement," by 7 requiring Council approval before the City may 8 enter into certain long-term contracts, and 9 requiring the Administration to report to Council 10 concerning such contracts; all under certain terms 11 and conditions. 12 As the prime sponsor of this bill, I 13 would like to read this statement into the record 14 relative to this particular bill. 15 I introduced this legislation to 16 reemphasize what I believe is Council's legal and 17 currently neglected role in the City's procurement process. " It further makes clear that approval of the operating budget or capital budget should not be construed as Council approval. Finally, it would require the 38 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228 Administration to file periodic reports regarding the status of such contracts. This provision was included to maintain a Council role in case the previous sections are struck down in court. " Currently Council is not being asked to approve any such contracts. Some contracts are being executed with multi-year terms of duration, in blatant violation of the charter. Others include provisions that state that Council's approval of the operating or capital budget should be construed as Council's authorization. Still other contracts sidestep the intent of the Charter by having only very a one-year term but include provisions for multiple one-year extensions. The City Solicitor in a 1994 opinion argued that this third type, a one-year contract with multple-year extensions does not violate the Charter. In the Law Department's opinion of this 39 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228 bill, which I have also distributed, it is also argued that concession contracts do not require Council approval. I personally disagree and consequently propose requiring Council approval of both types -- both these types of contracts in the proposed legislation. But regardless, these opinions do not justify why all of the other types of contracts are not being brought before Council. The contracts in question are frequently of profound importance to the future of the City, but we, as the elected representatives of our constituents, are not being allowed our Charter-required oversight. Several members of the Administration have expressed concern over the impact of this bill and their ability to quickly execute the thousands of contracts their department require. Consequently, I have agreed to amend the bill so that it would affect only contracts with a dollar value of $1 million or more. I have distributed a copy of this amendment to each Councilmember. I thank everyone present for their attendance and participation and I am hopeful that 40 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228 this bill may introduce a new attitude towards City contracts where the Administration and Council could work together as partners to get all required projects done. I have been a member of this Council going on ten years now. And it's not only in this administration but more so actually in the prior administration. Contracts and issues were decided unilaterally without input or even knowledge of Council. And one example that I would give, which recently came about as a result of the hearing on the request for an additional $175 million in bond authorization for the airport is that we found out simply by mistake, or by happenstance, that two very lucrative concession contracts were unilaterally extended to Terminal F and Terminal 1, without any not only input from Council, but without any even knowledge of Council. I think that over the years, the effort to bypass Council in this regard.

I think, has been not in the spirit or in the letter of the Charter's requirements, but I also believe that it also an atmosphere where we have to kind of seek and find the information by chance, as opposed to 41 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228 having a working partnership. I believe the Council has a fiduciary and Charter responsibility to be partners in this process. And I believe that the last two administrations, at least in my experience -- and I don't know what happened prior to my coming to Council -- consistently tried to find ways to circumvent that input. What I would like this bill to do is to simply make it clear that Council believes that it has a responsibility to be a part of the process when it comes to letting contracts or procuring services above $1 million and that issues like competitive bidding and affirmative action and minority participation will be things that we will be aware of so that we can advise our constituents or represent our constituents better than we've been able to under the current system. So with that being said, if there's any other comments from members of Council, I would like to call witnesses to testify for or against the bill. Councilmember Reynolds Brown.

Good afternoon, Mr. Chairman. 42 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228

Good afternoon.

I always preface my comments and back them up against the fact that I've been only been here for months, but I come 6 here with the understanding that there are 7 essentially two areas of government. We have the 8 executive office and the legislative branch. And 9 based on my understanding of the piece that we're 10 putting before us today for consideration for a 11 vote, I will find it difficult at best to support 12 the bill as it has been presented. 13 So I want to put that on the record at 14 the outset so that you know where I am. 15

The Chair would request if the Councilmember is interested in explaining areas of concern that she has so that we could perhaps work on alleviating those issues either now or at a later point.

At a later point.

Okay, thank you. The Chair now calls Linda Berkowitz and Mr. Tustin. (Witnesses come forward.)

Good morning. 43 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228 Please identify yourself for the record.

Good morning, Chairman Kenney and members of Council. I am Linda Berkowitz, Deputy Secretary of Financial Oversight and Director of the Office of Management and Productivity, which oversees efforts to improve the City's process for contracting for professional services. With me today are Richard Tustin, Director of the City's Capital Program Office, and Marla Neeson, who is Deputy Commissioner for the Procurement Department. They will each be testifying on their own areas of contracting purview and how the proposed ordinance amending Title of the Philadelphia Code will affect 17 their work. The proposed ordinance amending Title 17 of the Philadelphia Code would extend the definition of a multi-year contract to an agreement that has a term of up to one year and contains an option for up to three annual renewals. That expanded definition goes well beyond that found in the City Charter, which requires Councilmatic approval of all purchases of 44 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228 supplies and services or leasing of real estate that bind the City for more than one year. In 1994, the City Solicitor issued an opinion to then-Council President Street that a one-year contract with renewal options does not require Council's approval because it does not bind the City for more than one year, because it is subject to annual appropriations by Council, and because such renewals are at the City's sole option and without financial penalty. Although the Administration rejects the expanded definition based on its illegality, we are sensitive to Council's need to be knowledgeable about those financial agreements for which it is not directly involved in approving. I thought, therefore, that it would be helpful and perhaps even reassuring to provide some context for discussing professional services contracts. In 1993, the City undertook the re-engineering of its professional services contracting process, which at the time was over-complicated, time-consuming, paper-ridden, and otherwise Byzantine. There were few rules, particularly with respect to cost, and contracts 45 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228 traveled through 33 steps with multiple sign-offs. The result was that virtually no 4 contracts were conformed prior to the onset of service delivery, a very poor business practice. Payments to vendors were extraordinarily delayed, documents were lost, there was little accountability for contract management, and there was no mechanism to obtain current accurate information on what the City was buying from whom and for how much. That way of doing business was untenable, considering that at the time, the City was spending nearly $700 million annually to purchase professional services. To remedy those problems, the Office of Management and Productivity directed the efforts to streamline the contracting process by reducing the approval path to 11 steps, placing greater accountability on contracting departments and service providers and creating written policies, procedures and cost principles that address, among other things, allowable expenditures and reimbursement requirements. Importantly, an automated contract information system called "ACIS" was developed 46 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228 that contains a comprehensive database of pertinent contract information as well as a repository of contract documents, provides for the electronic flow of documents through the process, and allows managers to know where contracts are in the process and how long they have been there. Since its inception, ACIS has been modified several times to incorporate other functionality. An interface with FACIS enables funds for professional service contracts to be encumbered through ACIS rather than people working through dual systems and provides information on annual -- on actual contract expenditures.

This automated system now allows those within the government who have a responsibility to perform due diligence on professional services contracts to do so and to do so easily. For example, each contracting department is required to create an annual contract services plan in ACIS which must be consistent with its fiscal year target budget plan and to provide information on minority business participation. Consequently, both the Office of Budget and Program Evaluation and the Minority Business Enterprise Council have 47 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228 ready access to information that facilitates the performance of their own management responsibilities. During the next several years, we will be exploring the feasibility of other enhancements to ACIS, including the electronic submission of proposals and payment invoices by service providers and the acceptance of electronic signatures for contract execution. The goal, again, is to continue to streamline the City's contracting process and eliminate unnecessary administrative delays in order to ensure that services are rendered pursuant to enforceable contracts and that providers are paid timely for their services. Continuous improvements to the contracting process remain an important focus for the City. 61 billion. Over 42 percent of those contracts were funded by the Departments of Public Health and Human Services in conjunction, which, in conjunction with the Office of Emergency Shelter and Services and the Philadelphia Prison 48 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228 System, generated 80 percent of total contract costs, mostly for the care of individuals. 68 billion. The ability to renew existing contracts under the same terms and conditions is probably one of the most critical factors in expediting and managing the extraordinary contracting workload in those four departments in particular. Without that flexibility, departments would find themselves in protracted contract negotiations each year, which would likely result in either breaks in service or services delivered in the absence of agreed-upon terms, which, in turn, would delay the provider payments an increased costs to the City. I hope this information has been useful. The ACIS team would be happy to offer ACIS training to the Chairman and to other members of Council, and I will be happy to answer any questions that you may have. Thank you very much.

Thank you for your 49 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228 testimony. I don't necessarily disagree with your testimony. The only disagreement I have is your conclusion, that somehow Council's involvement in this process of ACIS and FACIS would somehow eliminate your ability to streamline and to gain the quality assurance and pricing that you've been able to accomplish in this administration and in the last administration up until now. For example, in construction, public works construction project awards, only 5 percent of the contracts are over 365 days. Out of $719 million in contracts, $184 million represent the contracts that go over 365 days. To make an argument that somehow we would be hamstringing the government in reviewing and approving 5 percent of all contracts let seems to me to be a bit of an overstatement, number one. And secondly, your comment about unnecessary administrative delays, I assume that when they wrote the Charter, they added that language for a specific reason. And I guess part of my concern, in addition to having to find out these things by accident or find out that 50 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228 something's happened by accident, because we're not in the loop so to speak, this committee or the Council of the Whole or the Council President is out of the loop, where is the harm in allowing us to simply carry out our chartered, mandated responsibilities by bringing it to us for review an approval?

Councilman Kenney, let me just answer you in a couple ways. First, Marla Neeson is going to address the construction contracts, which are not considered professional services contracts. Professional services contracts are those for what I describe as doctors, lawyers, and Indian chiefs, those who have a particular skill, where the intent is to obtain their services as competitively as possible, but they are not -- we are not required to seek bids and those contracts are not awarded based on price alone. But with respect to the numbers of --

But would that not be -- (Unintelligible, parties talking over each other.) 51 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228

The way in which you've described that particular realm of contracts, would that not even indicate more so an argument that Council should have at least some involvement in this because it's not a straight- out lowest-price bid? There are other subjective factors, or objective factors also, that enter into the decision to award a particular contract to someone. And we're talking again, with the amendment, over a million dollars and over a one-year period. It doesn't -- I don't believe it would amount to that many contracts that Council would be bogging the City down with.

It would amount to a lot, and I will tell you why. The Health Department alone in FY 2000 had 299 contracts. I can tell you that most of those are one-year contracts with renewal options. They are with providers of mental health, providers of behavioral health services, services for mentally retarded individuals, contracts important to the district health centers. And the contracting workload is so enormous that without renewal 52 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228 options, the department really could not function. And based on your ordinance, many of those contracts -- I can't tell you right now how many of those contracts are a million dollars or more, but I can tell that you in total, those 299 contracts in the Health Department last year were worth $874 million. So I can guarantee you that a significant number of them are for a million or matter.

But Miss Berkowitz.

Yes.

These numbers that you're giving us, I think in some ways, are making my case that the City is spending $874 million of public money without the Charter-mandated involvement of the Council. And I think part of the mix of argument here is that the Council -- I am not interested as chairman of the committee on being involved in the actual consideration process; all I want to know is to have someone, when they're spending $874 million of City money, come before us in a formal way and explain the need, the purpose, the outcomes, what the goals are, and why this is the best way to do this. I 53 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228 think that really speaks to what our responsibilities are. In some ways the attitude -- and I don't mean to take this -- I'm not taking it personally. The testimony and the attitude of the Administration, and the last administration in, this regard is that somehow Council is an annoyance, that somehow we need to get around. And I think -- that's not been stated formally, but we're not looking to change any of your procurement process, we're not looking to change any of your due diligence, we're not looking to being involved in the committee selecting contractors. All we want to know is, when $874 million in the Health Department is being spent, we would like to have some approval of that process. Considering the fact that the Charter mandates it. Now, one of the things that's concerning to me as it relates to issue of renewal options -- and I think the Rendell Administration made an art form of creating this one-year contract with multiple-year renewal options as a way to skirt the letter of the law that requires 54 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228 our involvement -- is that now increasingly 40 percent of service, supplies, equipment contract awards are done with renewal options, as opposed to either letting a, you know, two- or three-year contract or doing simply one-year contracts, which you're allowed to do as part of the Charter's provision. But to simply create a vehicle to get around the Charter by expanding the use of one -- of multi-year option contracts, I think, is something that needs to be addressed.

I can honestly tell you in terms of professional services contracts -- and, again, Marla Neeson is going to address the service supplies and equipment contract issues for you. I was a great supporter, and still am, of the renewal options because very, very few contracts -- when I became engaged in the re-engineering effort to rationalize the way we managed our professional services contracts, very, very, very few contracts were actually conformed by July 1, which, for most of those contracts, is the service start date. If contracts are not conformed by that 55 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228 date and we have -- one of the reasons we eliminated steps from the approval process was 4 to try and get as close to that July date as 5 possible because without that, we are actually 6 doing business in an exceptionally poor way and we 7 are putting City dollars and City taxpayers at 8 risk because we are operating without the benefit 9 of approved terms and conditions. That is bad 10 business practice. 11

But you also 12 understand -- 13

I would say that any 14 additional approval step would delay the process. 15 Not only that, renewal options allow us to hold 16 down the City's cost, and Marla is going to be 17 addressing that. 18

But I'll give you a 19 good example of what prompted this legislation. 20 It was learned, again by happenstance, that the 21 Vets Stadium concession contract was being 22 extended for three years, without any interest or 23 any movement in coming to Council for that 24 approval. I wrote a letter to the Procurement 25 Commissioner complaining about that and they 56 1 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228 promptly turned around and issued a one-year contract with two-year renewal options. To me, that is offensive. To me, that is simply a matter of stating, Well, since, you know, we're not intending to bring this contract to you for approval, 'cause it is a three-year contract, then we're going to find another stealth vehicle with which to get around your request for approval. I think it's important for us as a body representing the citizens of Philadelphia, elected by the citizens of Philadelphia, to review not only the expenditure of dollars but also contracting in areas that affect their pocketbook in the long run. And my argument from the concession standpoint is, the price of a beer and the price of a hot dog, the quality of food at a public facility like Veterans Stadium is an important thing for us to have some say over. The quality of food, the quality of service, the pricing of items and retail items at the Airport comes out of the pockets of Philadelphians and people who live in the region. That's public money. It may not be public money coming from the 57 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228 treasury of the City of Philadelphia, but it's public money because they're citizens of Philadelphia who have to pay to park and to fly and to buy. And for the Procurement Commissioner -- and I respect him personally, he's a wonderful person -- to turn around and respond to my letter asking for approval of a three-year concession contract at a publicly owned Veterans Stadium, to come back and say simply, Well, fine, we'll give 'em a one-year deal and two one-year options, to me is offensive. And it simply shows a lack of respect for this Council and its responsibilities. And that's one of the things that prompted this. I mean, why not bring that contract before City Council and say, Look, here's a three-year deal that we want to do with Aramark at a municipally owned stadium. Bring it through here, we'll have the Committee of the Whole or the Committee of Public Property or Public Works or whatever committee's appropriate, and say, This is why we want to do it and this is why we think it's going to serve the public better, and we'd like your approval. 58 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228 Instead of doing that, we say in a Nah-nah-nah-nah-nah, we're going to give them one year and two one-year renewals. To me, that is what is going causing my concern and, I hope, the concern of the majority of members of Council that we are being kind of patted on the head and told to go away. And that's what the long-term problem is here.

I understand your position.

Okay. Who's testifying next. Is there a question from Councilmember Clarke.

Yes. Good morning. I just want to get some clarity on a couple of issues in your testimony. On the last page, it talks about renewing the contracts under the same terms and conditions. Is that in all cases, in most cases?

I have not read all 1890 contracts, but I can tell that you that in just about all cases, the contract language, the contract terms and conditions of the existing 59 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228 contract prevailed in a renewal. Now, you will have professional services contracts that might have language that says something like this. "The contract may be renewed at the City's sole option with a 5 percent increase in cost if approved by the City."

But that's stated in the original contract.

That is stated in the original contract.

And is it your position that the likelihood if we didn't have that language either at the same terms or conditions or as specified an incremental increase in the language, that the likelihood if we had to start over with a new contract would be much higher?

Absolutely. And to underscore that, the Department of Human Services contracts with many, many -- in fact, in 2000, Human Services had 501 contracts -- I'm sorry, they had -- 308 of them were in Class 290, which is care of individuals. Those are the -- those are the contracts for residential treatment for 60 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228 emotionally disturbed children, for services for abused and neglected kids, services for delinquent youth. The department has been able, over the last decade or so, to pretty much hold down rate increases in the costs of their contracts because they have renewal options. And if contracts had to be renewed -- if contracts had to be negotiated every year, I don't know how the City would be able literally to afford the match that would be required, and I'm not certain that we would not and find ourselves in an over-match situation with the State just, like the City found itself in 1992.

With respects -- and you've been in government quite some time?

Long time, my whole life, yes.

And during your tenure, I'm assuming you were involved in a number of contractual negotiations. Do you recall -- maybe you can't give me the number, but from a percentage standpoint, how many times when we had the negotiated new contract with the same provider 61 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228 that we were able to decrease the contract amount for the following year?

Decrease the contract amount for the following year?

Yeah.

I can't think of any. Unless we decided to cut the scope of the contract.

Okay. With respects to the process -- and I'm not very familiar with the procurement process per se. If a contract came to City Council, as an example, for $1.5 million, what process would we have to use to determine the contract as it relates to MBEC, as it relates to, you know, costs associated with other submissions of bids. Run me through that process. What's involved? 'Cause we have a somewhat limited staff now and I'm just a little concerned about our ability to do that.

As I understand the purpose of the ordinance, it would be to approve contracts that were negotiated; is that correct? (Difficulties with sound system.)

We probably made 62 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228 this procurement decision without the advice of Council. I don't know, maybe we'd have a better microphone system. But having tried to say that, all this bill is asking is that contracts in excess of a million dollars or that are more than one year or that represent a one-year contract with multi-year options come before this Council for advice and consent. This is not -- for the Administration to take a position that somehow the board of directors of this $2.9 billion company should not have some information and some advice and some consent on the expenditure of this corporation's money, it is insane. And my position is that in the private sector -- and I know it's the public sector, it's a different standard, but in the private sector, the board of directors would hang the CEO out to dry if he or she spent the amount of money that's being spent without the advice and consent and information and knowledge of their board of directors. We have a fiduciary and Charter- mandated responsibility to inform ourselves. Councilmember Clarke said he's not real 63 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228 familiar with the procurement process, and I think part of the reason that we're not is because we're not brought into that process to understand it. It's kind of like approve the capital budget, approve the operating budget, and leave us alone, and we know better. Now, you may know better, but I would like to be enlightened as to what it is you know better that our having a hearing about a $5 million contract to build a police station in the 24th and 25th District, what it is that we would hamper in that process by having something like that brought before us, something that affects the citizens that we represent, something that affects the police department that we oversee, and something that affects the expenditure of $5 million in taxpayers' money is not -- and it's a two-year construction deal and was not brought before us. And the concept is, from the Administration's point of view, Well, you approved the capital budget on whatever date you approved it and that gives us carte blanche now to expend money in excess of a million dollars and to engage 64 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228 in a process of more than one year because you gave us kind of blanket approval last April. So we don't really have to come back to you. I think -- and an example of the 24th and 25th Police District is exactly the reason why this bill is necessary because there was no 8 intention of informing us of what was going on, who was getting the contract, how long it was going to be before it was built, and what was going on. And I think that District Council people, consistently through the course of my tenure here, have complained about their lack of input into projects in their own districts as it relates to various departments, whether it's Recreation or whether it's Health and libraries, or whether it's the Police or Fire Department, that formerly District Councilpeople had much more input and say into the projects that were being encouraged and developed in their district. And the Rendell Administration took much of that prerogative away and it is now basically moving forward in their own way without any input from us unless we happen to trip over it and find out 65 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228 about it by mistake.

Councilman, my saying that was just trying to clarify --

Can I have the floor? 'Cause I was asking the question.

Right.

And I kind of got a little sidetracked.

I apologize.

Right. I was just trying to get clarification so I could try and answer your question. I can't tell you what your process on the legislative side would be.

What I'm asking -- you know, because of our staffing issues, mine, you know, as a District Councilperson and our technical staff. What the process is. I'm assuming that if we're going to review a contract that has already been negotiated by the Administration, that we would have to have some level of resources to review that process that has happened, and I don't have a sense of what actually happens when the bid package comes back. 66 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228 Run me through that process.

Contracts, competitive contracts, are obtained through two processes. One is through a public bid, which is very much in the purview of the Procurement Department, and Marla can take you through that. Professional service contracts, for the most part, are procured through an RFP process, and the RFPs are public. The specifications of what the City chooses to buy, the terms and conditions under which it chooses to buy them are outlined in the public RFP. So it's a very open process and everyone has access to the RFPs.

So that RFP is put together based on a particular need.

Yes.

And there's an analysis that --

Yes.

There's an analysis of that particular contract or of that particular department that determines what the RFP ultimately looks like.

That's correct. And we 67 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228 are attempting to move more and more into the -- an environment in which outcome are one of the drivers in selecting providers. Human Services has been working for a couple of years in defining outcome measures that they wish to impose on their providers. So for the millions of dollars that we are spending -- and the Health Department is working towards the same goal so that we actually understand the benefit we are getting for the dollars that we are spending.

All right. So we would probably have to have a sense of that department early on in the process to determine even if the RFP was warranted.

I think so because although an RFP does not bind you to execute a contract, it -- should the City go out with too many RFPs that pursuant to it does not execute contracts, we would lose a lot of credibility. And there are very small time frames for doing this. It is right now an extraordinary effort. I can't tell you how much of an effort it is, and continues to be, unfortunately, to get contracts in place by July 1. It is very, very 68 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228 difficult. The budget -- the budget, as you know, does not get passed by Council until March. And then the department -- the departments then know exactly how much they have to spend for contracts, and they've been working with providers ideally since January, trying to set some groundwork for those contracts. But the real crunch in contract development and approval happens between April 1 and July 1st. It's a very, very small window. And a lot of the crunch comes in June.

Okay. I wanted to ask one last question. To your knowledge, how many people, City employees -- or I don't know if we source out any of this work -- are involved in that process, in the procurement process?

None. It's all done -- the contracting work is done in-house.

How many, would you say?

It varies by department. Some departments -- Marla can tell you how many people work on it in Procurement and -- 69 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228

Do we have, like, 50?

It's a very, very small number. There are approximately 40 contracting departments and agencies in the City government. Some of them have one person who handles all of their contracting departments like -- DHS and Health have more than that, but I would say probably DHS has no more than five.

Okay.

It's a very small contract management staff citywide.

You keep on making my arguments for me, Miss Berkowitz. If there's five people making all these decisions on all of these contracts, would it not be prudent to have some additional oversight in that process to determine that the money that these five people are determining be spent, which is taxpayers' dollars, is spent appropriately?

Actually, I think Council does have oversight, and that's why I spent time talking about the automated contract information system. That system tells you just 70 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228 about everything you want to know about a contract and allows you to look at contract documents.

Where's the oversight, however, when we don't have the ability to approve these contracts over a million dollars? I mean, what you're basically telling me is I can access the information if I desire but if I have a problem with what was done, you're out of luck.

Well, I think that you have the ability to raise those issues during the appropriations process because, again, contracts are for one year with renewal options; they do not bind the City for more than one year of appropriations.

Well, I'll tell you what I'd be interested in knowing. Of all of these contract of one year with renewal options, how many were not renewed? How many have not been -- and you can give -- 'cause we're not going to get this out of committee today. So let me --

Yes.

I need some additional information. How many were not renewed? In effect, I would argue, probably very 71 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228 few were not renewed. So, therefore, these are in actuality more than one-year contracts.

I think we have the definition of --

We're splitting hairs here.

I don't believe so. A multi-year contract -- I'm not a lawyer, but as I understand, a multi-year contract, the definition of that in the Charter, it is a contract that binds the City for more than one year.

Right.

A one-year contract with renewal options does not bind the City for more than one year.

So in the Human Services area, I'd like to know how many contracts were not renewed after the first year of being let. And let me ask you one question about the budget process.

Sure.

You've been involved in City government here since as long as I've been here. 72 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228

Yes.

Have you ever seen a budget item in the operating budget in any department amended and changed? I don't think so.

I'm sorry. Say that again?

Have you ever seen a number allocated that was recommended by the administration, any administration that you've been involved with, through our budget process, amended and changed on the operating side? Have we ever had any successful amendments to the operating budget in the last ten years?

Well, I think --

I think not.

I think that there may have been.

I can't think of any back over the last ten years. My point is that when you argue that somehow this crunch time between March or April and June, when each department sits on the edge of its seat, trying to determine just how much money it's going to get that year, is a bit of an 73 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228 exaggeration because the money that was recommended in the initial budget from the Administration has never been changed. So they know by history in the last decade how much money they're getting because we haven't amended an operating budget in ten years.

Councilman, I acknowledge and that's why I said most of the -- most -- a lot of the background work is done ideally starting in January, after the Mayor has submitted his budget request to Council.

And this bill is not changing any of that process. It's not changing any of the internal mechanisms, due diligence, investigation, research that's done by any department in this city as it relates to procurement or contracting. All it says is that when you get to the point where we've decided who we want, if it's over a million dollars or more than a year, or in effect more than a year by doing this renewal game, then it comes here for approval. Why is that so frightening?

It's not frightening to 74 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228 me, it's not frightening to me. I'm not certain that it's frightening to the Administration.

Well, then they should support the bill.

There is no doubt in my mind that additional approval layers --

Layer.

-- whatever they may be --

Us, the board of directors here.

An additional approval layer will delay the execution of contracts; I believe that, I believe that. The other issue is not a logistical issue; it is a legal issue. And I am not a lawyer, I am not the City Solicitor, and so I can only speak to what is my understanding of what the Charter requires in terms of Councilmatic action. And the Charter, it is my understanding, requires Councilmatic action of those multi-year contracts that bind the City for more than one year.

So I guess the answer to -- 75 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228

It's a legal issue.

The answer to my other question is how many of those contracts in the last five years that have had multi-year options have not been renewed? Because in effect, if it's a very small or no percentage of them have not been renewed, then it's in effect more than a one-year contract. In practice.

I would say that because they have been renewed at the City's options at the same terms and conditions, and they are subject and totally dependent on subsequent-year appropriations, they are not multi-year contracts in the way that the Charter defines multi-year. But I'm not going to resolve that issue for you.

You sound like a lawyer. You may not be.

No, I'm not. No, I'm not.

Councilmember Rizzo.

One of the concerns that I have is the fact that we are, as members of 76 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228 Council, contacted when it becomes a problem or there's a complaint. An example. We buy or rent vehicles from a company in New York. People that do business here complain about that. And I'm going to talk more about the controversy right now about tree removal and the controversy about contracts, the way they're being handled. And vendors that depend on our business right here in the City of Philadelphia come back at us and say a contract's being written to exclude them and to kind of give it to a particular company. These are the things that we -- bother me. I'm not suggesting that I'm going to be supportive of changing the way you do business, but if you're suggesting that the ball's in our comfort, that we should be looking into this computer to see what's going on, well, how I involve myself in the process is when I get complaints about the way the City does business. And we would think that we'd be trying to do business with our local companies and then we're designing a tree contract that's written for a particular vendor -- there are accusations that 77 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228 are easy to make and I understand the procurement process fairly well. But my point being, when you give someone a year-contract with a renewal, that year gives them the opportunity to know where they can fudge, where they can save money. I think what you do in many cases, you take away that competitive environment. Where if I want to do business with you and you already have a vendor and you're just going to renew, you don't give me an opportunity to come in and say I would like to bid on it. You don't even give me that opportunity. You basically have given a person a year of experience in how to dial in. An example. We put out contracts for street -- for water mains and various street work. In our contract, we say they have to back-fill at the end of the day, put blacktop back in place, or that they're supposed to use work-area protection, that they're supposed to do A, B, C, D, all of these various things. Well, they don't do 'em. They know where they can stick it to us, they know where they can only throw a shovelful of dirt back in the ditch, and then our 78 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228 constituents that don't have City cars hit that pothole and blow out a tire because some vendor that learned how, because of his experience or her experience with doing business with the government, they learn what they can get away with and they don't do it to the letter of the T because the jobs aren't being inspected properly. This is when we, as members of City Council, have to listen to these business people that are frustrated, that go out and make big investments on equipment, and then the rug's pulled from under them and they aren't eligible to do business or aren't being considered for additional business, and this mega tree-trimming company is the one that we're focusing on. These are the things that frustrate me when I think that we need to be communicated with. Here we are, we're talking about a blight program, where tree removal and tree-pruning is going to be a significant part of that process. And we have existing vendors and we're looking to bring a new one in. And I don't want to hear that they can't deal with it, they can't handle it. They 79 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228 can handle it, but obviously, someone has an interest in that particular company and wants to make sure that that deal is written to exclude some -- this is the problem. When you have some experience around here and you start to learn how you can take care of your friends and stick it to your enemies, that's the problem that I have with this.

And if it takes Council oversight to level the playing field, maybe we might have to do that because, you know, I came in here, I came in here not being very supportive of what we're talking about here. After hearing the exchange, I'm starting to change, I'm starting to think that maybe we need to take a look at -- and I already said to people that I wasn't in support of it. I might have to call them back and say, you know, I think I've changed my mind and I think we might need to have Council look at these. 'Cause I'm tired of hearing of this system being manipulated, and it is manipulated, and I can prove and I have a file of areas where people that want to do business with this city find out that all of a sudden, the existing vendor 80 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228 got another year. And then I'm told that they've learned so much in that one year that they're taking such advantage of this city and the taxpayers of this city, it's a shame. So I walked in here not being too keen on this piece of legislation, and because of what I heard from that table, I'm not sure where I am right at the moment.

Councilman, before you get me fired, I would appreciate it if you would hold off until you hear from Marla on the procurement side. I can't address some of the issues that you --

Can you tell me why we buy police vehicles, rent police vehicles in the State of New York? Just tell me that.

Marla can address that. Those are bid.

No, you know that, you know the answer.

They're bid, they are bid.

We have no vendor from the City of Philadelphia -- 81 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228

I can't respond to that. The Office of Fleet Management does not report to me. At this present time, I have no 5 idea how we are purchasing police vehicles.

Well, I know we're buying police vehicles but I know that we have deals -- we have deals, and Councilman Kenney talked about the private sector, that in the private sector, there isn't a CEO that could survive a week doing some of the deals we do. Thank you.

Councilmember Miller.

Yes. Good afternoon. I want to get some clarity pretty much on the public works. In Mr. Applebaum's testimony, he talks about the length of construction periods in excess of 365 days. How would this bill impact that? Right now as a District Councilperson, there seems to be a long period of time before we actually get to the bid at construction phase. And we have a project in my district that's a 82 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228 $2.8 million project that will probably take longer than 365 days. And would this bill mean that after they've completed work for months, that they 6 would have to come back again and bid the rest of 7 the job out? I mean, how does the time factor and 8 the cost of the job coincide with getting this 9 done, particularly with this Council oversight? 10 And maybe this question might be for 11 Jim too -- or Councilman Kenney. 12

"Jim" is fine.

Right now, I'm kind of lost with this.

Well, there's --

I want to see how this will -- actually, my bottom line question is, how would this benefit my district?

Councilwoman, I am Marla Neeson, Deputy Procurement Commissioner. Not to get ahead of myself and my testimony, but with respect to the 365 days, within any public works construction process, that 365 days is only after the bid document has been awarded and the notice to proceed has been given. 83 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228 There is obviously many activities that precede that within the Capital Program Office with Mr. Tustin related to the design of the project and meeting with the community and doing the budgeting process. But you asked how would this proposed bill affect you?

Once we get the notice to proceed, past the community meetings, the design, all of that --

There would be a definite negative impact. One, the project would be delayed. As a result of the project being delayed, bid dollars would come in higher to cover that wait period.

How would the project -- I'm sorry, 'cause you guys keep saying the same thing. How would the project be delayed if all the due diligence was completed, the notice to proceed was granted, and we had to sign off either through resolution -- probably through resolution, that we had to say, Yes, this is in fact a project that we want to see done? How would that delay the process? 84 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228

We could not issue the notice to proceed. If the actual contract conformance was predicated on presentation and approval by City Council, we couldn't issue the notice to proceed. We could be delayed by the fine issues. For instance, we know that when we had to have PICA approval prior to proceeding with all capital projects, that had approximately a three-month delay. We did see increases in price because also vendors weren't certain. We were no 12 longer -- correctly or incorrectly, the perception we are no longer awarding to the lowest responsive and responsible bidder; we are awarding predicated on an additional approval outside of the bidding law by City Council and --

Not outside of the Charter, however.

Well, as Miss Berkowitz --

No, forget that. We just kind of conveniently forget that document in our discourse, but that is -- what this does is basically memorialize what's in the Charter. And I'll go back to another example that we just went through last week because we 85 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228 were told a year and a half ago or so, or two years ago, that this $343 million expansion project at the Airport needed to be taken out of the control or out of the loop of the government for issues of expediency and efficiency, and then they come back last week and ask for $175 million more because USAir was running the show. I mean, it's either -- which is it?

Unfortunately, I am not involved in that and I can't comment on it.

I understand, but it's still a major capital improvement project, expansion project, that we were asked to say, Look, trust us, give us the $443 million authorization, we'll proceed, we won't have government because USAir will be the developer and we'll get rid of all of those problems, and then they come back with $175 million hole. I mean, can you at least be sympathetic with our frustration?

Oh, absolutely. No, I understand what your concerns are, but there are comments in the testimony related to that.

Well, the other 86 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228 thing -- see, I feel that it takes too long to get public works projects started as it is. And already, we have a $500,000 cost overrun with our playground project. And then in addition, it's complicated when you get money from the State and money from the City to put the projects together, and then you have thee cost overruns. And I don't really know, and maybe I'll find this out later, what Charter-required oversight means as it relates to this whole contract piece. I mean, suppose you bring something to Council and suppose we don't like who's been chosen to be the contractor? I mean, I don't really know what our role -- I would need to know what our specific role would be under this bill.

Let me just make one comment about that. And I believe that instead of looking at it from a delay standpoint, I would look at this bill as an expediter. And let me tell you why. If your playground project is not exactly on the hit parade of the Capital Projects Office, it's not something that they're all that 87 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228 necessarily motivated to get done, but they have another project that they're dying, that they're salivating to get done, you're not voting for that one until your project comes before that table and gets done. Now, the way the capital projects works now is that the priorities are set by the Capital Projects Office and by the Administration, not by the District Councilpeople. So if they have some major project that they have to get done for good reason and your project's been languishing somewhere in the bureaucracy of the capital works project, I can assure you, yours will get done much quicker than they're getting done now if we have to in some way have oversight and approval in the big projects that are priorities for them. I can assure you your stuff will get done much more expeditiously than it's getting done now.

Councilman Kenney, my name's Rick Tustin, and I'm the Director of the Capital Program Office, and I have to disagree with that blanket statement before I get a chance to testify. I have been -- in the short period of 88 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228 time I've been managing the Capital Program Office, I've had many favorable instances where I've had to meet with certain people from City Council, and upon their request as to expedite a certain project, getting them done very, very quickly -- probably much faster than they've ever been done before. So I don't believe the statement that Council projects would sit on some back burner is a very accurate statement. There is a process that we go through where we --

Well, you could talk to the District Councilpeople and ask them what they feel the pace of projects are in their districts that were approved maybe two or three capital budgets ago. I'll bet you there are projects in this Council that were approved two, three, four years ago that still aren't in a position to be started yet, and it's frustrated District Councilpeople tremendously. I mean -- so, I mean, maybe, you know, you have a different view of what this is, but I'll tell you, I know I hear a lot of frustration from District Councilpeople as a result of their 89 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228 inability to see, you know, projects in their district that they feel are a priority designed and started after being authorized for the funding. And they can speak for themselves, but I hear a lot of frustration this that regard.

I'd --

If I could respond also to a comment that the Councilwoman made, where you said, what happens if we don't like the vendor who is brought to us for approval? That is exactly -- you've nailed it on the head. That is exactly what will scare the vendors away. That is exactly what would compromise the open competitive bidding process, because now you take it out of strictly objective evaluation and you insert --

Oh, come on, come on. Don't tell me about objective evaluations. You mean to tell me that the $39 million in additional project costs put onto the Airport was done in an objective -- professional services was done in an objective standard?

I can only thing comment on -- 90 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228

Please.

-- every contract that comes through the Procurement Department -- I want to distinguish Procurement Department as defined by the City Charter versus the procurement process. We've been interchanging the vernacular. Professional services, as Miss Berkowitz discussed, are a negotiated process. They're an evaluation of objective and subjective issues, but every --

And political issues.

Every contract which comes through the Procurement Department is a bid written to the specifications for the service or the product desired. It is not written to favor one or more vendors, it is designed to be a generic specification to maximize competition. Once that bid is issued and opened, it is awarded to, without exception, the lowest responsive and responsible bidder. There are no 23 other variables that come into that process.

So in that process, bids aren't thrown out and rebid? Oh, that 91 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228 happens occasionally, doesn't it?

Oh, no, absolutely.

Oh, yeah. And who makes that decision?

There have been -- departments will come back and say vendors -- one of the things we try to do is encourage vendors to let us know basically when our specifications don't make any sense, okay? Of the 76 people within the Procurement Department who write bid documents, we cannot possibly be experts in the field of all of the items we purchase. We rely on the departments. But in addition, there are technology advancements, there are market changes. So we rebid because: One, we've made a mistake, the City, in our specification; two, we have forgotten something; or three, I can't tell you the number of times where we had responsible bidders responding at a good price, but because they submitted a totally blank minority business enterprise form, we had to throw them all out. It was as though nobody had bid. There are times when we when we can't award because everyone has 92 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228 been determined non-responsive. We then go back and do additional training. So those are the reasons that we rebid, not because --

So there's no input from the Administration when a bid is thrown out? Those bids, when they're thrown out and rebid, are all done because you simply can't award the bid?

In my tenure of six years, I have never rebid anything because somebody called me from the Administration or otherwise and said "I want you to rebid this." We have only rebid for valid reasons in the best interest of the City. We have rebid public works jobs because the original bids came in grossly over estimate and we're not going to award. Maybe it's because we didn't have enough competition, maybe it's because we need to revise the specification. But there is -- we are happy to share with you the reasons because there are there is a valid reason for doing that in our best interest.

If this process and the people who are running it, along with the 93 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228 second floor, were happy in sharing information with us, we wouldn't be sitting here looking at this bill, I can assure you. And there's no 5 desire to share information; there's a desire to hide information.

Well, I can -- I do not believe that the Administration is looking to hide information. As a matter of fact, just as the professional service process has made efforts through reengineering and technology to make information available versus a mystery, so has the Procurement Department. Every contract document, every purchase order is available for any City employee on our intranet. You can pull up anything you want, know where it is, why it's there. And we have never turned away anyone who's asked a question. We can produce reports out the wazoo for us you, we can discuss these. So if -- it would most unfortunate if we have gotten to this stage because of an unfortunate impression that we are holding back information.

I could give you instance after instance. Let's go, for example, 94 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228 to the vending machine contract for the police stations and the rec centers. How was that done? I mean, I had a vending situation in a rec center where I am a hockey coach in the winter, and we used to have the machine ourselves and the money used to be dedicated to the kids and the sports programs and the ice skates and the ice time. In the month of December, which is our biggest month in history ever, we get a $9 check from the vendor, a $9 check from the vendor. So when decisions are made to hire people like that without our input, without our ability to go back and deal with it in the end, other than to complain about it, those are things that affect, from the highest level of contracts to the grassroots people in the neighborhood, who put their $1.25 in the machine and don't get a soda can out of it, and then they come and complain to us about it and come and complain to the rec center personnel about it, and then they rip off the rec center in addition to providing bad service. And this contract was let -- this contract was let with this wonderful, you know, objective process. 95 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228 So there's a perfect example that I've had firsthand experience with.

Councilman, I think you have just reinforced one of the most significant benefits of a one-year contract with renewal options, and that is, it gives the City the ability to look at performance over the course of a contract term and to determine, in consultation hopefully with consumers of the service throughout the government, whether in fact the contract should be renewed at the City's sole option.

And I will guarantee you that that contract with that vendor will be renewed next year, because that contract was given to one vendor, who then subcontracted to other vendors, so that there's this layer of isolation that they can put on themselves. I'll bet you that contract is renewed. Maybe after this discussion, it won't be, but I'll bet you under normal circumstances, that contract would have been renewed. Because, guess what, the next month our check was about $150. It's amazing how stuff happens like that. 96 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228

Well, let me just comment. What you are speaking of and your frustration and our citizens' frustration has to do not with the term, the potential term of the contract, but the contract management. You don't watch somebody, they're going to give you crap. They'll do it for a one-year contract, they'll do it if there's renewals. But one of the questions that was asked was, how many contracts have not been renewed? Unfortunately, I can't give you that data right now. The report which you have does not properly identify those contracts with renewal options where we did not execute. But I not just from my involvement, probably within the last year, at least five which were not removed because, one, there was a change in the competitive marketplace so we were going to get better pricing. We had at least three vendors where we were not satisfied after a year that their performance met the requirements of the contract. So we're going back out again. It's much easier to cancel a contract at our sole discretion versus pursuant default of 97 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228 a vendor. Bar for default is much higher and more difficult. So it is a good management tool for us to say Fine, we just don't renew, aside from the fact that, as you correctly noted, 40 percent of our contracts, approximately 40 percent of our contracts, have renewal options. Probably if you went back -- this is not something that's new. For at least the last twenty years, the Procurement Department, on its service supply and equipment contracts, has had renewals. It was not new in the prior administration. It has been a normal part of business, because there are certain things that you acquire. Heavy maintenance of facilities of HVAC systems require the vendor to make a large initial capital investment to start service. They do look at our history of renewals in determining how much time they can anticipate for amortization. So we do -- my point was, it is not -- we do cancel, not renew contract 'cause it's our sole discretion that we have vendors who get upset when we choose not to renew because they say, Wait a minute, I had a renewal option. It's at our 98 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228 sole option, at our discretion.

Well, I would like you to make it our sole discretion, like all of us, the whole government, not just one element of the government, but the other part of the government that is responsible by virtue of our constitution, our charter, to be responsible for the expenditure of taxpayers's dollars. Somehow in this whole discussion, that philosophy gets lost, that somehow this is other people's money. It's all of our money and we have a responsibility to have oversight relative to its expenditures.

Yes, we are a pluralistic "we" of the City serving the --

Well, right now, we're not part of that.

And what I can comment on is that the Procurement Department conducts its business in accordance with the City Charter and public bidding law and as directed by legal opinion from our City Solicitor's Office. And the Solicitor's office has approved and condoned that we are not in any way in violation of the City 99 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228 Charter with the one-year contract and optional renewals.

He's your lawyer, not our lawyer. Technically he's ours; realistically he's yours so -- Councilmember Nutter was next. I'm sorry.

I just wanted to follow up on that.

If it's going to be real quick.

Yeah, really quick, 30 seconds. The statement that you made that you've never thrown out a bid, I believe that's what you said.

Absolutely.

Where there's no 20 political input. What about conversations before the fact, when you may know that there's a particular vendor that is recommended to you? They don't get any consideration?

No. Okay, once again, do we make mistakes, do we inadvertently have a 100 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228 specification that may favor one vendor? Yes. But I can assure you, it is one of the things that I have worked hardest on and Commissioner Applebaum worked hardest on is that to be sure that the entire vendor community knows that our bidding process is an open and fair one and that we are looking to maximize competition. We do not allow departments to say, "I only want this guy." We scrutinize those specifications, we'll go out to competitors, we'll go out to associations to be sure that we're establishing specifications that can be met by the general vendor community. So I guarantee you, it's never happened that, you know, there's been a favoritism, no, but it's inadvertent. We certainly are not sitting down with "Joe Blow Vendor," saying, Okay, John, tell me to write this.

You have to have blue trucks or something like that. Okay, got it. Thank you. Thank you.

Councilmember Nutter.

Thank you, 101 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228 Mr. Chairman. Miss Berkowitz, just a couple of questions. Let me go back for one moment, though, to something you said, which I thought was intriguing. At the earliest part of this hearing, you made reference to the process by which many of the departments reauthorize contracts or it's kind of the crunch time of negotiation, and you started that part of your statement by saying basically well, you know that Council doesn't approve the budget until March and that that somehow creates somewhat of a burden on people trying to deal with the contracting process. At least that's the way it came across. And I guess what intrigued me about that is that until about nine years ago, I think maybe for the history of the body, the budget wasn't approved until May, which is when the Charter says it must be approved by.

At the very last hour. And I did not -- that was not --

I guess I didn't understand how our approving budget in March, which is a process that was started in 1992, 102 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228 somehow negatively impacts what the departments do. If anything -- I mean, I'm not saying that a couple months makes all the difference in the world, but your statement confused me.

First of all, it was not meant to be denigrating with reference to City Council, because anybody who's been involved in this process, the before and the after, knows that the passage of the budget in March is a tremendous improvement over the --

I thought that's what you wanted to say. I just wanted to give you that opportunity.

And has actually allowed the department to expedite their contracting, but there is still a crunch because the workload is tremendous.

Mm-hmm.

But it's better than it used to be.

All right, thank you. I appreciate you clearing that up. Let's talk about -- I mean, it seems to me that a lot of this revolves more around the 103 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228 issue of having access and some level of involvement in a process to some amount of information, which, quite honestly, is probably more narrow than it is broad. I don't think that many of the contracts that you were talking about specifically with regard to human services and the other 8 million contracts that you guys may work on or don't work on, which I have no idea the nature and complexity of, are probably not even, quite honestly, within the realm of what the primary interests that the Councilman may have. He can certainly more than adequately speak for himself, but I kind of don't get the impression from a lot of this back-and-forth that anyone wants to really sit sand monitor what DHS is doing in the provision of services to children or something like that. It seems that a lot of this revolved around the higher-profile, somewhat more discretionary contracts that attract a fair amount of attention and, you know, may have a fair number of well-known interested parties paying attention to them. You know, we again rarely get lobbied about, you know, DHS contracts. I think most of 104 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228 the usual suspects are not even involved in that side of the business. So in that context, it would seem that if we have a particular need for more information, at a minimum, there should be some effort, I think, to try to address that particular concern. And then I know we get closer and closer to a legal line or, you know, who's doing what to whom line, when you start getting into do you get to approve, do you get to see the actual documents, because technically, if it's not more than a year, not only do we not approve it, I think generally we probably don't even get a copy of the contract automatically, unless we ask for it or have a public hearing about it or something like that. Now, I had some experience in this a while ago and it's continued for some time, specifically with regard to one of our health-care providers, Rite Aid. And as far back as probably 1993, I've had concerns and raised issues about that particular contract, which was technically a one-year contract, which at the time had three one-year renewal options. Now, would you happen to know who our 105 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228 prescription provider is today?

Our prescription provider for the district health centers?

No, for the City of Philadelphia.

For the City of Philadelphia?

Mm-hmm.

Yes, I do.

Who is that?

Well, I believe it's a network. The network is managed by Advanced PCS.

Mm-hmm, and we're still dealing with the Rite Aid company, or we have been for some time?

Yes. That, as I understand it, is part of their network.

And that was in essence a one-year contract, which I think started out with three one-year renewals and then we went back out in the market and did whatever we did and somehow magically we ended up with the same company with a multi-year contract. And I think it really kind of goes back 106 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228 to an item that was raised earlier, which is, I would also be interested in some of those types of contracts where it has been one year with multiple one-year renewals. And I would also be intrigued to know how many of those were not renewed, because I think what you have in reality -- it may not even be, you know, an insidious, conspiratorial thing that someone's trying to create, but the reality of what we see is, ten years later, we're still in essence dealing with the same company because it becomes convenient, maybe they do something with the price or we try to build in price protection, although that one, the price actually went up every year. We had difficulty in the beginning even finding out when the one-year renewal period was going to start or did other companies have an opportunity to approach the City, because I understood that it was at the City's option, but if the City is not interested in having a discussion with anyone, they can just go ahead and automatically renew. So, I mean, some of this is in the realm of what's the real spirit and intent of 107 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228 Charter provisions and how do these things not only work on paper, but what's the final result of what happens out of it. And I would venture to guess that in that situation -- we have a present situation, which I've expressed concern about, which happens to regard the School District, but it's the proposal that we approve a one-year contract with nine one-year renewals but an up-front payment of $45 million. I mean, if we're going to give the School District the money, which I support, I mean, we should just have that hearing and give them the money. But it is -- I mean, I respect the Law Department and others who worked on this. I mean, it is a complete ruse of what it is that we're really trying to do. The Mayor made certain commitments. Many of us would like to help not only the School District but support the Mayor in having made those commitments, but to sit around here and the back-and-forth on that one, I mean, if you're really, you know, intrigued and want some interesting nighttime reading, you should read the notes of testimony from that hearing. I mean, to try to defend that as 108 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228 anything but what any average person can figure out, it's a ten-year contract. There's no doubt, there's no question about it. I don't know why we're doing it. And I think ultimately it doesn't even accomplish the purpose for which it was created. But, I mean, to try to convince us that that example, a one-year contract with nine one-year renewals, an up-front payment of X-amount of dollars to cover a certain time period is anything other than a ten-year contract, I mean, it is an insult to any of us who learned math in first or second grade. I mean, 1 plus 9 still equals 10 every day. So I think, you know, in that regard and under that circumstance, you know, we wouldn't necessarily have a right to, you know, the contract documents and what does it say and who does what. I mean, why are we dragging ourselves through all this, I guess, is one of the questions.

Well, I hope you can appreciate the fact that I really cannot respond to that; I have not been involved in that, I don't 109 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228 know what any of the specifics are, and I'm not prepared to discuss that. But I would like to go --

Under the circumstances, that's a reasonable answer. I appreciate you, you know, crafting that particular response. It's more than understandable under the circumstances, and even if you did have an answer, I wouldn't necessarily expect you to offer one because it's not necessarily the point of this particular hearing. Now, when you mentioned these systems, you talked about -- I don't know, I heard Amos, Famous, Avis --

ACIS.

-- Hertz, National. I mean, wouldn't even know where those systems are, how to access them. If I have a problem about a procurement issue, which I have one presently that I was going to talk to Mr. Applebaum about call, I mean, I just call the Procurement Commissioner. And, I mean, I'm not necessarily looking as a sideline to be a contract officer. But, again, some of these contracts are 110 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228 very serious, they are quite high-profile, but also of particular importance to a variety of constituencies out there. The recent situation, which I don't know all of details on, of the voting machines; now, that is something that Council was involved with, we put a question on the ballot, the voters approved of it, there was some process. And as put the bits and pieces together, it sounds like there was a negotiation back and forth between the City and a couple potential vendors. I also get the impression that at some point in time, the discussion stopped between the City and both and proceeded between the City and one, which seems to be very different from the process that we used in the procurement of the 800 megahertz system, which, I'm under the impression, that the City to the last bidder, final day was in discussion with both companies, going back and forth, trying to make sure that we got not only a good price, but good quality and good delivery. As I can, again, best understand it and maybe you can clear up the record today, that negotiation seemed to have stopped at some point 111 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228 with both, continued with one, the result of which was an increase in the dollar amount of the contract -- I don't know if the other company had an opportunity to respond based on that -- and an increase in the amount of time for delivery. There is a state statute that does, I think, delineate some time frame within which the City is supposed to have those machines in place, and I don't really understand that.

If I can respond. On the voting machines, you are correct, there were two proposers. There were negotiations proceeding with both. Essentially, both vendors could both provide a good machine, they both had good organizations, and they had essentially the same delivery schedule. The difference was $6 million.

Mm-hmm.

So you have negotiations. They refused to lower their price any further. That was why you then say thank you very much, I am going to proceed with negotiations with this vendor. We always have the opportunity to go back, but there was really no purpose. We didn't have, I believe it was, $25 million for their 112 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228 system. They had much --

How did you have?

Excuse me?

How much did you have?

Okay, I wasn't the lead person on here. I believe the capital budget is around $20 million, I believe.

Is that what was approved or is that what the ultimate price is?

No. The price right now is approximately million. 14

Okay. 15

That is with some 16 additional services, but they would have been -- 17

Based on the 18 back-and-forth? 19

Right. You know, once again, it was determined there was some additional things that were needed. That would have occurred with the other vendor also, so there was no 23 difference in that context. It's just you were starting at a different base point of what your cost was going to be. And there was no way we 113 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228 could justify an additional $6 million expenditure. There was not an associated benefit for that cost. So that's why.

Was the contract amount increases?

I don't -- the -- let me rephrase this. The contract that has been entered into defines the specific products and services that are being received, the schedule of delivery, and their individual cost. Those products and services are authorized once they receive -- "they" being the vendor -- a funded purchase order. If, for instance, next week, they determine that the centralized computer -- the centralized data center down at the voter registration needs another land line, we could, with appropriate funding, add that with a new purchase order. So the contract is not the funding vehicle; the purchase orders are the funding vehicle. So there isn't a maximum amount per se, but it's all predicated on the budget you have. So our budget cannot exceed what has been approved 114 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228 and appropriated.

And the budget is. . . ? Is that the million? 5

Yes. Don't quote me on 6 the actual number on that line item. Once again, 7 I was not the controlling negotiator on this and I 8 certainly wasn't involved in -- 9

Well, at public 10 hearings, you tend to get quoted a little bit. 11 You say it in the microphone and before you know 12 it, it's on the little paper over there. 13

I believe it is around 14 $20 million. 15

Mr. Tustin, do you 16 have anything to add to that? 17

Unfortunately, I don't. 18 The Finance Department negotiated that, set the 19 budget for that. 20

I'm sorry, who did? Who negotiated it?

I believe -- not negotiated it, but the Finance Department is the department that basically requested the budget for that project. It didn't come to our office. I'm 115 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228 sort of the bricks and mortars of the construction, and purchase of equipment like that doesn't come through our office.

Can I just ask one question on that?

Sure.

Just for a moment. Take this example. It's $20 million in public funds being expended as a result of the negotiation, pretty free-ranging negotiation that the City entered into, the Procurement Department entered into on behalf of the City. What is wrong philosophically with that ultimate contract coming back to us, considering the amount of money involved, the effect that it has on our constituents, which every six months, they have to go vote, considering the fact of the national attention on voting irregularities and voting problems throughout the country in the last election? What is wrong philosophically with that coming back to here for one more go-around just so we can ask some questions, be informed, understand, and move forward together in a feeling that, you know, what we're doing the right thing? 116 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228 What's the problem?

None.

Okay.

To have a dialogue on that. I would create -- I would distinguish that that process was a negotiated process. So it is outside of the normal -- our issue is primarily related to those open advertised competitive bids, as defined by the Charter, as defined by public bidding law. Where there is not that outside subjective, I-don't-like-that-vendor --

So would the department support our approval of contracts at that level if removed those that are competitively bid simply on price?

I am not authorized for that. That is, again, a --

But that wouldn't be as big of a problem, I guess, if we were just doing the big, high-profile ones that were --

Conceptually, but once again, I have to refer back to our solicitor's office is who defines what the Procurement Department may do with our bid documents and 117 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228 contracts.

Thank you, Mr. Chairman. Why don't we do this. In that particular instance, 'cause, I mean, I would never even think to want to try to put you on the spot in a public hearing. Well, actually, I thought about it but I chose not to. If you could get us some information through the Chair about some of those particulars. There seems to be a fair amount of information and possibly misinformation about some of the particulars surrounding that matter, which is something that I was directly involved in. I also ask if you would seriously go through the notes of testimony from today's hearing. You've heard a number of statements from the Councilman and other concerns raised by other committee members. There seems to me that there has to be some way to bridge some, if not most, of the gap that revolves around information, involvement and process. I have no particular interest in a, from my perspective, in a day-to-day, watch the ball, follow people around 118 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228 with documents over in Procurement on these various projects, 'cause I know that I will basically get in the way. On the other hand, there are projects and contracts that have serious import, not only to the Council but I think to the general public at large. And, you know, in the day-to-day discussion, if not at times jousting over who has what jurisdiction, individual or shared, this is an area where maybe the framers of the Charter thought right that, you know, we'll continue to have a little bit of attention in these areas, but at the same time, to the extent that we can lessen any of that and make sure that everybody just has what they need, we'd probably find things going along a little smoother. Thank you. Thank you, Mr. Chair.

Councilmember Rizzo.

I just want to restate that I came to this hearing not necessarily in support of this legislation, and I'm not suggesting that I am, but it has certainly 119 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228 opened my eyes, and made me listen very carefully. I'd like you to describe for me the scenario that will occur in the next few months in reference to -- this is just an example of how we do business. We currently have a company that is called ATX that is a long-distance provider that the City's engaged with. And I'm only saying this because it's been said to me. We know who owns that company. But let me move on quickly. What will be the scenario on the City of Philadelphia bidding, again, for the long-distance service? Will this particular company, ATX, be able to renew without competitive bidding? Will the AT&Ts, the Global Crossings, the Sprints all be solicited to provide the long-distance service for the City of Philadelphia? Or could this particular company, which I believe is being sold as we speak, or has been sold, will continue to do business with the City of Philadelphia? These are the things that get us going when we get these phone calls from various vendors that don't think they have a shot because of a relationships that some people have with this 120 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228 government. Could you describe how that's going to go down?

Yes. And also let me say that one of the things I -- literally just before I left my office to come over here, I had to persuade a vendor, a very large vendor, that no, there were not outside influences that were going to be impacting on the award of a procurement contract, that it was open and competitive. There weren't the political influences. So when we develop -- I don't know the specifics around the long-distance contract. I believe that we may be at a point where the contract is scheduled to expire in the next six months, and so, as part of the normal procedure, we begin developing a new bid; "we" being the Procurement Department, in this case, in direct collaboration with the Department of Public Property Communication Division, which as responsibility for all of our phone and telecommunications equipment. We will develop a bid document. We have approximately 12,000 vendors who are already on the City's bid mailing list. That means they 121 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228 automatically get a notice when we issue a bid for which they are interested in. In addition, we advertise, we have all of our bids on the Internet; we have had some vendors who come to us as a result of that. So we are not -- vendor participation is not limited to being on our bid list. That's just a convenience. Anyone can respond to a bid document. For those vendors that respond to the open competitive bid, they must first pass what we call a "responsiveness issue." This is strictly black and white, this is primarily laid out in the Charter. They have t have their bid there on time. If they arrive at 10:31 and the bid is at 10:30, it's as though they never showed up, because they were not there for the public opening and reading. They then have to have executed the appropriate bid surety, as also defined in the Charter, signed the document, and submitted their Minority Business Enterprise Council participation form. Once they have passed those hurdles, which is strictly black and white, you know, met 122 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228 the rules, then you have a responsibility. That is the assessment of, does this vendor have the experience, competency, and fiscal capacity to do the work that we're requiring in this contract? Once again, once that determination is made, then you strictly go to the low bidder. I don't personally -- one of the responsibility issues can be that a vendor has done prior work for the City and it was unsatisfactory. As a result of that, we would determine them to be, if it's a comparable work, that they are not responsible. They have already proven that while on paper, they may appear to be capable of doing this work, they have not performed to satisfaction. They would be disqualified and not considered for award. So there are a number of processes. Just a for-instance, let me also state that by federal -- we have had inquiries from individuals saying "ABC Company" is in bankruptcy, they're in Chapter 11, you're not going to award to them. Unfortunately, as a municipality, by federal law, we are precluded from disqualifying a vendor because they are in a reorganization 123 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228 through bankruptcy. Our disqualification can only be based on their performance.

So you're telling me that the Communications Division, if they had a bad experience sometime in their life with AT&T, they could tell the Procurement Department to knock AT&T out of the deal.

No, this is -- you have to have some judgment in the process. First of all, what is the context? Was this eight years ago? All right, that probably is --

They have to qualify.

Also, you have to take into consideration what was the nature of the problem. If AT&T's problem was, I don't know, laying cable, and this is for cellular service, are they totally different divisions, are they totally different subsidiaries? How do we relate -- consider that? In addition, we have to be sure that -- contract management is so important. The Procurement Department spends a fair amount of time going out to the departments, and we'd be 124 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228 more than happy to come to City Council to talk about the process and what you need to do to be a good contract manager, because we need to be sure that if we're not happy with the vendor, we've got to tell them. You put it in writing, you call them, you don't just remain silent and then at the end, say, you know, we're not going to give you a contract, you were terrible.

And this is a perfect example of getting to know how to manipulate government. In the contract --

Control or manipulate?

Let's use the long-distance service as an example. In the deal, there's a way that you can get a credit for a wrong number if you believe that you were connected with the wrong number. The same with the cellular service: If you get a dropped call, there's a paragraph that explains how the City's supposed to get credit for these various things. Well, if nobody ever asks for a credit, you're talking about contract management, that's where we don't do a good job. I'd like to know the last credit, unless it's an automatic credit, that 125 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228 we've gotten for a wrong-dialed phone call in this government. My point being is that there are so many phone calls made to members of Council, and I'm only speaking for myself, and this issue, we're watch it very carefully to see, because Verizon of Pennsylvania is in a very few months going to be eligible to provide long-distance service. So they're concerned about companies that are on the other side of the world getting the business that is a company that can provide that service right in our own city. So I'm not suggesting that they should get a leg up on that. Maybe they should, I don't know.

We are precluded from providing local preference. Once again, we will define -- and it is in best interests of the City. We are going to award to the lowest bidder, be that person here. Yes, would I prefer for them, the lowest bidder to be from Philadelphia? Absolutely. But we do not have the opportunity to give local preference. It is strictly an award --

Why? Why if an employer employs a thousand people and pays City 126 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228 wage tax, why don't they get a --

Because the City Charter says that we will award to the lowest responsive and responsible bidder. That would require a charter change, I believe.

Changing a lot of things. So thank you, I appreciate it.

Any other questions? (No further questions.)

Thank you. This committee will be in recess till the call of the Chair.

Councilman, can I just respectfully submit -- this is Linda Berkowitz. Can I just respectfully submit that the testimonies of the Procurement Commissioner and Richard Tustin be entered into the record?

Yes.

Since they won't have an opportunity to give it? Thank you . (Copy of Mr. Tustin's testimony not ultimately given to stenographer for attachment hereto.) 127 5/23/01 PUB. PROP. PUB. WORKS - BILL 010228

Well, they will have an opportunity to give it at another date.

Okay, thank you.

Thank you. - - - (Adjourned 12:39 p.m.) 128 C E R T I F I C A T E I HEREBY CERTIFY that the foregoing proceedings of the Council of the City of Philadelphia of Wednesday, May 24, 2001, were reported fully and accurately by me, and that this is a correct transcript of same. RE: COUNCIL COMMITTEE ON PUBLIC PROPERTY AND PUBLIC WORKS BILL NO.'S 010228, 010303 __________________________________, JOSEPHINE CARDILLO, Registered Professional Reporter