COUNCIL OF THE CITY OF PHILADELPHIA2 COMMITTEE ON COMMERCE AND3 ECONOMIC DEVELOPMENT4 5 6 Room 400, City Hall7 Philadelphia, Pennsylvania Wednesday, October 5, 20118 10:20 a.m. 9 10 PRESENT: COUNCILMAN W. WILSON GOODE, JR., CHAIR11 COUNCILMAN DARRELL CLARKE COUNCILMAN FRANK DiCICCO12 COUNCILMAN BILL GREEN COUNCILMAN WILLIAM K. GREENLEE13 COUNCILMAN CURTIS JONES, JR. COUNCILWOMAN MARIA QUINONES-SANCHEZ14 COUNCILWOMAN BLONDELL REYNOLDS BROWN 15 16 BILLS 110557, 110558, 110559 and 110561 17 - - -18 19 20 21 22 23 24 25 2 1
Good2 morning. This hearing is called to3 order. This is a public hearing of the4 Commerce and Economic Development5 Committee on Bills No. 110557, 110558,6 110559 and 110561. My name is W. Wilson7 Goode, Jr., Chair of this Committee.8 I note that a quorum is9 present. To my left is Councilman10 Darrell Clarke. To my right is11 Councilman Curtis Jones. Councilman12 Frank DiCicco is also present, as well as13 Councilman Bill Greenlee.14 The title of Bill No. 110557,15 amending Chapter 17-1300 of The16 Philadelphia Code, entitled "Philadelphia17 21st Century Minimum Wage and Benefits18 Standard," by requiring employers subject19 to that Chapter to provide certain earned20 sick leave benefits to employees covered21 by that Chapter, all under certain terms22 and conditions.23 The title of Bill No. 110558,24 amending Chapter 17-1300 of The25 3 10/5/11 - COMMERCE - BILL 110557, ETC.1 Philadelphia Code, entitled "Philadelphia2 21st Century Minimum Wage and Benefits3 Standard," by repealing Section 17-1311,4 entitled "Living Wage Advisory5 Committee," by enacting a new Section6 17-1311, entitled "Living Wage and7 Benefits Review Committee," all under8 certain terms and conditions.9 The title of Bill No. 110559,10 amending Chapter 17-1600 of The11 Philadelphia Code, entitled "Economic12 Opportunity Plans," to require that13 certain economic opportunity plans be14 submitted to Council and published on the15 City's website and changing all16 references to "MBEC" to "certifying17 agency," as defined; all under certain18 terms and conditions.19 The title of Bill No. 110561,20 amending Subsection 19-2604(6) of The21 Philadelphia Code, under which businesses22 that enter into agreements to make23 contributions to community development24 corporations receive business privilege25 4 10/5/11 - COMMERCE - BILL 110557, ETC.1 tax credits, all under certain terms and2 conditions.3 We will take testimony on Bill4 No. 110561 first regarding the CDC Tax5 Credit Program. Mr. James White, please6 approach the witness table.7 (Witness approached witness8 table.)9
Good morning and10 thank you, Chairman Goode and esteemed11 members of the Committee, for the12 opportunity to testify. 12 We asked all the CDCs13 participating in the program to speak14 with their business partners to determine15 if they would participate at less than16 100 percent tax credit. While a tiny17 minority indicated that they would likely18 still participate at the proposed new19 reduced tax credit rate of 75 percent,20 the vast majority indicated they would21 not. 18 We have forwarded this proposed19 amendment to Bill No. 110561 to20 Councilman Goode. 2 The CDC Tax Credit Program has3 leveraged the involvement of many4 businesses to support neighborhood5 economic development for the first time6 while providing an ongoing stream of7 revenue that CDCs can count on to plan8 and carry out neighborhood economic9 development. The flexible nature of the10 funding enables CDCs to use the funds to11 leverage additional funding for a wide12 range of economic development activities13 while also covering staff and14 organizational operation expenses related15 to this work. 1 expanded city tax base. 6 We look forward to continuing7 to work with the City Council and the8 Administration to ensure the long-term9 effectiveness of the CDC Tax Credit10 Program and urge the Committee on11 Commerce and Economic Development to12 favorably report Bill No. 15
Thank you,16 Mr. White.17 Any questions from members of18 the Committee?19 (No response.)20
Our next24 witness for this bill is Karen Fegely,25 9 10/5/11 - COMMERCE - BILL 110557, ETC.1 Commerce Department.2 (Witness approached witness3 table.)4
Good morning,5 Chair Goode and members of the Committee6 on Commerce and Economic Development. My7 name is Karen Lockhart Fegely and I am8 the Director of Neighborhood Economic9 Development for the City of10 Philadelphia's Commerce Department. I am11 here today to provide testimony in12 support of Bill No. 110561. This bill13 will amend and continue the CDC Tax14 Credit Program.15 Community development16 corporations are vital partners for the17 Commerce Department and the City in18 strengthening neighborhood economies and19 creating jobs. The Commerce Department20 partners with CDCs to outreach to21 existing businesses, attract new22 businesses to vacant properties, organize23 and manage business associations,24 facilitate workforce training, implement25 10 10/5/11 - COMMERCE - BILL 110557, ETC.1 improvements to make neighborhoods and2 commercial areas more welcoming places,3 acquire and renovate key properties, and4 develop new construction for new job5 opportunities.6 The CDC Tax Credit Program7 offers businesses an incentive to provide8 a long-term commitment of flexible9 funding to CDCs undertaking such economic10 development activities. Thus, the11 program assures organizational stability12 in years when other public and private13 support may wane or may only be available14 for programmatic uses.15 The Commerce Department16 supports the bill's allowance for new17 businesses and CDCs, as well as those who18 participated and completed ten years of19 the program, to apply. The Commerce20 Department intends to ensure that the21 organizations that applicant businesses22 are selecting to support are qualifying23 CDCs or non-profit intermediaries, as24 defined by the regulations for the CDC25 11 10/5/11 - COMMERCE - BILL 110557, ETC.1 Tax Credit Program.2 Thank you for your time. I'm3 happy to respond to any questions.4
Thank you5 for your testimony.6 Let me note for the record7 Councilman Green and Councilwoman Sanchez8 are also present.9 Are there questions from10 members of the Committee?11 (No response.)12
Seeing none,13 thank you.14 We also have written testimony15 from Andy Frishkoff of LISC that will be16 incorporated into the record.17 Is there anyone else to testify18 on this bill?19 (No response.)20
Seeing none,21 we will move to Bill No. 11055922 concerning economic opportunity23 transparency. Our first witness is Jihad24 Ali.25 12 10/5/11 - COMMERCE - BILL 110557, ETC.1 (Witness approached witness2 table.)3
Please state6 your name for the record and proceed with7 your testimony.8
My name is Jihad Ali.9 I'm with the Contractors Roundtable10 Council. Chairman, Councilman Goode, and11 members of the Committee on Economic12 Opportunity, I would like to thank you13 for this opportunity to testify before14 you today on this Ordinance 110559,15 requirement for publication of economic16 opportunity plans. I am particularly17 grateful for your role in providing18 Philadelphia citizens with the necessary19 oversight of the Office of Economic20 Opportunity and your dedication to21 Philadelphia citizens to have22 transparency and accountability at all23 levels of City government.24 The requirement that we -- the25 13 10/5/11 - COMMERCE - BILL 110557, ETC.1 need is apparent that we need oversight2 on this economic opportunity plans. The3 papers that I have submitted to the4 Committee this morning, if you go on5 OEO's website -- and I had a conversation6 with Ms. Dowd-Burton about the7 availability of having economic8 opportunities available for public9 inspection. Well, I was wrong. She10 said, Well, they're on my website.11 So when I go to the website, I12 found four pages. Each one of those13 pages represent over $385 million that14 the City has contracted for contract15 opportunities. It really comes down to16 four pages. The one page with biosolids,17 that's 195 million; Delaware Avenue, that18 comes down to 6 million; RDA, 11819 million; PIDC and PHDC, 64 million. And20 all we get as citizens is four pages,21 four pages of information.22 If you ask for a plan, I went23 back in my records to see -- I've been24 down here a few times on a few issues,25 14 10/5/11 - COMMERCE - BILL 110557, ETC.1 and I wanted to look and see how many2 times I requested economic opportunity3 plans from Ms. Burton. Typically4 Ms. Burton will try to help me get5 whatever I want, but it's a struggle. I6 mean, the fact that I have to send in an7 e-mail, I have to get four or five weeks8 before I get the response back.9 The last time I was down to10 your office, Councilman Goode, I spoke to11 your Chief of Staff. I had an issue that12 I asked him to address with OEO as a13 citizen. I get a letter from the Law14 Department two weeks later telling me15 that they would respond in 30 days. Had16 it not been for -- my dear mother died,17 and if it hadn't been for that tragedy, I18 would have been back down to your office,19 but I was -- it took me two months to get20 back from that. But the fact that when21 you ask for this information, you can't22 get it.23 See, the big thing is, they24 talk about transparency, and I've known25 15 10/5/11 - COMMERCE - BILL 110557, ETC.1 everything that you all have done on2 behalf of the citizens. And I just3 wanted to say before I forget, I wanted4 to just thank Councilman DiCicco, because5 I'm not sure if I'll see you again.6 But Councilman DiCicco on every7 issue that I've ever came to him about,8 this issue, he always had time for me.9 And one thing that really stuck in my10 mind, those of you that are familiar with11 the Bechtle decision, the Bechtle12 decision was won by GBCA, the General13 Building Contractors Association of14 America, and I was at a meeting with all15 the guys from GBCA and I was the only16 African American male in that room, and I17 went to Councilman DiCicco to talk about18 African American issues. He stopped in19 his tracks. He listened to me. We20 talked. He could have threw me under the21 bus. Jihad, go see Councilman Goode, go22 see Clarke.23 And for that, I respect you.24 Thank you.25 16 10/5/11 - COMMERCE - BILL 110557, ETC.1 COUNCILMAN DiCICCO: Thank you.2
On the other issues3 of economic opportunity, when we come to4 this stuff, everybody is talking about,5 oh, we give you transparency. And6 through all the efforts that this7 Committee does and the entire Council8 does, monies and dollars are coming out9 to the street in the neighborhood, but10 that's where things are stopping.11 There's a crime occurring out there, and12 the crime is they're stealing13 opportunities from the invisible men.14 There's an author, Ralph Ellison. He15 wrote a book called the Invisible Man,16 and he defined that as African American17 men. Well, that's who's being ripped18 off. Those invisible men, they don't19 have a voice to speak, other than through20 the representatives that we've elected21 that are here.22 So what happens is, the23 management -- once something leaves this24 office or this Council, underneath of you25 17 10/5/11 - COMMERCE - BILL 110557, ETC.1 is where the crime is occurring, because2 the people that have the responsibility,3 like Commerce -- I'm surprised Commerce4 didn't even testify in support of this5 bill. Commerce, all they care about is6 moving money around, this and that. They7 don't care about economic opportunity8 coming to African American, especially9 males. If we talk about women, yeah,10 everybody is for that, and then they use11 that women badge as a badge to defeat the12 invisible men. They say, Well, we're13 doing -- they get to what I refer to as14 phantom percentages. Oh, we're doing 40,15 50 percent in participation, but when you16 ask, where's the back-up for that, you17 can't get it.18 So I was here today to talk19 about those issues. The system is broke.20 It needs to be fixed. It's obvious that21 we need accountability, and I support22 this bill.23 COUNCILMAN GOODE:24 Ms. Dowd-Burton, please approach the25 18 10/5/11 - COMMERCE - BILL 110557, ETC.1 witness table.2 (Witness approached witness3 table.)4
Good morning,7 Councilman Goode and members of the8 Committee on Commerce and Economic9 Development. My name is Angela10 Dowd-Burton. I am Executive Director of11 the Office of Economic Opportunity. I am12 accompanied here today by Kevin Dow, who13 is the Chief Operating Officer and Deputy14 Commerce Director for the City.15 I am here today to provide16 testimony on Bill No. 110559. This bill17 amends Chapter 17-1600 of The18 Philadelphia Code, requiring that certain19 economic opportunity plans be submitted20 to the Chief Clerk of Council and21 published on the City's website. The22 Office of Economic Opportunity would also23 certify the contractor's or developer's24 compliance with the plan's requirements25 19 10/5/11 - COMMERCE - BILL 110557, ETC.1 of Chapter 17-1600.2 The Administration is dedicated3 to maximizing the opportunity for4 minorities, women and disabled-owned5 businesses to contract with the City of6 Philadelphia and the private-sector7 partners that we engage in economic8 development projects. The economic9 opportunity plan is an effective tool for10 leveraging the portfolio of11 OEO-registered companies and those12 certified for ownership and control by13 PA-UCP and other recognized certifying14 agencies.15 As introduced, Bill No. 11055916 will standardize the economic opportunity17 validation process and provide additional18 transparency to the EOP process. To19 assist in our implementation of this bill20 with respect to sealed competitive bids21 let by the Procurement Department, we22 respectfully propose that Section23 17-1603(2)(a) read as Section24 17-1603(1)(e) has been amended, that25 20 10/5/11 - COMMERCE - BILL 110557, ETC.1 saying "Within 15 days of receiving such2 certification, the winning bidder shall3 submit a full and final version of the4 plan to the Chief Clerk of Council and5 the certifying agency shall make a full6 and final version of the plan available7 for viewing and downloading on the City's8 website." We ask for this modification9 to ensure that the winning bidder's plan10 has been certified by my agency before it11 is filed with the Chief Clerk and12 published on the City's website.13 To further facilitate OEO's14 certification of compliance, the EOP15 prototype will include a signature line16 for the bidder/developer and approval of17 the plan by OEO. This signature will18 confirm compliance of the EOP with the19 plan requirements of Chapter 17-1600.20 Bill 110559 supports OEO's21 ability to engage the project participant22 in a more timely dialogue about diversity23 and inclusion, to review the availability24 of OEO-registered firms and provides25 21 10/5/11 - COMMERCE - BILL 110557, ETC.1 visibility to the participant's2 commitment of inclusion.3 This Administration believes4 this legislation will advance the mission5 of OEO in its continued execution of the6 Inclusion Works: Strategic Plan. It7 will give us an opportunity to8 aggressively pursue our mission to foster9 the growth and sustainability of10 minority, women and disabled businesses,11 as well as facilitate increased diversity12 within the local workforce.13 Thank you for this opportunity14 to testify and propose amendments to Bill15 110559. I will be happy to answer any16 questions you may have at this time.17
Thank you,18 Ms. Dowd-Burton, for your testimony.19 Let me note for the record20 Councilwoman Blondell Reynolds Brown is21 present as well.22 I have a long list of questions23 or a short list of questions. I'll ask24 the short list first and hope the long25 22 10/5/11 - COMMERCE - BILL 110557, ETC.1 list won't be necessary.2 Do you have any objection to3 City Council receiving economic4 opportunity plans directly in an5 unfiltered way?6
Do you have8 any objection to posting all economic9 plans on the website?10
Do you have12 any objection to approval of this bill13 without amendment?14
Okay. Thank17 you.18 Any questions from members of19 the Committee?20
That21 shortens my list as well, Mr. Chairman.22 Let me ask this question, and23 maybe Kevin Dow might join us here. When24 we start talking about these25 23 10/5/11 - COMMERCE - BILL 110557, ETC.1 opportunities, Mr. Ali suggested -- and,2 by the way, Mr. Ali, I'm sorry about your3 loss of your mother. I recently lost my4 father. I know there's a hole in your5 heart from that, but we're glad to see6 you back and working on this issue.7
When he said9 there's four sheets that come down, this10 is not all that's published on the11 website, is it?12
We have the16 participation reports for Fiscal Year17 '09, '10 and the first three-quarters of18 '11.19
Excuse me,20 Ms. Dowd-Burton. I think Councilman21 Jones is asking whether that's the extent22 of which exists regarding economic23 opportunity plans.24
Yes.25 24 10/5/11 - COMMERCE - BILL 110557, ETC.1 Correct.2
We do have a3 series of the four pages that document4 about eight economic opportunity plan5 results.6
And that's7 the extent of what exists on the website8 with regard to EOPs?9
Well, then12 that just says that this bill is very13 timely, because without proper14 information, disadvantaged businesses,15 minority businesses, female businesses16 cannot compete on a level playing field.17 It is a little -- let me ask this18 question: Why is there only four sheets19 and these participating -- and we want to20 thank the ones that actually have21 submitted them. It gives people an22 opportunity to at least guess as to where23 they may fit in within a contract24 opportunity.25 25 10/5/11 - COMMERCE - BILL 110557, ETC.1 Can you tell me or give a2 rationale why we only have these EOPs?3
Sure. The4 difference between having an economic5 opportunity plan and the four sheets that6 you're referring to, the four sheets7 actually represent the tracking of8 specific economic opportunity plans and9 oversight committees. There are10 approximately 59 projects that have11 economic opportunity plans to them that12 we're also looking to track. And we'll13 be happy to post the plan online. We're14 just as interested in sharing with you15 what the process is and the results are.16
-- input,20 but why wouldn't we on the front end put21 the plan up? When we used to do in22 another century requirements contracts or23 different plans, it would seem to me we24 did them in workshops to talk about in25 26 10/5/11 - COMMERCE - BILL 110557, ETC.1 advance to minorities. If you want to2 take advantage of a big biosolids EOP3 participation plan, it may mean gearing4 up to hire different types of personnel5 within your business. It may mean6 seeking financing to buy equipment. It7 may mean a host of things that it takes8 to gear up.9
Giving them11 that information in advance allows them12 at least a chance, an opportunity, if you13 would, to at least go after departments14 and also individual prime contractors15 that they may want a subcontract16 opportunity from.17
If I could18 speak to that. September represents the19 anniversary of one year that we've met20 with the Minority Contractors Roundtable21 and the National Association of Minority22 Contractors on a monthly basis where we23 have brought in the different operating24 departments from Aviation, License and25 27 10/5/11 - COMMERCE - BILL 110557, ETC.1 Inspection, Streets, Water, Public2 Property. We've also brought in speakers3 who own economic opportunity plans to4 talk about the projects that are coming5 down the pike, which would do exactly6 what you're proposing. It is speaking to7 what the expected timeframes are for a8 particular project and what the needs are9 for those major projects.10 As an example, last evening we11 just met with the Children's Hospital12 where, I guess, over, I'd say, 6013 minority contractors participate in14 meeting with project managers from CHOP15 as well as the general contractors who16 were there. The unions were there.17 We've also had similar programs with18 Drexel University, the Delaware River19 Waterfront Corporation.20
Are these21 voluntary or is there a trigger that22 suggests why an EOP plan should be23 listed? Is it their voluntary effort to24 do outreach?25 28 10/5/11 - COMMERCE - BILL 110557, ETC.1
So if there3 is a penny in by way of government money,4 wouldn't that also warrant them being5 required to do that?6
Well, I guess7 the point is that they're doing it, and8 the Office of Economic Opportunity is9 promoting minority and women-owned10 businesses to participate in these11 meetings so they can be on the forefront12 of opportunities as they emerge, in13 addition to seeing the report on the back14 end, which says this is the results thus15 far.16
Well, my17 only comment is, also as we start looking18 at volunteer efforts, as major projects,19 eds and meds happen as well, being20 assisted by the Commerce Department, they21 too should also do it. We have had a22 vigorous program with Saint Joe's23 University in my district and we're24 looking at the expansion of the25 29 10/5/11 - COMMERCE - BILL 110557, ETC.1 Roxborough Hospital and we're encouraging2 them to do that. But I want to have a3 connection so that a wider audience of4 people, more competition, more5 transparency, people actually know about6 these opportunities and would love to7 have this as a vehicle. It is not by8 chance that today starts MED Week,9 Minority Enterprise Development Week, and10 these kinds of legislations and efforts11 need to be fostered.12
Thank you,25 30 10/5/11 - COMMERCE - BILL 110557, ETC.1 Mr. Chairman. Really I don't have a2 whole lot of questions. I just want to3 commend you for the introduction of this4 bill and thank you for coming to me with5 this idea and allowing me to be a6 co-sponsor. I think accountability and7 transparency in this regard has really8 been lacking. I'm sorry that we have to9 put these up on City Council's website10 instead of making them available11 generally beforehand.12 I'd like to suggest that we try13 to work together with the Administration14 to not just have available on our website15 City-related things, but there are many16 universities, Comcast, et cetera, that17 have -- Temple I'm aware of, that have18 specific programs to try to help minority19 and women-owned businesses, veterans, et20 cetera, participate in the dollars spent21 by those programs, and if we could find a22 way to coordinate all of that information23 in one place, I think -- and hopefully it24 won't have to be the City Council25 31 10/5/11 - COMMERCE - BILL 110557, ETC.1 website -- I think that that's something2 that I'd love to work with you on.3
Real12 quickly, I actually wanted to first13 follow up on Councilman Jones' lines of14 question. With respect to making15 available information to potential16 subcontractors and other smaller17 businesses to take advantage of18 participating in a contractual19 relationship with somebody that has a20 contract with the City, I want to say21 that you're obviously doing a good job22 and, again, thank Councilman Goode for23 continuing to expand on the EOP. It24 started some time ago and he's continued25 32 10/5/11 - COMMERCE - BILL 110557, ETC.1 to ensure that we improve on what was a2 good idea.3 I want to ask you -- because4 over the past couple of years, and now5 maybe not so much as in the earlier6 years, because we have a district and7 it's this debate about Councilman DiCicco8 and Councilman Clarke's district as to9 who has the most activity. I still think10 that we have more in the 5th District,11 but, you know...12 What we've had to do in the13 past is essentially, we have someone that14 wants to come in and they need either15 legislation or some financial support16 from the City, and I've had to reach out17 to people like Mr. Ali or Anthony Fullard18 or some of the other organizations that19 provide assistance on contracts as20 relates to construction and other people21 on other issues. And I didn't mind doing22 it, but in all honesty, we probably23 weren't in a position to give all of the24 information and all of the best process25 33 10/5/11 - COMMERCE - BILL 110557, ETC.1 of getting people engaged, and2 contractors, some of them genuinely came3 in and wanted to reach out. So we were4 pretty much limited to that.5 What can I do now, because6 fortunately there are going to be a7 couple of contractors coming in the 5th8 Council District, and I'm assuming in9 other parts of the City, of significant10 size. What's the first thing I tell them11 to do as opposed to me sitting down and12 giving them names of who to call?13
Two things.14 The Office of Economic Opportunity15 sponsors a meeting the third Wednesday of16 every month, and that is for contractors,17 minority and women-owned businesses, but18 primarily minority contractors, who come19 to this meeting to not only learn about20 opportunities to do business in the City21 but with the non-profits as well as the22 for-profit businesses. General23 contractors are also invited. Union24 representatives have also attended.25 34 10/5/11 - COMMERCE - BILL 110557, ETC.1 So the first thing is to attend2 one of those meetings. And the calendar3 of events is on the OEO website at4 www.phila.gov/oeo.5 The second meeting that we have6 once a month is over at the Greater7 Philadelphia Chamber. It is Doing8 Business With the City, and it not only9 features the Procurement Department, the10 Finance Department, but also PIDC, SEPTA11 has agreed to participate, the SBA agreed12 to participate, the Pennsylvania13 Department of General Services is also14 there to share opportunities for doing15 business around the City in addition to16 with City government.17 So those are two meetings. And18 I also meet with -- I have an open-door19 policy. So I also meet with any20 contractor who is interested in learning21 more about doing business with the City22 or meeting others who have resources for23 doing business.24
Let me be a25 35 10/5/11 - COMMERCE - BILL 110557, ETC.1 little more clear about my question. My2 question is about the contractor who is a3 prime or a business that will have4 opportunities for subcontractors or joint5 venture partners, the big guys or women.6
Who do I8 tell them to contact? Because people9 come in every day and they have these10 ideas, and I say, Well, you're going to11 have to submit an EOP. Once we get to12 the public hearing now, if this passes,13 which I suspect it will, you have to do14 it prior to then, and they say, Well,15 Councilman, I'm prepared to do that, but16 who do I reach out to.17
And is20 there some standardized process? And I21 don't like just tell people just to call22 you, because I know you're busy, you got23 a lot of stuff.24
They can call25 36 10/5/11 - COMMERCE - BILL 110557, ETC.1 me, but there's an economic opportunity2 template that they can also use, and we3 provide it to organizations who are4 interested in developing an EOP plan.5
All right.6 That's kind of what I'm getting at,7 because I need to be in a position -- and8 I don't mind meeting with these guys, but9 when it comes to that, I wanted to10 broaden all possibilities to make sure11 that when they come before us in the12 public hearing, they have the appropriate13 EOP plan and not say, I couldn't find14 anybody or I didn't know who to call.15
Absolutely.16 And I'll also be happy to provide it to17 the Committee.18
Can you19 please, so I can just hand it to them in20 a meeting.21
Thank you,25 37 10/5/11 - COMMERCE - BILL 110557, ETC.1 Councilman.2 Any other questions for this3 panel?4
A couple12 of comments, observations. First, I do13 want to say thank you to Jihad Ali for14 continuing to be a voice and a conscience15 both for members of this Council and for16 the Administration, because it's clear,17 as is evidenced by this bill being18 introduced by my colleague, that work19 still needs to be done and we have to20 continue to reach deep to make real these21 aspirations around leveling the playing22 field. So your work continues to be23 very, very important.24 Secondly, as someone who kicked25 38 10/5/11 - COMMERCE - BILL 110557, ETC.1 off and launched what are called business2 roundtables ten years ago, I fully3 understand their value. So in response4 to Councilman Jones' observations about5 these workshops, participation is6 certainly one thing. That's a baby step.7 It's important to have the information,8 share the information, relay the9 information and then provide instruction10 on how one can be seriously considered11 for what these departments are working12 for, working towards these goals.13 Securing the actual tangible contract at14 the end of that continuum is a totally15 different animal.16 And so the question is, what17 continuum of -- not services, but18 instructions are given to those who19 attend? Is there a connect between those20 who attend, those who have given21 technical assistance because they22 attended, those who then received the23 information and get additional TA to make24 sure they're applying to ultimately be25 39 10/5/11 - COMMERCE - BILL 110557, ETC.1 considered and those who ultimately win?2 And so is there some kind of connect? Is3 there some kind of dot that's connected4 between those who attend at the very5 beginning around a particular opportunity6 and those who ultimately win the7 opportunity? That's what I'm curious to8 know.9
So you're10 asking whether or not we actually track11 the participants through the process --12
We do not18 track the companies at this time. We19 have a capacity-building program that is20 currently underway that we host, started21 September 1st. It's every other week for22 six months at the Enterprise Center. We23 have 37 speakers from the technical24 community of construction, and our goal25 40 10/5/11 - COMMERCE - BILL 110557, ETC.1 is at the end of that program, to track2 those participants through the3 construction project planning process.4 The ultimate goal is to have other5 programs that will filter their success,6 such as bonding, additional financial7 resources, small business, administrative8 types of programming that they will9 participate in to grow their capacity and10 move forward.11
Well,12 that's great news and it's a long way13 from where we started ten years ago where14 my office and Councilman Jones and a15 couple were just hosting these events.16 And so that's what's needed. It's been17 lacking. And I think in the absence of18 what you've just articulated, we continue19 to hear from persons like Jihad Ali, who20 represents a breadth of MBE/WBEs, and21 members on this side of the table22 continue to be frustrated, quite frankly,23 angry when we roll up on these sites and24 we don't see Philadelphia license plates.25 41 10/5/11 - COMMERCE - BILL 110557, ETC.1 So that's good news to be had.2 My final question is,3 universities in the area continue to4 expand and do well, and those who get5 City support have to answer those6 questions at this table. Is it OEO's7 duty to track what's happening with our8 universities at least in Philadelphia9 County?10
Because we12 know what's happening on these campuses,13 and the picture around MBE/WBE, in my14 view and based on where I sit and the15 little I know, is still not fairly16 represented.17
True. I sit18 on the Economic Development Committee at19 the University of Pennsylvania and we've20 talked about the disparity in their21 performance and some of the things that22 can be done working with the Enterprise23 Center and other organizations that can24 further the growth and development of25 42 10/5/11 - COMMERCE - BILL 110557, ETC.1 small businesses. We'll be starting a2 similar kind of program at Drexel3 University next week.4
Yes. In7 fact, Drexel University is looking at a8 program that would launch back-room9 resource support/training for small10 businesses. This is where a lot of the11 companies are weak, the accounting, the12 legal requirements, the marketing13 capability for their businesses. So14 Drexel is looking at designing a program15 with the Enterprise Center that would16 provide that kind of service.17
What's the18 yield or goal set with the University of19 Pennsylvania? You say we're talking with20 Penn.21
Have any23 goals been established? What's the yield24 of the talking?25 43 10/5/11 - COMMERCE - BILL 110557, ETC.1
There are2 some goals. I don't have the specifics3 with me today, but I will tell you that4 the numbers are of concern to the5 Administration, as well as specifically6 the Committee. And so we're working to7 figure out how we turn that around. I8 mean, specifically in terms of employment9 from the local community on these job10 sites.11
Thank you,15 Councilwoman.16 Are there any questions for17 members of this panel?18 (No response.)19
I wanted to say to22 Councilwoman Blondell Reynolds Brown,23 thank you for everything. I wanted to24 just say to Ms. Burton, Ms. Burton is a25 44 10/5/11 - COMMERCE - BILL 110557, ETC.1 very nice lady. She's always been2 approachable for me. But being nice is3 not going to get this job done. Each one4 of you that's up there, you're not up5 there because you're nice. You're up6 there because you were the best -- of the7 people's candidates, you were the best8 people. And that's what we need to make9 this thing happen. We need the best10 effort. We need the best people at the11 table, and we need to come up with12 solutions.13 You know, a lot of times -- my14 mother used to always say the devil is in15 the details. And the thing about that16 program that Ms. Burton just talked17 about, that's the Tommy Bock program18 that's being sponsored in West Philly.19 Well, Tommy Bock is the contractor that's20 been in business for 60 years that had a21 problem at the airport, so as a -- trying22 to resolve that issue, they came up with23 a program.24 I'm going to give you one big25 45 10/5/11 - COMMERCE - BILL 110557, ETC.1 secret, let you in on one big secret.2 There's a lot of African American-owned3 companies out there, women and men, who4 are already established. They need help.5 I wanted to pass out to this6 Committee, here's another handout, how7 this actually is supposed to work. Now,8 this is from a contractor, a woman, a9 majority woman who is a contractor. She10 started in 2004 with $20,000. Five years11 later, she's doing 45 million. Now, in12 that article they lay out how that's13 done, and it's done the old-fashioned14 way. She talks about someone that takes15 her around and introduces her to this16 person and that person.17 So the system is designed to18 work, and it works for certain people.19 It's just not working for the vast20 majority of black men out there and black21 women. All these committees that when22 they're having these programs that are23 new start-ups, we need to look at the24 different level of experienced companies25 46 10/5/11 - COMMERCE - BILL 110557, ETC.1 out there.2 Councilman Goode, in this bill3 you talk about an oversight committee.4 That oversight committee, that's very5 important, because Council should have6 the right to put someone on that7 oversight committee. When we talk about8 EO plan providers, that's something that9 this committee needs to look at, because10 in this field, it's about three people.11 There's three firms. And in addition,12 each one of those firms, with the13 exception of one that I know of, sit in14 some kind of capacity on Ms. Burton's15 board or some board she's associated16 with.17 So we can't talk about18 ethics -- I hear ethics a lot when they19 talk about you and City Council, but when20 we talk about other issues, ethics, that21 goes out the window. You can't have22 somebody in charge of these committees,23 but every dollar that they're making is24 coming to them or as a result of their25 47 10/5/11 - COMMERCE - BILL 110557, ETC.1 allegiance with some committee. So you2 need to look at that. And that's really3 all that this is required. We need4 old-fashioned leadership, like you're5 exercising, Mr. Chairman, and we need6 somebody that knows to say, You know7 what, this is the way it's going to be.8 Thank you.9
Thank you.10 Any other questions for this11 panel?12 (No response.)13
Thank you.14 Thank you.15 Is there anyone else to testify16 on this bill?17 (No response.)18
Seeing none,19 we will now consider Bills No. 110557 and20 110558, the sick leave standard bill and21 the Wage and Benefits Review Committee.22 Our first witness is Rob Dubow.23 Before Mr. Dubow gets started,24 Councilman Greenlee would like to make25 48 10/5/11 - COMMERCE - BILL 110557, ETC.1 some opening comments.2
Thank you3 very much, Mr. Chairman. I'll be brief.4 I appreciate the time since I'm not on5 the Committee.6 I just want to say I fully7 support this bill. I'm proud to be a8 co-sponsor, but I'm sure you won't be9 insulted if I say I wish you didn't have10 to introduce this bill, this Bill 110557,11 and the bill that Councilman Clarke and I12 sponsored would already be in effect.13 But it particularly seems that this bill14 is worthy because it involves City15 government money, and if someone is16 getting a contract, it just seems to me17 that the fair and reasonable18 requirements -- and I still believe19 that's what they are -- of paid sick20 leave is appropriate. And I think we're21 going to hear similar arguments to this22 bill that we heard before on the other23 bill. I won't get into all that, except24 to say that experience in other cities25 49 10/5/11 - COMMERCE - BILL 110557, ETC.1 does not support those arguments. But I2 hope this Committee and eventually the3 whole City Council approves your bill for4 the same reasons that I've used5 previously on the other bill. Paid sick6 leave is simply the right thing to do.7 Thank you, Mr. Chairman.8
Good morning,12 Chairman Goode and members of the13 Committee. I'm Rob Dubow, the Finance14 Director for the City. Thank you for the15 opportunity to testify on behalf of the16 Nutter Administration on Bill No. 1 provide all full-time, non-temporary or2 seasonable employees who work on those3 contracts up to seven days of earned sick4 leave a year. 11 The Nutter Administration is in12 agreement with the sponsor that the City13 needs to be aware of how employees of14 City contractors are treated,15 particularly when engaged in work on16 behalf of the City. As you know and as17 Councilman Greenlee said, we opposed the18 adoption of a mandate that all employers19 in Philadelphia provide similar benefits20 to their employees. 1 than helpful to Philadelphia workers2 given its expected anti-competitive3 impact on job creation and attraction in4 relation to our suburban neighbors and5 other cities. 15 Whenever we place requirements16 on our contractors beyond the basic17 requirements of performance of the task18 we ask of them, we generally can expect19 some kind of impact on both aspects of20 our contracting responsibilities. We can21 generally expect an impact on the overall22 cost and, therefore, some impact on the23 dollars we have available. 5 We have many service6 contractors with both for-profit and7 not-for-profit entities. Impacts may be8 similar between the two types of9 contracts, but there are many10 differences. For non-profit contractors,11 which make up the substantial portion of12 our service contracts, there is often13 very little or no margin under which the14 contractors are operating. We are being15 charged for the costs of providing the16 service, which includes some amount of17 overhead. 5 Larger contractors will6 sometimes have other considerations as7 well. An entity that does not already8 provide sick leave benefits to all its9 employees may have offices in multiple10 locations, in Philadelphia and elsewhere,11 or perform various different types of12 work, some of which it performs for the13 City under contract and some of which it14 performs for other clients. 2 Determining the actual impact3 of the requirements of the bill is4 extremely difficult. We have thousands5 of service providers in place every year,6 a good portion of whom would likely meet7 the thresholds set forth in this law to8 trigger the sick leave requirement. We9 don't know which of these many employers10 provide the benefits called for in the11 bill. 3 I do note, however, that the4 City's Law Department has recommended5 amendments to the bill to clarify the6 precise contours of the benefits to which7 employees of contractors would be8 entitled. 13 Thank you for the opportunity14 to testify. I'm available to answer any15 questions, and Mr. 17
Thank you,18 Mr. Dubow. The first question is, did19 you write your own testimony?20
Our testimony is21 always a collaborative effort. I wrote22 parts of it. I edited it.23
I just want24 to know if I should be questioning you or25 56 10/5/11 - COMMERCE - BILL 110557, ETC.1 you and Lewis Rosman.2
Okay. Let's13 discuss the flexibility within the14 ordinance. Are you familiar with15 Subsection 17-1304 of The Philadelphia16 Code, entitled "Waivers"?17
How much19 authority is given to the Administration20 to control the cost of this ordinance?21
I would say24 full authority.25 57 10/5/11 - COMMERCE - BILL 110557, ETC.1
Has the3 Administration used their authority since4 the original ordinance was enacted in5 2005?6
I'm not sure the7 extent to which it's been used. I assume8 it has, yes.9
Has the10 Administration tracked the cost of the11 original ordinance since 2005?12
Does the14 Administration know the cost of this15 bill?16
Of this bill? No,17 we don't, because we don't know the18 current practices of employers or of19 future employers.20
But the21 Administration could use its authority to22 make it cost neutral, if necessary?23
We could provide24 waivers, yes.25 58 10/5/11 - COMMERCE - BILL 110557, ETC.1
Last year2 the voters overwhelmingly confirmed City3 Council's authority on this issue. The4 Administration actually testified against5 amending the Charter to give Council the6 authority to legislate on issues of7 living wage and benefits. At that time,8 Chief of Staff Clay Armbrister on May9 5th, 2010 in written testimony written by10 Lewis Rosman claimed that the Charter11 amendment in and of itself would cost the12 City $9 million a year, $45 million over13 the Plan. That's on of the14 transcript. That wasn't true, was it?15
That's a17 direct question. It simply wasn't true.18 It was a lie.19
I don't know. Like23 I said, I don't think we've tracked the24 costs.25 59 10/5/11 - COMMERCE - BILL 110557, ETC.1
Do you2 believe that a simple amendment of the3 Charter to allow Council to legislate on4 these issues costs $45 million to the5 Five Year Plan?6
That was9 irresponsible testimony, as is this.10 On of that same May11 5th, 2010 transcript, Mr. Armbrister12 actually conceded that the Administration13 can manage the cost of implementation and14 also retracted the statements of the $915 million cost or $45 million over five16 years.17 So at the end of the day, I'll18 just ask again for the record, does the19 Administration know the cost of the bill?20
No. I don't think21 there's any way to know the cost of the22 bill.23
Have you24 ever tracked the cost?25 60 10/5/11 - COMMERCE - BILL 110557, ETC.1
Can I just finish2 the answer? Which is one of the things3 that we say in the testimony, that we4 don't know how much the bill might cost.5
On this bill, no,8 because we don't know practices of9 employers.10
Within the11 transcript from May 5th, 2010,12 Mr. Armbrister claimed that the13 Administration was working on data then.14 Was that a true statement?15
I was not working16 on that. I think there probably were17 people working on it. I don't know18 whether that was final.19
At the end20 of the day, this could be cost neutral to21 the City; is that true?22
If you25 61 10/5/11 - COMMERCE - BILL 110557, ETC.1 provide waivers or if people already have2 a sick leave policy --3
Thank you,11 Mr. Chairman. Good morning, members of12 the Committee. I'm Alan Greenberger.13 I'm Deputy Mayor for Economic Opportunity14 and Director of Commerce. I'm joining15 Rob Dubow, Finance Director, to provide16 additional testimony on Bill 110557.17 As we have testified on18 previous legislation dealing with paid19 sick leave, the bill we are discussing20 today has a laudable goal of ensuring21 that workers employed in Philadelphia are22 able to take time off from work to23 address their own health needs and those24 of their family without having to lose25 62 10/5/11 - COMMERCE - BILL 110557, ETC.1 pay for doing so. However, despite this2 well-intended objective, we have several3 concerns regarding the proposed changes4 to the Philadelphia 21st Century Minimum5 Wage and Benefits Standards.6 Though it is impossible to7 accurately calibrate the impact of this8 bill on those projects that are, quote,9 "City financial aid recipients," end10 quote, we believe that the proposed11 legislation will make it more difficult12 for the City to help businesses create13 jobs and particularly jobs for the14 lower-skilled workers. The City provides15 economic incentives in order to encourage16 a particular behavior, such as the17 development of a geographic area or the18 attraction or retention of a particular19 business. Our financial assistance is20 often the last piece of funding necessary21 to close a funding gap. When we create22 additional requirements to the businesses23 that we are trying to attract,24 effectively making the funding gap even25 63 10/5/11 - COMMERCE - BILL 110557, ETC.1 larger, we negate our original efforts2 and ultimately harm job creation in the3 City of Philadelphia.4 Today, we live in an economic5 environment in which the number of6 economic incentive tools that we have is7 diminishing. Cuts in state and federal8 monies, both in form of grants and loan9 pools, have left all cities with a very10 small number of programs available to11 help close funding gaps. As the number12 of new requirements increases with such13 programs, their effectiveness decreases,14 running the risk that the programs are no15 longer capable of incentivizing projects16 as they were intended to do.17 Thank you for the opportunity18 to provide testimony, and I too will be19 happy to answer questions.20
Thank you,21 Mr. Greenberger. The first question is22 the same as it was for Mr. Dubow. Did23 you write your own testimony?24
This was25 64 10/5/11 - COMMERCE - BILL 110557, ETC.1 written in part by me and in part by2 Commerce staff.3
How much4 does the City spend per job in terms of5 economic development subsidy?6
I'm sorry. I7 don't have that number in front of me.8 I'll be happy to get it for you.9
You can give14 me a range, you can give me any ball15 park. The question is per job, how much16 do you spend in terms of economic17 development subsidy.18
I just don't19 know. I don't want to make up a number20 and then be wrong.21
How much22 should the City spend per job in terms of23 economic development subsidy?24
I don't know25 65 10/5/11 - COMMERCE - BILL 110557, ETC.1 the answer to that.2
It's not a5 matter of whether we're spending too6 much. It's a matter of whether --7
I asked you8 how do you know if you're spending too9 much.10
As I11 indicated in the testimony, I think it's12 almost impossible to calibrate. We can't13 know what doesn't come before us. My14 concern is primarily -- go ahead. I'm15 waiting.16
I'm asking17 you -- actually, let me just go to where18 I'm really going.19 On April 5th, 2011, exactly six20 months ago, you testified before the21 Committee of the Whole on the Commerce22 Department's budget. You were asked by23 Councilwoman Sanchez -- and it appears on24 of the transcript -- "How much25 66 10/5/11 - COMMERCE - BILL 110557, ETC.1 do we invest every time we create a job?2 Do we have a formula that says this3 amount of money creates this job?" You4 answered, "No."5 So you don't have a formula for6 how much to invest per job?7
So how do14 you know if you're increasing the cost15 per job?16
What we are17 saying -- I don't know whether we're18 increasing the cost of --19
How can you20 testify this bill impacts the cost of job21 creation if you don't know how much the22 cost of job creation is?23
What we24 believe --25 67 10/5/11 - COMMERCE - BILL 110557, ETC.1
That's2 disingenuous, as disingenuous as the3 Administration's testimony last year on4 this issue. I understand what you're5 trying to do theoretically. I understand6 you want to align yourself in a pro7 business manner, but when you're talking8 to someone who is actually an economic9 development professional, you should10 respect that.11 You don't know how much the12 cost per job is, so you don't know that13 you're increasing the cost per job.14 That's the simple truth.15
When we16 provide incentives and certain kinds of17 incentives, we are able to calculate what18 a payback period looks like on a dollar19 basis.20
I'm talking21 about managing economic development22 subsidy. You're talking about economic23 development subsidy being depleted. I'm24 talking about managing economic25 68 10/5/11 - COMMERCE - BILL 110557, ETC.1 development subsidy. If you don't2 actually have an objective formula for3 how you do that, you can either4 rationally discuss the quantity of jobs5 or the quality of jobs in terms of6 strategy. You can't do that unless you7 have an objective formula.8
I'd like you12 to explain how economic development13 subsidy is being depleted if you can't14 say how much you're spending per job.15
Every loan16 that is made lists how many jobs are17 projected to be increased over the18 minimum to evaluate it against the nature19 and quality of the loan and the ability20 of somebody to pay back, for example.21 Grants --22
Certainly25 69 10/5/11 - COMMERCE - BILL 110557, ETC.1 that's a key part of underwriting, yes.2
Have you7 ever called a loan for lack of job8 creation as opposed to non-payment? No.9
I don't23 believe they're going to run out of24 money.25 70 10/5/11 - COMMERCE - BILL 110557, ETC.1
Then what2 are you talking about in terms of this3 bill impacting the creation of jobs and4 the depletion of economic development5 subsidy? It's simply not true. It's not6 true.7
I'm simply10 saying that when we put additional11 requirements on the few incentives we12 have, it makes them less useful.13 COUNCILMAN GOODE:14 Theoretically.15 MR. GREENBERGER:16 Theoretically.17 COUNCILMAN GOODE:18 Theoretically.19
I don't have24 a way to calibrate it.25 71 10/5/11 - COMMERCE - BILL 110557, ETC.1
I do. If2 you look at -- PIDC actually is3 responsible for most of our economic4 development investment; is that true?5
They are the6 primary transactor of our economic7 development.8
If you look9 at their annual reviews over the last two10 years, 2010, 2009 before, as we continue11 to legislate on this issue -- and this12 ordinance has been in effect since 2005.13 I continued to legislate on it in 2008,14 2009 and 2010 -- what happened in terms15 of economic development subsidy and its16 impact? Nothing.17