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
Now let's19 deal with the issue of funding gaps and20 gap financing. Is that really primarily21 what you do?22
Primarily23 what we do in the Commerce Department24 or -- I don't understand the -- primarily25 72 10/5/11 - COMMERCE - BILL 110557, ETC.1 what I do, primarily the Commerce2 Department?3
Primarily4 what's done in terms of economic5 development subsidy. Is it really gap6 financing or providing a funding gap?7
When it comes8 to incentives, yes, it is primarily gap9 financing. We don't do any primary10 lending.11
That doesn't24 really mean that that's the last funding25 73 10/5/11 - COMMERCE - BILL 110557, ETC.1 in or that it's gap financing. That's2 how it's characterized. Because in3 reality, what happens is, you're simply4 writing down the interest rate for the5 banks. You're allowing the bank to get6 the interest rate that they want.7
So the banks14 stay in the deal with the interest rate15 that they want.16
Well, what we21 do is we close gaps where projects can't22 close them through the normal private23 sector means.24
And maintain25 74 10/5/11 - COMMERCE - BILL 110557, ETC.1 the interest rate that the banks want.2
We don't --3 that's right. We do not influence the4 interest rate the banks want.5
Thank you.11 What would you say is the12 number one, two and three impediments to13 job creation, business attraction and14 business retention in the City of15 Philadelphia?16
It may not be17 in the order of one, two and three, but18 I'll put a few of them out.19 I think that we are -- for a20 variety of reasons that have to do with21 the perception of the culture of the22 City, the tax structure of the City, we23 are not seen as a business-friendly city.24 I think that is the largest impediment.25 75 10/5/11 - COMMERCE - BILL 110557, ETC.1
I wouldn't4 say it is only our business tax5 structure. I think it's a whole host of6 things.7
I'm10 repeatedly told that people don't want to11 come here because they think the12 environment is difficult. They think13 it's an unfriendly environment. They14 think it's too political.15
It means18 that, for example, on real estate19 development, they're worried that there's20 not a level playing field, that the rules21 are not consistently applied. I hear22 that repeatedly.23
From24 developers?25 76 10/5/11 - COMMERCE - BILL 110557, ETC.1
From2 developers and businesses who are3 thinking about coming here.4
What is the8 Administration doing to counter the9 complaint that we're not a -- that10 there's not a level playing field if you11 want to do business in the City of12 Philadelphia?13
Well, one is14 we're telling them that that's not the15 case, first of all.16 Secondly, we are trying to17 reform a number of systems to make them18 more citywide predictable. That19 includes --20
How are you21 telling them that's not the case? In22 other words, it's only businesses that23 are considering coming here that have24 shared that with you. What is the25 77 10/5/11 - COMMERCE - BILL 110557, ETC.1 Administration doing to get rid of that2 perception from people who, because they3 have that perception, don't even bother4 to talk to you?5
Exactly, and6 that's a very fair point and something7 we're greatly concerned about, and the8 way you do that, I believe, is you have9 to get the message out there through10 examples by attracting businesses to the11 City, who can then turn around and create12 an environment in which it is clear that13 that is not the -- that this myth -- that14 this comment is mythology, and you do it15 by example.16 So, for example, we've been17 working very hard with some out-of-town18 developers to try to get their projects19 going so that they're living proof then20 in fact you can do this, you can make21 money and it will work.22
But isn't23 the very concept of PIDC providing24 incentives and gap funding for particular25 78 10/5/11 - COMMERCE - BILL 110557, ETC.1 projects political in nature? Isn't the2 fact that we do provide these incentives3 to some people and not other people part4 of what creates this misperception? In5 other words, the very colloquy that6 you're having with Councilman Goode about7 gap financing means that there are some8 people who get it and some people who9 don't, and really the question is, what10 can we do to change the business11 environment so the City -- and cities are12 and states are notoriously bad at this13 based on every academic study I've ever14 read -- so that the City is not picking15 winners and losers in terms of who gets16 gap financing? What's the number one17 thing we can do as a city to not need gap18 financing for people to want to come19 here?20
So that22 there's not a perception that you have to23 come into the City and do that.24
The reason --25 79 10/5/11 - COMMERCE - BILL 110557, ETC.1 let's go back to the original point. The2 reason that there is gap financing is3 because the margin between the cost of4 development or the cost of doing business5 is, particularly development, is razor6 thin.7
I'm going to10 get to your question. Give me a chance.11 It's razor thin between that12 and the revenues that come with it. So13 our costs of development are high. The14 revenues that back it up are15 insufficiently high. So, therefore, the16 gap is marginal, and anything that pushes17 it over the gap generally creates these18 kind of gaps that we wind up having to19 fill. Now, we're not the only city that20 does this. All cities have to do this at21 some level. It's a particular problem22 for us. So increasing -- at a theory23 level, increasing the value of the City24 and at the same time trying to decrease25 80 10/5/11 - COMMERCE - BILL 110557, ETC.1 development costs is helping the2 equation.3
Development4 costs are not the problem, right? It's a5 demand problem. Not enough people want6 to be here. Rents in Boston are 67 bucks7 a foot. They're 27 bucks a foot in the8 City of Philadelphia --9
So what can16 we do to drive demand that is going to17 eliminate the need for gap funding18 because projects won't be on razor-thin19 margins? What's the number one thing we20 can do as a city to change the demand21 equation to have people want to be here22 and not need gap financing?23
I think it24 comes on the back of several things that25 81 10/5/11 - COMMERCE - BILL 110557, ETC.1 make the City more desirable. More2 livable, more people wanting to live here3 is very much a part of it. Quality of4 life is part of it. Streamlining5 regulations is part of it.6
You began7 the conversation when I asked what the8 top three things were and you only9 mentioned two discussing what we need to10 do as a city to -- the three things that11 are impediments to business retention,12 attraction and job creation. You13 mentioned taxes and you mentioned the14 perception of people out there. The15 perception is in part created because16 people have to come to you in order to do17 anything because of the razor-thin18 margins. The perception we perpetuate,19 because in order to have a project pencil20 in the City of Philadelphia, it needs gap21 financing. Everything big does, whether22 it's a hotel for the Convention Center,23 the Convention Center itself.24
Everything2 needs public subsidy. The question is3 what's the one thing we can do to get4 away from the public subsidy that's not5 necessary. And you're not going to6 answer, because we both know what the7 answer is, because you listed it in your8 first two. It's change our tax9 structure. But the reality is, the10 cities that have these kind of bills that11 we're talking about, they don't have12 business taxes and, therefore, they have13 huge demand and, therefore, when they14 have a sick leave bill or they have a15 minimum wage bill, it's not a problem in16 those cities in terms of job creation,17 business attraction and business18 retention, because they're not one of19 four cities in the country with a net20 income tax. And it seems to me that21 that's what we need to address, not22 complain about sort of fairness and23 equity.24 Thank you, Mr. Chairman.25 83 10/5/11 - COMMERCE - BILL 110557, ETC.1
Before we go2 to Councilman Jones, Mr. Greenberger,3 1700 Market, the building there just4 sold.5
Yeah. I'm6 just trying to put a mental image in my7 head. Tall office building, yeah.8
I'm not aware22 of there being public money in the sale23 of the property.24
Councilman25 84 10/5/11 - COMMERCE - BILL 110557, ETC.1 Jones.2
I don't know3 if sometime public back and forth like4 this is helpful or not. I don't know,5 because the public is watching this, but6 I have to say that I spent a couple years7 on that side of the table in the economic8 development committee. What I found is9 that different developers will say the10 reason development is good or bad to11 different people in different rooms,12 because they don't want to embarrass13 either the political side or the14 administrative side, because at the end15 of the day, they're trying to make money16 and they're trying to do it with the17 least amount of impediment. But some18 recurring themes I have heard is that it19 is difficult also to navigate some of the20 economic development entities that are21 responsible for it. I've heard22 complaints that there's not a level23 playing field. I've heard complaints24 that some communities are sought after by25 85 10/5/11 - COMMERCE - BILL 110557, ETC.1 way of doing business while others are2 taken for granted. I've heard people3 from emerging nations suggest that to me,4 that when some entities come in from out5 of town, they're showed the Navy Yard,6 but they never see Hunting Park or they7 never see Parkside or they never see8 parts of the waterfront.9 So there's enough of this to go10 around, and I don't know if it's helpful11 to do, but I think one of the things that12 we can do is really go in a session or a13 room. We are sponsoring legislation to14 look at the question from top to bottom.15 Some people have mentioned that it costs16 more to build in Philadelphia than it17 does in New York and less yield by way of18 square foot by way of at the end of the19 day. So I've heard a number of things.20 I've heard that, Oh, I would love to21 build in New York, but where will my kids22 go to school?23 So there is enough of this kind24 of pointing the finger stuff, but I think25 86 10/5/11 - COMMERCE - BILL 110557, ETC.1 at the end of the day for this city to2 grow, all of us better come together and3 figure it out and figure out how to put4 the best face, the best tax, the best5 open-for-business-with-economic-6 development-agencies foot forward for all7 people. It is MED Week. There are8 minority developers that are qualified9 that say they can't get a shot with you10 guys, because they won't get the same11 kind of information that others are12 afforded.13 So there's enough of this to go14 around to say why can't Johnny or Jannie15 read, but what I will say to you for the16 future of this city, as the Mayor talks17 about and as Rob talks about shrinking18 revenues, we better get in a room and get19 it right. And I would suggest that it's20 not one thing but a plethora, a whole lot21 of things that we need to correct.22 That's what I'll say.23 Thank you.24
I would agree25 87 10/5/11 - COMMERCE - BILL 110557, ETC.1 with you. Thank you.2
Yes.5 Thank you.6 Good morning. Councilman Green7 raised an important question that we've8 seen debated and asked in a number of9 different forums around attraction of10 businesses. What would you identify as11 the three incentives or attractions for12 why businesses might ultimately select13 Philadelphia as a place to do business?14 What would be the top two or three?15
Well, you16 know, it's sort of -- this is a bit of a17 sort of multi -- it's got two sides to18 this first answer, and, that is, the cost19 of doing business here is indeed lower.20 The real estate rents are lower. It also21 means that making those equations work is22 more difficult.23 We have our centrality relative24 to a very large population is desirable.25 88 10/5/11 - COMMERCE - BILL 110557, ETC.1 So organizations like Teva2 Pharmaceutical, in part the reason they3 came here is because this is a great4 central location from which to do their5 distribution, and, in fact, they found6 not only land availability in the City of7 Philadelphia, they also found that8 working with us was relatively easy, and9 so that transaction got concluded.10 So I think the nature of sort11 of the administrative response to12 business is really important. People13 need to feel that they're both welcomed14 and that they're going to be treated in a15 fairly predictable and efficient manner.16 I think our centrality on the17 East Coast is very important to us and is18 an asset. I think our workforce is an19 asset and the resources that we have in20 the City by way of educational resources.21 Councilman Jones, for instance, mentioned22 a point that in fact does come up from23 time to time where you said, I'd like to24 be in New York, but I can't either afford25 89 10/5/11 - COMMERCE - BILL 110557, ETC.1 to be there or I have a school problem.2 We probably have more options than many.3 That's particularly attractive to4 international folks.5 The research capacity of6 Philadelphia and the ability to integrate7 with that asset is a big plus for us, and8 I think also just the nature of the City,9 the fact that the population increased10 because we are a desirable place to live,11 that there are -- and in my former12 business, we heard -- we were pretty13 regularly able to attract people from14 places in the Midwest and the South15 because they liked the big city16 atmosphere of Philadelphia, but it wasn't17 New York. They didn't want that.18
So I think20 all those things are assets, and there21 are probably several others that make us22 a very attractive place to be.23 That said, we're also in pretty24 serious competition with a lot of places.25 90 10/5/11 - COMMERCE - BILL 110557, ETC.1
Sure. The2 one I would like to punctuate is the3 Greater Philadelphia -- called the4 Greater Philadelphia Cultural Affairs5 Alliance has done in their portfolio --6
Where our9 rich arts and culture community as well10 is becoming increasingly a factor that11 corporate execs consider when attempting12 or making decisions about moving their13 company here as well. So thank you for14 that.15 The second question raised by16 Councilman Green or the observation made17 was this notion/perception, which is not18 often reality, that you have to be19 connected to do business here. Having20 heard that, has there ever been a21 sit-down with the Greater Philadelphia22 Chamber of Commerce or like interest23 groups where collateral can be -- written24 collateral, written PR brochures can be25 91 10/5/11 - COMMERCE - BILL 110557, ETC.1 developed where you have personal2 testimony from businesses who actually3 moved here and learned that that is4 really not the case always in ultimately5 wanting to make a decision here? Because6 when we hear those type of observations,7 for me that's just homework has to be8 done to counter what we know is not9 always true.10
And, in fact,11 we do take those kind of testimonials and12 use them both in our brochure materials,13 Smart City, Smart Choice, our Commerce14 Department annual report, and we've had15 also -- I can think of several press16 conferences where we've asked individuals17 who run businesses in the City to come18 forward and talk about it, including a19 whole series of them recently made20 related to Smart City, Smart Choice on21 video.22
I'll be happy25 92 10/5/11 - COMMERCE - BILL 110557, ETC.1 to make sure that you get copies of that.2
Please.3 Thank you very much.4 Thank you, Mr. Chairman.5
Thank you.8 I think Teva is a perfect9 example of what I'm talking about. What10 was the public subsidy involved in11 bringing Teva to Philadelphia?12
Two and a18 half million dollars. And the19 alternative for them was looking just20 outside the City lines, because they21 already have --22
And the main25 93 10/5/11 - COMMERCE - BILL 110557, ETC.1 difference between just outside the City2 lines and the City lines, other than our3 land is slightly cheaper, is what?4
The main5 difference in that particular instance6 was the process and the time it would7 take to get the entitlement on the land.8 They were facing pretty significant9 difficulties in Bucks County related to10 road improvements and opposition from the11 local community that they did not receive12 in Philadelphia. They had both the13 infrastructure and the support.14
I spoke to15 people from the company during that16 process, and one of the main factors17 involved in their decision was the tax18 burden in Philadelphia versus outside19 Philadelphia. Would you agree that that20 was a major consideration of theirs in21 your discussions with them?22
I'm not sure23 what you're saying. If you're saying --24 you were saying before you thought the25 94 10/5/11 - COMMERCE - BILL 110557, ETC.1 tax burden was heavier here.2
Well, but8 RACP is a state grant. It could have9 gone to Bucks County as well, but there10 were additional expenses in Bucks County11 that we didn't have, mostly related to12 infrastructure.13
Well, okay.14 We're not going to agree on that. The15 point is, they came to Philadelphia and16 they came with subsidy.17
Any more20 questions for this panel?21 (No response.)22
Thank you,25 95 10/5/11 - COMMERCE - BILL 110557, ETC.1 sir.2
Our next3 panel is Marianne Bellesorte and Rebecca4 Foley.5 (Witnesses approached witness6 table.)7
Good morning,8 everyone. My name is Marianne9 Bellesorte, and I'm the Senior Director10 of Policy for PathWays PA, a non-profit11 organization serving 6,000 women and12 families in the Greater Philadelphia13 area. 1 cost-effective, quality goods and2 services. Yet, jobs without access to3 paid sick days offer neither of these4 options. 11 Without paid sick days, the12 City also loses money in payments made13 for health services that otherwise might14 not be needed. Workers without access to15 earned sick days are twice as likely to16 go to the emergency room to get medical17 care. The cost of emergency services add18 up quickly. Just one preventable19 hospitalization for asthma can cost up to20 $13,000. 2 The City also risks a public3 health crisis by not taking action on4 paid sick days. As long as two in five5 Philadelphians lack earned sick days,6 five out of five working Philadelphians7 will be exposed to illnesses in the8 workplace. 15 Instead of losing money under16 this amendment, it actually represents a17 way to save money. First, paid sick days18 are not a pre-determined19 one-size-fits-all plan. Workers earn the20 time, and businesses choose how to21 implement the time. 1 competitiveness. In fact, San Francisco,2 a city that offered paid sick days since3 2007, was just named by4 PricewaterhouseCoopers as the third best5 city for business opportunity in the6 world. Businesses continue to operate in7 San Francisco, even though they have8 different regulations than surrounding9 municipalities, just as businesses10 continue to operate in Philadelphia under11 our Wage and Benefits Standard. 50 per hour, a single18 business offering paid sick days under19 this bill could save nearly $2,000 a20 year. These savings come from increased21 productivity and decreased turnover. 1 In addition to these saving2 estimates, we have support letters from3 non-profit City contractors stating that4 this amendment will not affect their5 ability to provide services or affect the6 cost of those services. I will add that7 PathWays PA is also a non-profit8 contractor with the City. 4 When families struggle to reach5 the standard, they may end up not paying6 their electric bill, running up their7 credit cards past the breaking point or8 taking medicine infrequently to make a9 prescription last longer. 16 In looking at the facts around17 paid sick days and their potential18 effects in Philadelphia, the fiscally19 responsible choice for the City is to20 move forward with this amendment. 5
Thank you6 for your testimony.7 Please identify yourself.8
Thank you very much12 for having me here today, Chairman Goode13 and members of the Committee on Commerce14 and Economic Development. I will be15 testifying in support of Bill No. 1 Philadelphia region, where I serve as2 Director of Public Policy. 11 In Philadelphia, 40 percent of12 workers do not have a single earned sick13 day to take care of themselves or their14 loved ones. Women continue to be15 overrepresented in these jobs that are16 less likely to offer earned sick days,17 the low-wage jobs. Further, industries18 that are often dominated by women are19 among the least likely to provide earned20 sick days. For example, 72 percent of21 child care workers and 73 percent of22 food-service workers have no access to23 earned sick days. 1 and for many women, having a sick child2 or elderly parent means losing a day's3 pay or their job altogether. 8 I'm sure it will come as no9 surprise to you that half of working10 mothers miss work when their children get11 sick, and of these working mothers, half12 do not get paid when they take this time13 off. The problem becomes worse for women14 in poverty. 18 Many of the clients Women's19 Way's funded agencies serves are working20 mothers in low-wage jobs just trying to21 make ends meet. These women struggle22 daily to meet their basic needs and the23 needs of their family. 1 put on the table or paying rent or the2 heating bill. 5 In addition to having a6 significant impact on workers' economic7 security, earned sick days will also8 greatly benefit businesses. Research9 shows that employers who offer earned10 sick days have higher productivity,11 reduce absenteeism and higher employee12 loyalty, which reduces turnover. 16 And I won't go -- Marianne did17 a very good job at covering all the18 health savings. 19
Thank you20 both for your testimony. I only have one21 question. Last year the voters22 overwhelmingly confirmed City Council's23 authority on this issue. You also24 conducted a poll on earned sick leave.25 106 10/5/11 - COMMERCE - BILL 110557, ETC.1 Could you just state for the record what2 the results of that poll were?3
I don't have4 the poll directly in front of me at the5 moment, but I will say that a very high6 percentage of Philadelphians, I believe7 around 70 percent, were in support of8 paid sick days.9
Thank you.10 Any more questions for this11 panel?12 (No response.)13
Our next17 panel is Denise Earley and Ed Donaghy.18 (Witnesses approached witness19 table.)20
Good morning,21 Chairman Goode and members of the22 Committee on Commerce and Economic23 Development. 1 Chamber of Commerce works to attract,2 retain and grow jobs for companies and3 residents of the region. We believe that4 future job growth in our region will be5 driven by the for-profit and non-profit6 sectors, not from increased government7 payrolls. In an effort to advance this8 agenda, the Chamber has recently9 developed a list of principles which we10 believe will foster job growth and11 competitiveness. We plan to use these12 principles as a tool and guide for13 assessing legislative measures at all14 levels of government. 21 These regulations should be appropriate22 for the level of government enacting23 them. 13 An educated workforce is key to14 the long-term success of the business15 community and acts as a catalyst to16 attract and retain businesses in the17 region. It is important for us to be18 active in a significant evaluation of the19 effectiveness and efficiency of public20 education as it applies to producing a21 quality education for students as well as22 a job-ready workforce. 1 along with TD Bank and Work Ready2 Philadelphia, sponsors paid internships3 for teens living in Philadelphia and4 Chester. In its fifth year, the5 initiative encourages companies of all6 sizes to change the life of a young7 person by providing them a job. 10 Our region should strive to11 provide efficient services with the12 lowest possible tax rates. 20 And quality of life issues21 impact both the business environment as22 well as serve as a positive factor in23 talent recruitment. 1 the arts and culture and tourism sectors,2 which are proven job creators for large3 portions of our population. 7 In a perfect world, all8 employees would be able to earn paid sick9 day benefits. Let me congratulate the10 sponsors of Bill 080474-AA for their11 diligence and untiring efforts to pass12 this legislation. 17 The bill before us, Bill18 110557, serves as a pro worker19 contract-based alternative to that bill20 which covers full-time, non-seasonal21 employees. 1 universe of employers than Bill2 080474-AA. However, with no surrounding3 counties implementing these regulations,4 clearly Philadelphia is put in a less5 competitive position. Should companies6 be required to adhere to the provisions7 of this bill, any increased cost will be8 passed through the company, potentially9 leading to increased costs for City10 contracts. 22
Thank you,23 Ms. Earley. The first question is,24 unfunded mandated for who?25 113 10/5/11 - COMMERCE - BILL 110557, ETC.1
It can't be3 both an unfunded mandate and cost the4 City. You actually have to choose.5 Either the City is going to assume the6 cost or the business is going to assume7 the cost, but you can't say that both are8 going to happen. Would you agree with9 that?10
I think11 employers -- it would be an added cost12 for employers if they had to pay sick13 time to their employees.14
Okay. The15 Chamber is aware this bill only covers16 businesses that benefit from City17 support. Does the Chamber support any18 specific job quality standards for19 employees of City-supported contractors?20
Does the23 Chamber support any job quality standards24 for employees of City-supported25 114 10/5/11 - COMMERCE - BILL 110557, ETC.1 contractors?2
Job quality,9 though. I understand the quantity of10 jobs. Are you concerned about the11 quality of jobs? And what is the Chamber12 doing in terms of public policy on the13 issue of quality of jobs?14
That's17 quantity. That's not quality. A good18 job that pays a living wage with19 benefits. The Chamber has no specific20 position on that?21
Does the24 Chamber offer earned sick leave for its25 115 10/5/11 - COMMERCE - BILL 110557, ETC.1 employees?2
Do you4 expect the Chamber's sick leave policy to5 change as a result of the public policy6 position you're taking today?7
So the9 Chamber will continue to offer earned10 sick leave to its employees?11
I do not know the15 cost of this bill. I think it's hard to16 get your arms around the cost of it, only17 that it could potentially, as I said in18 my testimony, add increased cost to City19 contracts.20
Has the21 Chamber ever tracked the cost of the22 original ordinance from 2005?23
Not that I'm aware24 of.25 116 10/5/11 - COMMERCE - BILL 110557, ETC.1
So in fact2 you don't have any hard data for us3 today, and this bill could actually be4 cost neutral?5
You don't8 have any hard data for us, and in fact9 this bill could be cost neutral?10
Do you have12 any testimony on the economic opportunity13 bill?14
Oh, no,19 Councilman, I do not. I only have a20 statement on one other bill that's being21 considered today.22
But you23 don't have any testimony on the economic24 opportunity bill?25 117 10/5/11 - COMMERCE - BILL 110557, ETC.1
Good morning. My6 name is Ed Donaghy. I'm with The Hankin7 Group, a regional developer and property8 management firm. 1 the tri-state area. In the City of2 Philadelphia alone, BOMA member buildings3 provide approximately 44 million square4 feet in office space for over 200,0005 building occupants and employees. 9 As a civic-minded organization,10 BOMA Philadelphia endorses and promotes11 those courses of action that will help12 create and maintain a safe, positive and13 forward-looking environment for all who14 live and work in the City and throughout15 the Greater Philadelphia region. 22 While Bill No. 1 legislation, both in terms of its scope2 and in terms of its economic impact on3 the City and the region. As currently4 written, the Philadelphia 21st Century5 Minimum Wage and Benefits Standards is6 ambiguous in terms of who is an affected7 party. 16 BOMA has attempted to receive17 clarification as to the affected parties,18 as well as the types of City incentives19 which would trigger the 2st Century20 requirements. 4 From a business perspective,5 Bill No. 110557 stands to become yet6 another impediment to local economic7 development. To the extent that it8 inhibits the preservation of existing9 jobs as well as the creation of new jobs,10 this legislation will adversely affect11 the very workers it seeks to assist. 14 The economic realities of15 recent years have impacted us all,16 individuals and businesses alike. 12 Furthermore, City programs and13 incentives that have been instituted to14 encourage development should be allowed15 to do just that. serves to increase the City's cost of2 doing business. Placing these additional burdens on firms5 which conduct business with the City6 means only one thing, higher cost of7 service. 12 You can't keep raising real13 estate taxes and other fees to fund the14 City's increased costs of business15 without having a deleterious impact to16 the City's revenue streams. 3 BOMA Philadelphia and its4 member buildings have a vested interest5 in seeing the City move forward and to6 continue to create a truly vital living7 and working environment. The public and8 private sector should collectively be9 endeavoring to create a market that is10 flush with opportunity and full11 employment for all. 19
Thank you20 for your testimony, Mr. Donaghy. You are21 Chair of BOMA?22
Can you tell24 me which of your members are covered25 124 10/5/11 - COMMERCE - BILL 110557, ETC.1 under this bill?2
That's one of our3 questions. We still don't know. We're4 looking for an answer from the --5
I can give6 you the answer to that question. None of7 your members are covered under this bill.8
Okay. If we have9 representatives that are tenants of our10 buildings, are they included?11
No one is12 covered under this bill until July 1st,13 2012. And so if you don't receive any14 City benefits before July 1st, 2012, you15 are not covered. So currently none of16 your members are covered under this bill.17
We were waiting18 for that answer from the Law Department.19
So do you20 expect any of your members to be21 receiving City support after July 1st?22
Moving forward,23 any one or multiple developer members of24 our organization can receive at some25 125 10/5/11 - COMMERCE - BILL 110557, ETC.1 point.2
But you3 don't anticipate, you don't know that4 they're going to receive money. There's5 no way to know that they're going to6 receive City money after July 1st?7
At that time, no,8 but I would assume that at some point9 moving forward, with the expansion of the10 economy and everything, that there will11 be some sort of incentive programs that12 somebody in our organization will reach13 out to the City of Philadelphia and look14 to use.15
So you are16 aware of the fact that 1700 Market just17 sold, aren't you?18
And you're20 aware of the fact that it sold for 14421 million?22
This24 original ordinance was passed in 2005.25 126 10/5/11 - COMMERCE - BILL 110557, ETC.1 We have amended it on several occasions.2 Did that stop the sale of 1700 Market?3
Does BOMA10 offer earned sick leave to its employees?11
Mr. Donaghy,15 I want to thank you for your testimony.16 BOMA clearly, based on previous testimony17 before City Council, recognizes that the18 impediment to job creation and business19 attraction in the City of Philadelphia is20 highly related to its tax structure. And21 so I just want to thank you for that22 previous testimony.23 Ms. Earley, I was struck in24 your testimony that you are creating a25 127 10/5/11 - COMMERCE - BILL 110557, ETC.1 comparison in terms of job creation in2 Philadelphia with the surrounding3 counties, and in your testimony you said4 that because the surrounding counties5 don't have this same sort of regulatory6 burden for people doing business with7 those counties and the municipalities8 they're in, that it would cause jobs to9 go to the surrounding counties. I'm just10 interested on the Chamber's perspective11 on what the number one difference in12 terms of -- the number one, two and three13 differences between people being willing14 to come into the City of Philadelphia15 versus the surrounding counties, because16 you drew that comparison.17 So in your view, what's the18 number one thing that makes Philadelphia19 less competitive vis-a-vis the20 surrounding counties?21
Well, Councilman,22 I think the tax structure is probably23 right up there as number one.24
Thank you.25 128 10/5/11 - COMMERCE - BILL 110557, ETC.1
Thank4 you, Mr. Chairman.5 Very quickly, Mr. Donaghy, you6 refer in your testimony many times about7 how this bill would ratchet up costs,8 lose jobs, that kind of thing. Do you9 have any figures to back that up?10
We don't have any11 hard data. It's just more of a12 philosophy of if you're putting more13 burden on an owner, that there is going14 to be some give and take and they have to15 make up for that at some point.16
Because17 in Ms. Bellesorte's testimony, she has a18 chart here, and you could disagree with19 it, but at least there's some figures20 here that say that that would not be the21 case. So maybe you could look at that22 and see if you have anything to counter23 that. Because I'd be interested to know.24 Because I know that is generally thrown25 129 10/5/11 - COMMERCE - BILL 110557, ETC.1 out, it's going to cost, it's going to2 cost, it's going to cost, people are3 going to leave, businesses aren't going4 to come in, but it doesn't seem to be any5 data that people present really backing6 that up, that I could see. So I'd just7 like to hear that, because there seems to8 be some data both projected here and in9 other cities showing that that's not the10 case, that that's the fear but not the11 case. It's not backed up in real12 numbers. So I just throw that out there13 that maybe you can --14
I haven't seen15 her charts, but it's more of a philosophy16 of understanding the building owners that17 we have and talking to them and hearing18 their responses. If I have more costs,19 I'm going to have to lose a person or20 raises aren't happening next year. We've21 seen that across our whole organizations22 over the last couple years with the23 economy that we've had. The development24 and real estate economy, it's been hit25 130 10/5/11 - COMMERCE - BILL 110557, ETC.1 pretty hard.2
Okay. I3 won't go back and forth, but obviously4 the counter argument that if people are5 provided the right benefits, they're more6 productive, respect the job more, that7 kind of thing. And that has been shown8 in other cities. So I'll leave it at9 that.10 Thank you, Mr. Chairman.11
Thank you.15 I don't have any questions for16 these witnesses. I do have a general17 question. I don't know who can answer18 this for me, and, that is, if a business19 has a standard that is above the standard20 that is required by this bill in terms of21 number of days of sick leave earned, do22 they have a record-keeping requirement to23 demonstrate that or is there no24 record-keeping requirement as long as25 131 10/5/11 - COMMERCE - BILL 110557, ETC.1 they have a minimum standard that is in2 excess of this bill? Because that's been3 raised by several people as a concern.4
There is no5 record-keeping requirement within this6 bill. There's a separate record-keeping7 requirement associated with the law8 that's already on the books and those9 people are covered by it. The only10 provisions of the previous bill that are11 contained within this bill relate to the12 amount of days that can be earned.13 In the bills I originally14 introduced, they used the term15 "equivalent." So there was some16 misunderstanding about whether equivalent17 meant that all the provisions of the18 previous bill applied or just a number of19 days that could be earned. The amendment20 clarifies the fact that this only applies21 to the number of days that can be earned.22 So those people who are covered under the23 existing law will be required under this24 new bill, if it's enacted, to provide25 132 10/5/11 - COMMERCE - BILL 110557, ETC.1 those number of sick leave days.2
And that3 will just be their corporate policy and4 there will be no record-keeping policy5 with respect to that?6
Yeah. It7 does not speak to how it should be8 accrued or how it should be used or how9 it needs to be recorded, other than10 what's in the existing law as it is.11
Are there14 any other questions for this panel?15 (No response.)16
Thank you17 very much.18 Our last panel slated is Wendy19 Chun-Hoon and Andrea Lemoins.20 (Witnesses approached witness21 table.)22
1 today in support of the proposed earned2 sick leave standard. My name is Wendy3 Chun-Hoon. I am here representing Family4 Values @ Work, a national network of5 cities and states working to win paid6 sick days and other policies that support7 families' economic success. 15 Philadelphia's proposal is part16 of this national movement to bring17 workplace policies in sync with the18 realities of today's workforce and the19 values of the public. 1 advocates for children, seniors, women2 participate in each of our cities' and3 states' coalitions. 10 We hear a lot about family11 values and personal responsibility, and12 yet in the United States today, being a13 good family member can cost you your job14 or career opportunity, health or economic15 security. And being a conscientious16 employee can jeopardize loved ones. 23 When the recession hit, family stress24 levels skyrocketed. 7 Every day workers who need a8 day off to take care of a loved one are9 told if you don't get to work, you will10 lose this job. 19 Fortunately, most kids don't20 drag themselves to school with broken21 bones, they don't get leukemia or some22 other life-threatening illness, but they23 do all get the flu. 9 So I believe this is a story10 about risk. Every day parents face the11 dilemma of sending their kids to school12 sick, knowing that they will infect other13 kids. 21 Over the past 30 years, the22 average worker has seen the value of23 their wages decline, their job security24 and job-related benefits eroded. 3 According to a recent study,4 the loss of a few days' pay for low-wage5 workers can equal a month's worth of6 groceries. 15 Multiple economists have pointed out that16 job retention policies like paid sick17 days help reduce unemployment and18 strengthen the economy. 1 universally. And here's also what we2 know. There's been several questions3 about this. 7 This policy proposed is8 important. We have evidence from San9 Francisco, who implemented this policy,10 that shows that the predictions of higher11 costs and job loss actually didn't12 happen. San Francisco in fact13 outperformed the five other surrounding14 counties. 5 percent15 despite a recession, and this was true16 for big businesses and small businesses17 alike. 4 I'll just close by saying that5 work cannot pay if it doesn't last, and6 it can't last if it jeopardizes families7 and kids. Passing a law in Philadelphia8 that allows workers at companies who9 receive contracts or subsidies from the10 City to earn paid sick time is a smart11 way to mitigate this risk. We need to12 make work work for families. 23
Thank you24 for your testimony.25 140 10/5/11 - COMMERCE - BILL 110557, ETC.1 Ms. Lemoins.2
Hello. Thank you3 for letting me speak today before all of4 you. My name is Andrea Lemoins and I'm5 the Co-Coordinator of the Restaurant6 Opportunities Center here in7 Philadelphia. We are a national8 non-profit. We just started here in9 Philly. We are a non-profit focused on10 making the restaurant industry11 economically sustainable for owners and12 for workers. 21 In my past life, I was a pastry22 chef. 1 I've worked at some of your favorite2 restaurants, and I have served many of3 you. I've actually served Mayor Nutter4 once for his birthday. I made him a5 chocolate cake and served him, while two6 of my co-workers were sick and sneezing7 in the kitchen. 11 I have also served Governor12 Rendell. I have served him a pecan13 cheesecake at a time when I was actually14 sick with pneumonia. I could not take15 the time off. 18 Now, this sounds very crazy,19 but it is extremely -- it happens all the20 time in restaurants, in the food-service21 industry, period. Restaurants are no22 different than any other place of23 employment. same thing at those businesses. I want to let people know just4 because that eat at a high-end5 restaurant, just because you spend $1006 or more on a meal does not mean that you7 are paying for healthy workers. 14 I'm sure that many of you have15 heard from business owners saying that16 they cannot afford to supply their17 employees with paid sick leave due to our18 current recession. However, when I saw19 the list of food-service businesses who20 are contracted out by the City, I notice21 that many of them already provide some22 kind of paid time off. 1 several of them already supply their2 employees with paid time off and that3 this bill will have little impact on4 them. S. will6 tell you that the food industry itself is7 booming. S. 13 workforce. 16 Food-service sales are expected to reach17 a record $604 billion and post positive18 growth in 2011. 1 Philadelphia, yes, we are in a deep2 recession. 9 I'd like to say a vote to pass10 this bill is a vote for job security for11 low-wage workers. 83, and most kitchen and18 staff are paid minimum wage generally to19 come in the doors. So thank you so much.
Thank you9 for your testimony.10 Any questions for this panel?11 (No response.)12
Thank you13 very much.14 Is there anyone else to testify15 on this bill?16 (No response.)17
Thank20 you, Councilman. I too want to echo some21 of the comments that were made earlier22 today, and thank you for allowing me the23 opportunity to co-sponsor this. I know24 there's been a lot of debate about the25 146 10/5/11 - COMMERCE - BILL 110557, ETC.1 stats and the numbers. I think this bill2 takes us to a place where we could work3 with the Administration and we can begin4 documenting the facts versus the5 perceptions. It would allow the6 Administration to be prudent in issuing7 waivers for those companies that we8 understand have sick policies and have9 standards but, at the same time, sets a10 bar for anyone who wants to do business11 in the City of Philadelphia that we12 expect some minimum standards in paying13 people not only a living wage but14 affording them the opportunity for sick15 leave.16 So with all of the debate and17 all of the work that Bill Greenlee and18 Councilman Clarke did with the previous19 version of this bill, I think government20 sometimes has to step in and begin to21 pose the questions and use its hammer and22 its economic thrust to get us to a place23 where we can document and get away from24 the misperceptions that exist.25 147 10/5/11 - COMMERCE - BILL 110557, ETC.1 I want to thank you for2 providing us this opportunity and this3 open dialogue. I think being open for4 business as a city and providing5 standards of living wage and sick leave6 are not conflicting statements, but they7 are a testament to providing real8 opportunities for Philadelphia's working9 class and, in many cases, underemployed10 population. So thank you, Chairman.11
Thank you,12 Councilwoman.13 We will move from our public14 hearing into a public meeting.15 The Chair recognizes16 Councilwoman Brown for a motion on the17 amendment to Bill No. 110557.18
Thank you,19 Mr. Chairman. I move that Bill No.20 110557 be amended.21 (Duly seconded.)22
All in23 favor?24 (Aye.)25 148 10/5/11 - COMMERCE - BILL 110557, ETC.1
The Chair5 now recognizes Councilwoman Blondell6 Reynolds Brown for a motion on Bill No.7 110557 as amended.8 COUNCILWOMAN BROWN:9 Mr. Chairman, I move that Bill No.10 110557, as amended, be reported out of11 Committee with a favorable recommendation12 and further move that the rules of13 Council be suspended.14 (Duly seconded.)15
Bill No.22 110557, as amended, is reported out of23 the Committee with a favorable24 recommendation and the suspension of25 149 10/5/11 - COMMERCE - BILL 110557, ETC.1 rules to allow first reading at our next2 Council session.3 The Chair recognizes4 Councilwoman Brown for a motion on Bill5 No. 110558.6 COUNCILWOMAN BROWN:7 Mr. Chairman, I move that Bill No. 1105588 be reported out of Committee with a9 favorable recommendation and further move10 that the rules of Council be suspended.11 (Duly seconded.)12
Bill No.19 110558 is reported out of Committee with20 a favorable recommendation and a21 suspension of the rules to allow first22 reading at our next Council session.23 The Chair now recognizes24 Councilwoman Brown for a motion on Bill25 150 10/5/11 - COMMERCE - BILL 110557, ETC.1 No. 110559.2 COUNCILWOMAN BROWN:3 Mr. Chairman, I move that Bill No. 1105594 be reported out of Committee with a5 favorable recommendation and further move6 that the rules of Council be suspended.7 (Duly seconded.)8
Bill No.15 110559 is reported out of Committee with16 a favorable recommendation and a17 suspension of the rules to allow first18 reading at our next Council session.19 The Chair recognizes20 Councilwoman Brown for a motion on the21 amendment to Bill No. 110561.22
Mr.23 Chairman, I move that Bill No. 110561 be24 amended.25 151 10/5/11 - COMMERCE - BILL 110557, ETC.1 (Duly seconded.)2
The Chair9 now recognizes Councilwoman Brown for a10 motion on Bill No. 110561 as amended.11 COUNCILWOMAN BROWN:12 Mr. Chairman, I move that Bill No.13 110561, as amended, be reported out of14 Committee with a favorable recommendation15 and further move that the rules of16 Council be suspended.17 (Duly seconded.)18
Bill No.25 152 10/5/11 - COMMERCE - BILL 110557, ETC.1 110561, as amended, is reported out of2 this Committee with a favorable3 recommendation and a suspension of the4 rules to allow first reading at our next5 Council session.6 This concludes our public7 meeting. Thank you for your patience.8 Go Phillies.9 (Committee on Commerce and10 Economic Development concluded at 12:2511 p.m.)12 - - -13 14 15 16 17 18 19 20 21 22 23 24 25 153 1 CERTIFICATE2 I HEREBY CERTIFY that the3 proceedings, evidence and objections are4 contained fully and accurately in the5 stenographic notes taken by me upon the6 foregoing matter on October 5, 2011, and that7 this is a true and correct transcript of same.8 9 10 11 12 --------------------13 MICHELE L. MURPHY14 RPR-Notary Public15 16 17 18 (The foregoing certification of this19 transcript does not apply to any reproduction20 of the same by any means, unless under the21 direct control and/or supervision of the22 certifying reporter.)23 24 25