Are you budgeted for the overtime for this year? DEPUTY COMMISSIONER GAITTENS: Deputy Commissioner Jack Gaittens. 124 3/7/06 - WHOLE - BILL 060001, ETC. The overtime that the program is costing us right now is more on the form of investigative overtime that is coming from arrests that are being made and from shootings there. The overtime is not actually being spent for deployment at this current time. We are aware of the fact that we get the $10 million as of July 1, and then for deployment purposes, the cost will go up, because then we're in the middle of summary vacation period. So the bodies won't be there on straight time. We will have to replace them with overtime. So the overtime costs in the summer will be a lot higher than what they currently are now.
Okay. I have another question on cameras. I don't know what the Police Department's position is on cameras, on installing cameras and using cameras. Have you done any studies on this to see what hot spots you could put them on? Would there be a 125 3/7/06 - WHOLE - BILL 060001, ETC. pilot program? How much would each of these locations cost? COMMISSIONER JOHNSON: Well, I'll say this, because we have different opinions: I talked to the Police Chief in Chicago when I was in Florida, and matter of fact, we both gave different presentations. The presentation that he gave, I was impressed with. I can't argue with success, and it appears like in Chicago, it has been successful. At least in 2004 it was successful. Now, their homicide rate went up a little bit in 2005. But I am not opposed to putting cameras here in the City of Philadelphia. I know Wilmington has cameras, Baltimore has --
Excuse me, Commissioner. When they did those studies, in other words, did they prevent the homicides from those areas that they have cameras? COMMISSIONER JOHNSON: Well, 126 3/7/06 - WHOLE - BILL 060001, ETC. see --
In other words, did the number go down? COMMISSIONER JOHNSON: Well, their numbers went drastically down, but that's the same as our numbers went drastically down when we put up Operation Safe Streets. It's like a chess game. As we put things in place, the criminals put things in place, and we're still changing. The facts are that when you put those cameras up, can you move those cameras? Because they're going to realize the cameras are there. They use the cameras for court presentations. They use the cameras for a whole lot of different things. So the cameras were successful in Chicago, at least during that year, until the criminals will adjust to it. I didn't go to Baltimore, but I understand that they're being used in Baltimore. At least the Baltimore Police are saying that it is a positive thing for them. 127 3/7/06 - WHOLE - BILL 060001, ETC. Wilmington said it was a positive thing for them. So I'm not objecting to putting cameras.
Well, the neighborhood that has the cameras, their crime rate is going down, but is it going up in other areas which doesn't have the cameras? COMMISSIONER JOHNSON: Well, Chicago is starting to go back up.
Okay. COMMISSIONER JOHNSON: I think Councilman Clarke is having Chicago and Baltimore come in here on Thursday. I will be here, and I think we really have to listen to the people where the cameras are at to really get a true analysis of what's going on with the cameras.
Okay. Thank you. Thank you, Madam Chair. Thank you, Commissioner.
Thank you. The Chair recognizes Councilman 128 3/7/06 - WHOLE - BILL 060001, ETC. Clarke.
Thank you, Madam Chair. Commissioner, I would like to talk a bit about Safer Streets. The Administration had a series of meetings to announce the roll-out of the program and one was in my Council District, and a big part of the process was the community component, but in all honesty, to date, I haven't really seen that on the ground level. A lot of people came to the meeting extremely optimistic about being able to participate, and while you may not be in charge of that part of the process, you're here and I need to ask you about where is the follow-up. Because a number of people have called me and said, Well, Councilman, we had a great meeting with the Mayor and Police Commissioner. We haven't heard from anybody since. Where does this thing go from here? 129 3/7/06 - WHOLE - BILL 060001, ETC. COMMISSIONER JOHNSON: I've been to approximately three meetings since then down there myself. I mean, we didn't bring all the different groups in there. I went to one of the meetings in North Philadelphia. I went to some of the community groups and I'm scheduled to go to three or four different churches, I am along with some of my deputies. The Mayor through the Managing Director's Office is planning something additional, and I think that will be very, very soon, but as far as the Department is concerned, our outreach program, I had a meeting over on Erie Avenue not too long ago, maybe a couple weeks ago. I had two meetings up in Germantown. So I'm constantly going out with our deputies and talking to the people in those communities, because I think that at these meetings -- we didn't have a lot of dialogue there, but I think at the meetings that we're having now, there's dialogues on both sides of about 130 3/7/06 - WHOLE - BILL 060001, ETC. quality of life. And I know that Mothers in Charge, Men United, the Managing Director and the immigration program and a lot of other groups, Friday I met with about ten different groups in my office to make sure that we're all on the same page, because we have different groups doing different things and going all kinds of different ways. I thought it's important that we call that meeting, because we all have the same goal in mind, that's to eliminate the violence in our city, and we have to get rid of the egos. There's a lot of egotistical self-centered people in there. It isn't about individual people. It's about us working together and all the groups working together and supporting one another. So that meeting was in my office on Friday. We had scheduled another meeting for later on this month. I've asked them, say, for example, if there's problems in your area or anybody else's 131 3/7/06 - WHOLE - BILL 060001, ETC. areas, that we just not need to send one group, we need to all go as a group. I also met with Reverend Moore, the leader of the Black Clergy, and one of his people last week also, who has committed to getting involved and getting the churches involved on a continuous basis. So I really believe that it has to be a wholistic type of approach. We met with people from the DHS and other people to form those groups. But the answer to your question, that is still a plan that we have all the community groups and all the Police Department and other people coming into the communities and tell the community what we're going to do, because we need their help. We need everybody's help. I also have scheduled a meeting with some of the business people who want to get involved. I also met with the leader of the business wards of the Chamber of Commerce. He wants to bring 132 3/7/06 - WHOLE - BILL 060001, ETC. some of the business people, say, for example. What I've asked them to do -- what I asked the churches to do basically is to do things in your church, in your community, to have outreach programs for people who are ex-offenders, people in recovery.
I asked the business people to put money into youth groups, kids that don't have -- give summer jobs to them to prevent them from going out there and doing certain things, because we need those things. They have the money. They take a lot of money from the neighborhoods. A lot of these communities that have a lot of business in their community, the business people need to put back into those communities to help the kids out there, help for training, help for other things. So I'm going to every area that I can possibly go to and ask them for their help, and a lot of them have agreed to get involved with this, which is something totally different than happened 133 3/7/06 - WHOLE - BILL 060001, ETC. in the past.
So by and large, we're getting a positive response from the community, the groups that you've met with? COMMISSIONER JOHNSON: Yes, sir. And even from the business communities and even from the clergy. I see in the last month or two months they're doing more now than -- and I don't want to say the wrong thing. They just opened up their churches on Wednesday for prayer and Sunday for collections, but they're starting to get involved and they're reaching out to us. And I've gotten calls from other churches to say, Can you come to our church, come in there with the HEADS UP Program, come in to talk to the youth, come in there and -- now, there's one thing that we've never done before that I've gotten a lot of calls from a lot of different people, and these are the people who are so-called thugs, who want to meet, and 134 3/7/06 - WHOLE - BILL 060001, ETC. we're setting up a meeting with them. And at that meeting will be Bernard Hopkins, who is an ex-offender who wants to get involved, and other people, because they basically said to me that, We try to do things, but we have a bad past and the police don't want to talk to us, but we have the answers, we have solutions, we want to help, we want to go to the corners. We don't want to go help with the kids and we get locked up. So we're having a City-wide meeting. I don't have a date or a time, but it's in process of planning right now to meet with the people who are doing more damage to our cities than anybody else. The one group that we never sat down and talked to now are saying, We want to help. And I also got calls from Graterford Prisons from the Lifers Association that say, We want to help. When you have prisoners who are incarcerated who want to help, then we need to get the men out there in the 135 3/7/06 - WHOLE - BILL 060001, ETC. cities who are free to help.
That's encouraging. Commissioner, getting back to the policing side of this Safer Streets Program, in terms of the police presence on the street on a daily basis and your ability to create a quality of life within the law, where are your limitations as it relates to loitering but full well knowing -- and I'm assuming the police know, everybody in the community knows it -- these people are selling drugs? You don't see it, or these people are gambling on the sidewalk or they're doing whatever. What are your limitations in terms of your ability to limit it? COMMISSIONER JOHNSON: We can't break the law to enforce the law. So we don't go out there and just do stop and frisk, but at the same time, since December 19th to the present, I guess our pedestrians in our car stops have went up 136 3/7/06 - WHOLE - BILL 060001, ETC. almost 500 percent that we're stopping people, and when they stop a person, they can't profile. They have to put down on their incident report why they stopped and the reason they're stopping them. Our curfew has went up almost in the short period of time well over a thousand, almost 4,000. We're enforcing the curfew laws. We're enforcing the truancy laws. What we try to do, those who are gambling on the highways, we're enforcing those. Those who are out there drinking 40's on the highways, we're enforcing those. So we're enforcing quality of life laws that we really didn't enforce a whole lot the last time, but we're enforcing them a lot more now. We're being more focused. So there is no limitation. If there is a complaint of a neighborhood -- and I know we had a discussion at the last two or three, four Council meetings -- that we want to make sure that people can walk through the streets 137 3/7/06 - WHOLE - BILL 060001, ETC. and walk to the stores and kids can sit on those steps. So we're enforcing things now, more quality of life issues, than we've done in the past.
Thank you, Madam Chair. Commissioner, you said something that got my attention. You said a lot today that got my attention, but one area specifically. You talked about the $10 million that we're going to use for overtime, and the focus is prevention, to hopefully stop crime, because when President Verna asked the question about possible ripple effect with cost, courts, et cetera. I'd like to know, seeing the activity in the Philadelphia Police Department, it's just incredible the 138 3/7/06 - WHOLE - BILL 060001, ETC. amount of activity and the amount of crime that the Police Department responds to, but let's use homicides as an example of a particular issue that we want to discuss. Is it safe to say we had somewhere around 380 homicides in 2005? COMMISSIONER JOHNSON: Yes, sir.
Many of the homicides we talked earlier were people that knew each other. So there was an apprehension made in most cases almost immediately? COMMISSIONER JOHNSON: No, sir.
No? COMMISSIONER JOHNSON: No. 18 There was 380 homicides that happened last year, and 215 were arguments. Ninety-seven percent was victim specific, somebody meant to kill that person. Seventy-one percent or 76 percent of those who were the victim of crimes or victim of homicides had a criminal record, and 74 percent of those who 139 3/7/06 - WHOLE - BILL 060001, ETC. committed those crimes that we arrested had a criminal record. There is times that there's a homicide happen, and there is about close to 100 -- I think it was 97, 98 -- of the homicides happen indoors. But we are just not concerned about the homicides. We're concerned about the shootings, because there was over 1,700 shootings, which means there was a potential for 1,700 people to be killed. A lot of times it depends on how bad a shot the person was or how close to a good hospital he was. So we're going to the overall big picture of the shootings and everything else. I think we solve approximately 64, 65 percent of the homicides. Probably close -- 62.86 percent of the homicides we've cleared by arrests, but probably close to 98 percent or somewhere in that area, we know who did it. We just can't get the person to come forward to testify. The family normally gets the 140 3/7/06 - WHOLE - BILL 060001, ETC. information exactly who committed the crime. They will call us up and give us the information, but they won't come forward. And for even a child homicide, you know, we got numerous amount of calls who gave us the names, and they don't have a problem giving us the names, but we have to have probable cause to make the arrest. We just don't want to arrest them on a conviction. At the same time, what's happening is that people are afraid to come forward. We know who did it, but we don't have enough evidence to arrest the person.
So in our City, we obviously have a lot of people that have committed violent, vicious crime that are still walking the streets of our City. So that is obviously a startling issue here. Clearance rate in our Police Department -- and, again, that's a word I don't like to use a lot, because sometimes people think that the wrong 141 3/7/06 - WHOLE - BILL 060001, ETC. person could be scooped up or arrested and incarcerated. Based on like all the crime you said, all the shootings and everything that happens, burglaries, robberies, all of that stuff, I know we do a great job in bringing those people to justice. Do you have some numbers that you could share with us on how good a job we're doing? Because 65 percent is okay, but I understand what you just said in the area of homicides. You would hope that it would get better and a lot of those folks would eventually be arrested and tried, right? COMMISSIONER JOHNSON: Yes, sir. Okay. Last year we had a total arrests of 352, and 264 of those were actually charged with murder. Now, last year we arrested 68,000 people, but this is just for homicides. And the person may possibly be arrested for -- in our statistics of homicides, they may not have necessarily been arrested for the 142 3/7/06 - WHOLE - BILL 060001, ETC. homicide, but been an accessory or some other areas that was involved in that particular case. But people who was arrested for the actual homicide last year in 2005 was 264 people we arrested.
Arrested, but -- COMMISSIONER JOHNSON: Arrested and charged with murder.
Convicted? COMMISSIONER JOHNSON: I don't have the conviction rate here, sir.
That's pretty good. That's good. We would like to see how many of them have actually been convicted, though. That would be an interesting number. But clearance rate in the Police Department for all the time that goes on, from car thefts to -- my point is that we're so busy responding to crime, I'm always curious about the other side of the coin. What's the follow-up? What's the investigative side of it? 143 3/7/06 - WHOLE - BILL 060001, ETC. Does it just continue just to pile up? I just can't imagine how like a Detective Division just stays -- are they putting out fires? Do they have active ability to have -- Monday a crime occurs. Is the crime that occurs on Tuesday still -- does it replace the job that happened on Monday? How do you stay current on all of this violent crime that goes on and really have a quality investigation? DEPUTY COMMISSIONER GIORGIO-FOX: Councilman, Deputy Commissioner Fox. I'll be happy to forward you the UCR clearance rates. I didn't bring them with me, but I will tell you this, that one of the things we've been doing with the Detective Divisions for a while now, and I think you'll recognize this when I show you multiple arrests, is that we attempt to try to find immediate patterns of crime, and so that when we have a burglary, one of the things we do on a regular basis is, we process those 144 3/7/06 - WHOLE - BILL 060001, ETC. scenes, the purpose of which is that we all know that a small percentage of people are committing a large percentage of the crimes in this City. And so what we attempt to do in the Detective Divisions right now is combine assignments, look for trends, and then when we make an arrest, either try to use evidence or get a statement for multiple clearances. And I can tell you without having the figures in front of me the number of multiple clearances has arisen in this Police Department as a result of both investigative work and technology that we have now that we didn't use in the past.
Is part of that 10 million, Commissioner, is that overtime being spread to the investigative areas of the Police Department? Because earlier you said something which I mentioned, that you were going to spend a lot of that money to extend tours to prevent crime. What 145 3/7/06 - WHOLE - BILL 060001, ETC. about spending some of it to solve some of the crime? COMMISSIONER JOHNSON: Well, it has, and I think that -- every person that we arrest, especially in our hot spots, we debrief by crimes that have happened in that area. In addition to that, I believe, and Deputy Commissioner Fox can speak for herself, the detectives were using some of the overtimes to go out there and serve these warrants, that we have the Detective Bureau going out there serving warrants on a daily basis now. In addition to that, we now have detectives for the first time that I can recall patrolling in the streets of Philadelphia. So we use it for a lot of things, but we definitely cannot use it for patrol. We don't use it for the detectives. It's used both ways.
Great. Thank you both, Commissioners. 146 3/7/06 - WHOLE - BILL 060001, ETC. Thank you, Madam Chair.
Thank you, Madam Chair. Commissioner, I need to go back to the earlier discussion, because I'm not exactly sure that we reached a conclusive answer. You indicated with regard to the $10 million that you weren't exactly sure how long it would last. There were a series of numbers laid out. I think there was an attempt at a calculation with regard to $10 million, number of hours or cost per officer leading to a certain number of hours, I guess then divided by eight, which gets you a certain number of shifts. Can we maybe go at it from a different direction? For the hot spots, I guess, that you have -- and I don't know how many there are and you may not want to say here under this situation -- 147 3/7/06 - WHOLE - BILL 060001, ETC. how do you figure out or how do you even get close to figuring out how long these funds will last? They come in July 1st, as Deputy Commissioner Gaittens mentioned. You're going to have the summer schedule, vacations. Is it true crime tends to go up a little bit in the summer? COMMISSIONER JOHNSON: Yes, sir.
So, I mean, what exactly will happen with the $10 million? How many officers can work, I guess -- are they working eight-hour shifts? COMMISSIONER JOHNSON: No. 18 Normally -- well, it really depends. I mean, right now because there's no 20 vacations, we're using most of the overtime that we're going to use for extended tours. Probably during the summertime and during vacation --
An extended tour is what? You work your -- 148 3/7/06 - WHOLE - BILL 060001, ETC. COMMISSIONER JOHNSON: An extra two hours, an extra four hours. Probably in the summertime, we will use it for replacements for probably an eight-hour tour.
Okay. Let me go at it from this perspective. How much money was spent on overtime in the original Operation Safe Streets? COMMISSIONER JOHNSON: I have no idea. Let me say this, though: The original plan of Operation Safer Streets did not involve overtime.
What did it involve? COMMISSIONER JOHNSON: Straight time.
Straight time? COMMISSIONER JOHNSON: Yes, sir. The original plan of Operation Safer Streets.
That's Safe Street No. 2? 149 3/7/06 - WHOLE - BILL 060001, ETC. COMMISSIONER JOHNSON: Well, we had about three or four of them since then, but the original plan, the initiative that we have in place right now did not involve overtime. The additional overtime -- because if we put them in hot spots, we would still have warm spots all over. So our original plan that we had was all straight time. The $10 million will let us suspend our tours of duty and anticipate during the summertime that we will have people who will either be on vacation and we have a number of officers who are injured or out sick. So they would give us a replacement. With the overtime, we can probably keep the same level of officers that are in these areas on a continuing basis.
If you plan to run the program on straight time and you're not increasing the number of officers, how do you do that? COMMISSIONER JOHNSON: I said 150 3/7/06 - WHOLE - BILL 060001, ETC. the original plan, our original plan of Operation Safer Streets, was all straight time. We identified what --
That was about two weeks ago? I mean, Safer Streets came into play about two, three weeks ago, right? COMMISSIONER JOHNSON: No. The Police Department came into place in December. The policing began in December 19th of 2005.
Okay. But we were all -- COMMISSIONER JOHNSON: This was prior to the budget.
-- together at a church just a few weeks ago when the big -- COMMISSIONER JOHNSON: That was the comprehensive plan. That was the whole plan, but the Police Department's plan began December the 19th of 2005. We were on the street.
Okay. 151 3/7/06 - WHOLE - BILL 060001, ETC. Let's go back. Operation Safe Streets, my recollection is that operation started on May 1st, 2002; is that correct? COMMISSIONER JOHNSON: Correct.
Now, when did it end? COMMISSIONER JOHNSON: It hasn't ended.
We have overlapping operations? DEPUTY COMMISSIONER GIORGIO-FOX: Excuse me. Operation Safe Streets is a program whereby we placed officers on corners. We identified 306 corners. As of about ten days ago, my latest survey is, there are still 114 corners that we periodically cover on straight time in an effort to ensure that those corners never again become problematic.
Deputy Commissioner, what do you mean by "periodically"? DEPUTY COMMISSIONER 152 3/7/06 - WHOLE - BILL 060001, ETC. GIORGIO-FOX: Periodically, we call it random interval coverage. So the captain will identify the hours where that corner is most problematic, and then for some period of time each night, I'm assuming it's an evening hour, the corner is covered. An officer may be given three corners in an eight-hour tour to cover. So they drive to a corner, they get out and they walk for an hour and a half, they then get back into their car and they drive to a second corner. COMMISSIONER JOHNSON: If I can say, with Operation Safe Streets, and we analyzed Operation Safe Streets, we identified 300 of the worst corners in the City of Philadelphia based on our intelligence, based on data and based on a lot of other things to go after open-air drug marketers. When I talk about an open-air drug market, I'm talking about corners where people line up like car washes to sell their drugs. And during that period of time, that's 153 3/7/06 - WHOLE - BILL 060001, ETC. when we put 600 police officers on 300 of the worst drug corners on May 1st to eliminate the open-air drug corners. I think that was very, very successful. That was the purpose of Operation Safe Streets, to eliminate the open-air drug market, not to always just keep police officers there on those corners forever. If there is no problems going on -- you know, realistically, and I try to be as realistic as I possibly can, as long as you have a person who is going to buy drugs, somebody is going to sell them drugs. Have we eliminated all drugs? No, we haven't. Have we eliminated almost all of the open-air drug corners? Yes, we have.
Okay. Is Deputy Commissioner Gaittens, is he like the finance person for the department? COMMISSIONER JOHNSON: Yes, sir.
Deputy, I know you were getting your documents and 154 3/7/06 - WHOLE - BILL 060001, ETC. papers together there. Can you tell me on a yearly basis since May 1st, 2002 what the yearly overtime has been for Operation Safe Streets? DEPUTY COMMISSIONER GAITTENS: Yes, sir. In Fiscal Year '02, we spent $12 million; '03, $36.8 million; '04, 23.2; '05, 6.7. So far this fiscal year for Fiscal '06, we spent about 2.6 million. We estimate it will come in a little bit under $5 million for this fiscal year.
So let me go back through that. FY02 was 12 million. FY03? DEPUTY COMMISSIONER GAITTENS: 36.8.
FY04, 23.2; FY05, 6.7. Your year to date on FY06 is 2.6 and you think the end-of-the-year number is going to be 5. DEPUTY COMMISSIONER GAITTENS: It will come in around 5 million, yes, sir. 155 3/7/06 - WHOLE - BILL 060001, ETC.
Okay. That's about 71? DEPUTY COMMISSIONER GAITTENS: 81,464,141.
I'll take the 81. Has there been an independent analysis of Operation Safe Streets? COMMISSIONER JOHNSON: I believe there was one by Temple University, which we disagreed with.
Is it available? DEPUTY COMMISSIONER GIORGIO-FOX: I can get you a copy of it, yes.
Could you forward a copy to the Chair? DEPUTY COMMISSIONER GIORGIO-FOX: Absolutely.
We'll get back to you. The Chair recognizes Councilwoman Brown.
Thank you, Madam President. Just a couple of follow-up questions. I too was struck by the stats you shared in response to Councilman Nutter and Councilman Rizzo's questions; namely, you mention, and forgive me if this is a misquote, 97 percent about are crimes done indoors. COMMISSIONER JOHNSON: No. I didn't say 97 percent. What I said was that out of 380 homicides last year, 97 were committed indoors.
And to narrow the question even further, you mention that in many instances, they know each other. They're victim specific, is what you said. COMMISSIONER JOHNSON: Right. That's the same figure. Ninety-seven 157 3/7/06 - WHOLE - BILL 060001, ETC. percent of those who are killed either are relatives, friends or associates. They know that person.
Okay. So let me narrow it further. Do you know of those how many are domestic relations related? COMMISSIONER JOHNSON: Yes, ma'am. Last year there were ten, which came to 2.6 percent. Now, let me say this: This year, the same time period that we compared last year to this year, we had one domestic homicide last year. This year we have seven.
Okay. So if you tie that to the questions raised about more police officers when so many of the crimes are indoors, and if there's an interest in the preventive or intervention arm of this, if you know now that there are ten, when there are domestic arguments reported, is there some kind of follow-up, if you will, with that family of an intervention type of 158 3/7/06 - WHOLE - BILL 060001, ETC. nature so that it doesn't end up in ultimately a killing? COMMISSIONER JOHNSON: Well, we have a Domestic Violence Committee that I'm Co-Chair. And I don't do much work because I think Tracy does all the work. We have a group that goes out there on a continuous basis for education and for training. With the Women's Group, we really have partnered with them. In the orders of the Department, if they go to a house and there's indication of domestic violence, there's an arrest. There's an immediate arrest. So the Police Department takes it very, very serious, and we approach it in that way.
Okay. Finally, I, too, was curious by the comment that we know the priorities are huge and the list is long, but I was curious to know the why, for why cameras don't rank as high in terms of priority attention. 159 3/7/06 - WHOLE - BILL 060001, ETC. COMMISSIONER JOHNSON: Well, I mean, I don't want to say, Well, it's a priority, because I think with all the other things that we have in the Department at this point, we really have to analyze that. I mean, the reason -- and I appreciate Councilman Clarke bringing the people here -- because cameras are stationary and criminals are not, and criminals will leave where they feel as though they've been identified and go to different areas. So I think we're still in the process of evaluating whether they work or not work based on the amount of money that they will cost, because we just can't take these expensive cameras and just put them in each place. And as long as cameras are stationary and criminals are not, then we have to look at that.
Surely. Finally, on of your testimony, you give discussion to the professional development opportunities 160 3/7/06 - WHOLE - BILL 060001, ETC. that you have in the Department. Can you just speak to how many officers and civilian employees take advantage of the program that you have ongoing with the colleges and the universities and tell us which colleges and universities are currently involved in that partnership? DEPUTY COMMISSIONER GAITTENS: Deputy Commissioner Jack Gaittens. The current times we don't have the exact statistics. We'll be able to get them for you, but Deputy Commissioner Council has made contact with several different colleges in the area. The ones that are actually participating in the program now include Widener, Immaculata, Eastern, Cabrini, DeVry, Holy Family, Rosemont, Chestnut Hill, Peirce, Arcadia, Philadelphia-Wilmington, Phoenix and Mountain State. COMMISSIONER JOHNSON: And Community College.
Sure. There's a lot of options. 161 3/7/06 - WHOLE - BILL 060001, ETC. Who pay for what exactly? When it comes to the professional development, who pays for that? DEPUTY COMMISSIONER GAITTENS: For the college education, that's basically on their own. Now, we do have department training within the Philadelphia Police Department, and that is through a request from the commanding officer. The officer fills out a memorandum identifying the particular type of training, seminar or whatever it is they're looking for. It goes through the commanding officer. They make a recommendation as to whether or not this is a benefit to the Police Department, whether we offer this type of training in-house or if we have a contract with anybody to provide that type of training, and then it would come up through me through the budgetary process. We do have funds available for training. COMMISSIONER JOHNSON: I think 162 3/7/06 - WHOLE - BILL 060001, ETC. in addition to that, we have Kal Rudman who has paid tuition for approximately 100 or more officers to go --
Repeat that. I can't hear you, Commissioner. COMMISSIONER JOHNSON: Kal Rudman has paid for approximately over 100 police officers to go to Community College and pay their tuition. And that's just a figure I threw out there, but it's probably more officers. Each semester officers can put in a request to go to Community College. Their tuition has been paid by Kal Rudman.
Okay. And whom shall I speak with with regards to young people who are intimidated outside of school areas for follow-up? Whom on your team should I speak with related to the task force? COMMISSIONER JOHNSON: Deputy Commissioner Fox.
Okay. Thank you for your testimony. 163 3/7/06 - WHOLE - BILL 060001, ETC. COMMISSIONER JOHNSON: Yes, ma'am.
You're welcome. The Chair recognizes Councilman Kenney.
Thank you, Madam President. Quickly, Commissioner, you had indicated in your previous testimony that car stops and ped stops are up about 500 percent? COMMISSIONER JOHNSON: Yes, sir.
As a result of that increased activity, what were the number of guns that have been -- COMMISSIONER JOHNSON: Well, I can go by since December the 19th. I think I may be off one or two figures. This time last year we had approximately 36, 37. We're now up to like close to 80 164 3/7/06 - WHOLE - BILL 060001, ETC. just in that time period just by car stops and pedestrian stops. Our weapons procedure has definitely went higher.
So obviously it's a very effective tool used in a legal way. It's very effective in getting guns out of people's hands. COMMISSIONER JOHNSON: Yes, sir. And what we try to do is, we're not going to break the law to enforce the law, but sometimes when robberies and shootings, they're on the corners drinking 40's or gambling and doing other things, and we can make these type of stops just -- there is a probable cause of stopping them. We're finding weapons, we're finding drugs, we're finding all kinds of things.
I mean, I think you agree that a car stop and a ped stop does not have to be a violent act. It can be done in a professional and considerate manner, but getting that gun out of that waistband is a huge 165 3/7/06 - WHOLE - BILL 060001, ETC. accomplishment. COMMISSIONER JOHNSON: Yes, sir.
So we haven't had any push-back from the community? COMMISSIONER JOHNSON: Not at all, and one of the things that I monitored based on the car stops and pedestrian stops, I monitored the complaint on police, which has been very minimal.
Are the numbers, are they staying stagnant or are they going up, too? COMMISSIONER JOHNSON: They're going down.
So obviously it's not been a major civil rights issue as far as citizens are concerned. COMMISSIONER JOHNSON: No, sir.
So we're going to continue that high level of 166 3/7/06 - WHOLE - BILL 060001, ETC. activity? COMMISSIONER JOHNSON: Yes, sir, we will.
Great. Thank you. One other issue on enforcement. Councilmember Brown had been talking earlier about safe corridors and crossing guards. Do we have any indication as to the number of tickets written for speeding in school zones? Can we find out whether or not we've had increases, where they've been? Because it seems to me to be an issue that would be best promoted by the captain of a district telling people that, Be aware of what's going on in schools zones and write these tickets. I know, for example, on North Broad Street coming down, I dropped my son off at school, there's a school speed zone outside of Ben Franklin High School. I mean, no one pays attention to it. I get honked at because I'm going 15, and 167 3/7/06 - WHOLE - BILL 060001, ETC. I'm pointing up to the sign. So I'm trying to get an idea as to what we're doing enforcement-wise, because, as I said, when we had this discussion earlier on crossing guards and school safety, in the suburbs when you hit a school zone, you automatically put your foot on the brake and get down to 10 because you know you're going to get a 11 ticket if you don't. Here we have a 12 different, I guess, cultural experience 13 that people seem to ignore school zones, 14 they ignore crosswalks, they ignore red 15 lights and stop signs, and it creates an environment in the community that's pretty dangerous in itself. As you know, you have a better chance of getting killed getting run over by a car than being shot. What do we do about this kind of traffic enforcement? COMMISSIONER JOHNSON: Well, I know last year what we did, and I'm not sure whether it's still going on, we have 168 3/7/06 - WHOLE - BILL 060001, ETC. assigned to problem schools and problem areas our traffic people. Even the State Police had came in to assist us and help us to make sure that citations were being issued in those areas. I'm not sure whether it's still going on, but I believe we had a whole committee. I think the Managing Director was involved in it, where we analyzed all the different schools and the areas where there was kids hit at. So I think that committee is still going on, but we put additional resources into those areas to prevent those things from happening.
Could you try to break down the numbers a little when you get a chance as far as how many have been written and actually where they are? DEPUTY COMMISSIONER GIORGIO-FOX: Sir, every week a detail of Traffic Division officers choose five or six or seven schools, depending upon what 169 3/7/06 - WHOLE - BILL 060001, ETC. else we have to do that week, and they forward me the statistics every week. And so I can give you from the inception what's been written and where.
Finally, cities like Houston, Los Angeles and Boston -- I'm not sure. We're still researching what New York and Chicago do -- have field training programs for their cadets where at some point in time at the end of their training process, they're actually on the street in a limited capacity. Some cities certify their cadets early on in the firearm process; some wait until the end. It occurred to me that it would be a good experience for our officers to have some citizen contact in a regular environment, in a normal environment, not necessarily in high-crime areas like some of the high-crime districts, but the Center City area, the Penns Landing area, South Street, Manayunk, places where it's more personal contact with people. 170 3/7/06 - WHOLE - BILL 060001, ETC. Do you find any value in that or potential value? COMMISSIONER JOHNSON: We did that. I'm not sure whether we're still doing it. I'm sorry.
You're not. COMMISSIONER JOHNSON: Well, what we used to do is put the officer out there. Before he graduated, they would put him in the streets with the senior officer for a month and then come back to the Academy before graduation. And I think that that's a good program. If we're not doing it, then I will look and see into reimplementing that.
Do you think there's any value in having higher visibility of police in areas that are not as crime ridden but have a tourist and hospitality effect? I mean, for example, one of the things that impresses me about New York when I go is the Theatre District always has officers directing traffic, getting people across 171 3/7/06 - WHOLE - BILL 060001, ETC. the street safely. Sometimes as the Academy of Music empties out, people are dodging cars that are making right-hand turns running through people. To me, it's a better environment, even if the officer doesn't have a firearm or isn't allowed to have a firearm, either not have the firearm or be with someone who has a firearm, so that you can have this kind of additional presence. And I think what the value of it is, these recruits or cadets have a chance to interact with people, which is going to be their main responsibility on the force, is interacting with the public. COMMISSIONER JOHNSON: Well, I think that's a good idea. They're like ambassadors. We give them an idea. Because what happens sometimes, at least in my opinion, you have a lot of officers who go to the Police Academy and graduate and are assigned to areas that they never even rode through before, that there's no 25 interaction. 172 3/7/06 - WHOLE - BILL 060001, ETC. So we will look into that, and I think that would be a good idea.
And my staff will provide some research information on what other cities do and forward that to you also. COMMISSIONER JOHNSON: I appreciate that, Councilman.
Thank you. The Chair recognizes Councilman Nutter.
Thank you, Madam Chair. Commissioner, I'm winding down. I think I have maybe four or five questions. Did you indicate at the beginning of the testimony, is there a class at the Academy now? COMMISSIONER JOHNSON: Yes, 173 3/7/06 - WHOLE - BILL 060001, ETC. sir.
How many recruits are in that class? COMMISSIONER JOHNSON: I believe it's 70.
73. And can you share any information on average class size in the past? COMMISSIONER JOHNSON: Well, if I can recall correctly, we had over 100 and sometimes we had less than 70. One of the problems that we were having is that -- and we're going by attrition and maybe to keep our numbers that we have agreed to keep, but sometimes it's hard to get a class. It's hard to get a class for a number of reasons. They put a lot of things in place now that they didn't have in place before. Say, for example, the agility test now has to be done before the class starts. 174 3/7/06 - WHOLE - BILL 060001, ETC.
The what? COMMISSIONER JOHNSON: The agility test. When the recruits went up to the Academy, before they graduated, that had to do agility. They have to do sit-ups and runs and stuff like that. Now they have to do them prior to getting into the Academy. The candidate who is --
So is that eliminating some people? COMMISSIONER JOHNSON: The person who was number one on our list could not pass the sit-ups, who was number one on the list, came up number one. He did it five times, could not pass. And we're losing so many people with that. Surprisingly, and probably discouragingly --
So I guess just from your perspective, how many sit-ups do you have to do? COMMISSIONER JOHNSON: I think you had to do 35 in one minute. I'm not 175 3/7/06 - WHOLE - BILL 060001, ETC. sure of the exact figure, but I believe it's 35 in one minute. Then you have to do the run. And this is all state mandated.
Okay. But stay with me for a moment. You're 42 years in the Department. You're a highly decorated officer. My recollection of your background is, I think you've spent a little bit of time at the FBI Training Academy. You've been to Quantico. You've literally guarded various presidents of the United States and possibly other foreign dignitaries. How critical is it, in your opinion, for overall police work that you be able to do 35 sit-ups in a minute? COMMISSIONER JOHNSON: My personal opinion, I don't think it's very critical, but the point, unfortunately, is that the state mandates these things and we can't get around them.
I understand. 176 3/7/06 - WHOLE - BILL 060001, ETC. COMMISSIONER JOHNSON: I think we should be flexible.
Okay. So in some classes you've had more, in some classes you've had less. Is this a class that started in 2005? COMMISSIONER JOHNSON: It started in 2006.
Started in 2006. How many more classes do you expect in 2006? DEPUTY COMMISSIONER GAITTENS: Jack Gaittens. The next class would be Class 346. We intend to start them around May 7th, and after that into Fiscal '07, a class --
Fiscal '07 but post -- DEPUTY COMMISSIONER GAITTENS: Fiscal '07, but the starting date is tentatively July 17th of '06. And the next class still starting in '06 would be Class 348, and that would start around 177 3/7/06 - WHOLE - BILL 060001, ETC. October 9th of '06.
Hold on for a second. There's 73 in a class now. That started when? DEPUTY COMMISSIONER GAITTENS: That started February 13th of '06. We started with 75 recruits. Two have dropped out already.
How many anticipate to be in the May class? DEPUTY COMMISSIONER GAITTENS: We are anticipating another 75.
How many in the July class? DEPUTY COMMISSIONER GAITTENS: Based on attrition, we are anticipating possibly up to 125.
And how many in the October class? DEPUTY COMMISSIONER GAITTENS: 100.
So you are trying to bring in a total of 375? DEPUTY COMMISSIONER GAITTENS: 178 3/7/06 - WHOLE - BILL 060001, ETC. That's correct. Again, that depends on the attrition rate.
I understand that. How many police officers do you expect to lose from retirements or other reasons in the course of Calendar Year 2006? DEPUTY COMMISSIONER GAITTENS: The class schedule is based on maintaining the same level of manpower, that as we lose --
Okay. Now, how many non-Philadelphia police officers do we train at the Academy? DEPUTY COMMISSIONER GAITTENS: That varies depending on the time of the year. Sometimes it's 12 to 14. Sometimes it could be only three or four.
These are for other police departments? 179 3/7/06 - WHOLE - BILL 060001, ETC. DEPUTY COMMISSIONER GAITTENS: That is correct. COMMISSIONER JOHNSON: We train SEPTA police.
Okay. Do these other entities pay for the service? COMMISSIONER JOHNSON: Yes, sir.
Now, Commissioner, is it fairly accurate to say that the Police Department would be considered, in essence, a paramilitary organization? COMMISSIONER JOHNSON: Yes, sir.
And it functions primarily based on command and control -- COMMISSIONER JOHNSON: Yes, sir.
-- methodology? How many individuals, based on the current provisions of the Home Rule 180 3/7/06 - WHOLE - BILL 060001, ETC. Charter, how many people do you directly appoint to positions? COMMISSIONER JOHNSON: Well, going by the Home Rule Charter, I believe --
I'm sorry? COMMISSIONER JOHNSON: I'm allowed to appoint two deputy commissioners, and we now have two who are assigned to the Managing Director's Office detailed to the Philadelphia Police Department.
What was that last part again? COMMISSIONER JOHNSON: There's two officers who are assigned to the Managing Director's Office detailed to the Philadelphia Police Department.
What is their rank? COMMISSIONER JOHNSON: Deputy commissioners.
So what are they, like assistant managing directors 181 3/7/06 - WHOLE - BILL 060001, ETC. or something? COMMISSIONER JOHNSON: Deputy managing directors.
So they're in exempt positions, and then we reroute them to get around the two-deputy limit? COMMISSIONER JOHNSON: Yes, sir.
And is that it? COMMISSIONER JOHNSON: That's all I can appoint.
So two deputies directly and then you get two assigned from MDO. You've known many police commissioners from across the country. What's the experience in other cities with regard to how police commissioners are able to put together their top management structure? COMMISSIONER JOHNSON: Almost every other major city that I know of are allowed to pick their own executive staff of the 35, 40 people. 182 3/7/06 - WHOLE - BILL 060001, ETC.
So how does your management staff end up in place? COMMISSIONER JOHNSON: Civil service test.
And they move up through the ranks and then -- COMMISSIONER JOHNSON: In the police --
What's after the four deputies? COMMISSIONER JOHNSON: Chief inspector. So in the Philadelphia Police Department, every promotion is by civil service test. So up until the rank of chief inspector, it's all by civil service.
And so chief inspectors would be considered a part of the -- what was that term, executive? 183 3/7/06 - WHOLE - BILL 060001, ETC. COMMISSIONER JOHNSON: It's part of our executive staff.
Part of your executive staff, okay. To your knowledge, have there been discussions in the past about whether the Police Commissioner of Philadelphia should have more authority with regard to appointing the executive staff? COMMISSIONER JOHNSON: I believe -- not to believe. I know for a fact that it has. It's been going on for the last 10, 15, years. 16
What 17 happened? 18 COMMISSIONER JOHNSON: It's a 19 Charter change. 20
Well, I understand that. COMMISSIONER JOHNSON: Nothing has happened.
Well, I know that, too. 184 3/7/06 - WHOLE - BILL 060001, ETC. From your perspective as a Police Commissioner, a long-time officer, should the Police Commissioner of Philadelphia have more control, authority and then accountability over the top executive staff? COMMISSIONER JOHNSON: My opinion is that if I'm going to be held accountable for everything that happens in the Police Department, I should be able to have my executive staff that thinks like I do, going to the direction that I go. Not that I'm saying the people there don't right now, but I think he should have the ability and the authority and the capability of putting his own executive staff in place.
And how far down in the ranks does -- down to what rank is the executive staff? I mean, I understand the police commissioner at the top, then you have chief inspectors, and then how far does it go down? COMMISSIONER JOHNSON: In most 185 3/7/06 - WHOLE - BILL 060001, ETC. cities, it's captains and above.
So the police commissioner -- COMMISSIONER JOHNSON: Or above the rank of captain. Every city is different.
Above the rank of captain, the police commissioner, what, makes an appointment or issues an order or directive, or how do you -- COMMISSIONER JOHNSON: He makes an appointment. Say, for example, Commissioner Timoney went from captain to first deputy in New York.
Okay. And then what? Police Commissioner Timoney situation in New York City as, what, first deputy? COMMISSIONER JOHNSON: First deputy commissioner.
Do you serve at the pleasure of your appointing authority at that point? COMMISSIONER JOHNSON: That's 186 3/7/06 - WHOLE - BILL 060001, ETC. correct.
So if you did a good job, you get to stay, and if you don't do a good job, what happens? COMMISSIONER JOHNSON: He can have the authority to put him back to his previous rank. Now, when the new commissioner comes, he also has the authority to put him back to their previous rank.
Well, that gives you a lot of incentive to -- COMMISSIONER JOHNSON: To do a good job.
-- pay attention. Right. Interesting. Do you think a structure like that would better serve the Philadelphia Police Department? COMMISSIONER JOHNSON: Yes, sir. That's my opinion.
That's your opinion, okay. All right. Last question. 187 3/7/06 - WHOLE - BILL 060001, ETC.
Point of information on that. Madam Chair, point of information.
Yes. The Chair recognizes Councilman Rizzo for a point of information.
Commissioner, I was confused. A year or so back when there was a rank in the Philadelphia Police Department that was for many years eliminated, I think it was called staff inspector. And you made some staff inspectors. Is that still a current rank in the Police Department? COMMISSIONER JOHNSON: Yes, sir, it is.
How did that rank ever come back? Was it some court thing, or what? COMMISSIONER JOHNSON: The FOP filed suit and they won it, and what happened is that at the time that they won it, it was like last year, I believe 188 3/7/06 - WHOLE - BILL 060001, ETC. it was, and there was some negotiation, because at the time, staff inspectors in the Department more or less did our internal investigations, and up until two years ago, we had one. When they won in court, we did a civil service test and I promoted so far seven.
So that is part of our organization chart, staff inspector, progression? COMMISSIONER JOHNSON: Yes, sir.
That's captain, then staff inspector? COMMISSIONER JOHNSON: Well, you can go from captain to staff inspector and then you can skip staff inspector rank and go to full inspector. When you take the test, you take two tests, staff inspector and inspector. Say you don't score high enough to be inspector, but you score high enough to be a staff inspector. So you can actually skip the staff inspector rank 189 3/7/06 - WHOLE - BILL 060001, ETC. and go to full inspector.
Thank you, Commissioner. Thank you, Madam Chair. Thank you, Councilman.
You're welcome. Councilman Nutter, are you finished?
One last question. Commissioner, I've read news accounts, but I'd like get it directly from yourself. Since July 1st, 2003, how many officers is the Police Department down? COMMISSIONER JOHNSON: I believe it's 544, but I'll give you the exact number. 617.
617 officers fewer since July 1st, 2003? COMMISSIONER JOHNSON: Yes, sir. 190 3/7/06 - WHOLE - BILL 060001, ETC.
You're welcome. The Chair recognizes Councilman Kenney.
Thank you, Madam President. I just want to make a public comment that last year's budget hearings were not a particularly pleasant experience for you and your staff, because your numbers were switched up at the last minute and you weren't aware of it. I just want to compliment you on tremendous testimony this time. You had both financial numbers at your fingertips, staffing numbers at your fingertips, very few things you're going to have to get back to us on, and I just 191 3/7/06 - WHOLE - BILL 060001, ETC. wanted to compliment you on the quality and substance of your testimony this year. I know you would have done the same last year had your numbers not been removed from you at the last minute. But I just wanted to make a public comment that I thought it was a tremendous set of testimony. COMMISSIONER JOHNSON: Thank you very much, Councilman.
Any other questions or comments from members of the Committee? (No response.)
Seeing none, I thank you very much. COMMISSIONER JOHNSON: Thank you. MR. McPHERSON: The next witness is Rob Dubow from the Pennsylvania Intergovernmental Cooperation Authority.
Good 192 3/7/06 - WHOLE - BILL 060001, ETC. afternoon and welcome. Nice seeing you again, Mr. Dubow.
Thank you, and thank you for inviting us to come today to give our comments on the Plan. My name is Rob Dubow. I'm the Executive Director of the Pennsylvania Intergovernmental Cooperation Authority. With me today is Uri Monson --
Mr. Dubow, just a minute, please. We are still trying to conduct our hearing. Please proceed.
With me today is Uri Monson, our Deputy Executive Director, and in the audience is Chairman of our Board, Lauri Kavulich, and our Director of Capital Analysis, John Daly.
What I wanted to do is walk through the letter that we distributed to Councilmembers yesterday 193 3/7/06 - WHOLE - BILL 060001, ETC. that summarized our views on the Plan.
Thank you. In reviewing the Plan, PICA asked two basic questions: Is the Plan balanced and does it address the key long-term financial issues facing the City. I'll talk first about whether the Plan is balanced. As presented, the Plan appears balanced, but it contains a series of speculative revenue enhancement and expenditure reduction assumptions that we believe do not meet the tests of reasonableness included in the PICA statute. If those speculative items were removed from the Plan, it would not be balanced. Unless the Administration can demonstrate either that those items are not speculative or that the Plan would be balanced even without those items, PICA staff will not be able to recommend to the PICA Board that it approve the Plan. 194 3/7/06 - WHOLE - BILL 060001, ETC. Among the speculative items in the Plan, perhaps the most significant is that the Plan assumes state reimbursements that are $132 million more than the amount that's required by law. 3 million annually beginning in Fiscal Year '09 for increased reimbursements for the costs of social workers. The prevention services funding is above the amounts that the Commonwealth is required to pay under existing matching formulas. The adoption services subsidies increase would require state legislation, and according to the Plan, the increase in social worker reimbursements would require state and federal legislation. The PICA Act requires that 195 3/7/06 - WHOLE - BILL 060001, ETC. revenues from other governments that are included in a five-year plan be consistent with historical patterns, currently available levels, or levels in the state or federal budget. None of these revenues meet that test. The Plan also assumes that PGW will be able to repay the City's $45 million loan in Fiscal Year '09. There's a strong possibility that PGW will not be able to repay this loan during the life of this Plan. In fact, PGW's fiscal health and the repercussions of its potential financial failure are perhaps the biggest threat facing not just the Plan but the overall health of the City. The Plan also includes about $60 million for future fee increases in future government efficiencies. The fee increases would add 12 million annually beginning in Fiscal Year '09, and the future government efficiencies would provide 12 million annually beginning in Fiscal Year '10. 196 3/7/06 - WHOLE - BILL 060001, ETC. The Administration has yet to demonstrate that either of these assumptions is reasonable, given the cuts to departmental budgets made over the last years and the City's recent fee 7 increases. Last year, PICA was so 8 concerned about the future government 9 efficiencies that the FY06-FY10 Plan was 10 approved only when the Administration was 11 able to demonstrate they did not need 12 those savings to balance the Plan. PICA 13 further required that the Administration 14 no longer include these savings as a means to achieving a balanced budget in future plans. The Plan also assumes that the state will provide funding to completely eliminate the City's costs for the Convention Center beginning in Fiscal Year '09. While state legislation allows the Commonwealth to assume the City's share of funding for the Convention Center, it does not require the Commonwealth to assume that funding. 197 3/7/06 - WHOLE - BILL 060001, ETC. Convention Center authority officials project the authority will require about $65 million in subsidies from FY09 through FY11. The Plan also assumes that the City will receive more than $18 million annually from the Philadelphia Parking Authority, but the Parking Authority's budget includes an $18 million payment to the City, and Parking Authority officials have told PICA staff that the City will not receive more than that million for 14 the foreseeable future. The Plan 15 includes up to 24 million a year by 2011.
16 The Plan also assumes the 17 Administration will reduce health 18 insurance costs by $46 million over the last four years of the Plan by implementing reform such as self-insurance or consolidating prescription drug purchases. It does not appear that either of these initiatives would produce the kind of savings that the Plan projects. 198 3/7/06 - WHOLE - BILL 060001, ETC. The combined value of the speculative items included in the Plan is over $386 million. If all of the speculative items were removed from the Plan, we would have a negative fund balance in FY08 of $51 million and then would have negative fund balances in each succeeding year reaching $330 million in Fiscal Year 2011. In addition to those speculative items, the Plan has a number of other risks that could threaten the City's ability to maintain positive fund balances. While any long-term spending plan will contain some unknowns, the substantial amount of speculative revenues in this Plan greatly increases the threat posed by these additional risks. Among the risks are the following: That the City will successfully implement a strategic marketing initiative and begin to receive revenues from the initiative in Fiscal Year '07. The Plan projects that the 199 3/7/06 - WHOLE - BILL 060001, ETC. 5 million in FY07 and million annually thereafter. While 4 there is clearly revenue potential from 5 this initiative, it has been under discussion for several years with no 7 tangible results. The Plan also assumes the Administration will be successful in appealing the health/medical insurance award provided to the Fraternal Order of Police. If the Administration's appeal is not successful, the award would cost $57 million over the life of the Plan. The Plan assumes the City will be able to stop the increase in the prison census and not see any increases in the cost of its prison health contracts. The Administration projects that the prison census will grow three percent in FY06 and would grow about four percent annually thereafter if the Administration took no action to slow that growth. While the Administration intends to work with the consultant to 200 3/7/06 - WHOLE - BILL 060001, ETC. develop ways to stop that growth, until those prison population management strategies are developed and implemented, there will continue to be a risk that these costs will exceed the Plan's projections. The Plan assumes the City will receive $25 million annually in gaming revenues beginning in Fiscal Year '09 from the state tax imposed on gaming institutions. The Plan also assumes the City will receive those revenues but does not include any increased service costs that may be associated with that gaming. The Plan also assumes that the number of shelter beds will stop growing. The Plan projects the number of shelter beds, which grew from 2,109 in Fiscal Year '03 to a projected 2,763 in FY06, will grow slightly in FY07 and then remain stable for the rest of the Plan period. Stabilizing the number of beds is dependent on the implementation of initiatives that are still being 201 3/7/06 - WHOLE - BILL 060001, ETC. designed. In addition, the Plan assumes there will be no increases in employee salaries after FY08. This is consistent with earlier plans, but does present an additional risk. If all of these quantifiable risky assumptions were removed from the budget, the Five-Year Plan's gap would grow to $480 million. The gap would be even larger, however, if future collective bargaining agreements contain any salary increases. Each one percent annual increase City workers got would add about $80 million over the life of the Plan, which means that future labor contracts that had one percent annual increases in salaries would push the gap to over $550 million. And that gap could get even larger in the years immediately after the end of the FY07 to FY11 Plan. By FY11, the size of the deficit is growing by over $120 million annually. If the gap 202 3/7/06 - WHOLE - BILL 060001, ETC.
continued to grow at that rate, it would near a billion dollars by 2015. I'm going to move on now to our second question, which is does the Plan address the key long-term financial issues facing the City. PICA has spent much of the last six months highlighting the key long-term financial issues facing the City. We believe the Plan could have proposed any number of steps to address those critical issues. While the proposed Plan does have some limited steps to address these issues, it largely ignores them. Specifically, the Plan responded to concerns in the following ways. The first one we'll talk about is long-term obligations. The City's long-term obligations have grown much more quickly than its revenues and are putting an increasing burden on the City's General Fund. Instead of reducing the City's long-term obligations, however, the Plan 203 3/7/06 - WHOLE - BILL 060001, ETC. increases them. In addition to two new standard general obligation bond issues for basic infrastructure, the Plan includes $150 million for a bond issue to fund improvements to cultural assets and commercial corridors. Debt service is projected to be at least $13 million higher in each year of the Plan than it was in last year's Plan. From FY07 through FY10, the Plan includes $73 million more in debt service than did last year's Plan. And the Sinking Fund's purchased service line, which consists primarily of repayments of debt issued through authorities, is projected to be at least $92 million in each year of the Plan. 6 million. The next issue is the Rainy Day Fund. PICA has long recommended the City should establish such a fund. A Rainy Day Fund would help the City build a contingency against the effects of downturns in the economy or other 204 3/7/06 - WHOLE - BILL 060001, ETC. potential events that could have a negative impact on the General Fund. This Plan does not recommend the establishment of a Rainy Day Fund. The City's tax structure: As has been documented in a number of analyses, the City's tax structure puts it at a competitive disadvantage. For a variety of reasons, taxes in Philadelphia are substantially higher than taxes in other cities. In order to narrow the gap, the City must realign its tax rate so as to be in line with other jurisdictions. The Plan slightly accelerates the business privilege tax cuts included in last year's Plan, but does not significantly narrow the competitive disadvantage. The total value over five years of the accelerated cuts is $24 million. The Administration has proposed legislation that would lock those rates into place for three years, but as described during testimony before City Council in November, PICA believes 205 3/7/06 - WHOLE - BILL 060001, ETC. the benefits of having a predictable set of tax rates makes it prudent to have tax rates that are set in law for the life of the Five-Year Plan. The Plan also proposes to eliminate the low-income tax credit that was enacted two years ago. If that credit is not eliminated, the Administration will have to reduce revenue estimates by million in FY10 12 and 30 million in FY11. 13 The next issue I want to talk 14 about is the unfunded pension liability, 15 which is too large and has been growing. As PICA recommended, the City has lowered the fund's investment earnings assumption from nine percent to eight and three-quarters. That change reduces the risk the City will miss its earnings assumption, but even at eight and three-quarters, the City's earnings assumption is well above the median of eight percent in other cities recommended. 206 3/7/06 - WHOLE - BILL 060001, ETC. And while we're happy that the City took that action, the Plan does not propose implementation of any of the pension fund benefits restructuring recommendations included in the pension paper. Changes to the pension benefit formula are essential if the City is to reduce its unfunded pension liability without incurring dramatic increases in pension costs. And, finally, infrastructure.
The City is grossly underfunding its infrastructure maintenance and improvements. The FY07 to FY11 Plan includes the same insufficient level of funding for infrastructure as did last year's Plan. An analysis by the City Planning Commission said the City needed to invest $185 million annually to keep its infrastructure in good condition. Instead, the Capital Program includes only $52 million in FY07, with slightly lower amounts from FY08 through FY11. It's likely that there will eventually be 207 3/7/06 - WHOLE - BILL 060001, ETC. substantial costs stemming from the Administration's failure to invest in its infrastructure. That concludes my testimony, and we'd be happy to answer any questions.
Thank you very much. Mr. Dubow, you did not include the $25 million the Administration has included in the revenues of the Five-Year Plan for patrolling state highways. Does this mean that PICA believes the City will receive these funds? And I know that's one of Councilman Rizzo's questions.
From our discussions of people and from looking at last year's state budget, we believe that what the state will do is patrol the highway with its own officers. So what the City would need to do is take those revenues out of the Plan, because I don't believe they're going to get them, and to 208 3/7/06 - WHOLE - BILL 060001, ETC. keep the Plan balanced, make a corresponding reduction in the number of officers who would have been patrolling the highways.
Thank you. The Administration has proposed the repeal of what has become known as the Cohen bill. I'm sure you remember that.
Is there any reason as to why you have not included that in your list of concerns?
Our assumption was that one way or the other, that issue will resolve during the Council process, and if the bill is not repealed, then the Administration would have to make changes to the Plan to keep it in balance.
It's roughly $45 million over the last two years of the 209 3/7/06 - WHOLE - BILL 060001, ETC. Plan.
Thank you. The Chair recognizes Councilman Kenney.
That most likely would go immediately back into the economy, in my estimation. I mean, it's going to be a lot of money for people that are getting back to buy treasury bills. I would suspect that the necessities of life will be purchased as a result of that tax reduction, things like appliances and clothing and things that people need to survive, right back into the economy. So I think the analysis on that particular bill needs to be done in that regard as opposed to just the loss of the tax revenue. I may be alone in this, but 210 3/7/06 - WHOLE - BILL 060001, ETC. isn't his testimony somewhat scary? I don't get the impression that the same level of urgency that should be here relative to this testimony is here. I mean, these revenues that he has articulated are extremely speculative, and I don't know how we even in good conscience allow this to go forward. The question I have for PICA and the Board is, as Sean Connery said to Kevin Costner in the Untouchables, what are you prepared to do? I mean, we've heard this kind of testimony before, not I guess at this particular urgency, but what is within PICA's ability or authority to effect a change in this whole situation?
Let me try to answer it this way: If the Plan is not changed from the way it looks now, we as a staff would propose to the Board that they not approve the Plan.
What happens if the Plan is not approved by 211 3/7/06 - WHOLE - BILL 060001, ETC. the Board?
The City then has to take corrective action to demonstrate that it can bring it back into balance. If it doesn't, eventually the state begins withholding funds.
It's a potential if the City doesn't make changes to its Plan. Our hope is that the City does.
And what is the time line you're looking at to make this decision?
We have 30 days from when the Plan is officially submitted to us to make that decision.
So if we send this over, the clock starts ticking and you guys will decide whether to approve it or not?
I want to go back to another looming fiscal concern. That's the City's pension liability. We had extensive debate when the Pension Board was here, and the Administration gave us the impression that by changing the earnings assumption and investing in, of all things, real estate at a time when real estate is beginning its slide the other way, we would correct the unfunded liability problem. Could you share your thoughts on that issue?
I think that's overly optimistic. I don't think that those actions by themselves would correct the unfunded liability problem. They might help around the edges. I think in the long term, in order to get at that 213 3/7/06 - WHOLE - BILL 060001, ETC. problem without increasing the City's costs exponentially, you have to look at changing the benefits.
I know you talked a bit about benefits for pensioners going forward.
Yes; not for existing pensioners. It's not really clear that you can do that under existing law, but for new employees.
-- what would be necessary going forward with new employees?
We have. We did a paper that we released in December that contains a number of recommendations for changing benefits.
It was circulated to Councilmembers and it was put on our 214 3/7/06 - WHOLE - BILL 060001, ETC. website.
I want to go back to the issue now of infrastructure and capital expenditures. I mean, it seems in many ways that -- I have this discussion with Councilman Nutter -- that we're asking to go into debt for an additional $250 million or so and only putting 50 of that towards what we already own and need to maintain, and most of the other money is going to projects that may be or intended to go to projects that may be well meaning and worthwhile, but we seem to be ignoring totally, almost totally, the existing infrastructure of the City. What effect is that going to have on us long term?
Over the long term, it will mean that the condition of City facilities will decline.
And get more expensive to correct or get to the point 215 3/7/06 - WHOLE - BILL 060001, ETC. where they're not usable. So you'll have a choice of putting in major investments or not using facilities.
Thank you. The Chair recognizes Councilman Rizzo.
Councilman Kenney's statement just reminded me of a statement this morning. So I don't know. Maybe when Mr. Dubow is finished, the Budget Director can come forward. This morning in the media, the Capital Programs Office Executive, Mr. Hess, was quoted, and the report, and I'm paraphrasing, is that there's parts of the building, City Hall building, that are falling into the sidewalk and that they had to go to the extreme to put netting around some of these attachments, architectural attachments to the 216 3/7/06 - WHOLE - BILL 060001, ETC. building. Obviously they're concerned about the public safety of the building falling into the footpath. I just can't imagine that there isn't money available, and we have to have an executive of the Administration go to the media and say that the building is falling onto the sidewalk. I mean, that really gives a lot of confidence to people that walk around this area, that they had to put nets around this stuff because there's no money to repair it. I mean, I think that's your point.