Okay. I appreciate it. So you'll get us something about that?
Okay. In a hearing -- I can't keep track of them all these days -- I think it was last week, and I 89 Whole - 4/14/04 - Bill No. 040255 don't know whether under questioning by the President, there was further discussion about the self-insurance issue. Have we had any of that discussion this morning?
No. We've not decided the particulars of the program, if that's the question.
Okay. Can you give us any particular information with regard to the recent decision involving PGW and the $18 million impact on -- and Mr. Dubow tackled some of this yesterday -- impact on the upcoming budget, as well as the five-year plan?
As we discussed yesterday, there's 18 million in the plan each year from fiscal year '05 through fiscal year 90 Whole - 4/14/04 - Bill No. 040255 '08, and the $45 million loan is soon to be repaid in fiscal year '07. Last week we didn't get any of that revenue, so there would be $72 million less that we would receive over the life of the plan, including $18 million in the budget year. And since we had a surplus at the end of the budget year of 13.6 million, we would then have a $4.4 million gap as a result of not getting the $18 million, if nothing else changed. So we need to go back and look at the budget and the plan and figure out how to make them balance.
We'll have a second go-around. The Chair recognizes Councilwoman Tasco. 91 Whole - 4/14/04 - Bill No. 040255
Thank you very much. Could you explain the $125 million to be taken from the water revenue reserve to be used for the Administration's $500 million economic development initiatives, and are these restricted funds and can they be used for other things other than water-related expenses?
These funds, as we currently expect to withdrawal them from the water fund, are restricted to water-related items. What would be involved is that the City would purchase a surety policy to replace those funds that are withdrawn, and the surety policy acts as the insurance against the possibility that the City would not be able to pay debt service at some point in the future. The reserve fund -- and at this point, that reserve fund has a cost to carry that is negative, because we paid much more in debt service for those funds than we're earning in interest because of the interest environment. So your negative cost to carry 92 Whole - 4/14/04 - Bill No. 040255 is probably in the three percent range. But those funds are there as insurance against the City not being able to make a debt service payment. We can buy a surety policy that provides that same type of coverage for a one-time fee.
So we're paying $3 and $4 million to buy $125 million. And what would you use the money for?
The program that the Mayor has planned for economic development in those areas that have been outlined, the Navy Yard, North Delaware, along the Schuylkill. I don't know any more about the use.
I've not seen the program for the usage. I've only been involved in the discussion on getting the 93 Whole - 4/14/04 - Bill No. 040255 money.
Is there a program that you know of that outlines how the funds will be --
So we would use the $125 million for we don't know what.
And then we would pay $3 million to buy an insurance policy so if we needed the money, you could have the money to cover it?
How would the Administration pay for the remaining $375 million of this $500 million initiative?
It's anticipated that that will be through a borrowing. The sources of the debt service have not been specifically identified yet.
And how 94 Whole - 4/14/04 - Bill No. 040255 would we repay this $375 million?
The source of the debt service payment hasn't been identified yet.
Okay. So will we have any information about that prior to passing this budget?
The 375 is not currently on the table in any way. So as that gets developed, there will be a need to come back to City Council. But it's not included in the budget as an expenditure in any way.
Okay. You have on of the operating budget 200 and -- you have $78,000 for lobbying contract with PAID. What is that for?
That's one of the City's lobbying relationships with, I believe, the Wojack Fund, but goes through PAID.
Why don't 95 Whole - 4/14/04 - Bill No. 040255 they write it in their budget?
I don't know why it's been done like this, but this is the way it's been handled traditionally.
On 38, $700,000 is allocated to implement the objectives of the Executive Order to a provider to be selected. When will this provider be selected and what objectives will they assist in implementing?
That's a dual purpose. One is to have someone to assist in the restructuring and redirection of the program, of MBEC, and the other piece is to continue technology enhancements that are required to comply with some of the requirements of better reporting under the Ordinance.
We just hired a new Executive Director of MBEC. What plans does he have for the implementation of the Executive Order and is it necessary to hire a consultant to help him do that?
I'll have him come 96 Whole - 4/14/04 - Bill No. 040255 to the table. I will add, however, that the program needs refocusing and redevelopment, and this assistance would have been there no 5 matter who the new Executive Director was, because we needed a more clearly defined mission for the program.
We had an estimate on what the software would cost, and the remainder would provide the funding for the consultant. But the software itself has a $600,000 price tag.
The consultant should be someone who has had experience in running or developing MBEC programs, and that's what we're looking for, someone to help us share a program that will be effective in developing firms to participate in economic development. 97 Whole - 4/14/04 - Bill No. 040255
It will be a selection -- and the consultant has been selected. We did a small RFP and we've selected someone. And this is the second part of their participation. They haven't started yet. They start May 1st, if we can get the contract.
It's a firm out of San Antonio. The principal is Mario Trevino.
There's supposed to be -- Councilman wants to know what will they be doing.
They will help us to develop a program that's effective. 98 Whole - 4/14/04 - Bill No. 040255 They'll help us to refocus this program.
We have been in negotiations of various types for the last two to three months, I believe.
So our new Executive Director will come in with a consultant. Did he have any part in the selection process?
He hasn't had a part in the selection process, but they've begun no work. They have communicated with him. And nothing about the program will be done by this consultant until they've had an opportunity to work with him. It is part of the reason why we did not begin any work, because I felt it was important for the program to take shape and to be fully integrated with his plans for the department. 99 Whole - 4/14/04 - Bill No. 040255
When did you decide to hire a new Executive Director of MBEC?
I think that decision came out of the whole look at Government after the election and which positions would stay or not be there.
Very quick. Does a consultant contract call for the consultant to implement the Ordinance or just the Executive Order?
It would be the Ordinance and the Executive Order. I take those together and we --
Let me ask you this: The specific contract is aware that the Ordinance has to be implemented and that the plan and strategy has to be based on the Ordinance?
What he has been provided, "he" being the consultant, what he has been provided is, in fact, the Ordinance. 100 Whole - 4/14/04 - Bill No. 040255
Does the contract say that he has to implement the Ordinance?
In the verbal or the RFP or RFQ, did you base it upon implementation of the Ordinance?
Both firms had copies of the Ordinance and that's what they based their responses on.
Was there 101 Whole - 4/14/04 - Bill No. 040255 anything in writing?
So the written proposals would outline what they're supposed to do?
I will get those to you. And Mr. Williams is here to define his strategy.
Good morning, Councilpersons. My name is Michael Williams. I'm the director of MBEC.
Have you given any thought or do you have any plans yet of how you will proceed this MBEC office to operate?
Yes, I do. I've been speaking with many minority contractors. I have on my agenda now -- I've only been on the job for a couple days, but I have on my agenda to speak to everyone in Council and to meet with folks. I do have three overarching goals that I want to look at. First of all, the certification process. I've heard many complaints about that from contractors, and I want it to be very clear that I don't think that there should be any paperwork in stymieing someone trying to get certified. If they are a legitimate minority business, they should be certified. So I want to look at what methods or mannerisms we can take to make that not a burden on contractors going through 103 Whole - 4/14/04 - Bill No. 040255 the certification process. The next thing I want to look at is enforcement. At this point, we have five folks doing programmatic work at MBEC. And I don't want to read you the whole laundry list, but they're doing everything right now, and it's just sort of not enough people to do it. If you look at anecdotally some of the numbers coming out of the procurement process, it's not great, but MBEC is supposed to be watching this, and at this point, there's just not enough personnel to do it. So one of my proposals, when I first met with Ms. Davis, was to bring on an Enforcement Deputy to come in and to ride her on procurement departments here to make sure that folks, after they've been certified, actually get work here. Also, to do off-site monitoring and everything that happens outside of the office here. I also want to look at economic development issues. Now, I know that hasn't been MBEC's general traditional role, but I think that's important. It's something that I 104 Whole - 4/14/04 - Bill No. 040255 talked about with folks in the Administration. And I think that -- I met with the NTI chief yesterday, Patricia Smith, and we're talking about doing some similar goals of trying to create some sort of economic development piece that MBEC could be a part of. We're still talking about that. So that's pretty much all I can say about that at this point.
There's been a lot of discussions about you in this role and your experience. What experience do you bring to the table in dealing with the office of this nature?
I bring, first and foremost, four and a half years of running Community Legal Services. I was their operations person. I ran the day-to-day operations there. So the mechanics of running a business, I do understand that. But what I also bring, which is I think what MBEC needs at this point that we're talking about restructuring, is a strong administrative hand, a very good manner of 105 Whole - 4/14/04 - Bill No. 040255 dealing with folks and motivating them to do it. I have a lot of passion for this position and a lot of passion for folks who have been traditionally underdogs, as I have been myself in my life, to bring them up. I don't believe that Government in itself should be able to hold folks back. It should be able to lift them up. And I think, notwithstanding what may have happened before I got here, that I certainly can do that.
And you feel that you're capable of making sure that they are carried out with the spirit that they were passed?
Okay. Ms. Davis, what is the current status of the Disparity Study?
The Disparity Study has been completed and copies were brought 106 Whole - 4/14/04 - Bill No. 040255 over to City Hall yesterday, but I understand they weren't disseminated to City Council members.
They haven't been delivered to Council. We will see where they are.
Councilwoman, I brought them over in a hand truck in the rain. They kind of fell apart, but I put them back together and brought them over to Administration last night.
Thank you. Thank you, Madam Chair. 107 Whole - 4/14/04 - Bill No. 040255 Good afternoon.
I was actually going to wait until a couple of the departments came up, but since you referenced it in your testimony, Risk Management, why are you adding additional positions to Risk Management?
Those actually are not additional positions. They're positions that were vacant and then they're being filled. So it's a difference from where we are now to where we're going to be.
It's actually a reduction in positions. It's one position less than they had last year, but it's an 108 Whole - 4/14/04 - Bill No. 040255 increase from our staffing at this point.
It's not an increase budget to budget, no. It's a decrease budget to budget.
I'm assuming that you may not be able to answer some of the specifics, but obviously Community College is a very important entity in my district and in the City and I look at the reduction, the proposed reduction, in their budget. Can you talk to me about that and what you think the impact may be from your perspective? We've already gotten the Community College perspective. I'd like to compare the two, because I believe that particularly given the fact that we're talking about the new scholarship program, that there will probably be an increase in individuals 109 Whole - 4/14/04 - Bill No. 040255 taking advantage of that scholarship and the likelihood that they would be looking at Community College. Because, frankly speaking, speaking as a parent who has a child in college, and I don't want to say the number per year, but it's mind boggling, that $3,000 is not going to go a long way. So the likelihood that people will take advantage of the Community College's tuition payment would probably increase dramatically. So can you talk to me about that process?
When we were faced with getting our budget balanced, we looked at Community College, recognized that over the life of this Administration, we had, whenever possible, increased our funding to them and decided that this was a place that since everybody was going to have to share in the pain, that Community College would also have to share in the pain. It's not something that I can assess. I'm not there on the ground, but I know that not making that kind of cut would 110 Whole - 4/14/04 - Bill No. 040255 have meant taking it someplace else in the Government, and, quite frankly, there aren't many other places in the Government that we can take it. We care about what's happening there, but we think our commitment --
Ms. Davis when you say there aren't many other places, it's been suggested that there are places that you could take it from.
I mean, that's a policy decision, and the Mayor feels that the level of support we are currently providing to the Police Department is the level of support that's required, and so we did not take it from the Police Department.
You didn't even look at that, right, because it was a policy decision?
It was a policy 111 Whole - 4/14/04 - Bill No. 040255 decision.
So you can't speak with any level of specificity as to the impact on Community College from your perspective?
No. I'm not on the ground there. I don't know. I do know that they did have a problem when I notified them that we were making a cut. They were already grappling with a problem and a deficit. This could not have made it easier for them. But, again, looking at our budget and the options we had that we felt were viable options, this was one of the few viable options.
Is there any other -- I actually know the answer to this, but it's for the record -- any other departments in the proposed budget that has not received any directive to decrease the budget or had actually received a proposed reduction other than police?
I think even police when you look at them losing the mounted unit. Everybody has sort of given at the office. 112 Whole - 4/14/04 - Bill No. 040255 Maybe not to the same extent, but I think everybody is taking some small reduction.
Even the departments that got additional funding for some initiatives wound up taking cuts in their budget. So there was no department that wasn't asked to do something.
There was no 12 department that didn't take a cut somewhere in their budget.
All right. I know the bell rang, but I would like to ask, and I probably should wait for the Police Department, but since you brought it up -- actually, I think I brought it up. I would like to ask if there had ever been a study, an analysis on the correlation between activities for young people, that category of individual who is, quote/unquote, most likely to be involved in some criminal activity, and the reduction in activities and subsequently the increase in crime in some of the areas. 113 Whole - 4/14/04 - Bill No. 040255 I'm simply asking the question, is it prudent to decrease activities on the front side and ultimately on the back side you'll end up having to increase your budget; i.e., police and, i.e., prison system and judicial system. And from a policy perspective, at some point I got to get -- so this is actually in preparation for when the appropriate law enforcement people come in, and hopefully you all will be there, the support to the Police Department. But I'm just concerned that you cut these budgets on the front side, ultimately it doesn't happen to pay, given what we paid per room in the prisons. I believe it's -- I'm not sure of the number, but I've been told it's upwards of $50,000 a year. It's more than a college scholarship quarterly, substantially more than the college scholarships that we're talking about today. So I'm wondering that if there's been an analysis done when you made a determination to cut back on some of the programs in terms of educational opportunities 114 Whole - 4/14/04 - Bill No. 040255 and recreational opportunities and made the decision to drastically propose a reduction in those to some degree but not make similar reductions on the back side; i.e., law enforcement. So, first of all, was there any type of analysis done to make that decision, that particular policy?
There have been analyses over the years of those kind of things, but in some ways, we're stuck, in that we know that it's important to be able to make investments in the long run to reduce your prison population. On the other hand, we also know that at the level of census we have now, there's a certain amount of money we have to put in to prisons, for example, that consumes part of our budget, and that makes it harder to make the kind of investments that --
What I'm saying, isn't there a likelihood, based on some of the studies I've done, if you decrease what we perceive to be preventive activities, that you will ultimately increase the prison 115 Whole - 4/14/04 - Bill No. 040255 population and increase the need for more law enforcement and more money in the judicial system? So by that policy decision that we could, in fact, enhance the levels of resources that we have to put on the back side. I mean, we made the decision because that was a policy decision to say, We want to spend money on law enforcement, continue to spend a substantial amount of money on law enforcement and reduce the preventive measures that, to some degree, studies have done that, in fact, do prevent crime.
Even with this budget, I think that the level of funding that's included for prevention is much higher than it had traditionally been before this Administration. So we understand the importance of prevention.
Than what it was before this Administration. Not much higher. It's been probably lower than it was last 116 Whole - 4/14/04 - Bill No. 040255 year. Actually, take a step back. If you look at the DHS budget and the amount of funding that's included for prevention, it's actually increased. The prevention money in there, including funding for after school, goes up in the budget that we've submitted. So there are actually places where there's more prevention funding, but there are places where we've made cuts to things that we understand we wouldn't want to have to cut if we had more money. But there are places like the prison system where we don't have a choice about how much we put in, and that crowds out some of the other things that we'd like to be able to do.
Well, I think we have a choice. We're alone in the process. You may not have a choice now because people are in the prison, but if you focus your strategies towards prevention in a broader way, I think that you can ultimately impact the prison population. Maybe not this particular year, but in subsequent years. 117 Whole - 4/14/04 - Bill No. 040255
Yes, I agree. And, for example, one of the things that we talked about yesterday is taking some of the MOCS money. But, I mean, that's part of --
You're talking about folks that are already in prison. I'm talking about creating an environment where people don't have to go to prison. Too often we pay more attention to the people that ultimately end up in the system and we don't pay enough attention to the people who have never gotten in the system, and because we don't pay enough attention, they end up in the system. I want to make sure that people don't ever have to go through that process.
When you talk about reducing the educational 118 Whole - 4/14/04 - Bill No. 040255 opportunities, that is one of the key factors.
Thank you, Madam Chair. Ms. Davis, the water reserve fund, we've been talking about it a lot because of this stimulus suggestion or recommendation. What is the total -- I know it's 125 that we want to take out. What is the total water reserve fund?
The recent decision to forego the PGW 18 million for the next five years was well publicized over the weekend. I know that creates a hole in the budget and the five-year plan, as does the Scoop on the water reserve fund. 119 Whole - 4/14/04 - Bill No. 040255 Are there any other areas that you're aware of right now since the budget was presented that present similar problems that you have to either fill with revenues or with expense reductions?
Yes. We also had the PICA letter and how we react to those items from reimbursements that PICA views as very speculative. So those items --
We were told pretty directly that while there may be some movement between departments or between line items with this budget, that any increases would spell layoffs. At least that came across to me fairly loud and clear from the Administration. It seems like just with the PGW money and the Scoop, without taking into consideration the PICA letter, well over 20 million right there that Council has had nothing to do with, but does the same warning 120 Whole - 4/14/04 - Bill No. 040255 still apply or the same position the Administration had several weeks ago still apply? Does that mean there has to be layoffs to cover that money? Because if there were other areas, we would have not been told there would be layoffs only.
We are not approaching this with a determination to do layoffs. We will, again, explore other ways, but ultimately people will be impacted. I don't know how we can get to the numbers of dollars that we need unless we do something significant. There may be some opportunities in dealing with overtime in some of the larger departments where there are large overtime dollars, but for the most part, this is a budget -- our whole Government is a government of people, and so ultimately when you have To reduce, you are looking at people. Some of it is mitigated by the fact that there is DROP and we can choose to utilize people to replace those 50 percent that are coming from DROP. But at some point, 121 Whole - 4/14/04 - Bill No. 040255 the DROP doesn't become -- those bodies and positions are no longer available, and ultimately people are impacted.
The Water Department has a rate increase that's been recommended. What's the status of that? Your office, I assume, is involved in the process even though it's the Water Department. Does the finance --
Not at all? Okay. How about the Water Department's capital budget? Is the Finance Department involved in that?
I'm not -- budget is involved to some extent, but it's not a general fund item.
Okay. I raise it because the Water Department -- and I'm not sure of the timing of it, but I think by the end of the year -- will be assuming the water lateral and sewer lateral responsibility 122 Whole - 4/14/04 - Bill No. 040255 underneath the street. And I raised the issue within the last week or ten days. Both the Water Commissioner and the Managing Director say that those replacements are capital eligible. In fact, they're capital items. The water rate increase is heavily depended on -- or not depended, but these laterals are given of credit for the large water rate increase that's being proposed. Has there been any discussion, any decision about moving that item to the Water Department's capital budget?
There has been discussion, and the Water Department is looking at that. They're preparing response to a couple of the questions that you asked, and we should have that within a couple of days to you. I think we'll have it to you tomorrow or Friday. So you'll have that by the end of this week.
Okay. Because it really ties into the rate increase very directly. 123 Whole - 4/14/04 - Bill No. 040255
Given all the attention, concern and interest that's been shown to us, MBEC, over the last year, looking at where we were last year with regards to MBEC and where we are now and exempting the appointment of the new leadership, what one, two or three differences of changes exist this year that were not in place last year?
The Disparity Report has been completed. The web site has been updated. We have a consultant in place who is pulling together the reports that have 124 Whole - 4/14/04 - Bill No. 040255 been identified as required by the Ordinance. We've engaged someone to do a survey that was required by the Ordinance. Those are just some of the items. And we have another consultant assisting with the restructuring and we've had another consulting engagement where certain recommendations were made about the staffing and size of the organization.
Okay. Thank you for that. When you look at this multiExecutive Order, it's actually ten pages long, and knowing that there's no way you can or an agency or individual leadership can make a difference in all these areas in one year, what would be the two, three top priorities that you will expect of the new leadership over the next 12 months?
I'll let the new leadership tell you where his efforts will be directed.
Good afternoon, Councilwoman. 125 Whole - 4/14/04 - Bill No. 040255
As I explained before, I'm looking at processes here. Certification and then enforcement and then economic development. Now, economic development isn't in the Ordinance here, but this is discussions that I've had amongst folks in and outside of the Administration and I think that it's something that folks want me to do.
You mentioned in your earlier testimony that part of your skill-set includes being able to cultivate relationships and make differences with individuals. One of the problem areas I think of MBEC is systems change, is a lack of systems working together.
Well, I can speak to it to the extent that I understand those kind of problems. I felt like I've 126 Whole - 4/14/04 - Bill No. 040255 dealt with them at Community Legal Services when I was there. And a lot, what I feel personally, is that it just takes a lot of will to get things going. You know, you can have a plan, but when you have some kind of systems breakdown, you just need will to get in there and to do it, to get the proper folks in there, to get all the resources that you need and then to just do it.
Have you had a meeting yet, sit-down yet, with the Procurement Commissioner?
I have not yet. My secretary has a list of folks who are setting up meetings with me.
I'll reserve that question then for him. To Janice Davis I think it may be more appropriate to ask this. The status of the establishment and the composition of the Economic Opportunity Task Force.
I believe that will be coming out of the Mayor's office soon. It 127 Whole - 4/14/04 - Bill No. 040255 was part of the 21st Century review for task -- of identifying people for commissions and task force. So that will be identified soon.
What about the Minority Contractors Loan Fund, the status of that?
The Loan Fund? I believe that's still up and operating. The consortium that were providing a line of credit, that's up and has been very effective.