Okay. The rest of my questions I believe are just premature at this juncture given the new leadership, so I'll reserve them, but I have a number of questions for the Procurement Commissioner at whatever hour he comes before 128 Whole - 4/14/04 - Bill No. 040255 us.
Thank you, Madam Chair. In response to Councilwoman Tasco, you talked about the -- I guess it's this line item on , which at the time of printing was to be selected and now you mentioned something --
There is a small continuing piece that has been determined. The 600,000 piece is to be selected.
And what's 129 Whole - 4/14/04 - Bill No. 040255 the other hundred for?
The other hundred is a continuation of restructuring the contract.
Okay. Let's talk a little bit about that. In response to Councilwoman Tasco, you said that there were two proposals. There was a verbal --
A verbal request. Well, first, when did this process start?
Let's see if I can tell from the date. This has sort of been an ongoing thing since last May. I believe we began --
From the time of 130 Whole - 4/14/04 - Bill No. 040255 the Ordinance. We've been in some form of restructuring since then. I believe we requested the proposals sometime in December or January.
But you said they were not in writing; is that correct?
I requested someone to help us with the implementation of the Ordinance and the Executive Order and a 131 Whole - 4/14/04 - Bill No. 040255 restructuring of the department.
Now, why would we go and -- nothing wrong with getting a third-party opinion, but given the significant talent that we have both in the Government and in the City, why would we need to go outside to find someone to help us restructure this particular department? How many people are in this department?
Oh, it's 12. I'm 16 sorry. Our numbers today are 12. We felt that it was important to go outside of the organization, because this organization was created in 1982 or '83 and I don't believe that any point in its history anyone has stood up and heaped praise on their performance. Given that the talent that is there now is much of the same talent that's been around, new eyes see things in a different 132 Whole - 4/14/04 - Bill No. 040255 way, and we desperately needed help. And I am not certain that the help that's been available that, yes, they're gifted people, but if we've not gotten the results that we've been seeking or that you or that the citizens deserve, I think it would have been sort of -- it would have been insanity on our part to continue to go back to the same well for new ideas when we've been unsuccessful to that point in generating any.
Well, let me at least share a little bit of, I think, historical perspective. I think that the MBEC was -- first it was created by this Council in the early '80s, I think for appropriate reasons. I think it did what it was supposed to do, at least at the time it was created and for some time. I think they've had some amount of success over at least its early years, and I guess maybe what I'd like to better understand is at what point did the current Administration determine that, one, MBEC was not operating at the level that the 133 Whole - 4/14/04 - Bill No. 040255 Administration thought it should, and, two, what benchmarks or performance standards did the Administration create or impose in January of 2000?
We didn't set specific benchmarks or goals in January of 2000. I wasn't here, but I wasn't handed any when I got in. We did expect that there would be --
I have not been provided any. We did expect that there would be improvement in the plight of minorities, women and the disabled business enterprises because we were here. We have not seen that significant improvement --
You expected it, you said, because you were here or because --
We expected improvement, and we've not seen it. So we knew we weren't doing what we anticipated. 134 Whole - 4/14/04 - Bill No. 040255
Is there a goal established to determine what improvement was?
Improvement was not doing the same as the year before or less. I was not given specific benchmarks, no. 8
Well, when you say you were not given specific benchmarks, at least on the organizational chart, the agency is under you.
So who would give you standards or criteria for your department?
When I looked at what MBEC was doing compared to what my other organizations were doing where I was involved with MBEC, I was not satisfied.
I understand, but I'm trying to understand the -- when you say you were not given any --
In the organization, I report to the Mayor, so -- I mean, in the Administration, I report to the 135 Whole - 4/14/04 - Bill No. 040255 Mayor. I was not given specific goals by the Mayor. That is not to say that he did not have a desire to have improvement. We all wanted improvement.
-- goals or benchmarks or anything to measure a year-to-year progress other than the next year should be better than the previous year?
So if in one year the number was eight, then improvement would be if the next year the number was nine, notwithstanding any other standard that might be established which would say we really want the number to be 15?
If there were another standard established that said the good number is 15, then that's where we needed to be.
But that 136 Whole - 4/14/04 - Bill No. 040255 never happened?
How did you determine which two firms to call and what was the name of the other firm?
The other firm was Ganz and Ganz Associates and they had done some prior work in looking at the department and setting the as-is's and identifying best practices and making some recommendations. They've been used in the first go-around of restructuring. The other firm was Innovative Strategies. Innovative Strategies I know of because I worked extensively with the principal, Mario Trevino, at DFW Airport where he was the --
At DFW Airport, where he was the head of the minority business program. He has --
I'm sorry. Ms. Davis, I'm sorry. 137 Whole - 4/14/04 - Bill No. 040255
No. Just slow down for me a little bit. Because you know your information so well, sometimes you speak very fast. What airport?
He was the head of the minority business program at DFW. He went on from there to work for the SBA, and he is now in consulting, developing programs for municipalities, states and other organizations around the country. He was a resource that I knew. I knew how effective the program at DFW was, because it did win several awards for its effectiveness, and I wanted -- I figured if 138 Whole - 4/14/04 - Bill No. 040255 anybody could help us, he will be someone who could help us create a diversity program that we could be proud of.
These were the only two firms, because we were looking at getting something in place rather quickly.
But now when I look in the budget book on again 38, and this is what I was kind of generally or inadequately talking about yesterday, I thought that there had been some survey or some outreach last year by someone regarding MBEC. I could not remember, and I think your testimony now is refreshing my recollection that it was Ganz and Ganz last year?
Is there a report? 139 Whole - 4/14/04 - Bill No. 040255
Now, the reference earlier to the Disparity Study, I was left with the impression that it has been transmitted from one place to the other, has come into this general and wonderful, beautiful building called City Hall --
-- but is not on the fourth floor or in any of our offices?
It is not on the fourth floor that I know of or in any of the offices. I will check with --
I will check with the Administration. It was delivered to the Administration and they're holding it. We'll 140 Whole - 4/14/04 - Bill No. 040255 find out when it's going to be delivered.
Okay. Now, this $600,000 in technology out of those 700,000 -- and so what is Innovative Strategies being paid? Where are they in the book here?
They are currently in the difference between the 600 and the 700. Their contract has not been conformed for '04, so they're not actually working in '04. They will start work, we anticipate, May 1st.
I have funds in my '04 budget to get them through May and June.
Well, you know how women are. I have dollars in all my purses at home in case I need them.
Ms. Davis, wild horses could not get me to respond to 141 Whole - 4/14/04 - Bill No. 040255 that. No, no, no. You got to get up a little earlier in the morning for that.
You know I have my money in the sugar dish. What can I say? My mom used to hide it in the freezer. You know, we learn early.
Yes. Moving right along, $600,000 in technology, what is it that the MBEC needs to do from a technology standpoint that the normal processes of Government haven't already done over there?
The normal processes of Government don't adequately address minority participation. In most governments, you are able to capture your minority participation through your procurement system. You're able to flag it, you're able to identify your vendors and do a lot of your reporting on participation through your procurement system and through the extensive use of requisitions so that every process is requisitioned. We don't have that type of facility 142 Whole - 4/14/04 - Bill No. 040255 in our current procurement system. We don't have systems that are supportive.
So you're saying you don't know presently what the participation levels are?
We know what our award levels are. We don't know with any ease. And that was the first step, is to capture from Famous and do some verifications from Famous of the awards to actual participation. Right now we have no easy way of getting what the actual participation was. If you look at what's been paid in Famous as compared to what an award has been, there may be a wide discrepancy. And then the other piece, subcontractors are not currently captured in Famous. So that if someone lists me in ASIS as someone that's going to be their sub, what actually happens at the end of the day may not be the same thing. This is why we need additional technology. We need to create a system that 143 Whole - 4/14/04 - Bill No. 040255 allows us to capture information on subs, capture more information on those MWBE firms that end up bidding as primes, but to just provide more information. We do not have great systems.
Councilman, I think that it is everybody's opinion that we should recess until 1:30. We can continue our line of questioning at that time. And we think the stenographer also needs a little break. Thank you all very much.
We are now back in session. The Chair recognizes Councilman Rizzo.
Thank you, Madam Chair. Ms. Davis, we had this discussion before. I know you know it's not the last 144 Whole - 4/14/04 - Bill No. 040255 you're going to hear about this, but for this record, for your time, for your testimony, I would like you -- and, if necessary, could you bring the Revenue Commissioner to the table, because I believe it's a revenue issue that I'm about to discuss with you. At least that's what I'm led to believe. It's in reference to --
I'll switch over and I'll ask another question before I get to that.
Recently I had what I thought was a very enjoyable conversation with the Risk Manager in reference to some issues that I thought took too long to be resolved, and I understand in Risk Management that thorough investigations 145 Whole - 4/14/04 - Bill No. 040255 are required. But I do know that when we create damage to a vehicle or a property, that we have a responsibility to deal with that issue promptly, efficiently and I'm finding out that because of staffing, and I understand in your testimony you're talking about two additional people, which is still less than the number that really should be there, we really, really have an obligation to make people whole after we create damage to their property. I'm finding that six, eight, ten months go by and people have to call Council offices to get these issues resolved. I'd like to ask you to tell me the state of our Risk Management operation, and with these two additional people, will that make an impact on what I think is not a good situation, especially when we're absolutely responsible with no questions. A City vehicle backs into a parked vehicle and the investigation reveals that that, in fact, did happen and it takes months and months and months and months for people to get paid. Could you please describe the 146 Whole - 4/14/04 - Bill No. 040255 condition of Risk Management and is my assessment fairly accurate, what I described?
My name is Barry Scott, S-C-O-T-T. I'm Acting Risk Manager for the City of Philadelphia. Thank you, Councilman. The Risk Management division has greatly reduced staff over what it has had in previous years, and as a result, we are not able to respond in as timely a fashion as we would like to every claim that is filed against the City. Still in our division we have our primary responsibility to investigate each claim that we receive to assure both ourselves and the citizens that we appropriately investigate to determine whether or not there, in fact, was some damage or fault caused by the City and to make the appropriate compensation. We do have, and for some vehicle accidents, we do have a long time where we need to get some information back from the departments, and that feedback that we need to 147 Whole - 4/14/04 - Bill No. 040255 get from the departments sometimes does take a while before we're able to respond appropriately to settle a claim.
Well, Ms. Davis, I think that Mr. Scott was being kind to the operating departments. From what I understand, in some cases, it's like pulling teeth to get verification from Streets Department, Water Department, and that's a terrible situation to be in, where you're trying to settle a claim, you're trying to create some good-will and then you don't get the cooperation of the operating departments. Something needs to be done about that, and I think you, Secretary, at your level need to communicate with the Managing Director and develop a process that gives timely information to Risk Management so it doesn't take a year for a person -- and in most cases, they don't even get the value of the damage. They get the deductible that the state law I think dictates. So I think really that's something that -- I know that it's not the highest 148 Whole - 4/14/04 - Bill No. 040255 priority, but it is to me, that people that are injured by the City get their claims settled as quickly as possible. And Risk Management really needs to have the data, the verification, the investigation as quickly as possible, and I think you need to put a fire under someone to make sure that that's working, because from what I understand, it is not.
I will stress it again. We have had discussions in the past on a lack of cooperation around certain items, and I will reinforce that lack of cooperation and ask for continued assistance. We are very often captive to what we get from another department.
I'm sorry. We do have other Council members to ask questions.
This is my first go-around. I'm finished with Mr. Scott, and 149 Whole - 4/14/04 - Bill No. 040255 thank you.
I would like to ask the Revenue Commissioner a question, but I'll address it to you, Ms. Davis. I would like, for the record, the Revenue Commissioner, since I understand it is a Revenue Department issue, is trying to bring under control the program within the Police Department that allows police officers to work on their days off.
Councilman, if I may, the Revenue Department will be up next.
Yes. According to our schedule, it will be Revenue Department after the Finance.
You're welcome. The Chair recognizes Councilman Goode.
Thank you, Madam President. If Mr. Williams could approach the witness table.
Good afternoon. In your testimony so far, you've stated three major things you want to concentrate on, certification, enforcement and economic development.
Can you define what you mean by "economic development?"
Well, when I first started talking about the position and I started looking through the Ordinance and the Executive Order, I didn't see anything there that had an economic development component. 151 Whole - 4/14/04 - Bill No. 040255 Now, from my knowledge of MBEC, I knew they did certification, but I thought that was a part of it and I found out that it wasn't.
Can you just briefly describe what economic development is to you? Some people believe that it's business creation. Some people believe it's job creation. Some people believe that it's per capita income increase. Some people believe that it's more economic participation. What do you mean by "economic development," just very briefly, since you cited that as one of the three things you would concentrate on?
Yes, sir. Primarily business development and assisting minority businesses being created.
In that context, in testimony before the Commerce Economic Development Committee less than three weeks ago, the National Community Reinvestment Coalition cited an analysis that they did that said that in 2001 Philadelphia ranked dead 152 Whole - 4/14/04 - Bill No. 040255 last in terms of small business lending to minority census tracks. How would you combat that and how do you think that actually will take away from whatever success you will or will not have?
Well, again, I will probably have to partner with other public and private entities to combat that. I was not aware of that statistic or that problem, but --
But Philadelphia ranked dead last in the top 100 metropolitan areas. Obviously there is a serious access to capital and credit problems and a particular problem in terms of small business lending in terms of disparity. So some of the disparity in City contracts and some of the capacity in building that needs to be done may actually be small business lending issues. Do you intend to take those issues on directly?
I intend to meet with everyone in the Council, including you, sir, and if that's something you think I need 153 Whole - 4/14/04 - Bill No. 040255 to take on, I certainly will.
Well, let me ask you a question. How long have you wanted to be MBEC director?
I would say when I first learned about some of the difficulties over here. So that would probably be sometime in the fall.
So why did you want to become MBEC director six months ago?
I thought that at the point, I could bring a strong administrative hand to the department to sure up morale there, to actually get it out of whatever blaze it may have been perceived to be in at that point. I mean, at this point, I've met the 154 Whole - 4/14/04 - Bill No. 040255 staff there and got to talk to them and seen that there's other reasons why some of the numbers --
So there was no reason there other than a challenge and a problem to be solved?
Well, there's also just a passion for working, as I worked with Community Legal Services, a passion for working for, quote/unquote, the underdog.
Has the Mayor given you any policy direction whatsoever?
Did he or anyone else tell you why specifically you were chosen?
I interviewed with Janice Davis. I think she could tell you. 155 Whole - 4/14/04 - Bill No. 040255
I'm just asking the question. Were you told what you specifically brought to this?
Yes. I was told that my administrative background, my background in working at Community Legal Services and running its day-to-day operations. They felt that that was a key component to what they wanted to do when they were thinking about restructuring MBEC.
Two more quick specific questions. How often will you conduct a disparity analysis?
So you will establish any participation goals by scepter?
Thank 156 Whole - 4/14/04 - Bill No. 040255 you. The Chair recognizes Councilwoman Tasco.
Thank you. I haven't been paying attention, so I hope the questions haven't been asked. Ms. Davis, you talked about having the technical capability to capture minority participation. Will this contract for the technical program include just MBEC or does it expand to the Procurement Department?
In order for it to be effective, it's going to have to involve other departments, not only Procurement. Because currently we don't have centralized procurement of anything, especially not professional services. There's a very narrowly defined centralized procurement. In order to capture this information, they've used a contract management system to attempt to capture it, and that's ASIS. But ASIS requires that you know who the vendor is, that you have a lot of information that comes after you've made a 157 Whole - 4/14/04 - Bill No. 040255 decision. We need something that helps us capture it before any decision is made and definitely before a contract is awarded so that we will know what people are promising, have it in one place and then be able to measure against that. So by definition, it has to be broader than just sitting in MBEC.
What will the system you're looking at be -- is it just for MBEC or will it involve all --
It will be citywide. It has to be implemented citywide. Everyone has to have access to it in order for it to be effective. Although MBEC is tasked with pulling the information together, the information and the actual actions that generate that information are the responsibilities of the departments. And so this gives the departments a mechanism. It has to be broader than just in the MBEC office. It can't be viewed as an 158 Whole - 4/14/04 - Bill No. 040255 MBEC system. It is going to be a City system. And we haven't identified the specific software yet. Veradyne will be helping us to identify types of software that are out there. We've had visits from lots of vendors in many different cities where there has been some success using certain types of software in this manner and we've looked at some of it. We've had demos of some of it, but we've not settled on a piece of software yet.
In our travels, not even our travels, in our work with Veradyne, at one point there was a system identified that would have had a $600,000 price tag. So we feel that we can accomplish something within that 600,000. And at this point, short of implementing a new financial suite of systems, 600,000 should be the limit of what we're looking to spend on this type of software. So we know that there is a package 159 Whole - 4/14/04 - Bill No. 040255 out there for 600. We've seen some for less.
If we did a full-blown suite of systems, it would cost significantly more.
Would it be better to try and do the full-blown for the future?
We actually own the software at this point, but the implementation to roll it out to the entire system would be in the tens of millions probably, and at this point, the City is just not able to do that.
You talked about that -- I think maybe it was Councilman Clarke that talked about -- or someone talked about you're head of the department, but when you came in, you had not been given any benchmarks. How do you see your role as head of this department? What do you feel you should be doing as the head of the department? Do you have to wait to get the command from the 160 Whole - 4/14/04 - Bill No. 040255 Mayor to set the standard?
No. That's why we started working with the department from the very beginning, because I have been involved with programs that have been much more successful than this one. And so I started making available, to the extent that I could, whatever assistance MBEC wanted. But MBEC, like every other department, until last year has been subject to the same cuts and reductions in staff that everybody else has had. And it was last year very much at the insistence and with the cooperation of this very Council that we were able to get funding restored and funding there to help MBEC move forward, because they had very much been stagnant.
Well, when we had the hearings last year, you talked about your disappointment with the City's lack of increase in minority participation. And if you were in charge of the department, did you see yourself as being the person to --
I was not satisfied 161 Whole - 4/14/04 - Bill No. 040255 with what we had done and so I take the blame. If it didn't happen, it didn't happen because I did not take resources from someplace else to make it happen. So I do accept responsibility.
Maybe sometimes it wasn't the resource, but it was the will or at least the -- because we saw the decline from the prior Administration to this Administration. Although that Administration wasn't stellar, at least their numbers were higher than this Administration's numbers. I don't know if it took the resources, but maybe the will and intent of the department to make sure that the objectives were carried out, or at least some standards were set. It didn't necessarily require dollars to do that.
And we provided assistance whenever assistance was required or requested. Again, I take responsibility for it not performing.
One more question, Madam President. One more question I just want to ask. 162 Whole - 4/14/04 - Bill No. 040255 Mr. Williams?
We read in the newspaper during the course of the last six months about how some companies were given -- and this may or may not be true, and I have not talked to MBEC about it, but I'm only capturing what I read in the paper -- how some firms were given immediate certification and others have had to wait. How do you plan to handle the political pressure that you may and will get in terms of the request to deal with the various companies that come before you? Will your certification process be equal or will people be given preferential treatment, and how much investigation will they get in relationship to other companies that come in for certification?
Yes, ma'am. I think that of anything that's going to put about me in the press, this is probably going to be the thing I'm going to get the most heat 163 Whole - 4/14/04 - Bill No. 040255 for. I'm not going to give preference to anyone. I have a charge from the Mayor to run this department ethically, and I think that kind of behavior of trying to put some folks in the fast track and put in other folks on a very slower track is just not going to be helpful overall. It's not fair, and I don't intend to do that.
The Mayor calls you on the phone and tells you this company needs immediate certification. What do you do?
I'm going to tell the Mayor that that person is going to have to be put in line. And the Mayor has the power to remove me from that position, but that's a chance I have to take. I can't run this department any other way but how I know, and that's ethically.
One of the things that we are investigating is having certifications done outside of the City in 164 Whole - 4/14/04 - Bill No. 040255 some central agency. It is the model that I have seen the most success with, where there is a certification agency that multiple municipal or not-for-profits participate in, but that is not controlled by anyone. You take the politics out of it. And if there is a perception that something special is being done by taking it outside of the Government and having it done someplace else, you eliminate a lot of that.
Councilwoman, I would like to add that I hope the Mayor doesn't make that call to me.
Well, there's politics in everything. You can't get around that, whether you have it inside or you have it outside. There's always a political influence.
Taking it outside adds to the expense of running the business. If you want to run the business, I think you set the standards and ask the 165 Whole - 4/14/04 - Bill No. 040255 Executive Record to abide by those standards, and hopefully that they will.
The experience has actually been the opposite when the certification is done centrally because multiple agencies are using the certifier. Your share in getting certifications done is usually cheaper. North takes his certification group -- and I always get their name incorrect -- is the prime example of that. The City of Dallas, the School District in Dallas, the School District in Fort Worth, the City of Fort Worth and the airport all participate by making a contribution into that organization, which ends up being a lot less than staffing a group just to do certifications.
Do you have any idea why our numbers dropped in this Administration from the numbers that were in the Rendell Administration?
I'll ask Jim Roundtree to come up and give you an 166 Whole - 4/14/04 - Bill No. 040255 explanation.
Good afternoon. My name is James Roundtree and I'm one of the Deputy Finance Directors for the City. We don't know that the numbers dramatically decreased. What we do know is the way that we began to bundle procurements where I think where our participation took the biggest hit has been in the equipment and supply areas. First is the service and professional service areas. I think they remained constant or have improved. What you will see over at least the last year, that they went up last year. They were down in '02. They were up in '01, but they were up in '03 again. So we've had in the public works area, we've had a little bit of a roller coaster, but it's been consistent around the ten and a half to 11 percentile. I think in '02 it dropped a little bit, and that's when all the concern came. In '02 it dropped to below ten percent, which had 167 Whole - 4/14/04 - Bill No. 040255 a dramatic effect on the rest of the areas of participation, because we've always done poorly in the equipment and supply area because we don't have sufficient minority and females that can bid on equipment issues or supply issues the way that we had bundled in the past. Now, as soon as Mr. Gamble has been the Procurement Commissioner, they have taken a look at how to unbundle some of the package, but, again, we've been hit with budgetary cuts and the thing that has driven the purchasing area is getting the best return on the investment of the taxpayer dollar. So there are times when we will want to unbundle a package, but it's economically effective not to do it that way, and, hence, we try and identify some subcontractors, some subcontract opportunities that firms could participate on.
Thank you, 168 Whole - 4/14/04 - Bill No. 040255 Madam President.
Are there any questions of Mr. Roundtree while he's at the table? (No response.)