Committee Hearing, April 14, 2004

Are you working on financing for disadvantaged businesses?

I have been working on providing the 125 and then the 375.

Are you working on financing for disadvantaged businesses?

I am not.

Why not?

I don't know that that's part of the program, and that's not --

But you've been given that charge by several pieces of legislation that came out of this Council. 209 Whole - 4/14/04 - Bill No. 040255 You've been given that charge by several conversations with members of Council. One of the key things, I mentioned several times, the testimony before this Council, the National Community Investment Coalition said that Philadelphia ranked dead last atop 100 metropolitan cities in terms of small business lending to small census tracks. We discussed this issue for over full term. What are you doing to find financing for disadvantaged businesses?

There is the Minority Contractors Loan Program. I am not involved in economic development for this Government. That responsibility was --

You are in charge of finding financing --

I provide the reports.

You are in charge of finding financing for economic development. In terms of finding financing for economic development, are you finding financing for disadvantaged businesses? 210 Whole - 4/14/04 - Bill No. 040255

If disadvantaged businesses would like to participate in the $125 million pool and then the 375 million, yes, I am.

What's the status of the Philadelphia CDFI Fund?

The CDFI Fund, we have invested in several -- in one CDFI that I'm familiar with, and that was the people -- the capital of the people, the Murad study.

What is the status of the Philadelphia CDFI fund? Is the money there?

That money rolls in because it was an annual appropriation. It rolls into the budget. It would have to be reappropriated.

So the money is not there?

The balance would have to be reappropriated.

So that is a fund that actually was meant to finance disadvantaged businesses? 211 Whole - 4/14/04 - Bill No. 040255

And part of it has been invested.

When was the last time you utilized that fund or sought to try to finance disadvantaged businesses?

I haven't checked to see the last time it was used.

I can tell you that you have an answer to that. It's been at least a few years.

You may be right.

And a few years ago was the year when Philadelphia ranked dead last among the top 100 metropolitan areas in terms of small business lending to minority census tracks and to lower income census tracks. I'm asking you, if you are in charge of financing economic development, what are you going to do about financing disadvantaged businesses?

We can --

You can discuss it, right? 212 Whole - 4/14/04 - Bill No. 040255

-- revitalize the CDFI fund. That was a fund that was placed in Finance when it was an economic development tool that should have been with Commerce.

We can do a loan guarantee fund, too, can't we?

Sure.

Thank you.

The Chair again recognizes Councilman Nutter.

Thank you, Madam Chair. Ms. Davis, you talked about Phase 1 of the restructuring. How many phases are there?

Phase 1 sort of presumes there will be at least a Phase 2. Phase 1, though, is just the preliminary start-up that gets Mr. Williams tied in with his consultants and with what we need in order to have a program that does comply with the Disparity Study or does meet the needs of the Disparity Study without it appearing to be the chicken before the egg kind of situation. 213 Whole - 4/14/04 - Bill No. 040255

Okay. And we had some discussion earlier. Mr. Williams was not at the table at the time when you talked about the past in terms of goals, direction, standards, performance criteria and that they had not been given to you upon your arrival, nor over the past few years. Have any been developed at this point, or what do you plan to utilize to measure how well the organization is doing?

We have identified best practices in organizations across the country. That was part of the report in the Ganz report, and we're utilizing those to set up our criteria and performance evaluation.

So when do you think the restructuring will be done?

When will it be completed finally? I have no idea.

Well, what will happen since --

Our mission --

Life goes on. 214 Whole - 4/14/04 - Bill No. 040255

The mission will be charted. We will know what amendments we should request to the Bill, if there are amendments that are required. We have a better sense of how our program accomplishes -- or we will have a program that accomplishes or the design of a program, I should say, that accomplishes the requirements of the Ordinance and hopefully a new Executive Order that supports all of it.

And when all that is completed, what will it look like? What should business people expect? What enforcement mechanisms are in place? I mean, what will we do, the royal "we" of the Government, what will we do differently --

We will be monitoring, first and foremost.

-- when all this is done compared to what we've been doing?

We will be monitoring, first and foremost. We will also be reporting on actuals, which we're not 215 Whole - 4/14/04 - Bill No. 040255 currently doing. We should be at that point providing technical assistance in outreach, relationship building between the minority, women, disadvantaged, disabled business community and the majority community. Those will be the things that I would expect that you'd see a significant change in.

I read in the paper, there was a letter sent from the African-American Chamber with regard to, I guess, a list of concerns about the organization from a performance standpoint and looking forward in terms of outcomes. What is the response to those issues?

I understand a letter is being drafted -- a response is being drafted by the Law Department at this point.

By the Law Department?

Yes.

Is it a legal matter?

I understand some 216 Whole - 4/14/04 - Bill No. 040255 of the issues may have legal implications, some of the requirements and requests.

Just for the record, Ms. Davis, can you tell us what the participation levels were in the last fiscal year?

I don't have those numbers at hand. Of course, when I went back over, I left all my information over there. We'll get those numbers for you.

You could have just told me it was in the building.

It is in that report in the building.

Mr. Williams, it's my understanding at least from press accounts that at the moment you may not be a City resident?

That's correct.

When do you expect to establish residency?

I'm looking for apartments. Not as we speak, but I am looking for apartments. I'm hoping to move in 217 Whole - 4/14/04 - Bill No. 040255 hopefully sometime next month.

Okay. My last question is, and I think I had asked this earlier, from your perspective, what are the barriers -- and I know we talked about the technology issue and we talked about personnel. What system barriers exist, from your perspective, that work against the interests of the many businesses that you're charged with helping? Why is it so difficult?

Well, and again, because I've only been there for two days, this may not be the most complete answer for you, but I'll do my best. I think that from talking to contractors and talking to old staff, that the certification process bogs down sometimes, and that's something that needs to be taken care of. Also, once people are certified, if they're not being used by procurement people in every department, then obviously they're not getting work, and so that seems to be barriers that I want to take care of. 218 Whole - 4/14/04 - Bill No. 040255

And between the technology, the monitoring and more personnel, you feel that you will be able to change those things?

Absolutely.

Thank you.

Thank you.

Thank you. Are there any other questions of the witnesses at the table? (No response.)

Thank you both very much.

Thank you.

Ms. Davis, I think you ought to remain just in the event that there are other questions.

I'll be here.

Thank you. The next group to testify will be the Revenue Department. Thank you for your patience. Please introduce yourself and proceed with your 219 Whole - 4/14/04 - Bill No. 040255 testimony.

Good afternoon, President Verna and Members of City Council. I'm Nancy Kammerdeiner. I'm Revenue Commissioner. With me is Marlene Duley, Deputy Revenue Commissioner for the Water Revenue Bureau. We're pleased to be with you this afternoon to discuss the proposed fiscal '05 operating budget for the Department of Revenue. I believe you have my formal testimony, so I'll just highlight some of the key features of the operating budget request and some of the recent initiatives of the department for the record. We will be available to answer any questions at the conclusion of my testimony. First I'll start with the general fund. The FY05 general fund appropriation request for the Department of Revenue totals $17,803,969. This is a decrease of $373,374 from the FY04 estimated obligations. We're requesting $14,423,341 in Class 100. This provides for 300 full-time and four part-time 220 Whole - 4/14/04 - Bill No. 040255 positions. We're also requesting $3,595,774 in Class 200 for the purchase of services, and $739,971 in Classes 300 and 400 for materials, supplies and equipment. These amounts are reduced from FY04 estimated obligations by 7 percent in accordance with the general budget 8 reduction assigned to the department. 9 Apart from the general reduction in 10 these classes, $50,000 has been added to Class 11 400 to provide for the replacement of Mail 12 Center equipment that has exceeded its useful life. The balance of the cost of this equipment is in the Water Fund. The proposed budget for fiscal '05 also includes an allocation of $44,883 in Class 800. This funding will be used to repay the productivity bank for a loan used to provide programming and other technical support for an e-Government initiative that will enable citizens to pay tax bills and other fees over the Internet. Work on this application is nearly complete and this service will soon be available to interested citizens. 221 Whole - 4/14/04 - Bill No. 040255 With regard to the Water Fund, the appropriation request for fiscal '05 totals $26,601,946, an increase of $1,715,270 from fiscal '04 estimated obligations. 3 million from '04 estimated obligations. This amount provides for funding for 290 full-time and ten part-time positions. The department is also requesting $12,600,941 in Class 200, $853,550 in Class 300, $1,054,000 in Class 400 and $9,500 in Class 500. Among these amounts the most significant change has occurred in Class 400, which has increased by $437,308 to provide funding for data processing equipment upgrades and the Mail Center equipment replacement that I mentioned earlier. In FY04, Revenue converted its stand-alone real estate tax system to the Taxpayer Information Processing System, TIPS, thus completing the multi-year consolidation of major revenue collection systems. The City has acquired the Oracle 11i 222 Whole - 4/14/04 - Bill No. 040255 E-Business Suite as the mainframe architecture for future system development. The Water Revenue Bureau is using this platform to develop a new customer information system to replace its 25-year-old billing enforcement system. It's expected that this new system will be ready for implementation at the end of fiscal '05. I'd also like to mention that for several years, the department has used a document imaging and retrieval system to capture and store tax returns and payment information. When the technology for this imaging system became outdated, Revenue partnered with MOIS and Fleet Management to select an imaging solution that will not only meet our departmental needs, but will also meet the needs of other City departments. This new web-based image retrieval system is being installed at a cost of approximately $280,000 and will enhance the image storage and retrieval capabilities that we have in our department and making availability to others. 223 Whole - 4/14/04 - Bill No.

040255 In fiscal '05, Revenue will be expanding its efforts to identify those who are liable for Philadelphia taxes and not paying or are underpaying what they owe. We use information obtained from the Internal Revenue Service under an information-sharing agreement to identify those potential Philadelphia tax liabilities. With additional staff that we will be authorized under the proposed FY05 budget, we will initiate several new matching projects targeted at wage tax, net profits tax and business privilege tax. These projects are expected to increase revenue by approximately $5 million. We're also working closely with the Pennsylvania Department of Revenue to share data that will enhance revenue collections and are beginning a process of analyzing receivable information using some new computer resources to determine more effective ways to collect known tax receivables with, of course, the goal of enhancing and increasing revenue collections. 224 Whole - 4/14/04 - Bill No. 040255 One other thing I'd like to mention that's not actually in my formal testimony is that we are about to make information about real estate balances available via the Internet. This is newly ready. We'll be trying it out first with title companies who have a great deal of need for ready access to real estate information and expect to make that more public in the very near future. This concludes my formal testimony. We'll be happy to answer any questions you might have.

Thank you very much. What are the various taxes that the Revenue Department collects?

I'm sorry. The various taxes?

Yes.

There's a full range of taxes. All of the City taxes and the taxes for the School District. Let me reach in here for something that I believe I brought with me, and that's our Plain Talk Tax 225 Whole - 4/14/04 - Bill No. 040255 Guide, which I believe has been distributed in the past to Council members. This lists all of the various City taxes that we're responsible for collecting, provides information, a brief point of description of each of them and information about the rates. We'll need to update this, as there have been some changes and we know that there's a likelihood of some more significant changes going forward, and so we've held off in the last year or so about doing a new version of this, planning to do another edition shortly after any changes come out of these proceedings in the next month or so. But just to quickly run down some of the significant taxes, the wage tax, which is collected from employers who have withheld the tax in its quarterly; the earnings tax for someone whose employer doesn't withhold but they live in Philadelphia; the net profits tax; business privilege tax; business use and occupancy tax; real estate tax; the school income tax, which is the tax on unearned income; sales tax. 226 Whole - 4/14/04 - Bill No. 040255 In the case of the sales tax, we have an agreement with the Pennsylvania Department of Revenue. They collect our one percent with the state's six percent share and then remit it back to us. So we are not actively engaged in the collection of that, although we monitor the process there. The realty transfer tax, which is collected in the first instance on our behalf by the Department of Records when deeds are filed, but, again, we oversee and monitor the process. The parking tax, which is collected from the parking lot operators; hotel tax; amusement tax; liquor sales tax. So it's a wide gamut of taxes that we are responsible for.

Tell us what the value of your receivables is.

If you could bear with me a moment, I did bring something with me with receivable information. For the property taxes for the City -- and as you know, the real estate tax is divided between the City and the School 227 Whole - 4/14/04 - Bill No. 040255 District. At the end of October, which is the most recent report I was able to put my hands on just before I came over here, the receivable was 120,200,000, and for the various self-assessed taxes that we collect for the City, that would include wage, earnings, net profits, business privilege, amusement, parking and sales, it was 93,939,000, for which a transfer tax, which is not included in there, approximately 4.3 million.

What collection activities have you undertaken and what is the yield from that activity? I would assume that we have an awful lot of people who are delinquent. Tell us what process you follow.

Okay. Actually, there are various strategies, depending upon the tax, but first I would mention that within 90 days of when a liability becomes delinquent, it's officially under the Charter or responsibility for the Law Department for collection and enforcement. 228 Whole - 4/14/04 - Bill No. 040255 We do work cooperatively. Revenue continues to bill and Revenue does a lot of the --

But don't you contract with some collection agency?

I was just about to get to that.

I'd like to know who they are and what fees they're paid.

Okay. We have three collection agencies that provide collection services for both tax and water receivables. Those three are Penn Credit, NCO Financial and St. Hill & Associates.

What are their fees?

They're paid on a percentage of the collections that they get, and I believe it's --

What percentage?

It varies slightly by contract. The NCO contract is 21 229 Whole - 4/14/04 - Bill No. 040255 percent, the St. Hill contract is 20 percent and Penn Credit is 17.5 percent. We're about to go out for an RFP for new collection agencies and we're hoping to have significantly lower fees going forward, but at one time, they were actually higher than that. We brought them down the last round of contracts. And as I say, I'm hopeful that the next time around those collection percentages can be even lower. But we're just about to go out with an RFP. We'll be doing that in the next couple of months. The Law Department does have some contracts over and above what we do. They have co-counsel contracts where they collect on judgments that have been filed in the courts as part of the collection strategy for enforcement.

What is the breakdown by collection agency as to the amount collected, their fee over the last three years?

I have to get that for you. I know we have that 230 Whole - 4/14/04 - Bill No. 040255 information. I don't have it with me. I can tell you that we basically in the past have divided approximately one-third, one-third, one-third with each of the collection agencies in terms of referrals, and as I recall the reports that I've seen, they have been fairly even in terms of their ability to collect. There wasn't one contractor who collected a significantly higher percentage of the receivables they were assigned than any of the others. But we'll have to get exact information for you on that.

I'd appreciate that. What is the current collection rate for water customers?

I'll ask Marlene if she can answer that one for you.

Hi.

Hi.

Could you rephrase the question?

I asked what is the current collection rate for 231 Whole - 4/14/04 - Bill No. 040255 water customers.

What percentage we collect?

Yes.

Help is on the way.

Thank you.

If you have the information, sir, why don't you just come up to the witness table.

George O'Connor, Water Revenue Accounting, and the current rate is 85 percent.

85 percent?

Yes.

What is the historical collection?

We can get that for you. You want over the last three years?

Wouldn't you say it was more than 85?

It's been around the same. 232 Whole - 4/14/04 - Bill No. 040255

I just don't want to see us, meaning the Water Department, getting to the same stage that we are with PGW. What was the historical collection rate in the past, if you could just tell me that?

It's been between 85 percent and -- say, from the 82 to 85 percent in the last three years.

I think you're wrong.

It's been between 82 and 85 percent.

82 and 85?

Yes. It's been averaging between that rate over the last three years.

And if we went back further than the last couple of years, it would be much higher; would it not?

No. It's been basically the same. 233 Whole - 4/14/04 - Bill No. 040255

I find that hard to believe.

We can get you those numbers.

I would like that in writing, please.

Sure.

I have other questions that I would like to ask in reference to that, but that really concerns me. Is this one of the reasons why the taxpayers are going to be asked to pay more money for the water rates?

No. I believe the --

But is this one of the reasons?

Collection --

That the collection rate is not what it really should be?

Collection factors always do factor into the 234 Whole - 4/14/04 - Bill No. 040255 determination of a rate, because you identify what you expect to have as your income and that will affect the determination of the rate that will be calculated.

The Chair recognizes Councilman Goode.

Thank you, Madam President. Good afternoon, Commissioner.

Good afternoon.

Could you update me on the CDC tax credit program? First, the number of active partnerships?

We have 15 that are in place as a result of the legislation that was approved last fall. That would increase the potential number of participants to 25. An RFP went out or a request for applications -- I shouldn't call it an RFP, but a request for applications went out in January. We have since received seven applications that are in the review process, 235 Whole - 4/14/04 - Bill No. 040255 primarily with Commerce in terms of review of the CDC portions of those applications. They've had to ask for significant additional information that wasn't provided with the initial applications. I expect to be getting their sign-off and concurrence on two or three of those within the next week so that we can actually enter into full agreements with those, and I believe the others they're still waiting for information back to clear them. So we have, as I say, seven in progress, that are in place. 15

So we have at least three open slots?

Correct.

Can you tell me the dollar amount of tax credits that have been approved?

I think last year there were only two or three. I will confirm that for you, but I think only two or three businesses actually made the contributions so that they got the credit with 236 Whole - 4/14/04 - Bill No. 040255 last year's tax returns. The tax returns are just due tomorrow for the 2004 payment, and as a result, I don't yet -- excuse me; for 2003 tax year, and so I don't know yet how many are actually claiming that, but I think there should be at least of the 15. 9 I believe there were two that, for a 10 couple of reasons, had not actually made their 11 contributions in 2003 and we've been reviewing 12 those. One of them has already come to us and 13 asked for continuation even though they didn't make the payment, and we're in the final stages of clearing them to stay in the program.

Can you just forward that information to the Chair? Can you also forward in addition to the dollar amount of tax credits approved, are you keeping a record of how much money has gone to the CDCs even before the tax credits are approved? Is that correct?

Actually, we get verification of the payment that they make 237 Whole - 4/14/04 - Bill No. 040255 after the fact as part of the renewal for the next year, and then that's what gives them the opportunity to use that as a credit. So I don't -- I won't know in advance of what comes in for the actual credits.

Can you give me the dollar amount of the payments they've made and then the dollar amount of the tax credits? Also, I've received information related to five new applications, so could you forward the other two respondents?

I'm sorry?

There were seven pending applications. I only know of five. Could you --

I'm sorry. Okay. Now I understand what you're saying. Yes. There were two after -- the first day, we got five, and then the other two came in subsequent to that. Yes, we can get that partnership information to you. 238 Whole - 4/14/04 - Bill No. 040255

Very quickly, can you update me on the job creation of the tax credit program, the number of people who have applied?

Okay. One moment. I did bring something with me on that. We have businesses that have 10 applied, and I see I don't have a total here. 11 I'll have to total this in terms of the number 12 of jobs that they had indicated they would 13 create. 14 Only two of those have actually provided full documentation to us on those jobs having been created and have certificates that they can use in the future --

You're jumping ahead of my questions. It wasn't how many people applied.

There were 14.

How many have been approved?

Actually, 239 Whole - 4/14/04 - Bill No. 040255 that's who have been approved. I'm sorry. The list I have is 14 have been approved, and there are only a couple more that have applied that are in the review stages, and I think one of those just came in this week.

So 14 have 8 been approved. Can you tell me the number of 9 job creation certificates that have been 10 issued? 11

I meant to 12 add it up. This wasn't totaled, so I will 13 have to add it up and give it to you. It's 14 probably about 1,500 jobs, but I will add it and give you a verification on that.

Actually, my question was the number of job creation certificates that have been issued.

I'm sorry. I'm not hearing you.

The number of job creation certificates that have been issued.

Oh, certificates? Two, and they represent only 240 Whole - 4/14/04 - Bill No. 040255 five jobs.

And the other represent roughly 1,500? 5

Yes. 6

Thank you. 7 Thank you, Madam Chair. 8

9 You're welcome. 10 The Chair recognizes Councilman 11 Rizzo. 12

Thank you. 13 Commissioner Kammerdeiner, before we 14 go to where I want to question, I have a question based on the water revenue. What's the total amount of the debt owed to the Water Department by people who haven't paid their bill and what is your termination policy?

While she's looking for the dollar amount on the receivables, in terms of termination policy, we notify people for shutoff when they have -- this is a residential customer -- a bill of $75 or more and are delinquent at least two 241 Whole - 4/14/04 - Bill No. 040255 cycles.

Are you doing it?

We certainly are. I have some numbers here. Again, I brought a lot of individual pieces of paper. We have so far this year, since the moratorium ended, or the appropriation for the ending of the moratorium on April 1, we have sent out at least 72,000 shut-off notices. Many people come forward and pay after they receive that initial notice, but if they haven't paid us within about three weeks, we send out a second notice. We've sent out 30,284 second notices, and by last week, we still haven't received payment from the second notices, we have referred 19,117 water customers to the Water Department for actual shutoff, and they are in the process of shutting those off right now. Some of them have already been shut off.

The number you gave, 82 to 85 percent, was that number on water customers? Earlier there was some 242 Whole - 4/14/04 - Bill No. 040255 testimony about --

Oh, the collection factor? Yes.

Obviously you're not satisfied with that number?

Not at all.

What are you doing about it.

One of the things we do is that we shut off the service and try to force payment. Most of the people who do get shut-off notices eventually come back and pay to get their water turned back on. Some of the big receivables that are out there are with landlords. We pursue using support from a collection agency through the USTRA program, collection from those landlords.

So how much money is owed the City for water?

Do you got that number?

The total amount of 243 Whole - 4/14/04 - Bill No. 040255 the receivable is, as of March, it was $185 million. That was how much was in the receivable. That's how much was totally owed to the City of Philadelphia for billing. Of that $185 million of receivable, we have 130 million, which is in active enforcement. Active enforcement includes shutoff, those are accounts that are with the Law Department for suing for Municipal and Common Pleas Court, and those are accounts that have already been referred out to collection agencies. So there's active enforcement going on.

So we have 185 owed, 130 million that's actually in the collection process?

Right. And then we have about 44 million which is considered to be accounts that are under agreement or they are in various stages of -- they're either payment agreements or co-counsel, that type of activity.

Well, I 244 Whole - 4/14/04 - Bill No. 040255 think this is mind-boggling, 185 million, 130 in the collection, 82 to 85 percent collection rate. You really need to do something here. You know, it's interesting, I don't remember the last time I got a call, and I get a lot of calls, about people that have been threatened to have their water turned off. I'm having a hearing about this upcoming rate increase and I really think you'd better be prepared for one -- I don't want to -- we're going to rock and roll.

They're not calling you, but we have numbers from the Water Department that show that this year alone, and I'm talking about this fiscal year, we've shut off 53,374 accounts. And so they must not be calling you because --

But I still can't imagine the 130 million.

That goes back. We keep 15 years' worth of receivables on the book. Most utilities only have two or three. And so that's why we have such huge 245 Whole - 4/14/04 - Bill No. 040255 receivables. And one reason why we don't collect on all of it, because when you have receivables that are that old, you're not going to find the customer there, you're not going to find a payer.

Don't you think that needs to get cleaned up, because you're --

We would like to do that. That is an issue that we've been addressing. We've been required, I believe it's, statutorily to keep that on the books. And that's one of the issues that we want to explore, because it does make it appear that we have a far higher uncollectible rate than most other utilities. It's an issue that's been raised in audit in the past. It's an issue that the Water Department has raised before, because it does affect bond ratings. It has a tremendous negative impact on our fiscal situation, because we have all those old receivables that really are uncollectible.

Madam Chair, 246 Whole - 4/14/04 - Bill No. 040255 may I -- if you want to see --

Go ahead, you can finish your line of questioning. Everybody else will get an extra minute.

May I ask my last question on a different issue?

Yes, please do.

Commissioner Kammerdeiner, you know that I have brought to the attention of the Administration, specifically the Police Department, that they have a program called the Police Reimbursable Overtime Program --

Yes.

-- that was totally out of control. They're using dollars uncollected when we allow police officers to work, and the reason I'm restating it, it's for the record during your time here. When police officers are off duty, their days off, they're allowed to work. The City of Philadelphia pays them for their work 247 Whole - 4/14/04 - Bill No. 040255 and we bill the contractor, the business that hires them to work off duty. We have millions of dollars on the street that has not been collected. I understand that the Finance Director indicated that this program is all but under control, except the piece that you're responsible for, the Revenue piece. Could you explain where you are with getting this program under control, what the delay is and when you will have control of this program? And the last part, to be brief, there's still a significant amount of money on the street that has not been collected. What are we doing to collect the money? Because I don't want to see it written off.

Okay. The Department of Revenue has worked with the Police Department to better understand the program, what's involved from a financial standpoint so that we can understand what we need to bring into our system in terms of billing. We have the specifications outlined 248 Whole - 4/14/04 - Bill No. 040255 on that and need to do the programming to bring that into our TIPS system, the Tax Information Processing System. We had hoped or expected that that would be well underway by now. However, as I mentioned during my main testimony, we recently converted the real estate tax stand-alone system into TIPS. We ran into a lot more problems in that conversion than we had anticipated, and it's taking all of our computer resources to address those problems and stabilize the system. We're hopeful of being able to do the programming necessary to add something that's very different from the kinds of receivables we had in the tax system into our process. We have single tax amounts, not a series of things like you have with the Police Reimbursement Program where you're dealing with a number of individuals of different pay rates, whether they have dogs, horses, cars with them. There are a lot of things that are very different from what we have. So the 249 Whole - 4/14/04 - Bill No. 040255 system has to be altered in order to accept that. I am told that it's about three person months of programming that we need to carry out. That doesn't mean it will take three months to do, because you can put more than one resource on it, and so I think we're probably about, I'm going to guess, about two months away from being able to handle it ourselves.

Now, I'm sure you're familiar with the --

Councilman, I think you're way over your time.

I'll come back around.

You said the last question was going to be it.

I'll come back around. Thanks. I appreciate that little extra.

Thank you. Now, before we recognize another 250 Whole - 4/14/04 - Bill No. 040255 Councilman, I'd like to get back to the water delinquencies, if I may.

Certainly.

$185 million is an awful lot of money. I'd just like to ask a question. Are you notified of when demolitions have taken place? Because I would assume that if a house has been vacant and if the -- is it called the fell in the front?

The fell, yes.

Has not been disconnected or shut off, then you are still carrying that vacant property as a delinquent --

That is one of the problems and issues we've been dealing with as we're preparing to go to the new system. One of the things that Marlene and her staff have been doing is to try and isolate types of accounts like that where you've been perhaps in a non-billed status or perhaps in a status where they're continuing 251 Whole - 4/14/04 - Bill No. 040255 to accrue liabilities, but we don't have anyone to collect from. And I don't know whether there's anything more she can address on that, but that is one of the areas we are looking at, because we understand --

I would think that there would be an awful lot of --