First off, most of the self-assessed taxes have a six-year statute of limitations, and so we do write off the liabilities after we get beyond the statute.
Real estate tax, the years are 20-year liens and we revive those for another 20, so that, in essence, we protect the City's position for up to 40 years on the liens that have been filed, so that if 297 Whole - 4/14/04 - Bill No. 040255 a property exchanges hands and at the time the property changes hands, there's a title search and a settlement that goes through a title company, we have the opportunity to collect any of those outstanding taxes.
Let me ask this question: How is it that -- and I know it's a relatively small number in the whole scheme of things, but it actually is the same amount proposed to be cut from Arts and Culture. You have this $4.3 million in transfer tax outstanding. Transfer tax, my recollection is, is paid at the time that the property changes hand, you're at the table, you're doing whatever your transaction is. How does someone avoid paying the transfer tax?
We also find that there are people who have not paid or have not filed the proper transfer documents, particularly large buildings that are transferred as equity transfers and are not recorded at their full value. 298 Whole - 4/14/04 - Bill No. 040255 If we find that in reviewing the transaction, and our auditors do review those transaction regularly, we will assess a property owner for not having filed and not having paid the realty transfer tax at the time of the transfer. Sometimes the state identifies a transfer that was not properly identified in terms of its value, who may notify us, because we have a similar provision. We notify the state if we find someone. So most of the outstanding liabilities on realty transfer tax, at least two and a half million of the amount that was listed in that 4.3 million is as a result of audit assessments that we have identified and that are in some stage of process of collection. You have to remember that the numbers I give you are in flux. We may have just identified and just billed some of that and are not yet in the course of having collected it.
299 Whole - 4/14/04 - Bill No. 040255 Commissioner, I can only talk with you about the numbers as you give them to me. I mean, somebody might be at MSB this afternoon, overwhelmed by either the testimony or the threats of enforcement, and they could be making a massive payment as we speak.
Actually, I had worked on at least one piece of legislation a while ago seeking to close some of the more creative loopholes in the real estate transfer tax scheme.
I believe the one you're referring to is with what are referred to as 8911 --
-- transactions. And that certainly has helped in terms of the collection. But, yes, there are some other loopholes that have been identified, and, in fact, the Tax Reform Commission noted some that we had identified as a result of a fairly 300 Whole - 4/14/04 - Bill No. 040255 recent court case and a question was raised earlier this afternoon about that, and I've tried to check on the status of that at the Law Department. We'll find out more. That is in the creation, because they were developing some legislation to deal with those loophole closures. And I know you had some --
I had introduced the Tax Reform Commission bill, so whatever proposal --
I don't know anything else that was needed in addition to that. So we are checking on that.
If you have other stuff, I'd be glad to do it. I think the question was asked earlier maybe by the Chair, you're going to get us a list, I think, of all of your collection agency --
-- people and what their record is? And they get a percentage of what they collect; is that the way it works? 301 Whole - 4/14/04 - Bill No. 040255
Thank you. The Chair recognizes Councilman Rizzo.
Thank you, Madam Chair. Commissioner, I want to get back onto the police overtime issue pertaining to police officers working their days off and being compensated by the City and then on some cases the people that hire these officers never getting billed, not paying the bill, continuing to get services, disgracefully enough, and not paying their bill, continue to just to pile up the amount of money owed to the City. My question is, to the best of your knowledge, is the program all in order other than the piece that -- the most critical piece is the collection process. And I'm getting a little nervous having the Revenue Department 302 Whole - 4/14/04 - Bill No. 040255 involved in this collection process after hearing -- and I say that tongue and cheek. But this program, are we still having problems with this program? Is it shaped up now? What exactly is going on here?
The Managing Director's Office has been working with the Police Department to insure that all of the pieces of activity at their end are in order. We will only get the final information in terms of the service that's been provided and amounts that are actually going to be billed. And so the kinds of questions you're asking in terms of whether everything is in order really relate to the things that have to happen at the Police Department to insure that all of the numbers are identified properly.
I asked the Secretary, I believe, during one of our past Council sessions, and they indicated they'd be getting back to the Chair on what are we doing about the money that has not been collected. It's easy to write off money, and I 303 Whole - 4/14/04 - Bill No. 040255 would hope that before you start changing your write-off policy, that Council is made aware of it, because I just don't want to see you start with this big brush erasing money. But my question is, what are you going to do about all of this revenue that's on the street that hasn't been collected with this police overtime program?
It's my understanding that the police was working directly with the Law Department in terms of pursuit on enforcement, because after 90 days of delinquency, the Law Department has official jurisdiction on enforcement. And I know that they will pursue some of the outstanding amounts on the police overtime cases. I don't have the numbers that you're referring to. I don't know what the total scope of those numbers would be. My willingness has been to try and provide a platform for regular billing for going forward, and they had been working with the Law Department in terms of the going backward 304 Whole - 4/14/04 - Bill No. 040255 piece, the expenditures that have already been incurred without payment.
Wouldn't that still be the City Finance Director's responsibility, to make sure that that process is, in fact, in place to collect debt?
The Law Department has responsibility after 90 days. We will get the information on exactly what the remaining balances are and what actions have been taken. The Managing Director took over responsibility for creating a process, and I'll make certain that we get the information on the amount of receivables.
Great. Thank you. And my last comment is that I heard you say something that surprised me in reference to zero usage on meters when you -- most utility companies, electric, gas, when they have a meter that's showing that it's an active account and there's zero usage, there's usually an investigation conducted to find out why it is zero usage. 305 Whole - 4/14/04 - Bill No. 040255 What are we doing when we have all of these accounts that are showing zero usage? What do we do as a business, a water company, a revenue collection agency?
The Water Department is responsible for the meters, but they notify us. There's a reporting process. If there is a meter that's had zero usage and we have it as a discontinued service or vacant where there's no activity, if they see a usage amount there, we immediately restore that account to a billing status for any of the usage that's --
I'm talking about an active account. 8222 so-and-so street and you see zero usage. What do you do?
The Water Department has a program in place, and when there is a -- when our meter readers pick up through the Itron system that there's zero usage, they will send a report to us in addition to getting that meter replaced, and then we will send billing based on the 306 Whole - 4/14/04 - Bill No. 040255 historical use at the property and also usage forward. And I can get George O'Connor to comment on that a little bit more.
There is an active program in the Water Department to identify zero usage, and we work in concert with them to insure --
Are you aware that in the electric utility industry if you owe money to, let's say, PECO Energy here in the City and you move to another area and you haven't paid that bill, that you can't get electric service until you pay that bill? Why aren't we doing something like that? Isn't there a network of water utilities? Knowing fully Suburban Water, if someone owed money and moved out to Montgomery County and applied for service, first of all, they'd be considered a risk, bad credit. Do we have any kind of a relationship or a network to collect money through other water utilities? 307 Whole - 4/14/04 - Bill No. 040255
Not through other utilities. But we're also property based, so that we bill the property, we hold the property responsible for the water. Where you're citing with the PECO, they are customer based, so that they identify the individual person, they won't provide them with service. Where in the Water Department with the City of Philadelphia, we bill the property, we hold the property responsible, we hold the landlord responsible for making payment. And maybe I can get George O'Connor to comment just a little bit.
Is that something that should be reviewed? In other words, a single-family home, why is it property based? Single-family home, why would the electric utility do it and want my Social Security number to get electric service and the phone company, but the Water Department be property based? I don't understand the 308 Whole - 4/14/04 - Bill No. 040255 rationale there. Single-family home now.
We lien the property if there's a delinquency so that we can collect at the time of the transfer of the property from one owner to another. So we have that as part of our enforcement tool when it's property based that you don't have when it's individual based.
I guess the -- let me speak it in terms of collections. Those examples that you gave, they don't have the right to lien the property. So the City does both. We lien the property and in addition to that, we will go after the individual by placements of judgments, fines against the individual. Now, as the Commissioner indicated, the collection, the execution, turning judgment into money, is something that is housed within the Law Department. So we have quite a bit of receivable that has been sent to the Law Department that 309 Whole - 4/14/04 - Bill No. 040255 they have personal judgments against them. That does not necessarily lead to collections. When it does lead to collections, when the person attempts to go out and do some type of financing. But with the Water Department, you have both. You have the ability to lien the property so that if ownership changes, at the time of the ownership change, you will get your money. The example that you gave, when the person gets up and he leaves, there's no other recourse that the utility has, except if he has a Social Security number, in getting his money. In our place, we can get the money from the property and we can get the money from the individual when a judgment is placed against them if we can execute.
Madam President, Madam Chair, I think we really need to have this panel back with the Law Department here, because it's easy to hear, Well, it's not our problem, it's the Law 310 Whole - 4/14/04 - Bill No. 040255 Department's problem and we have $130 million in the pot that's involved in collection. So I'd like to see this panel back, because I'm not satisfied with this entire process.
I think we need a call-back date with the Law Department part of this panel.
Are there any other questions of this panel? Councilwoman Brown.
Thank you, Madam Chair. Two points of clarification. One, the Commissioner said that she was getting back to me regarding the hard data for the real estate receivables for 2004. I want to make that clear, it will be for 2004, Commissioner? 311 Whole - 4/14/04 - Bill No. 040255
That's number one. And number two, we introduced our New Start provision bill in November 2002, or at least it was signed by the Mayor in November 2002. I clearly understand why the transition in Government takes a while, so 2003 would not have been realistic. Can you give me a commitment that for FY05, that new process for two estimated payments will be in place?
I'm not certain that it will be -- and, in fact, we need to talk with you and with others in terms of what all of the issues are. I'm not prepared at this point to say that it will definitely be two installments. Two may not make the most sense. It may be --
Even though that was a new piece of legislation signed by the Mayor?
The legislation doesn't call for two estimated 312 Whole - 4/14/04 - Bill No. 040255 payments. The legislation calls for a change from a prospective to a retrospective tax. It still calls for the payment of that tax to be on April 15th of each year.
The request that came after that was that people be given an opportunity to pay in installments. The installment process that is used by the Federal Government and the State Government, I believe in both instances, call for quarterly payments, but those are payments made in advance. And one of the things that we need to look at with taxpayers who are affected by it would be what makes the most sense here in Philadelphia with our circumstances, and then we also need to look at it from a fiscal perspective in terms of insuring that the money comes in in the fiscal year that we need to have it come in.
For me that begs the question, why were not those questions asked over the last 24 months or the last 12 months? 313 Whole - 4/14/04 - Bill No. 040255
They were, and we came to the conclusion that this year we were not in the position to do it for the returns that are due on April 15th of 2004. The regulations provide an opportunity to have multiple payments in the future, but we have not yet determined whether we can do that and, if so, when.
So when would you be able to say you've determined that?
We'll be reviewing that situation over the course of the summer before we do the tax booklets for filing for next year. Those booklets are prepared in the fall. So during the course of this summer, we'll be analyzing what took place this year and what our opportunities for change will be for next year.
Then I would like to put on the record that you would send City Comptroller Jonathan Saidel and myself a report on your assessment fall 2004, please. 314 Whole - 4/14/04 - Bill No. 040255
Councilwoman Blackwell, your light is on. Do you have any questions?
Does anyone else have any questions of the panel? (No response.)
We will hear from the Sinking Fund Commission, please. Identify yourself for the record and proceed with your testimony.
Good afternoon, 315 Whole - 4/14/04 - Bill No. 040255 Madam President. I'm Vince Jannetti, Executive Director of the Sinking Fund Commission. I'm here to testify on behalf of the Commission for our fiscal 2005 operating budget request. Do you want the short version?
The Sinking Fund request for fiscal '05 totals $471.9 million. The General Fund request is for 172.3 million for leases and for debt service. The Water Fund request totals 178.1 million. The Aviation Fund totals 117.7 million. And, finally, the request from the Car Rental Tax Fund total 3.8 million. I'd be happy to answer any questions Council may have.
Thank you. Regarding the General Fund, what new borrowings are anticipated for fiscal year '05?
There is no new 316 Whole - 4/14/04 - Bill No. 040255 borrowing in the General Fund anticipated for '05.
The Water Fund has an estimate -- a borrowing coming up estimated at $250 million.
What will the Sinking Fund reserve requirements be on the new bonds?
I can't give you the amount. The reserve requirement on revenue bonds is calculated at the highest year's debt service on the bonds when they were issued.
Well, will the Sinking Fund reserves be part of the borrowing or will you use a security bond?
That will be determined when we start to work on issuing bonds.
If the City takes the $125 million from their Sinking Fund reserve, will the City stop 317 Whole - 4/14/04 - Bill No. 040255 taking the scope on the Water Fund's Sinking Fund reserves?
That's an area that I don't deal with, Madam President, but --
Ms. Davis is here. Maybe she could answer the question.
There won't be as much available for the scope, but to the extent that there are funds generated, the City will take the scope.
You would increase the cost of the borrowing with the amount of the reserves and still take the interest earnings. Doesn't that seem unfair to the waterway payers? Ms. Davis, you might as well stay up here.
In this interest rate environment, it probably makes no sense 318 Whole - 4/14/04 - Bill No. 040255 to fund a cash reserve. A surety policy is probably the best way to go given that the earnings that are thrown off by the fund are much less, perhaps as much as 300 basis points less, than what's earned by those funds that are invested. So as we get closer, if the interest rate environment is still where it is today, I will strongly encourage the Water Department to use a surety in place of a cash-funded reserve.
Okay. What are the projected debt service costs associated with the acquisition of the airport garages?
In the '05 request for the airport for the garages, we have $12 million in round numbers for interest and $3.8 million for principal for the first year's payment.
3.8 million. And $12 million for interest. 319 Whole - 4/14/04 - Bill No. 040255
How does this compare to the existing debt service payments?
I don't know what the existing debt service payments are because they're at the Parking Authority.
I don't have that information with us here, but we do have the information and we can get it to the President.
Thank you. Are you assuming that you will be extending the maturity dates of the existing bonds and, if so, for how long?
What is the total cost of the proposed debt service 320 Whole - 4/14/04 - Bill No. 040255 payments -- well, you don't know that either. Okay. I want some information on that, please.
Would you explain for the record what the Charter requirements are for advertising? That's for Procurement. I'm sorry. I thought he knew it all.
We'll wait for Procurement. The Chair recognizes Councilwoman Tasco.
If the City issued additional debt for NTI, how would this debt affect the City's debt capacity?
The NTI bonds are actually bonds issued by the Redevelopment Authority through a service agreement with the 321 Whole - 4/14/04 - Bill No. 040255 City. So they're paid out of our 200 class. The City's debt-incurred capacity is on general obligation bonds, so it would not affect it.
Are there any other questions of this witness? (No response.)
You've been very patient sitting there waiting all day. We will now hear from the City Treasurer. Good afternoon. Welcome. Identify yourself for the record and proceed with your testimony.
Good afternoon, Madam President and Members of City Council. I am John Nacchio and I am the Acting City Treasurer, and it's pleasure to be here today.
Thank 322 Whole - 4/14/04 - Bill No. 040255 you. Pleasure having you.
I'm representing the Office of the City Treasurer, and I appreciate this opportunity to testify before you for the FY 2005 operating budget. The total requested budget amount for the Office of the City Treasurer is 768,041, and it represents a 114,199 decrease from the FY 2004 estimated obligations. The highlights by proposed expenditures are as follows: The Class 100 personnel projected expenditures of 663,916 is the largest part of this budget and represents 86 percent of the Treasurer's Office proposed budget. The proposed FY 2005 budget includes 13 employees. This staffing level results in having two less positions than the number of positions budgeted in FY 2004, resulting in a decrease of $100,000 from the fiscal 2004 estimated obligations. The Class 200 component of the Treasurer's Office proposed budget totals 79,901 and is 10,896 less than the FY 2004 323 Whole - 4/14/04 - Bill No. 040255 estimated obligations. The principal items included are the cost of postage, the purchase of professional services for the intra-office Local Area Network computer support and the maintenance of office equipment. In the Class 300 and 400 component of the Treasurer's Office proposed budget totals 24,224, which is $3,303 less than the FY 2004 estimated obligations. Included in this class are expenditures of office supplies and small office equipment. The most significant cost budgeted is $15,000 for the purchase of printing the envelopes used to mail City checks. Just as a way of background, the overall function of the Treasurer's Office, the Office of the City Treasurer's principal cash management duties under the City Charter is to act as the official custodian of City funds for the purpose of sound financial management and the disbursement of checks. Also, for the financial administration of debt issuance and management, the City Treasurer works to insure that the City's debt offerings 324 Whole - 4/14/04 - Bill No. 040255 mitigate risk to taxpayers. Recently added to Chapter 19-200 of the Philadelphia City Code was an administrative role concerning the City depository banks by requiring that depositories submit community reinvestment goals annually to the Office of the City Treasurer. Under the function of cash management, the City Treasurer's Office manages the City's cash to maximize the limited resources that are available to serve the citizens of Philadelphia. Each year the City Treasurer's Office disburses over 1 million payments to approximately 32,000 employees, 31,500 pensioners, 18,000 vendors, 9,400 election workers and 2,400 foster parents. The Treasurer's Office also processes approximately 6,000 wire transfers, coordinates over 800,000 automated check clearinghouse payments and monitors over 30 portfolios representing over $1 billion of investments for various departments and 325 Whole - 4/14/04 - Bill No. 040255 agencies. The City's voluntary direct-deposit-of-pay program in both the active employee payroll and pension payroll systems now enjoys a participation of over two-thirds of the recipients in each system. By way of a breakdown, 67 percent of our active employees participate in the City's direct deposit program, as well as 71 percent of our pensioners. In FY 2005, the Department hopes to move toward fuller utilization of direct deposit. Similarly, an automated clearinghouse program for the City vendors was implemented in the year June 2000. This program is similar to the City's direct deposit program pay --
We'll be happy to take any questions, in the interest of time.
Thank you. I think many of the Council people do 326 Whole - 4/14/04 - Bill No. 040255 have a o'clock meeting. So are there any questions of Mr. Nacchio? (No response.)
Thank you very much, and congratulations and good luck on your new position.
I would run into you when I work at Municipal Services Building on the sixth floor. What was your position before you were named Acting Treasurer?
I was in charge of the investments and cash of the daily investments for the City Treasurer's Office. So I've been there for four years. Prior to that, I had been in the capital budget area and also operating prior to that. So I've been a City employee for 31 years.
He's 327 Whole - 4/14/04 - Bill No. 040255 qualified. Thank you.
Thank you. Procurement Department is next. Thank you for your patience. We do have a copy of your testimony, so if you would abbreviate your testimony, we would really appreciate it.
Yes, Madam Chair. Good afternoon, Council President Verna and Members of Council. I am William Gamble, Commissioner of Procurement. With me is Deputy Commissioner Janet Hagan. We would answer any questions that you may have regarding our budget proposal.
That's wonderful. I had started to ask, for the record, can you tell us what the Charter requirements are for advertising?
My name is Janet Hagan. I'm Deputy Procurement Commissioner for services, supplies and equipment. And currently under the Charter, Chapter 2, 328 Whole - 4/14/04 - Bill No. 040255 Section 8-200-2(a), it requires us to advertise for seal bids for those over $25,000 in one of the three largest paid circulation papers. We have advertised mostly in the Tribune in an effort to save some money.
What portion of your advertising budget is spent on the Charter-mandated requirements?
Excuse me. Advertising doesn't come under my jurisdiction, but I'll see if someone here has that answer. If not, I'll get that for you.
We didn't bring the advertising budget with us, and we'll get that information for you.
All right. Well, I guess we'll have to have you come back on another day. 329 Whole - 4/14/04 - Bill No. 040255 I think there are other Council members that have questions also that they wanted to refer to you, but as I said, many of them had to leave to go to a meeting this evening. So we will have a call-back, at which time we will ask Procurement to come back again. At this time, the Chair recognizes Councilwoman Brown.
Last year I sponsored a Bill that allowed for a ballot question on cooperative purchasing agreements that was passed overwhelmingly by voters. Provide for us an update on this. How much money have we saved thus far and what projections or savings do you anticipate in the upcoming fiscal year?
At the current time, Councilwoman Reynolds, we have implemented the program, but we have not 330 Whole - 4/14/04 - Bill No. 040255 really gotten any hard information as of yet. One of the reasons that we asked that the Charter change was to allow us to take a look at whether or not the current prices that we're getting are the best prices. So to be honest with you, this process really, we cannot begin it until July 1st, is when it actually will be put into place.
So you have personnel or structures in place within Procurement to monitor this activity and generate the kind of information requested?
Second question, and this is a quote from the testimony given by the Capital Program Office, because as I mentioned earlier, when speaking with another one of your colleagues, I'm still trying to get my arms around how MBEC and Procurement and Commissioners interface. So this is a paragraph from the Capital Program Office. "The Free Library is nearing the completion of the construction 331 Whole - 4/14/04 - Bill No. 040255 phase. In FY 2005, City funding totaling $950,000 is recommended to enable the Free Library to make needed mechanical, structural and safety improvements at the central library and its various neighborhood branches." Break down for me or explain to me how the leadership at the library would interface with Procurement in those areas, or would you?
Well, Councilwoman, we wouldn't really interface with the library, per se. We would interface with the Capital Programs who are responsible for it.
So the relationship we have is with Capital Programs and not with the library, per se. They represent the library.
All right. During the year, I have received phone calls from citizens who hear about RFPs being released by the Free Library, the Philadelphia Zoo and pose the question -- and I've seen a 332 Whole - 4/14/04 - Bill No. 040255 list, but there's no MBE, WBE participation. Appropriate to ask the "why" question would be whom?
All right then. Explain to me the Procurement's role and interface with MBEC. What is it?
What we do is, on a day-to-day basis on a project-by-project basis, we meet with them to determine a determination what the ranges are for each vehicle we put out. So we have a working relationship with them. And we don't put a bid out unless they have seen it and to give it their blessing as far as the ranges are concerned. They determine the ranges. We don't.
How often are those meetings? On an as-needed basis or a regular --
It's on a fairly regular basis, because we're constantly putting out bids. So we don't put a bid out 333 Whole - 4/14/04 - Bill No. 040255 unless they have seen it first to establish the ranges.
I see. And so does your office maintain the list of prospective vendors or is that MBEC's primary function?
And they provide recommendations, suggestions to you, the Procurement Commissioner, around whatever those bids are?
What we do is that when the bids come in, after the ranges have been established, MBEC would get --
After the ranges have been established and the bids come in, MBEC takes a look at their portions of it and then they make the recommendation, tell us whether or not a company is responsive in their MBEC participation, and if they're not responsible, then we cannot award them -- we 334 Whole - 4/14/04 - Bill No. 040255 will not make the award.
Okay. You make the award and then -- and this may sound like a repeat to you, but I want to learn this well. Then the monitoring function is then transferred to MBEC?
Thank you. The Chair recognizes Councilman Ramos.
Thank you, Madam Chair. Mr. Commissioner, when the City Planning Commission came here to discuss the capital budget, they pointed out that the build contracts are decided by Procurement. Therefore, any concerns we had regarding minority participation in build contracts should be directed to you. Please describe your process for 335 Whole - 4/14/04 - Bill No. 040255 including minority firms in consideration for large build contracts.
Again, Councilman Ramos, what we do is, we meet with MBEC and they, in turn, would tell us or establish what the minority business or the minority participation should be, and then we put the bids out based on their recommendation. So Procurement really does not establish any ranges on these bids. It's strictly MBEC.
What percentage of these contract dollars went to minority-owned firms; do you know?
The participation that we record in the Procurement Department 336 Whole - 4/14/04 - Bill No. 040255 is based on the contract award. That's what we record. Not the actual dollars, but the committed dollars at the time of the award. So for fiscal year '04, for SS&E, services, supplies and equipment, the participation was 11.64 percent for minority and 4.71 percent for women owned. For public works, it was 6.61 for minority and 3.07 for women owned.
Is that an improvement of the year past or is that flat? What do those numbers represent compared to previous years?
In fiscal year '03 for service, supplies and equipment, it was 4.18 percent for minority and it was 2.81 percent for women owned. And for public works, it was the same, 6.61, for minority and 3.07. So it was an increase in participation.
And you 337 Whole - 4/14/04 - Bill No. 040255 would attribute that to what?
Well, I can't speak for the public works side, but in the service, supplies and equipment side, one of the things could be the fact that we instituted a voluntary participation. That means we put a form out with a bid that MBEC had not set ranges on and they asked the vendors to complete that form based on -- they may be a minority-owned company and they may be certified by MBEC, and they would check that off, or they may actively have some subcontracting with a minority firm and they would check that off. So we're able to capture that when we do the awards.
Go ahead. I have more questioning, but after my colleague finishes.
Commissioner, you and I, when you first came to your current position in the Philadelphia Government and I was Director of Labor Standards for the City of Philadelphia, you and I met on a number of issues. 338 Whole - 4/14/04 - Bill No. 040255 One of the issues that we talked about was the issue of minority participation and the workings between your office and MBEC. Given that now MBEC is in the process of being reorganized, restructured and new personnel and the whole works, of your experience with them, because of your experience with them, have you been apart of making recommendations and providing your knowledge to how we can make MBEC work effectively?
Yes, Councilman, I have. I have a meeting regularly with MBEC in the process. We have -- we've consulted on a daily basis actually to go over these with recommendations. So we continue to work with them on a day-to-day basis. And, yes, they have asked my advice or --
Well, one of them they talked about was the fact that instead of going with goals we have, we set up a range that is based on a good-faith effort, and 339 Whole - 4/14/04 - Bill No. 040255 those good-faith efforts is determined by a numerical figure or a numerical number that says anything over seven percent and is based on about ten items that you would take into consideration in making a bid or in soliciting minority participants. One may be advertising in the newspaper for minority vendors. One may be going to an outreach that will include minority vendors. One could also include getting at least three quotes from minority vendors in the process. So these are some of the things that we had talked about and discussed.
And you're offering this advice and your knowledge in this area of procurement to MBEC on a consistent basis?
Yes. Again, Councilman, I worked with the past director and I will work with the current director in doing so. We have a very good working relationship with them, because we're all in this process and we want to make sure that it succeeds. 340 Whole - 4/14/04 - Bill No. 040255
One of the other issues that you and I talked about a few years ago, that I was not aware of, and I want you to give me or give us a report here of how this program has worked. I don't know if it was one of your original programs or it was a program that your predecessor might have started. It was a bonding program. This was a program that would help minority contractors get bonding for their work. Is that program still in existence and can you tell us a little bit about it?
Well, actually, it's a bonding program that's under the auspices of Risk Management. It's not really in Procurement. And from my understanding, yes, it is still in existence and they are working with minority companies in doing so. But it's not a Procurement issue. I wish I could take credit for it, but I can't.
I'm probably just getting old, but I thought I picked up this pamphlet -- were those pamphlets in your office, by any chance? 341 Whole - 4/14/04 - Bill No. 040255
Can anyone talk to us? Madam Davis, can you? Because I always found that one of the things that has always held back minority contractors, especially in the construction field, has been the issue of bonding. And correct me if I'm wrong. I still see it as still a big problem, but yet I found out in talking to you a couple years ago while going through the office that there was a bonding program that could assist contractors and particularly minority contractors.
We do have a program that is guaranteed by the SBA that assists in credit repair, writing up bond proposals, going to the banks for letters of credit or lines of credit and the full 342 Whole - 4/14/04 - Bill No. 040255 spectrum of those things that minority, women and disadvantaged firms often need but had difficulty obtaining when they go through the general process. This is operated out of Risk Management because they, again, are our insurers and our people who help us to mitigate risk and had the relationships with the insurance companies and with this particular person who -- they knew this person and knew how to maneuver through the bonding process. And so it's been in Risk Management since its beginning. We've had some difficulty in that a lot of people don't know about it. We're constantly looking for ways to get information about it more widely dispensed. We have the pamphlets. We are doing outreach whenever there are meetings. And the Commissioner is being very modest when he identifies how much assistance he's provided to MBEC and to the City in general in areas of minority, women, disadvantaged and disabled contracting. He's been a tremendous resource, and 343 Whole - 4/14/04 - Bill No. 040255 I'd be happy to give him the bonding program. I'm sure he wouldn't want it at this point. But we do have a program and it has been quite successful.
Is this bonding issue going to be part of trying to get Procurement to work even closer yet with MBEC and making these programs accessible, not just to what particular, but to make sure minority contractors are aware of this program like this bonding program?
We're continually looking for ways to make that a title fit, because the only way -- and it's one of the reasons, again, that I sort of harken back to the centralized requisitioning. If we can get to the very beginning of the procurement process, there's a lot that doesn't go through this man. There's a lot that until CRC we did not know about. The more centralized a process we can create, the greater the likelihood of inclusion, and that is our aim as a Government. And it's not -- we don't view it 344 Whole - 4/14/04 - Bill No. 040255 as Procurement's job. We don't view it as MBEC's job alone. It has to be the job of every commissioner, and that's what the CRC is trying to do, is drive it home and make it a departmental -- make them recognize that there is a departmental responsibility. But we'll be happy to get you additional information on the statistics surrounding the bonding program and get it to the President.
Please do. See how many people have been able to use the program in a very effective and prosperous way.
You're welcome. Councilman, can I see you a moment, please.