Committee Hearing, December 3, 1998

COUNCIL OF THE CITY OF PHILADELPHIA PUBLIC HEARING AND PUBLIC MEETING BEFORE THE COMMITTEE OF THE WHOLE - - - Room 400, City Hall Philadelphia, Pennsylvania Thursday, December 3, 1998 9:30 a.m. - - - BILL 980784 - Amending Phila. Zoning Maps. . . BILL 980785 - Regarding Civic Center Land. . . BILL 980787 - Amending Phila. Code, entitled "Wage and Net Profits Tax". . . BILL 980788 - Amending Phila. Code to add "Keystone Opportunity Zone". . . BILL 980796 - (Being held.) Amending Phila. Code section on "Residence Requirements". . . BILL 980789 - Alternative Funding Mechanism. . . BILL 980843 - Amending Retirement System Ordinance. . . PRESENT: COUNCIL PRESIDENT JOHN F. STREET COUNCILWOMAN AUGUSTA A. CLARK COUNCILWOMAN JANNIE BLACKWELL COUNCILMAN DAVID COHEN COUNCILWOMAN JOAN L. KRAJEWSKI COUNCILWOMAN ANNA CIBOTTA VERNA COUNCILMAN JAMES F. KENNEY COUNCILWOMAN DONNA REED MILLER COUNCILMAN MICHAEL A. NUTTER COUNCILMAN FRANK DICICCO COUNCILMAN RICHARD T. MARIANO COUNCILMAN W. THACHER LONGSTRETH COUNCILMAN FRANK RIZZO - - - VINCENT VARALLO ASSOCIATES, INC. Registered Professional Reporters Eleven Penn Center, Suite 600 Philadelphia, PA 19103 (215) 561-2220 2 12/3/98 COMMITTEE OF THE WHOLE I N D E X All Bills Steve Mullin, Commerce Director. . . . . . . 6 City of Philadelphia 7 Bill 980788 8 Richard Feder, Esquire . . . . . . . . . . . 23 9 Philadelphia Law Department 10 Steve Mullin, Commerce Director. . . . . . . 27 City of Philadelphia 11 12 Bill No. 980843 13 Ben Hayllar, Director of Finance . . . . . . 38 City of Philadelphia 14 Deborah Butler, Esq., Deputy City Solicitor 41 15 Philadelphia Law Department 16 Joe Herkness, Executive Director . . . . . . 58 Pension Board 17 18 19 20 21 3 12/3/98 COMMITTEE OF THE WHOLE - Pub. Hearing (All Bills) P R O C E E D I N G S

Good morning, ladies and gentlemen. This is a recessed meeting of the Council Committee of the Whole. In front of us today, we have several items: We have Bill No. 980784d, which is an ordinance to amend zoning maps in West Philadelphia around Penn; We have Bill No. 908785, which is another ordinance related to the Penn area; We have in front of us Bill No. 980787, which is the Wage and Net Profits Tax bill; We have Bill No. 980788, which is the Keystone Opportunity Zone Ordinance; We have Bill No. 980796, which is the bill that relates to police hiring. We also have two pension ordinances: One is refinancing or a financing, and one is a comprehensive codification of the pension ordinances. Now if I could have every Councilmember's attention, what I would like to do is talk a little process here. If I could have your attention, Councilmembers, I need all of 4 12/3/98 COMMITTEE OF THE WHOLE - Pub. Hearing (All Bills) you. I would not like to have to go back over this. We're now talking process, we're talking process. It is my understanding and belief that the ordinances sponsored by Councilwoman Blackwell, 980784 and 980785, relating to her district, were -- that all the testimony on those bills has been taken and that those bills are ready for consideration. Is there any member of Council who disagrees with that? (No response.)

So Bill No. 980784 and 980785 are ready for a public meeting. If there's no member that disagrees with that, it will be noted that these bills are ready for a public hearing. It is also my understanding that Bill 19 No. 980787 is also ready for a public hearing. Is there anyone who disagrees with that? (No response.)

I mean a public meeting, I apologize. It's ready for a public meeting. It is my understanding that Bill No. 25 980787 is ready for a public meeting. 5 12/3/98 COMMITTEE OF THE WHOLE - Pub. Hearing (All Bills)

I would like to find out from Councilman Kenney whether he intends to proceed with the bill. My understanding was that there was going to be no actionon that bill. Have I drawn the wrong assumption or --

The Chair recognizes Councilman Kenney.

Thank you, Mr. President. The intention is to hold the bill 11 today with the on-the-record promise from the Personnel Director and the Police Commissioner to pursue what is appropriate and necessary to accomplish the goals envisioned in this bill.

Without a bill.

Through the vehicle of the Civil Service Commission. So I'm not withdrawing the bill; it's going to stay.

You're just going to hold it?

Hold it and see how that goes.

All right. Thank you very much. The Chair has no objection to that welcomes the idea that this is worked out. 6 12/3/98 COMMITTEE OF THE WHOLE - Pub. Hearing (All Bills)

Yes.

It is my understanding that we are not now ready for a public meeting on Bill No. 980788, which is the Keystone Opportunity Zone bill. We are not ready for a hearing. There are requests for inofrmation. Do I correctly understand there were requests for information on that bill and that we really do need to get that information?

Was the information given to anybody?

All the information that was sent to our office is automatically circulated to members of Council. I get a copy like everybody else. And, Mr. Mullin, has information been prepared and circulated?

Yes. It was sent to your office, yes.

Has it been circulated, Mr. President?

Any information that came to my office should have been circulated. If 7 12/3/98 COMMITTEE OF THE WHOLE - Pub. Hearing (All Bills) it comes as a result of a request of a public hearing, it's automatically circulated.

Did you get it?

Mr. President, I got a fax copy sometime yesterday.

I don't know, we'll find out; it's not an issue. If it came and was not circulated, it will be circulated. If it came and was circulate, it will be recirculated. But I know that there were -- there were -- there was a request for some information on Bill No. 908788. Now, Bill No. 908789, it is my understanding that this bill is ready for a public meeting. And Bill No. 980843 is ready for a public meeting with the proviso that there are some amendments that Councilman Cohen has -- at least two amendments -- and I think Councilman Nutter may have an amendment. I think the Administration may have an amendment. Councilwoman Blackwell?

I understand that we'll have hearings on your bill and my bill 24 on Monday.

Yes. 8 12/3/98 COMMITTEE OF THE WHOLE - Pub. Hearing (All Bills)

And that they -- however, these bills may have to be changed. And I have been advised that our dealing with these bills today won't affect that.

That's correct. There's nothing in these bills that would impact one way or another what we do with your bill, with the COLA bill for retirees, nothing whatsoever. As a matter of fact, Bill No. 980789 has to be approved if there will be any COLA for anyone. And Bill No. 980843 a recodification that is unrelated to either of those things. What we would like to do, if possible, is clean all of this up and get ready because I think the only real bill that we have any real need for further testimony on is Bill No. 980788. We'll know in a minute the extent to which we need more time.

Right.

The pension recodification bill, I thought, was ready for a public meeting. The activity we need to do is amendment activity, and that can only take place in a public meeting; is that correct? 9 12/3/98 COMMITTEE OF THE WHOLE - Pub. Hearing (All Bills)

Right.

So, I mean, we've heard the testimony and we now have to go in a public meeting on it in order to get all the amendments considered. Councilman Kenney?

Thank you. Are there going to be discussions of the amendments in the hearing or in the meeting?

In the meeting. You know, it just seems to me that we can recess the public hearing and go into a public meeting as a practical matter. All of these amendments are friendly amendments in the sense that Councilman Nutter has an amendment that's designed to deal with issues related to only three members of Council. It is my understanding that the rest of us really aren't impacted by it and the Administration has no 21 objection to it, but it's kind of clarification thing to try to keep everybody out of trouble.

I'll only raise the issue of -- I thought the other day one of Councilman Cohen's amendments possibly -- 10 12/3/98 COMMITTEE OF THE WHOLE - Pub. Hearing (All Bills)

It's a five-year vest provision.

Right. What I asked at the hearing was whether or not we were going to hear any testimony or response to that particular issue from the Administration so that we would have a better understanding of what their reaction is.

We can do that.

If the discussion is only in the public meeting, then it's only a discussion among us.

What I just said was, we can recess the public hearing. See, we have the flexibility to recess the public hearing on that bill, go into a public meeting, let the bill be discussed at a public meeting, and then not act on it at that public meeting, then reconvene the public hearing on that bill. 'Cause as long as we keep our public hearing alive -- we can do it either way; it's not a big problem. It was my expectation, though, that that had been -- that there had been some discussions around all of that. It's not a big 11 12/3/98 COMMITTEE OF THE WHOLE - Pub. Hearing (All Bills) problem. What I would like to do really is try to get us to define what we have to do so that we can determine whether or not we can do it before the Council session or after the Council session. And it sounds to me like we need to have some additional testimony and discussion on Keystone Opportunity Zones, and we also need to have some additional testimony and discussions on the pension recodification. If that's the case, what we can do is have a meeting on all of the rest, get 'em out, recess the hearing and the public meeting on those two, and then we could have whatever discussion we need and testimony after a brief Council session and then decide what we want to do. 'Cause we have people here on some of these bills that are not here on other ones. So I'd like to just go ahead and let them -- I don't know.

So we'll have a Council session and then come back?

Yes. I have reservations about holding everybody up on the Keystone Opportunity Zones. I think that is going 12 12/3/98 COMMITTEE OF THE WHOLE - Pub. Hearing (All Bills) to take an hour or so, and I don't think that we can do that. It is now minutes to 10, and I 4 don't know that it makes any sense for us to try 5 to hold everything over. We won't have Council 6 till 11 or 11:30 if try to do this before Council. 7 My druthers are that we have a public 8 meeting on the bills that are are ready and then 9 recess the hearing, do the Council session, 10 reconvene the hearing, do what we have to do. And then if we report something out, go back into a session temporarily just to do that. Does anybody have any objection to our doing that? (No response.)

If not, then what I would like to do is recess the public hearing on all the bills and go into a public meeting on Bills No. 980784, 980785, 980787, and 980789, and do those bills now, and then recess the committee and then come back. Does anybody have any objections to that?

(Inaudible/off mike.) 13 12/3/98 COMMITTEE OF THE WHOLE - Public Meeting - 980784

Except the two bills, the Keystone bill and the recodification gives us a chance to get whatever information we want on the record, take whatever action we want to take, and we can still report it out to a recessed session if we want. Seeing no objections, the committee stands in recess. - - -

We will in now go into a public meeting on Bill No. 980784. The Chair recognizes Councilwoman Verna for a motion on this bill.

Thank you, Mr. President. I move that the amendments, as presented to us on Monday, November 30th, be adopted. (Duly seconded.)

All those in favor, let it be known by saying aye. Those opposed, say nay. The ayes have it. The amendments are adopted. The Chair recognizes Councilwoman Verna 14 12/3/98 COMMITTEE OF THE WHOLE - Public Meeting - 980784 for a motion on Bill No. 980784 as amended.

Mr. President, I move that Bill No. 980784 be reported out of committee with favorable recommendation, as amended; and a recommendation that the rules of Council be suspended so as to permit first reading at our next session of Council. (Duly seconded.)

All those in favor, let it be known by saying aye. Those opposed, say nay. The ayes have it. Bill No. 980784 will be reported from this committee with a favorable recommendation, as amended, and a recommendation that the rules of Council be suspended so as to permit first reading at our next session of Council. The Chair recognizes Councilwoman Verna for a motion on Bill No. 980785.

Mr. Chairman, I move that the amendments, as presented to us on this bill on November the 30th, be adopted. (Duly seconded.)

All those in favor, 15 12/3/98 COMMITTEE OF THE WHOLE - Public Meeting - 980785 let it be known by saying aye. Those opposed, say nay. The ayes have it. The amendments are adopted. The Chair recognizes Councilwoman Verna for a motion on the amended Bill No. 980785.

Mr. Chairman, I move that Bill No. 980785 be reported out of committee with a favorable recommendation, as amended; and a further that the rules of Council be suspended so as to permit first reading at our next session of Council. (Duly seconded.)

All those in favor, let it be known by saying aye. Those opposed, say nay. The ayes have it. Bill No. 980785 will be reported out with a favorable recommendation as amended and recommendation to permit first reading at our next session of Council. The Chair recognizes Councilwoman Verna on Bill No. 980787.

Are you asking for a suspension of the rules? 16 12/3/98 COMMITTEE OF THE WHOLE - Public Meeting - 980787

Yes.

Mr. Chairman, I move that Bill No. 980787 be reported out of committee with a favorable; also a recommendation that the rules of Council be suspended so as to permit first reading at our next session of Council. (Duly seconded.)

All those in favor, let it be known by saying aye. Those opposed, say nay. The ayes have it. Then this bill, as amended -- there are no amendments, so this bill, as written, will be reported out with a favorable recommendation and a recommendation that the rules of Council be suspended so as to permit first reading at our next session of Council. The Chair recognizes Councilwoman Verna for a motion on Bill No. 98078 the.

Mr. Chairman, I move that Bill No. 980789 be reported out of committee with a favorable recommendation; also a recommendation that the rules of Council be suspended so as to permit first reading at our 17 12/3/98 COMMITTEE OF THE WHOLE - Public Meeting - 980789 next session of Council. (Duly seconded.)

All those in favor, let it be known by saying aye. Those opposed, say nay. The ayes have it. This bill will be reported out with a favorable recommendation and a recommendation that rules of Council be suspended so as to permit first reading. This record should note that Bill No. 12 980796 held at the request of the sponsor of the bill on the basis that the Civil Service Commission and any other administrative body, as needed, will take the appropriate steps take the appropriate steps to see to it that the substance of this bill is implemented; is that correct, Councilman?

Yes, sir.

But the bill will be held in committee in case there are any problems. Now, it seems to me that that leaves for our further consideration as a committee Bill 24 No. 980788, which is the Keystone Opportunity Zone bill, and then there is Bill No. 980843. These 18 12/3/98 COMMITTEE OF THE WHOLE - Public Meeting - 980789 bills will stand in front of the committee. This committee will stand in recess until 12:00. Until o'clock, the committee will 5 stand in recess. We will now prepare for our City 6 Council session. 7 - - - 8 (Stated Council Session held, then 9 adjourned at 12:16 p.m.) 10 - - - 11 (Recessed Council Committee of the 12 Whole reconvenes.) - - - 19 12/3/98 COMMITTEE OF THE WHOLE - Public Hearing - 980788

This is a recessed hearing of the Council Committee of the Whole. We have two items in front of us: We have Bill No. 980788, which is an ordinance amending Title of the Philadelphia 7 Code, entitled "Finances, Taxes and Collections"; 8 And we also have Bill No. 980843, which 9 is an ordinance adopting a comprehensive new 10 pension plan for City employees by restating and 11 amending their retirement system ordinance 12 approved. . . a long time ago. 13 Are the Administration witnesses 14 present? 15 (Administration witnesses come 16 forward.) 17

The first bill I'd 18 like to consider is Bill No. 980788, the Keystone 19 Opportunity Zone bill. Is there any member of Council that has a question for the Administration on Bill No. 22 980788? The Chair recognizes Councilman Cohen.

At this point, I just want clarification from the Chair of the 20 12/3/98 COMMITTEE OF THE WHOLE - Public Hearing - 980788 general content of the bill. Which is it; is the pension bonds, the pension recodification, or Keystone Opportunities?

It's the Keystone Opportunity Zone bill.

Okay, very good.

Does any member of Council have questions about Bill No. 980 --

I know Councilwoman Blackwell stated to me that she had questions. If this is the Keystone Opportunity --

I'm okay, I'm fine.

She's okay.

She's okay. I have no questions.

You have no 19 questions?

I have none.

Any other member have any questions about Bill No. 980788. (No response.)

Now, I understand a series of amendments was offered. Do the 21 12/3/98 COMMITTEE OF THE WHOLE - Public Hearing - 980788 Councilmembers have the amendments? There's a big package of amendments. Do the Councilmembers have these proposed amendments? This -- fundamentally, these are -- these amendments. . . clear up some technical questions, and it is my understanding that they offer -- the description of the sites are actually defined by metes and bounds?

Yes, Council President. My name is Steve Mullin, Commerce Director with the City. Where we do not have a BRT parcel number, we have to put in the metes and bounds or other description. The vast bulk of the verbage that you see there are the non-BRT parcel number -- information.

All right. Now, it is my understanding that -- does everyone have a copy of the amendment that says at the top, "Exhibit 2, , Line 31?" And then it says "insert," and there's a bunch of detail there. And then there is amendments to Bill 24 No. 980788, Exhibit 1, , Line 25; Exhibit 1, , Lines 2, 3, and 5, does everyone have 22 12/3/98 COMMITTEE OF THE WHOLE - Public Hearing - 980788 that? Do you have all of those? And then you have the big amendment to the one bill. These are all amendments to the Keystone Opportunity bill. Is there anybody that has any question about any other proposed amendments? There's a large packet of amendments.

Where is it?

It was given to you at the public hearing. If we don't have extras, somebody dies. The extras are now being distributed, so nobody has to die; we can all live. This is a whole series of amendments that are fundamentally technical. And the Chair wishes to have a motion that these amendments not be read into the record but that they're available to all members of Council and that all members of Council have them.

So moved.

Is there any objection to our including these amendments in the record but not reading them laboriously into the record? There are many, many, many, many pages. 23 12/3/98 COMMITTEE OF THE WHOLE - Public Hearing - 980788 The Chair recognizes Councilman Cohen.

Mr. President, do I understand that there are two sets of amendments to this bill? First those outlined in this very heavy package.

Yes.

And then, secondly, a two-page additional supplement.

Those are all of the amendments.

Very good.

Those are all of them. You know, these lawyers get on my nerves. I tell you, they really do get on my nerves 'cause they -- now, Richie, come and tell us what you want to say now. (Richard Feder comes forward.)

Thank you, Mr. President. Richie Feder from the--

Please identify yourself.

Identify yourself for the record. 24 12/3/98 COMMITTEE OF THE WHOLE - Public Hearing - 980788

I was trying to. Thank you, Mr. President. Richie Feder from the Law Department. At the public hearing earlier this week, Mr. Mullin --

Make it brief.

Mr. Mullin distributed large package of amendments as well as that Exhibit A -- the exhibit -- Charlie, what does that say?

It says "Exhibit A to Exhibit 5."

Right, that was distributed last week as part of the package. That was a last-minute description which we --

Is it in the package?

It is not in the package, but it was distributed.

All right, make copies. (Copies of amendment made and distributed to all present Councilmembers).

Does everyone now 25 12/3/98 COMMITTEE OF THE WHOLE - Public Hearing - 980788 have Exhibit A to Exhibit 5? Does everyone have it? Does anyone have any questions on it? (No questions.)

The Chair recognizes Councilwoman Verna.

Thank you, Mr. President. I just wanted to make the record very clear. Mr. Mullin, we are not deleting, as it would appear, on of the Navy Yard Girard Point Philadelphia Naval Hospital. We're very simply referring to that area now as "Lower Delaware River?"

That is correct.

Thank you.

The Chair recognizes Councilman Cohen.

Mr. President, I have a single sheet of paper entitled "Exhibit A to Exhibit 5."

That's it, that's it.

So we now have -- 12/3/98 COMMITTEE OF THE WHOLE - Public Hearing - 980788 and that's going to be offered as an amendment?

Yes, it has been 00 it was already previously offered, but it wasn't a part of the package, and we are now making sure that everyone has it.

'Cause that's -- nothing on that sheet indicates it's an amendment; it doesn't indicate what it is.

Well, I understand that, but it has previously been -- it is an amendment.

Okay, very good, sir.

Any questions? The Chair recognizes Councilman Rizzo.

Just one question to Mr. Mullin. And I understand that this may not be applicable right now, but in the futre, is the liquor-by-the-drink tax exempt?

No. 22

Thank you.

Any questions from any other members of Council on any of these proposed amendments? 27 12/3/98 COMMITTEE OF THE WHOLE - Public Hearing - 980788 (No response.)

If not, we will stand in recess on Bill No. 980788.

Mr. President.

We are now out of recess and back on the record.

Thank you, Mr. President. Mr. Mullin, at a later date, if there are other areas that want to be included in this ordinance, would that be possible?

No. This is -- this will be the final version of what the City will allow to go into our application.

Thank you.

Thank you very much. Any other questions? The Chair recognizes Councilwoman Clark.

Mr. Mullin, all of this submission is on the assumption that we will be selected as a Keystone Opportunity Zone, yes?

Well, it's -- I don't want to assume that we will be accepted, but this is 28 12/3/98 COMMITTEE OF THE WHOLE - Public Hearing - 980788 all so that we will be able to submit an application. This is a required step in that application. And perhaps I'll also note, none of this is in effect if we are not selected by the State.

But it's a nullity if you don't get accepted.

Exactly.

But to follow up on the question that Councilwoman Verna asked, perhaps we would not be permitted to enlarge our scope, but would it ever be possible to substitute? I mean, are we locked to these specific sites exclusively and only forever?

Yes, we are, on that. We can, as I testified on Monday, we can drop a portion of what we agree here from putting in the application. And, again, if there are things that come up, like developments we know or things like that, we cannot include something in the application. But once the application goes in on December 31st, that's locked out for the next is 12 years, yes. 29 12/3/98 COMMITTEE OF THE WHOLE - Public Hearing - 980788

Councilman Cohen.

Wait a minute.

I'm sorry, Councilwoman.

Then, in looking at your map, was an attempt made to apply for a Keystone Opportunity Zone in places other than where there have been other developmental efforts such as Model Cities or the Enterprise Zone?

I think we actually attempted to look at all 145 square miles of the city to find out whether there would be appropriate subzones at a minimum of acres 15 under the guidelines, so we didn't restrict 16 ourselves to any particular areas. 17 Now, the fact that a lot of these areas 18 that would be appropriate also fall in Enterprise 19 Zones or Empowerment Zones because those are areas 20 where there's -- (Unintelligible; parties speaking over each other.)

Exactly. So there is a lot of coincidental. But our initial search was through the entire city to find any areas that we 30 12/3/98 COMMITTEE OF THE WHOLE - Public Hearing - 980788 could possibly include.

And the smallest site is acres? 5

The minimum for any of the 6 12 subzones has to be 20 acres. And I think the 7 smallest is about 35 acres or so. 8 And it's not completely contiguous. We 9 had to gerrymander a little bit of that, which is 10 allowed by the State. 11

Okay. When are 12 you expected to make your submission? 13

December 31, 1998 is the 14 last day that we can submit, so we will have it in 15 before then. And we expect the State to make 16 their decision sometime in either February, March, 17 and it would be retroactive to January 1st of 18 1999. 19

But you have an 20 estimated completion date in mind; what is it? For submission.

For our submission?

Mm-hmm.

I'd like to say that we're not racing up there on the 31st, so I hope that 31 12/3/98 COMMITTEE OF THE WHOLE - Public Hearing - 980788 we'll have it done the week between Christmas and New Year's for our application.

Okay. And we have until then -- what we do today is the last word that we have on it; is that what you're saying?

Uh, yes.

Okay.

The Chair recognizes Councilwoman Krajewski.

I just want to make sure I understand. The Northern Shipping will be known as the "Upper"?

It will be in a group in upper Delaware, yes.

And also, the I-95 will be known as what, the --

The I-95 will be --

Is it Lower Delaware --

The area below up Tioga would be known as "Middle Delaware."

Right. And then we have Northern Shipping, which is --

Which we are now calling 32 12/3/98 COMMITTEE OF THE WHOLE - Public Hearing - 980788 "the Upper Delaware."

Thank you.

Sure.

The Chair recognizes Councilman Cohen.

Mr. Mullin, would it be a fair characterization of the bill to say that it is narrowly tailored to cover only blighted areas?

If I could amend that by saying only blighted areas and certain that the City owns now that aren't necessarily blighted, like in our industrial parks. With that one adjustment, I would say I think that's a good characterization.

Well, are you saying the City-owned property are also blighted? Or they may not be; is that what you're saying? I'm just not clear.

They're deteriorated, but they might not be in as bad a condition as the private parcels, correct.

But all the privately owned parcels are blighted areas; is 33 12/3/98 COMMITTEE OF THE WHOLE - Public Hearing - 980788 that correct?

I don't know if you mean legally blighted through our City Planning. But are they all dilapidated and vacant and underutilized?

Yes.

Yes.

All right, thank you.

The Chair recognizes Councilman Nutter. Councilman Nutter, your light is on; do you wish to be recognized?

Yes, I'm sorry. I didn't hear you, Mr. President.

The Chair recognizes Councilman Nutter, then Councilman Rizzo.

Thank you. Mr. Mullin in the response that we received to the questions raised the other day -- this is the December 1st letter -- on question number 4, if you would expand your research effort beyond just the Michigan Renaissance Zones to -- again, it's my understanding that possibly subsequent to the passage of the Michigan 34 12/3/98 COMMITTEE OF THE WHOLE - Public Hearing - 980788 Renaissance Zones that in Michigan, there may be some legislation that has been passed that does prohibit municipalities in Michigan from offering incentives that abate school taxes for economic development purposes. So if you could expand your search beyond the Renaissance Zone legislation, I would appreciate it.

Okay.

Secondly, I do not completely understand the response to question number 7 where you say, "Attached is a memo from Mr. Feder that a person who does not own the property living on a non-residentially-zoned KOZ property would be eligible for the wage tax and income tax exemption." What -- where is this person living under that description? Are we talking about in an apartment?

I think the intent of that answer, Councilman Nutter, was in response to Councilman Cohen's concern that someone might be unlawfully living in a non-residential zone, yes, in a rental property, one that he does not own -- 35 12/3/98 COMMITTEE OF THE WHOLE - Public Hearing - 980788 a squatter, perhaps, or a rental property.

Well, are there any any rental properties in non-residentially-zoned KOZs?

There certainly should not be any, but the question was asked, What if someone is living there, even if not zoned for residential?

Okay.

And the answer is: if they're living, they are entitled to the exemption, and it's our job to get them out because they're violating the zoning laws. But they are entitled to the exemption; that was the answer to the question.

Okay. All right, thank you.

The Chair recognizes Councilman Rizzo.

Mr. Mullin, the area that we're designating as Keystone, do we have any knowledge whether or not any of the -- any of the area are hazardous waste, or have any of them been identified as being potential problematic areas 36 12/3/98 COMMITTEE OF THE WHOLE - Public Hearing - 980788 where there would be remediation? Or do we know of any situations like that that exist anywhere in the zone?

I think, in some cases, we do know that there's environmental problems; and in some cases, we have a real strong suspicion, even though we haven't gotten in there. These are dilapidated buildings that one -- they're on our on demolition list, and we probably have a good suspicion that there could be environmental problems there. And especially if it's not our land. If it's private, we wouldn't have necessarily checked. But we do know that there's probably a very good chance. And, in fact, one of our guidelines was to try to identify parcels that do have -- that do have environmental problems that are hindering redevelopment of those parcels.

So all of the City L&I requirements, all of the requirements that would be needed for construction of a new facility would hold -- stay in place? There would be no 25 exception or no laxing off of any of these 37 12/3/98 COMMITTEE OF THE WHOLE - Public Hearing - 980788 regulations because a company would want to come into a -- or a business would want to come into the Keystone areas?

Absolutely. They would all hold. And in fact, the current owner of the property -- if it is not us, the current owner of the property has to have everything -- all code violations taken care of, all liens paid off, all taxes paid off before they can take one minute's worth of the benefits.

Thank you. Thank you, Mr. President.

Are there any other questions from any other members? (No further questions.)

Is there anyone else in the chamber who wishes to speak on this bill? (No response.)

Seeing no one, we will take it all under advisement. Council will now consider Bill No. 23 980843. The Chair recognizes Mr. Mullin.

When I said it has to be 38 12/3/98 COMMITTEE OF THE WHOLE - Public Hearing - 980843 paid off for delinquent taxes, they have to be under agreement is what I mean; not that it does not have to be fully paid. Thanks.

Any other questions? (No further questions.)

We will now consider Bill No. 980843, pension recodification. (Administration witnesses come forward.)

Please identify yourself for the record.

Ben Hayllar, Director of Finance. And in that capacity, Chairman of the Pension Board. With me is Joe Herkness, the Executive Director of the Pension Board; and Deputy City Solicitor Deborah Butler from the Law Department.

Does anybody have any questions for this team of witnesses that are here to give us anything we want except lunch? The Chair recognizes Councilman Cohen.

Mr. President, I 39 12/3/98 COMMITTEE OF THE WHOLE - Public Hearing - 980843 offered hearing two proposed amendments, and I would like to hear from the Administration what their position is.

Councilman Cohen, I need you to speak into that microphone. Hold it up just a little bit.

All right, I'll try again. I offered two amendments to this bill 11 during the previous public hearing stage. My general impression was that it's at least, as to one of them, that the Administration was in agreement; that is the select group of or 15 people. 16

We're never in agreement 17 Councilman, Cohen. We have no objection to the 18 amendment concerning the people in Local 2186. 19

Well, then, at the 20 appropriate time, I would introduce the amendment 21 and we can attach the statement that there would 22 be no objection to it by the Administration, all 23 right?. 24 And as to the second one, I will offer 25 a revised version of that amendment. Mr. 40 12/3/98 COMMITTEE OF THE WHOLE - Public Hearing - 980843 President, on the five-year vesting provision, I have a proposed amendment which is different than the amendment I presented the other day in that it makes it very clear that if there's a five-year vesting period for anybody, it ought to apply to all City employees, and that will be the purpose of the amendment. I can circulate it at this time or ask that it be circulated.

All right. Can we get copies of the amendment. This isn't an amendment to an amendment; this is a new amendment, right?

Well, this is a -- I'm going to substitute this amendment for the previous amendment.

Thank you, that's what I wanted to make clear.

May I ask that this be distributed?

I would like for somebody to --

Actually, this amendment is the same in substance as the amendment that I offered at the public hearing. 41 12/3/98 COMMITTEE OF THE WHOLE - Public Hearing - 980843

Councilman, let's just -- that description doesn't help us at all. What we need to do is have someone get copies of all of the amendments or the proposed amendments to each member of Council so that we know that every member of Council has a copy of every proposed amendment.

I understand, Mr. President, that there's now going to be distributed -- the Administration has a copy of the one that referred to the small group of people?

Yes. Councilman Street, this is Deborah Butler. Charlie McPherson or the sergeant-at-arms is now distributing the proposed amendment that covers the transfer of the or so 19 employees from Plan M to Plan J. They are 20 currently in Plan M, and they'll be --

From M to J?

M to J. M as in "Mary," J as to "John."

Couldn't it be M as in "Martha?" 42 12/3/98 COMMITTEE OF THE WHOLE - Public Hearing - 980843

Martha is good, too.

It covers a small group. The only group the --

Councilman Cohen, let us get all of the amendments. We'll deal with them all.

Okay.

You don't have to argue the amendment before it's in front of us. We'll have a chance to get to that. Now I just want to make sure that every member has all of the proposed amendments, and we'll kind of walk through them.

Very good, sir.

Mr. Erickson, please approach the Chair. (Mr. Erickson comes forward and confers with President Street.)

If I can have your attention, Councilmembers, please. Amendments in hand, can each Councilmember get your amendment. I want to make sure everyone has everything that we have in front of us. There was a proposed amendment to Bill 43 12/3/98 COMMITTEE OF THE WHOLE - Public Hearing - 980843 No. 980843, which is an amendment that is offered by Councilman Nutter. Does everyone have the Nutter amendment? Can I -- this is the amendment that says: "Further as to members of Plan L, any part of this ordinance that represents an increase or a diminishment in the benefits rights of such member shall not apply to an elected official during any term of office to which such official was elected. . . " Ba-ba-ba-ba-ba-ba. Does everyone have that amendment, the last one handed out? Does everyone have that? Is there anyone who does not have that amendment? (No response.)

All right. Now, there is a proposed amendment regarding vesting within five years. This is Councilman Cohen's amendment. I think it was just recently distributed.

Yes.

Is there anyone who does not have that amendment? (No response.)

And then there are 44 12/3/98 COMMITTEE OF THE WHOLE - Public Hearing - 980843 three amendments -- proposed amendments to Bill 3 No. 980843. Number 1 starts to amend Section 1 by amending the Table of Contents of Title 22 by adding, after 22-806, installment payments. Do you see that? It's number 1, it's the first amendment on the page. Does everyone see that? It amends Section 1 by amending the Table of Contents. I want to make sure that everyone has it 'cause they all look alike.

We don't have that.

It's two pages.

That's the Monday amendment, Councilman.

They're making copies now. You're lost because you don't have it. All right, may I have your attention, please, may I have your attention. To the stenographer, we are on the record. The Council session that we previously recessed until o'clock will now stand in recess until 1:30. For anybody who's interested in that Council session, it will be in recess till 45 12/3/98 COMMITTEE OF THE WHOLE - Public Hearing - 980843 approximately 1:30. If it's going to go on longer, we will make such an announcement. We are now in consideration of -- this is the Council Committee of the Whole for those who may have entered the chamber. The amendments are still being copied and collated.

Are we recessed?

No, no, no, no, no, no, no, no, no, no, no. Please don't leave, don't leave.

May I ask, what is now being distributed is the totality of the amendments?

I want every member to have in his or her hands every amendment that we will consider.

I have a question with respect to that.

Yes.

There is now being distributed two pages, which begin with the big title "Proposed Amendments to Bill No. 980843."

Yes. 46 12/3/98 COMMITTEE OF THE WHOLE - Public Hearing - 980843

I am asking whether these two amendments, whether these two pages constitute the totality of the amendments being offered by the City Administration to this particular bill.

Can we -- can we just hold that question until we get everything in our hands and then we can go down the proposed amendments sort of one at a time and then we can get to that.

Yes.

'Cause it could be confusing if we do this now and then wait, and then you'll get handed other pieces of paper, okay?

All right, yes.

All right. It is now my understanding that Councilmembers have a series of pieces of papers that we are going to refer to as proposed amendments. I see Councilman Ortiz shaking his head. Councilman Ortiz does not have that. Can we please make it available to him. He now has it. 47 12/3/98 COMMITTEE OF THE WHOLE - Public Hearing - 980843 All right. Now, does -- I'd like to start from the beginning. Does everyone have an amendment regarding elected officials and benefits, the amendment that's being offered by Councilman Nutter?

It would be easier if you put names on it.

All right. Just put "Nutter" at the top, that's what I did. It's the Nutter amendment. Now, there's an amendment that ou should have just gotten that reads, "Proposed Amendments to Bill No. 980843." The first number on the page has "Amend Section 1 by Amending the Table of Contents of Title 22 by Adding. . . (Ba-ba-ba-ba). . . Installment payments." Does everyone have that? It's two pages. The last section says, "Separation Prior to Minimum Retirement Age. . . (ba-ba-ba- ba-ba-ba). . ." Does everyone have those two pages. Is this an Administration amendment?

Yes, Councilman.

So we put at the top 48 12/3/98 COMMITTEE OF THE WHOLE - Public Hearing - 980843 "Administration." Is this the only amendment the Administration is offering?

Yes.

That's clear. Now, I have a piece of paper that says "Proposed Amendment Regarding Vesting Within Five Years." Do you see that? Does everyone have that? We'll call that "Cohen."

Yes.

This is the "Cohen" amendment, all right. Now, it's my understanding that these three amendments are the amendments that members in the Administration wish to have considered. There's a Cohen amendment, there's a Nutter amendment, and there's the Administration's amendment. Now, Councilman Cohen, Councilman Cohen, you had two amendments -- one amendment regarding the -- is that incorporated in the Administration's amendment?

No. 49 12/3/98 COMMITTEE OF THE WHOLE - Public Hearing - 980843

Where is that amendment?

What's that?

Where is the amendment that you plan to offer which deals with the --

The one you identified as the "Cohen amendment" is the amendment. I would like to say that the Administration supports it but --

No, no, no, no, no. 13 Councilman, that's the five-year vest; that's a different amendment.

Yes. That's the 22 people.

All right, there's one another amendment.

You need the 22-people amendment.

That's right, that's the one we're looking for. Now do members of City Council have it? I have it. Are there copies of it?

Is that the 50 12/3/98 COMMITTEE OF THE WHOLE - Public Hearing - 980843 22-people amendment? May I suggest you call that "Cohen-2."

Amendments Regarding Members of AFSCME District Council 47, we all have it.

Well, they're saying they don't have it, Mr. President.

Well, I ask that they get a copy. It's three pages. This is also "Cohen." We'll call this "Cohen-2." There's the "Cohen amendment" and then there's the "Cohen-2 amendment" regarding members of AFSCME distribute Council 47. Does everyone have that?

For some reason, they are not included when everybody else in the city is included; that's why --

Councilman Cohen, let's not argue the amendments now.

No, I'm not arguin; I'm just --

Yes, you are, you're arguing the amendments now. 51 12/3/98 COMMITTEE OF THE WHOLE - Public Hearing - 980843

I'm identifying the bill.

We have it, we have it.

Okay.

We have the bill. Now I would like to start with something easy. Can we start with the Nutter amendment. This is an easy amendment. All right, the Chair recognizes Councilman Nutter.

Mr. President, I have a document that reads "Proposed Amendments to Bill No. 980843." In parentheses it says "Amendments Regarding Members of AFSCME D.C. 47."

Yes.

Cohen-2.

Cohen-2.

That's Cohen-2.

Yes.

What is this one that reads at the top "Proposed Amendment Regarding Vesting Within Five Years"? 52 12/3/98 COMMITTEE OF THE WHOLE - Public Hearing - 980843

Cohen-1.

That's Cohen-1.

And then there's "Proposed Amendment Regarding Members of AFSCME Local 21-86."

No, that's Cohen-2.

That's an old one. Discard that one.

Thank you.

Are we all right now?

Yes. Thank you, Mr. President. Sorry.

Can we take an easy one? Let's just sort of ease into this. Is there anyone who has any questions about Councilman Nutter's amendment? This amendment is done, and my understanding is that it only impacts three members, and those are the three members that came on this Council in the election that saw Councilman Nutter come to this Council. And I think it's Nutter, Kenny, and Blackwell. And this kind of makes sure that they 53 12/3/98 COMMITTEE OF THE WHOLE - Public Hearing - 980843 aren't voting for something that has the effect of increasing their compensation. It keeps everyone out of trouble. Is that the bottom line here?

Yes.

You know, there's all the Wiener case and that all that -- you can't increase your own compensation and all. And rather than run the risk, this amendment is designed -- and for the rest of us, it has no 12 impact,. Is that correct?

That is my understanding, Mr. President. Councilman Kenney and myself and Charlie McPherson tells me that Councilwoman Blackwell may now possibly not be impacted because of her previous service.

Whatever.

It would prevent Councilman Kenney and I from accessing the eight-year vesting provision --

Next year.

-- next year. And 54 12/3/98 COMMITTEE OF THE WHOLE - Public Hearing - 980843 it would require us to only -- to have to be reelected in order to take advantage of the vesting requirement which, at that point in time, it would be --

It wouldn't matter anyway.

But it would not allow us to either not run next year and then take advantage of --

Or not be elected.

That was the second. Or run and lose and take advantage of the eight-year vesting provision; we would not be eligible for it. And that's the purpose of this amendment.

Is there anyone that has any question about that?

Yes.

Councilman Cohen.

Did Councilman Nutter have a question?

No. 24 (Laughter.)

The question I have, 55 12/3/98 COMMITTEE OF THE WHOLE - Public Hearing - 980843 I think the President referred to it, I'm not certain. We are barred from increasing -- we, as members of the Council, are barred from increasing any benefits during our term of office.

"Our compensation," I think, are the words.

Or compensation, whatever it is.

Yes.

I'm asking, does this amendment avoid that problem?

Yes.

Very good.

Because -- right, it makes us ineligible for the provisions that are being passed -- that would be passed today; we would not be eligible for them until after the next election.

And then it becomes moot because if they get reelected, they'll have more than eight --

Under the current pension system, we have to run for reelection in 56 12/3/98 COMMITTEE OF THE WHOLE - Public Hearing - 980843 order to get the ten-year vesting anyway. I don't want to change that situation. We would not be eligible to take advantage of the eight-year vesting right now.

Is there anyone that has any question about that? (No questions.)

Can we put the Nutter amendment to the side for the moment 'cause we all understand that.

(Off mike/ inaudible.)

I'm sorry?

Section 2. The underlying language is added to Section 2.

So this amendment is Section 22-1305, Section 2?

Section 2 is amended to add the underlying language.

Okay, fine.

Can we now go to Cohen-2, Cohen-2. Mr. Hayllar, what is the Administration's position on Cohen-2, the 57 12/3/98 COMMITTEE OF THE WHOLE - Public Hearing - 980843 amendment offered by Mr. Cohen, which has been identified as "Cohen-2." This is the 22-person amendment.

This deals with people in Local 2186. We're fine with it; we do not oppose it.

Mr. Hayllar has indicated that the Administration is not opposing it. Is there any questions about -- does anyone have any questions about this amendment? (No questions.)

Can we now go to the Administration's amendments. Is there any question about the Administration's amendments? Does anybody have any question to ask Mr. Hayllar about the amendments that you have that are labeled "Administration"? Are there any questions at all? Councilman Nutter.

Thank you, Mr. President. These amendments actually may not deal 58 12/3/98 COMMITTEE OF THE WHOLE - Public Hearing - 980843 with this particular issue at all, but in a conversation earlier today -- and I don't know whether this is a question for Mr. Hayllar or Mr. Herkness. But I believe about six months ago or so, we passed a bill that had to do with a hero provision, I believe, for police and fire. The question is whether or not that provision has made it into the recodification bill.

No, Councilman, it hasn't. That arbitration -- the Fraternal Order of Police Arbitration that deals with language that would propose to change the pension ordinance 15 to allow for heroic action interpretation has not been yet passed by Council.

This is on disability?

Yes, sir.

So the bill is still pending?

Yes, sir.

All right, thank you.

Are there any 59 12/3/98 COMMITTEE OF THE WHOLE - Public Hearing - 980843 question for the Administration on the Administration's proposal? The Chair recognizes Councilman Cohen.

When a pension vests, that does not automatically mean that the person whose pension has vested and, say, leaves the government service, the fact that vesting does not mean that that person will start receiving retirement benefits; is that correct?

That's correct.

There's a requirement of age?

Correct.

Thank you, Mr. President.

Thank you very much. Are there any other questions regarding the amendment that we are referring to as "the Administration amendment?"?

I have a question for Councilman Nutter. I want to know if he qualifies on the age question or not.

Councilman Cohen refuses to dignify such a question from a youth. 60 12/3/98 COMMITTEE OF THE WHOLE - Public Hearing - 980843 (Laughter.)

Can we now consider the proposed amendment regarding vesting within five years. This is Cohen's amendment number 1. The Chair recognizes the Finance Director, Mr. Hayllar.

The Administration opposes this amendment. It's slightly different than the one we'd seen yesterday and earlier today, so we haven't studied it in depth. First, our opposition is based on the fact that we hold this to be a bargainable issue with the four principal union groups. Secondly, the change that was made from yesterday's amendment, today's amendment, it includes about 2,000 court employees. That creates a problem down the road since we estimate that the court employees will be moved as State employees sometime earlier in the next century. The whole question of how their pension will be treated is a very complicated one. This makes that problem more complicated because, as you know, the State has a ten-year vest, and this group of people would be in a pension plan with a 61 12/3/98 COMMITTEE OF THE WHOLE - Public Hearing - 980843 five-year vest. The State has not resolved how to deal with the pension matters of employees that would move over. This certainly will complicate it. Also, there's something confusing in the amendment that the Councilman has presented in that it covers only current employees. Somebody hired the day after this would go into effect would have a ten-year vest. So this is somewhat confusing and I'm not sure it was the intention. It certainly suggests that there might have been some haste in preparing the amendment. Finally -- and this is the least of our concerns, but I should note it. We will have a massive system with optional five-year or ten-year vesting. It will increase and add an administrative burden to the Pension Fund staff. I believe they can handle it, quite honestly, but it is an additional administrative problem that Mr. Herkness and his people will have. Thank you.

The Chair recognizes Councilman Cohen. 62 12/3/98 COMMITTEE OF THE WHOLE - Public Hearing - 980843

The purpose of this amendment is to treat everybody equitably. The Administration, in the codification bill, proposes that employees who are both exempt from civil service and who are not entitled to be represented by a union will have the option of vesting their pension rights after five years. They will have to pay an increased amount; that is, an increased amount would be deducted from their paycheck if they exercise their option to vest in five years. I believe it is wrong to give a benefit to a select group of people without making that benefit available to all others. If there is any special problem about court employees, then I think it might be appropriate to separate them from the general mix. I don't know how serious that problem is. But except for that possible problem, it seems to me very unfair to have two different standards of vesting. And I would, therefore, suggest that I would find it equally acceptable to eliminate the five-year vesting provision for the exempt non-civil service people who cannot be represented by a union; then we'd have the 63 12/3/98 COMMITTEE OF THE WHOLE - Public Hearing - 980843 standards vesting period. Or if we're going to move to a five-year vesting period, then I think it ought to be applicable to everybody rather than having it just applicable to nonunion members. It seems to me to be very unfair, and that's the purpose of my amendment. And, incidently, it would not cost a penny more because anybody who exercises the option would have to agree to having the deduction from their payroll -- from their check increased. So it's no cost whatever to the City because the employees would pay the full amount of money. And, therefore, I'm trying to prevent a discriminatory situation. And I say as far as I'm concerned, I could go in either direction provided it's applicable to all employees. Thank you, Mr. President.

Mr. Hayllar, would you like to respond to that?

Councilman Cohen, I'm sorry, I was wondering what the rationale was for having a five-year vest for current employees but not allowing that option for somebody who's hired 64 12/3/98 COMMITTEE OF THE WHOLE - Public Hearing - 980843 the day after this bill would go into effect.

I would be delighted to have that included. I was trying to make the demand as minimal as possible with respect to current employees and permitting the normal bargaining process to apply to those who are not yet employees. I would be delighted. I was trying to cut it down by saying, Let's just make it applicable to current employees and credit the Administration with having some freedom in the negotiating process with respect to future employees. But if it creates a problem, I would like to amend this further to have it apply to all employees.

Councilman Cohen. I'm trying to understand this. It is my understanding of all the employees in this city, as the bill currently stands, all the union members will be vesting in ten years.

Yes.

Right? And there are a few thousand people. Those who are ineligible to be in the union, those who are 65 12/3/98 COMMITTEE OF THE WHOLE - Public Hearing - 980843 exempt -- and they primarily work for City Council and for an administration, they come into an administration. My recollection is, the idea was that people who come into an administration don't usually stay -- as a matter of fact, they can't -- almost never stay for ten years. They tend to stay eight and they usually tend to stay less than eight.

That's true, but some of them stay on.

Yeah, some stay on, a few will stay for a full eight years. And I can remember, in some of our discussions about some of this, the idea was that those people, if they have a ten-year vest, they're out. I mean, what's going to happen is -- I mean, pension deductions will be made at the end. They'll leave after 2, 3, 4, 5 years. They'll get their money back, and they basically have to start all over again. It's my understanding the basic idea was to allow those people who are unlikely to be here for ten years, under any circumstances, and 66 12/3/98 COMMITTEE OF THE WHOLE - Public Hearing - 980843 those people who may work for a Councilmember who might be here, you know, for 3, 4, years or so, 4 to be able to vest in 4 years. But it is my 5 understanding that the overwhelming majority of our 25, 30,000 employees will all have the same 10-year vest. And you know, if there is other -- if there is other information to add, it's my understanding that at least that in part was the rationale for carving out this much -- this very -- this really represents a very small group of people and say, Look, we're going to let these people vest in five years if they're willing to pay for it.

Mr. President, my understanding is that the provision does not cover Council employees and that it was crafted purposely to exclude -- for Council employees, I believe the vesting period eight 8 years.

No, sir, they're they're not excluded. They would be included.

They are included.

Well, they -- as far as I know, Council employees don't fit within this 67 12/3/98 COMMITTEE OF THE WHOLE - Public Hearing - 980843 description.

They're exempt employees.

Yes, but they have to meet three conditions. They have to be exempt from civil service, and a Council employee is that, but cannot say to a Council employee, "I know of no law which says that Council employees are not entitled to be represented by a union." Those are words of art which mean that if the issue -- if Council employees sought to be organized by a union, they would have what are call "bargaining unit problems." They may or may not be held eligible for a bargaining unit. But there's no law that I know of that exists now that excludes Councilmembers from forming a union, and this language could easily be used --

Councilman Cohen.

I'd like to get the opinion of the Administration on that.

Well, it will be interesting to see if Council employees try to form a union. 68 12/3/98 COMMITTEE OF THE WHOLE - Public Hearing - 980843

No, I'm not saying that. All I'm saying is that they're not covered by the language that the Administration proposes to it.

That would be interesting. Where's Johnny Morris when we need him? (Laughter.)

If it even said, Mr. President, if it said "And who are not represented by a union. . ." then Council employees would be eligible. But this says they are not entitled to be represented by a union. That's a vastly different thing. Would the Administration agree to remove the words "entitled to be"?

Councilman, the bill 19 presently includes exempt employees any employee who is categorized as exempt. That includes Council staff. They are exempt employees under the present system; they would clearlyb be included by the language of this ordinance.

For a five-year vest. 69 12/3/98 COMMITTEE OF THE WHOLE - Public Hearing - 980843

Yes, sir.

Point of order.

If your scenario of this (unintelligible) could -- you know, anything could change, but they would still be included if they were five-year vesting.

Yes, ten years.

You can't raise a point of order, Councilwoman. That's inappropriate for --

It's a point of clarification.

What's the point of clarification?

I believe that now the legislative history around this amendment would be such to sustain what is meant and, therefore, it would will have met the objection that Councilman Cohen raiseds.

Thank you very much.

Did you understand that?

I understood exactly what you said; I agree with it. 70 12/3/98 COMMITTEE OF THE WHOLE - Public Hearing - 980843

The legislative history surrounding the amendment would be sufficient to show the intention and, therefore, to meet the objection that Mr. Cohen raises by making a distinction between those people who are eligible to be represented by a bargaining unit. By Mr. Herkness's comments that Council staff members meet exemption in every definition covered by the language, I think, would be sufficient. Mr. Cohen, I think you've done an excellent job in raising it. And I think that his answer to your question is sufficiently clear to serve as to what the legislative intent of this body is. Mr. Street, would you like to have me repeat that?

No, I understand that. (Laughter.)

Councilman Cohen, Councilman Cohen, it's my understanding that this amendment would cover uniformed workers as well as workers in District Council 43; is that correct? 71 12/3/98 COMMITTEE OF THE WHOLE - Public Hearing - 980843

Yes.

And at no point in time have I ever heard any of those unions come in here asking us to change their vest from a ten-year vest to a five-year vest. So why are we now offering an amendment to this bill that gives them something that they never even asked us for?

Well, I met with the leadership of all of the unions, and they all requested this amendment. I mean, I can't account for discussions at which I was not present.

I understand that.

But all of the union leadership said they favored strongly this amendment.

But none of that union leadership is in this chamber today except maybe some of the 47 people, but I don't even see the head of District Council 47 in here today. And I have to tell you, we're having a lot of discussion about this, and I have never known the unions to be bashful or shy about coming in here and telling us exactly why they want, and 72 12/3/98 COMMITTEE OF THE WHOLE - Public Hearing - 980843 they're not here doing that now.

Mr. President, I think they're planning to be here on Monday.

And I understand why they're going to be here on Monday; I do not understand why it is you are -- you are urging this amendment and they are not here today.

Well, I can't answer for them, Mr. President. They make their decisions.

The Chair recognizes Councilman Nutter.

Thank you, Mr. President. I'd like to go back to the area where Councilman Cohen started with this, which was the equity discussion. Mr. President, you began to explain what the original purpose was of this provision in the pension recodification bill that deals with the exempt-from-civil-service person. If I could ask either Mr. Hayllar or Mr. Herkness for some further discussion on that particular point. As you went through this process, what did you -- what did you think you were trying to 73 12/3/98 COMMITTEE OF THE WHOLE - Public Hearing - 980843 cure and how did you get to five years? If --

Okay. The major problem is that there are many employees of the City exempts who are appointed for the term of the Mayor. And because the Mayor can only serve two terms in this city, they will only be here for eight years. Therefore, they cannot vest.

Are most of the people that we're talking --

Yes.

In that category? I mean, how many people are we talking about?

In the administration bill --

Councilman, the total number of exempts, including assistant district attorneys, which are numerous, and the Law Department attorneys, is 1100. But that includes -- at least half of them are attorneys that are hired by the City.

The attorneys in the Law Department or the attorney's in the DA's office?

Yes. 74 12/3/98 COMMITTEE OF THE WHOLE - Public Hearing - 980843

I asked you two different questions; you said "yes."

The second question is, Why five years? I think we've answered the question of why ten years is not particularly equitable for this particular group of employees. The second question is, Why five? Because what we have seen from our own practice is that the inability to offer a pension to a manager that's coming in and who is not going to come for the entire, say, eight-year period of time, that during the course of any administration, there are vacancies, the Capital Programs Office is perhaps the largest one. The individual in charge not going to be there for more than four years. What has happened is, it's a disincentive to come to work for the --

Four or eight years.

Yeah. It's a disincentive to work for the City. They do not have the option of having a pension. They get their contributions back, they don't even get interest on that. 75 12/3/98 COMMITTEE OF THE WHOLE - Public Hearing - 980843 What you've seen is historically a pattern of managers at that level working for two years and moving on. And what happens is -- and I can tell you that I know this 'cause I was subject to it. That after two years, you begin to realize what you're losing in terms of not having a pension option. And, therefore, five years seemed to be an equitable number where there is a longer-term commitment to the City that's more than one term but it is certainly less than the probably impossible-to-reach ten years, and it encourages people who traditionally have been with us for two, three years to stay longer. That was the rationale for it.

Why didn't you just move it to eight?.

Because unless you were here on the first day of the new administration, you will not get a pension. So when you are recruiting for a manager, particularly in a technical area -- when you're recruiting for a manager in the second or third year of the term, eight years will not provide them with a pension. 76 12/3/98 COMMITTEE OF THE WHOLE - Public Hearing - 980843 Five years also in pensions is sort of the general number in which vesting is approved in the private sector, so there's a consistency there. That's why five chosen over six -- just because it tends to be what you see in the private sector.

Well, let's go back to -- the flip side of this discussion, as Councilman Cohen laid it out, is take that provision out, and is there anything that prevent us at that point from waiting to see what happens in future contract negotiations if, under the premise -- and we'll make the argument for the moment of -- I'll hold to your argument that this is a bargaining issue. Unions negotiate the contracts in 2,000. Suppose they do, in fact, bargain for this and the vesting number comes down? There's nothing to prevent us from going back and making, for the non-exempts, the number the same as whatever the unions negotiated for.

That is correct. Historically, however, this has not been an issue that stayed on the negotiating table for terribly 77 12/3/98 COMMITTEE OF THE WHOLE - Public Hearing - 980843 long; maybe that changes this time. The reason we're proposing it now is -- 'cause this will not benefit the Rendell Administration, obviously. That the next mayor coming in, and during that period of time when the next mayor is beginning to put together the look of the administration, this gives that mayor an extra tool to recruit people. He won't have that if you wait till the negotiations are completed in the year 2,000. You've lost six months easily; probably something significantly more.

I understand that. Are there examples of people who decline to come here because of the pension issue?

In my own experience, yes, it's been a contributing factor in a number of cases where you're trying to recruit professionals, and the lack of viable pension option was an issue. And then keeping them once they're here, you get that two-year, two-and-a-half-year cycle that we're so familiar with, and they are offering this to some of our really strongest 78 12/3/98 COMMITTEE OF THE WHOLE - Public Hearing - 980843 people who you would want to keep.

I understand. But, again, if contracts expire June 30, 2000, the negotiations are whatever they are. And if the issue is bargained, theoretically, somewhere within the first year of that mayor's term, the issue could, in fact, be legislatively resolved.

That is correct. By passing it as suggested in the recodification ordinance you would give the new mayor the opportunity to use that tool starting in November, when people begin to think about what the structure of their administration's going to be instead of waiting until the administration has already begun. There's no what-if's to offer somebody, like, Maybe I'm going to get this, this is an option. If you're with us for five years, you will vest. And when I was younger, it didn't matter that much to me, but I can tell you that at a certain age, you start thinking about the pension and the fact that, gee, you don't got one, and it makes a big difference as to whether you 79 12/3/98 COMMITTEE OF THE WHOLE - Public Hearing - 980843 stay.

Gentlemen, I think we might have a break-through here. The Chair recognizes Councilman Cohen.

Mr. President, I feel that the position I have stated has great merit, but I also feel that the matter of pension recodification that's taking place is a very important thing, and I don't want in any way to have the five-year vesting period interfere with the overall question, particularly since on Monday, we're going to be discussing another aspect on the COLA. And under those circumstance, I will withdraw this amendment known as "Cohen-1" in the interest of our moving forward with the recodification generally and the conversation of the COLA bill on Monday.

I thank you, Councilman Cohen. You do know we appreciate that. Does anyone else have any question of any person on any amendment? (No questions.)

Thank you very much. 80 12/3/98 COMMITTEE OF THE WHOLE - Public Meeting - 980788 The Council Committee of the Whole public hearing is now in recess. - - -

We will now convene a public meeting on the Council Committee of the Whole. We will now be in a public meeting of the Council Committee of the Whole. The Chair recognizes Councilwoman Verna for a motion on Bill No. 980843 -- I'm sorry, on Bill No. 980788 as it relates to the amendments.

Mr. Chairman, I move that the amendments stand approved on Bill 14 No. 980788. (Duly seconded.)

All those in favor, let it be known by saying aye. Those opposed, say nay. The ayes have it. The bill is amended. The Chair recognizes Councilwoman Verna for a motion on this bill, as amended.

Mr. President, I move that Bill No. 980788 be reported out of committee with a favorable recommendation, as amended; also a recommendation that the rules of 81 12/3/98 COMMITTEE OF THE WHOLE - Public Meeting - 980843 Council be suspended so as to permit first reading at our next session of Council. (Duly seconded.)