COUNCIL OF THE CITY OF PHILADELPHIA PUBLIC HEARING AND PUBLIC MEETING BEFORE THE COUNCIL COMMITTEE ON FINANCE - - - Room 400, City Hall Philadelphia, Pennsylvania Monday, November 15, 1999 10:15 a.m. - - - BILL 990455 - Approving a Third Lease Amendment Agreement between PGW by PFMC soley in its capacity as operator and manager of the City-owned PGW and the Philadelphia Regional Port Authority for premises known as PGW Lot 1, located near the intersection of Delaware Avenue and Tioga Street. (Being held till call of the Chair.) BILL 990555 - Amending Section 22-310 of The Philadelphia Code, entitled "Deferred Retirement Option Plan" ("DROP"), by specifying that the maximum time an employee may remain in the DROP before being required to separate from City service and retire is four years, not three years. BILL 990679 - Amending Section 19-201 of The Philadelphia Code, entitled "City Depositories," by authorizing the City Treasurer to deposit funds in Pennsylvania Business Bank. PRESENT: COUNCILWOMAN JANNIE BLACKWELL, Chair COUNCILWOMAN MARIAN B. TASCO, Vice Chair COUNCILMAN MICHAEL A. NUTTER COUNCILMAN W. THACHER LONGSTRETH - - - VINCENT VARALLO ASSOCIATES, INC. Registered Professional Reporters Eleven Penn Center, Suite 600 Philadelphia, PA 19103 (215) 561-2220 2 11/15/99 FINANCE COMMITTEE I N D E X Bill 990455 Ramanujan Rajan, Director . . . . . . . . . . 4 Engineering Facilities, Philadelphia Gas Works Bill 990555 Joseph Herkness, Executive Director . . . . . 9 Board of Pensions and Retirement Bill 990679 Joseph Faraldo, Deputy City Treasurer . . . . 13 3 11/15/99 FINANCE COM. - Bill 990455 P R O C E E D I N G S
Would all Members come to chambers. We'd like to get started. Would you please come to chambers. Thank you very much. - - -
Good morning. This is Jannie Blackwell. We need two members to have a quorum of the Finance Committee. If you are in the building, would you please come to chambers so we can have a quorum and begin our hearing. Thank you very much. - - -
Good morning. Our Finance Committee is now in session. We apologize for the delay. Apparently, this is one of those mornings where people have many other appointments. We do have a quorum now. To my left is Councilman Thacher Longstreth. To his right is Councilwoman Marian Tasco, Vice Chair. And to my right is Councilman Michael Nutter. The first bill that we will hear is Bill No. 990455. Will the clerk please read the 4 11/15/99 FINANCE COM. - Bill 990455 bill.
Bill No. 990455, an ordinance approving a Third Lease Amendment Agreement between Philadelphia Gas Works by Philadelphia Facilities Management Corporation soley in its capacity as operator and manager of the City-owned Philadelphia Gas Works and the Philadelphia Regional Port Authority for premises known as PGW Lot No. 1, located near the intersection of Delaware Avenue and Tioga Street.
Thank you. Are there those present who would like to testify? Thank you. Please come forward, identify yourself for the record, and present your testimony. Thank you. (Come forward.)
My name is Ramanujam Rajan. I'm Director of Engineering Facilities with the Philadelphia Gas Works. I'm here to testify today to --
Excuse me. 5 11/15/99 FINANCE COM. - Bill 990455 Would you spell your name for the stenographer, please.
The first name is R-A-M-A-N-U-J-A-N. The last name is R-A-J-A-N.
I'm here today in support of Bill No. 990455, which permits a Third Lease Amendment to an existing lease agreement between PGW and the Philadelphia Regional Port Authority. The Lease Amendment pertains to a lease for 0.24 acres of land located at the intersection of Tioga Street and Delaware Avenue. (Brief interruption due to technical difficulties.)
This is land that was a part of -- this is land that was part of the Richmond Plant. Pursuant to its current lease with PGW, the Port Authority uses this land for parking across the street from its office building located at the intersection of Delaware Avenue and Tioga Street. This Lease Amendment will extend the lease for an additional four-year term beginning as of July 1, 1999. However, the lease provides 6 11/15/99 FINANCE COM. - Bill 990455 that PGW can terminate the lease at any time on 12 months' notice. The Lease Amendment calls for the rental of $235 per month, increased from the rate of $213.29 per month. We believe this to be a reasonable rental for the property in this area and have obtained an estimate of value from Robert Hess confirming this belief. The appraisal was provided to you in the materials submitted with the filing as Exhibit B. In addition to rent, the Port Authority will continue to pay all utilities, taxes, and maintenance associated with the leasehold. PGW believes that the lease, as amended, is favorable to both PGW and the Port Authority for a number of reasons. PGW receives the benefit of income from an asset not currently being used for its operations. It also enjoys the ability to recapture the use of the property on a year's notice, whenever the property's needed for operations. The Port Authority receives the benefit of a parking area for its employees. For these reasons, PGW desires to enter into the Lease Amendment and has received PFMC 7 11/15/99 FINANCE COM. - Bill 990455 board approval for the Lease Amendment. The Philadelphia Gas Commission has also recommended the approval of the Lease Amendment to Council. Thank you for your attention to this matter. I'd be happy to answer any questions that you might have. I also have with me a representative from PGW's legal department who can answer -- who can assist in answering questions. Given the company's desire to implement this amendment as soon as possible, I respectfully request that you move to suspend the rules so that the first reading of the Bill No. 990455 can be at the next meeting of the Council and the second reading and vote the following week.
Thank you. Would you like to identify yourself, please.
Do you have any testimony that you would like to present?
Thank you. Are there any questions from members of the committee? (No questions.)
Thank you very much. That will conclude our discussion on Bill 12 No. 990445.
Bill No. 990555, an ordinance amending Section 22-310 of The Philadelphia Code, entitled "Deferred Retirement Option Plan" ("DROP") by specifying that the maximum time an employee may remain in the DROP before being required to separate from City service and retire is four years -- not three years -- thereby correcting an error in this section by adding Bill No. 990288-A, approved June 9 11/15/99 FINANCE COM. - Bill 990555 28, 1999, under certain terms and conditions.
Thank you. We would like those involved in this to please come forward, introduce yourself, and present your testimony. Thank you. (Joe Herkness comes forward.)
I'm Joe Herkness, Executive Director of the Board of Pensions and Retirement. I'm pleased to appear with testimony before you today in support of Council Bill 15 990455.
My testimony will be brief since the sole purpose of the bill is to 10 11/15/99 FINANCE COM. - Bill 990555 correct a minor and inadvertent error in the Deferred Retirement Option Plan, or the DROP, as it is called throughout City employment. As enacted, the Bill 990288-A, which was approved and signed by the Mayor on June 28, 1999, 990555, for its technical amendment. To put it in context, when the Retirement Code was enacted by Bill 980843, which was approved in January of 1999, it did not include a complete deferred retirement option plan. Instead, the bill directed the Pension Board to draft and submit to Council for its consideration a proposed ordinance setting forth the details of a test Deferred Retirement Option Plant. The Board submitted this test DROP, and on April 29, 1999,, Bill 990288-A was introduced, and it provided the specific details of a Deferred Retirement Option Plan. One element of a DROP is the length of time an employee may remain in a DROP before retiring. Bill 990288-A would have permitted an employee to remain in a DROP for a period of three years. However, that bill was amended on the floor to increase that period, from three years to 11 11/15/99 FINANCE COM. - Bill 990555 four years. It was one of several amendments to that bill, but this specific one increased the length of time of what would be referred to as the "DROP period." Unfortunately, while most of the City Council four amendments were incorporated, due to inadvertent error, Bill 990288-A, as printed and transmitted to the Mayor for signature, failed to include the four-year provision, as cited above. Throughout bill, there was about three or four places that it would be cited. And one or two were included, and in an inadvertent error, we missed certain sections. The purpose of 990555 is simply to correct this inadvertent error by increasing from three to four years the period in which employees may remain in the DROP. Under Section 2 of the bill, the correction would be retroactively effective to the date of the 99288-A, which became law on June 29, 1999 -- I'm sorry, on June 28, 1999. I thank you again for affording me the opportunity to testify, and I would be happy to answer any questions that you might have at this 12 11/15/99 FINANCE COM. - Bill 990679 time.
Thank you very much, Mr. Herkness. Are there any questions from members of the committee? (No questions.)
All right. That will end the hearing part of the discussion on the DROP program. Thank you, Mr. Herkness.
We will now enter into discussion Bill No. 990679. Will the clerk please read the title of the bill.
Bill No. 990679, an ordinance amending Section 19-201 of The Philadelphia Code, entitled "City Depositories," by authorizing the City Treasurer to deposit funds in Pennsylvania Business Bank, under certain terms and conditions.
Thank you. Will those who are here and ready to testify for this bill please come forward, introduce your name to the record, and begin your testimony. (Joe Faraldo comes forward.) 13 11/15/99 FINANCE COM. - Bill 990679
Good morning, Madam Chairperson. My name is Joe Faraldo. And I'm here to testify on Bill No. 990679. However, I'd like to point out, before I review my written testimony, I'd like to mention that there were a couple of proposed amendments that we've included in a marked-up bill that I gave you before the hearing. These amendments were due to an omission and the incorrect numbering of a subsection in the original bill I submitted.
Please, would you please enter these changes for the record.
On in the blank parentheses, we've inserted the letter Z. Below that, we've added the letters double A in Summit Bank. We've changed Subsection 2 to Subsection 3. And on , the letter X was changed to letter Y, and the letter Y was changed to 14 11/15/99 FINANCE COM. - Bill 990679 letter Z. Again, these changes were proposed because a letter was omitted, and the subsection paragraph number was incorrect. So if you would like, I'll give you read my written testimony now.
Hello. I'm Joseph Faraldo, Deputy City Treasurer. I'm here today to testify in support of amended Bill No. 990679, which amends Section 19-201 of the Philadelphia Code relating to authorize City depositories specifically to update the list of financial institutions that the City is authorized to deposit fund. To this end, I have reviewed financial information provided by Pennsylvania Business Bank and have determined that they meet the requirements as described in Section 19-201, Subsection 3, as amended. This concludes my written testimony. And I'm available to answer any questions you may have at this time. Thank you.
Thank you very 15 11/15/99 FINANCE COM. - Bill 990679 much. Are there any questions from members of the committee? Councilwoman Tasco?
We do a number of these transactions in terms of adding banks to the City depositories. Are they automatically -- what is the process for you now depositing monies into these banks? Is it a guarantee that you will deposit money, or you do it when you probably think you ought to? Or what happens now that these banks have been identified as banks to receive City funds?
Well, quite frankly, it doesn't happen very often. Once the banks are added to the list, I guess they can approach the City, and then the City at that point would entertain whether or not to do business with them at that time.
It just adds them to the list of banks that you could deposit your 16 11/15/99 FINANCE - PUBLIC MEETING funds.
So then they have to come back and lobby the Administration --
Are there any other questions from members of the committee? (No further questions.)
All right. This will end our public hearing part of our morning session. - - -
We will now enter into our stated meeting. With regard to -- we call up Bill No. 22 990455, and we are requesting that this bill be held subject to the call of the Chair at another hearing. The next bill is 990555, and the Chair 17 11/15/99 FINANCE - PUBLIC MEETING will entertain a motion. Do we need a suspension on this, Mr. Herkness?
The Chair will entertain a motion that this bill be passed with a suspension so that we can hear it at the next session of Council.
I move that Bill 11 No. 990555 be reported out of committee with a favorable recommendation and a request for a suspension of the rules. (Duly seconded.)
All in favor, aye? Opposed? The ayes have it, and so Bill 990555 will be reported out of this committee with a favorable recommendation and also with a suspension so that it may be heard at our next session of Council. I will now entertain a motion with regard to Bill No. 990679. Do we need a suspension on this? 18 11/15/99 FINANCE - PUBLIC MEETING
Thank you. That it be reported out of committee with a favorable recommendation.
Madam Chair, I move that Bill No. 990679 be reported out of committee with a favorable recommendation. (Duly seconded.)
All in favor, aye? Opposed? The ayes have it and Bill 990679 is being reported out of committee with a favorable recommendation. Let me say that this committee hearing is now -- Mr. Nutter, do you have any questions?
So moved. Mr. Nutter is reported as having voted aye on Bills 990555 and 990679. And as we said, 990455 is being held subject to the call of the Chair. So this will now end our committee 19 11/15/99 FINANCE - PUBLIC MEETING hearing is now adjourned, and let me thank everyone for attending. And I thank you all for your patience. Thank you. (Adjourned at 10:50 a.m.) - - - 20 C E R T I F I C A T E I HEREBY CERTIFY that the foregoing proceedings of the Council of the City of Philadelphia of Monday, November 15, 1999, were reported fully and accurately by me, and that this is a correct transcript of same. RE: COUNCIL COMMITTEE ON FINANCE BILL NO.'S 990455, 990555, 990679 __________________________________, JOSEPHINE CARDILLO, Registered Professional Reporter