COUNCIL OF THE CITY OF PHILADELPHIA COMMITTEE ON APPROPRIATIONS - - - Room 400, City Hall Philadelphia, Pennsylvania Wednesday, March 5, 2008 10:30 a.m. - - - PRESENT: COUNCILWOMAN JOAN L. KRAJEWSKI, CHAIR COUNCILMAN DARRELL L. CLARKE COUNCILMAN W. WILSON GOODE, JR. COUNCILMAN CURTIS JONES, JR. COUNCILMAN JACK KELLY COUNCILMAN JAMES KENNEY COUNCILWOMAN MARIA QUINONES-SANCHEZ COUNCILWOMAN DONNA REED MILLER BILL 080150 - An ordinance authorizing transfers in appropriations for Fiscal Year 2008 within the Grants Revenue Fund... BILL 080151 - An ordinance authorizing transfers in appropriations for Fiscal Year 2008 within the General Fund... BILL 080152 - An ordinance authorizing transfers in appropriations for Fiscal Year 2008 within the Aviation Fund... BILL 080153 - An ordinance authorizing transfers in appropriations for Fiscal Year 2008 within the Water Fund... - - - V A R A L L O Incorporated Litigation Support Services Eleven Penn Center 1835 Market Street, Suite 600 Philadelphia, Pennsylvania 19103 215.561.2220 215.567.2670 2
Good morning. The Committee on Appropriations is now in session. Will the Clerk please read the title of the bills.
Bill No. 080150, an ordinance authorizing transfers in appropriations for Fiscal Year 2008 within the Grants Revenue Fund from the Director of Finance - Provision for other grants to the Law Department and the Board of Trustees of the Free Library of Philadelphia; and Bill No. 080151, an ordinance 16 authorizing transfers in appropriations for Fiscal Year 2008 from the General Fund, certain or all City offices, departments, boards and commissions and from the Grants Revenue Fund, the Director of Finance - Provision for other grants to the General Fund, certain or all City offices, departments, boards and commissions; and Bill No. 080152, an ordinance 3 3/5/08 - APPROPRIATIONS - BILL 080150, etc. authorizing transfers in appropriations for Fiscal Year 2008 within the Aviation Fund from the Managing Director - Office of Fleet Management to the Managing Director - Office of Fleet Management; and Bill No. 080153, an ordinance 9 authorizing transfers in appropriations for Fiscal Year 2008 within the Water Fund from the Managing Director - Office of Fleet Management to the Managing Director - Office of Fleet Management.
Thank you. Is there someone from the Administration here? (Witness approached witness table.)
Good morning, members. My name is Steve Agostini. I 4 3/5/08 - APPROPRIATIONS - BILL 080150, etc. serve as the Budget Director for the City of Philadelphia and I appear --
Oh, I'm sorry. I appear before you today to offer testimony on Bill Nos. 080150, 080151, 080152 and 080153, which make FY2008 budget appropriation transfers between and among classes and departments in the City's General Fund, Grants Revenue Fund, Water Fund and Aviation Fund. There are a total of 27 transfers requested in Bill No. 080151, including transfers involving a net 18 change in departmental appropriations and 19 seven transfers between classes within a 20 departmental budget that do not result in any net change in appropriations. These transfers total $84,358,773, a majority of which is in the Grants Revenue Fund. The largest increase in appropriation requested is 47,427,378 in 5 3/5/08 - APPROPRIATIONS - BILL 080150, etc. Class 100 fringe benefit funds for the Director of Finance to cover the increased cost of employee benefits as a result of health and medical benefit reopener agreements. 7 million in Class 500 appropriations for an increase in Finance's Indemnities Fund due to the settlement activity higher than budgeted. For Fleet Management's increase in fuel costs, the Administration requests that five million be transferred to Classes 300 and 400. I'm going to try and hit the high notes for the rest of these, and if you have questions, there are a number of representatives from the Administration to answer your questions. Another transfer of five million in Prisons' Class 100 is requested to fund increased overtime costs associated with the census. 1 million is requested for the Department of Public Health to fund 6 3/5/08 - APPROPRIATIONS - BILL 080150, etc. hospital contracts and prescription drugs. 4 million in Class 200 for the Mayor's Office of Information Services, which will fund infrastructure and security improvements to the City's Internet, subpoena investigation requests for electronic data, as well as professional services in Wireless Philadelphia and the PhillyStat/3-1-1 system. 2 million to the Department of Public Property for maintenance and custodial contract cost increases. 2 million is requested for the Department of Human Services, as well as an internal transfer of one million to fund overtime and hiring associated with recommendations of 7 3/5/08 - APPROPRIATIONS - BILL 080150, etc. the Blue Ribbon Panel. These increases in appropriations are made possible in part through transfers of $72 million from the Director of Finance - Provision for other grants and million point 288 in 8 appropriations from the following General 9 Fund. 10 Internal transfers with no net 11 change in appropriation levels include 12 the previously mentioned one million for Human Services' Class 300 and 400 funds to Class 100, as well as some smaller amounts in Licenses and Inspections and Prisons, the Office of Behavioral Health and Mental Retardation Services and Zoning Code Commission. Bill No. 080150, Fiscal 2008 grants, requests additional appropriations for the Law Department in the amount of $9 million to pay additional expenses and commissions to their tax collection co-counsel relating to the City's efforts to collect 8 3/5/08 - APPROPRIATIONS - BILL 080150, etc. delinquent taxes, and the Free Library in the amount of 900,000 to roll over unspent FY07 grant funds from the state for the purchase of library materials. Bill No. 080152 requests approval for a transfer in appropriation to Class 300 for 575,000 for the Water Fund, and this is primarily for the increase in costs of unleaded and diesel fuel, as well as some internal realignment in the Office of Fleet Management. And, finally, for Bill No. 15 080153, which requests the approval of transfer of 178,000 in the Aviation Fund and is an internal realignment of appropriations in the Office of Fleet Management for repair of heavy equipment. I went over these quickly, and if you have questions, there are representatives here. Thank you for the opportunity to provide you with testimony.
Thank 9 3/5/08 - APPROPRIATIONS - BILL 080150, etc. you very much. Regarding Bill 080153, could you tell me the current number of vehicles now being utilized by the Water Department and a breakdown on how the vehicles are used and also the age of the vehicles.
I think we have that, if you would give us a moment. (Witness approached witness table.)
Jim Muller, Fleet Management. We have about 900 vehicles in the Water Department, but I could get you the information on the mileage and the years of that equipment.
Okay. 10 3/5/08 - APPROPRIATIONS - BILL 080150, etc. Go ahead.
What were the costs associated with the hiring of experts and outside legal counsel last year and what is the reason for this year's increase? (Witness approached witness table.)
Good morning. Shelley Smith, City Solicitor. The outside counsel fees are related to the departure of senior staff from the Law Department and the inability 11 3/5/08 - APPROPRIATIONS - BILL 080150, etc. to replace that expertise in time to handle matters that came into the Law Department. Based on the timing of the matters that we handle, we needed to hire outside counsel to get involved in the difference in the City in those cases.
Are there any other questions? Councilman Clarke.
Real briefly in response to that -- good morning, Ms. Smith.
The outside counsel that you're hiring, had those positions been budgeted for?
Some of them probably had been budgeted for, but really the issue is also related to the ability to bring people in in a timely manner and the time sensitivity of the legal matters that need to be defended in the interim. 12 3/5/08 - APPROPRIATIONS - BILL 080150, etc.
So would there be excess in your budget because we haven't filled the positions internally?
You said the inability to have people on staff. I thought you said that the positions that were not filled.
I said that there was a departure of senior staff from the Department that coincided with incoming matters that we couldn't then handle in the Law Department and we had to retain outside counsel.
So my question was, have we budgeted for those positions of senior staff? And if we had, where is that money now?
Madam Chair, 13 3/5/08 - APPROPRIATIONS - BILL 080150, etc. Councilmember, these are additional resources that are being asked for, requested for the Department to bring on the expertise. To your question in terms of the staffing and to Councilmember Krajewski's question, I don't have that in front of me in terms of what was spent in the prior year. We'll bring that forward to you. Currently, as I understand it, there are approximately to 13 vacancies in the Law Department. We are 14 having discussions with the City 15 Solicitor and her staff as to how we 16 would fill those, but these would be in 17 addition to that. There is a critical 18 need. There is a shortage of personnel. 19 There's a high turnover, and it has 20 become very difficult, as I understand 21 it, to bring people in on a timely manner 22 in order to take care of the business 23 before the City currently. 24
Okay. My 25 only question was purely budgetary, and I 14 3/5/08 - APPROPRIATIONS - BILL 080150, etc. understand why there's a high turnover. When I look at the private sector as it relates to the pay for lawyers versus the government sector, frankly speaking --
But I will bring that back to you. We'll put that together for you so you can see.
What I'm trying to understand is, the assumption is that we budgeted for the amount as it relates to the senior staff or any other Law Department employees that are currently not in place, and if we have, my question is, where is that money that we budgeted. And now you're asking for additional funding to hire outside counsel to take the place of the staff members that are no longer there.
I think this is to augment what they're doing currently, and we are still working with the Department in order to find a way to either hire up with the positions that were originally budgeted or find some 15 3/5/08 - APPROPRIATIONS - BILL 080150, etc. other solution to that, which we don't have in front of us now.
And if I might add, it is a combination of that and the fact that in the past year, we sustained a higher than typical level of attrition in the Department, so...
So, Mr. Agostini, you'll get more specific information on the budgeted amount versus the additional augmentation and where the revenue is associated with what we authorize?
And I'll try to give you a count as well, sort of a snapshot where we are today based on the most recent payroll in terms of the number of vacancies and how we're trying to address that as well.
Thank 16 3/5/08 - APPROPRIATIONS - BILL 080150, etc. you. Councilman Kelly.
I just have a question on tax collection co-counsel. Who is presently our co-counsel?
Could you tell me how much so far you've allocated to pay them for their services?
Bear with me just one moment. 17 3/5/08 - APPROPRIATIONS - BILL 080150, etc. I don't have here the precise amount that we've allocated to pay them so far, but we pay them a contingent fee based on the amount that they collect, and it's --
No. Actually, for Fiscal Year '08, they've collected $18 million.
Could you tell me what the percentage is? 18 3/5/08 - APPROPRIATIONS - BILL 080150, etc.
We pay them actually the fee. We pay them the fees. They collect their -- I'm sorry. We pay them their expenses. They collect their fees as a percentage of the collections, the amount that they collect. (Witness approached witness table.)
Good morning. I'm Donna Mouzayck, First Deputy City Solicitor. I understand the Linebarger contract is set up so that there is an administrative fee that's paid each year, which is a couple million dollars.
A couple million dollars. I don't have that precise figure, but it's a few million dollars. They get paid, based upon the amount of money that they bring in, the contingency fee.
That's in addition to the service fee? 19 3/5/08 - APPROPRIATIONS - BILL 080150, etc.
Yes, and that's percent. So if anyone can do the 4 math, 18 percent of the 18 million that 5 they brought in to date. And the $9 6 million that we're asking for was because 7 this past year we had initiated a broader 8 program, gave them more referrals so that 9 they did more -- 10
That was 11 another question that I had. Are these 12 property taxes now or is it all taxes? 13
We do have an across-the-board initiative going forward. We have staffed at greater levels in-house to take care of all other kinds of taxes, including Water Department taxes -- Water Department 20 3/5/08 - APPROPRIATIONS - BILL 080150, etc. delinquencies.
So they wouldn't be involved with the Water Department.
But they would not be involved for Linebarger. Linebarger is chiefly only real estate taxes.
So this additional $9 million is to pay for additional expenses and commissions, right?
Right. It's to pay their commission, and if they don't bring it in, then that million doesn't go out the door.
21 3/5/08 - APPROPRIATIONS - BILL 080150, etc. Councilman Rizzo, and then we'll hear from Councilwoman Miller.
Thank you, Madam Chair. To the Budget Director, in reference to Bill No. 080151, could you tell me what the transfer for -- the amount of the transfer to the Mayor's Office of Information Service for professional services to Wireless Philadelphia improvements, in Wireless Philadelphia improvements? How much is that transfer?
I'm going to defer to Mr. Phillis to answer that specifically.
Hello, Councilmember Krajewski and members of the Appropriations staff. Councilman Rizzo, your question was in regards to just the Wireless portion?
We have a project 22 3/5/08 - APPROPRIATIONS - BILL 080150, etc. manager who has been with us for some time. Varinia Robinson is her name, and it's the funds to support her as a contract person.
Mr. Phillis, when we rolled out Wireless Philadelphia, it wasn't supposed to have any cost to the City.
So how do we do that when the deal was no cost to the City?
I don't know how to answer that, because I understand there was supposed to be no cost to the City, but because the City has responsibilities in this project and 23 3/5/08 - APPROPRIATIONS - BILL 080150, etc. because we are looking for how we're going to use this network for our internal use for our government employees to be more proactive out there in the neighborhoods, to be able to do their work online with the right kind of technology, I needed a person to do that, and that's who I retained to do that.
No. The terms of the original deal did not change, but the ability to utilize that technology to further our City initiatives is what I'm using her for.
The next question, what is the transfer for $413,000 to the Streets Department to cover payments to Wireless Philadelphia as required by contract to complete the buildout of the infrastructure to provide 24 3/5/08 - APPROPRIATIONS - BILL 080150, etc. wireless Internet network throughout the City of Philadelphia? Can you explain that $413,000 transaction?
Councilman Rizzo, I'll have to get back to you on that. I don't have that in front of me.
It's in the budget. Transfer of 413 to the Streets Department to cover payments to Wireless Philadelphia. That's pretty much a quote. Is the Streets Department here?
I need to verify this for you, but it may be the cost of the electricity that we get billed from PECO that comes through the Streets Department and is paid for by EarthLink. I need to verify that, because I'm not aware of the number.
Councilmember, I 25 3/5/08 - APPROPRIATIONS - BILL 080150, etc. have an answer to your question on the 413,000.
Point of information. Essentially, Councilman Rizzo is quoting exactly from your testimony. It says an increase of $413,162 in Class 200 Streets Department budget requested to cover payments to Wireless Philadelphia as required by contract to complete the buildout of the infrastructure to provide wireless Internet network throughout the City of Philadelphia. It's actually on your testimony.
It's a pass-through of revenue from EarthLink to us. So there are no net costs to us. It is a pass-through of income from EarthLink to us.
Where do you show the money coming from EarthLink? (Witness approached witness table.) 3/5/08 - APPROPRIATIONS - BILL 080150, etc.
Good morning. Peggy Vanbelle, Deputy Budget Director. The million dollar payment comes in as a locally generated non-tax revenue credited to the Streets Department.
Yes. You would see it in the revenue estimate in the Streets Department in the FY08 budget. I think the issue is, it's not one for one, because the Streets Department had some excess appropriation power, so it's not the exact amount of the pass-through. It's the amount of appropriation power that the Streets Department needed.
And it's definitely for the electricity? This is paying PECO?
Well, that's what we were just told, maybe or 27 3/5/08 - APPROPRIATIONS - BILL 080150, etc. possibility. I think we really need to know what --
I'm just reading this portion of it now. I may know what this is. For the Streets Department, as the wireless initiative was being built out, there was a requirement to hire more inspectors to be able to facilitate a quicker buildout after the proof of concept area. There was $413,000 that was a pass-through because it was being paid for by EarthLink to hire additional inspectors.
No. That's a separate -- this is a totally separate issue, had nothing to do with the million dollars. The million dollars is a pass-through of what EarthLink owes to the City. One was at the completion of the POC and the other one is one year from that, which is May of this year, in which case they owe another million 28 3/5/08 - APPROPRIATIONS - BILL 080150, etc. dollars through the Streets Department that ends up going to Wireless Philadelphia, the non-profit agency.
Mr. Budget Director, I think we're going to really need to talk more about Wireless Philadelphia and now it's starting to cost with salaries and some things that really aren't clear to me. The integrity of that panel is important to me, it is, the information I'm hearing, but I would really like to eventually to the Chair see exactly what we're paying here to support Wireless Philadelphia, this allegedly free transaction that was supposed to occur here.
Thank you. 29 3/5/08 - APPROPRIATIONS - BILL 080150, etc. Good morning. How are you?
I actually meant to ask you this the other day, Mr. Phillis. What is the status right now of Wireless Philadelphia? How much of the City have you done and what else needs to be done?
The current status of Wireless Philadelphia is that the buildout is approximately between 75 and 80 percent of the 135 square miles of the City. That's where we're currently sitting. The far Northeast and the far Northwest have not been built out yet. There are towers out there that have not been -- the leases haven't been signed on those and they do not have a scheduled completion date at this time. EarthLink, I think everyone is aware of, is currently -- they've announced that this wireless initiative for the government is not part of their strategic plans in the future, thus they 30 3/5/08 - APPROPRIATIONS - BILL 080150, etc. have put this and their other networks up for sale. They are in the process of looking for qualified buyers for this network. I can talk a lot more about this if you have a specific question, but that's kind of where we're at at the moment.
No. I can wait until you come up when MOIS has its budget hearing, but the reason I ask the question, you answered. So it is not in the Northwest. That's my part of the City of Philadelphia.
I also would offer to be -- I'd be glad to meet with you and discuss in any detail that you'd like, both you and Councilman Rizzo and anyone else that has those questions. I'd like to tell you everything that we know about it.
Madam Chairman, I'd like to raise a couple of issues, first starting with the Mural Arts Program and the transfer of $40,000 from Class 100 to 200. Is anyone from the Mural Arts Program or can speak for them here? (Witness approached witness table.)
Good morning. I'm Eli Massar from the Mural Arts Program. I'm the Chief Operating Officer.
I understand a lot of these things are performed by young people and young adults. Is that still a part of the process within this budget?
Yes. We serve approximately two to three thousand 32 3/5/08 - APPROPRIATIONS - BILL 080150, etc. children a year here in Philadelphia.
And a part of that is a program directed towards at-risk youth?
The majority of those students are at-risk youth. Some of them are in custody of the correctional system as well as the Department of Human Services.
I'd like a little more information, quantitative information, a breakdown of where these young people come from.
Do you mean which neighborhoods they come from, what their addresses are?
Okay. Because I admire the program. I'm aware of it. Councilwoman Quinones-Sanchez and I were briefed by you guys and thought it was a wonderful program. I just want to 33 3/5/08 - APPROPRIATIONS - BILL 080150, etc. make sure that that continues and to get a better sense of where these young people and what neighborhoods they come from.
I'm happy to provide that information and also assure you that it's very much a part of our mission to continue to do that.
Okay. I mean, sometimes we want to cite good things that folk do, too. It's not all about bad things.
Could I also ask the representatives from the Sheriff's Department I see back there to come up? I have a question.
Excuse me a moment. Would you make sure that you send that to the Chair, the information?
Thank 34 3/5/08 - APPROPRIATIONS - BILL 080150, etc. you.
Excuse me, Madam Chair. Yes, ma'am. (Witnesses approached witness table.)
As you're aware, we had a hearing on the possibility of a moratorium on sheriff's sales. At that time, we asked for certain documentation, information and communications from the Sheriff, and those things have not been forthcoming. Is there a reason why?
Excuse me one moment. Would you please identify yourself for the record?
I'm sorry. I'm Darrell Stewart, Philadelphia Sheriff's, Real Estate, Director of Foreclosure 35 3/5/08 - APPROPRIATIONS - BILL 080150, etc. Preventions.
Tyrone Bynum, Finance Director, Philadelphia Sheriff's Office.
In answer to your question, we're still gathering that information. We did run into -- we had a huge -- well, not a huge. We had a mortgage foreclosure sale just yesterday and our staff was limited, so we haven't had an opportunity to forward that to you, but we are definitely working on it.
How many properties participated in that sheriff's sale yesterday?
Stand by. Properties that were currently scheduled for that sale we totaled 459. That does not include the properties that were postponed from previous sales.
So 459 properties were sold yesterday or a 36 3/5/08 - APPROPRIATIONS - BILL 080150, etc. percentage of them?
No. A percentage of them were sold. Some of them -- we experienced a lot of stays on properties that were scheduled yesterday. Moreover, there were a lot of postponements. I do not have the exact number, because we're still working on the post-sale information at this time.
Do you think that your inability to provide this Council with information that may well have assisted some of those people in that process yesterday, do you think that brings them any comfort, any comfort today that you're working on it?
All right. Let me repeat it again. How many properties were actually sold yesterday?
That I don't know. We're still working on it. I mean, the sale started at 10:00 a.m. It 37 3/5/08 - APPROPRIATIONS - BILL 080150, etc. went until 3:00 p.m. yesterday afternoon.
Okay. Too busy to get my information so that we could help some of those people, is my point. And the point I'm making is that you originally told me we could cooperate and we would try to do this together, but there are at least 200 people roughly yesterday that got their houses sold.
As I said, we experienced a large number of stays and a large number of postponements yesterday.
Okay. If it 38 3/5/08 - APPROPRIATIONS - BILL 080150, etc. ain't measured, it ain't managed.
Excuse me, Councilman. I think most of those questions really should be at our budget hearing.
All right. Okay. I defer to the Chairwoman. I'd like my information so that we can help those people, even if it was one, even if it was one yesterday.
Because we will have our budget hearings starting very shortly on the Operating.
You guys 39 3/5/08 - APPROPRIATIONS - BILL 080150, etc. are off the grill for now. I think the Councilman will get you later on. I'm okay with you. Thank you.
I just had a couple of quick questions about the authorization for overtime in the Prisons, and the reason I ask this question -- and correct me if I'm wrong -- I think in our earlier testimony on the budget, I think that there was a projection of stabilization on the increase in the operations of the Prisons in, I guess, maybe Fiscal '10 or '11, and at that time I was wondering why we thought we would stabilize in terms of increases in our budget for the Prisons at that time, but here we're actually asking for overtime. First, can you tell me what's the purpose of the overtime request, if this is a traditional request. And if that's the case, why do we anticipate in a couple of years it will stabilize in 40 3/5/08 - APPROPRIATIONS - BILL 080150, etc. terms of cost to the Prisons? COMMISSIONER GIORLA: Good morning, Councilman.
Good morning. COMMISSIONER GIORLA: Lou Giorla, Acting Commissioner of Prisons. The request is primarily to cover overtime expenditures, because our vacancy rate of correctional officers at this point is below where we believed we'd be, and our overall vacancy rate has created --
Say that again. COMMISSIONER GIORLA: Our vacancy rate of correctional officers, the number of vacancies we have in the department, has exceeded what we planned for, and in order to operate the facilities, we need to cover that with overtime.
So assuming that we'll ultimately replace those 41 3/5/08 - APPROPRIATIONS - BILL 080150, etc. employees, there will be no need for overtime in the relative future or is there a strategy to replace those employees? Because I know that there are -- COMMISSIONER GIORLA: We have a recruiting plan. We have people assigned to the recruitment process. We've made an informal request to the Mayor to expand our recruiting similar to what the Police Department has done, and we're actively recruiting all the time. We've been authorized to hire to fill the vacancies, and whatever we can do to fill them.