COUNCIL OF THE CITY OF PHILADELPHIA2 COMMITTEE ON LAW AND GOVERNMENT3 Room 400, City Hall6 Philadelphia, Pennsylvania Thursday, March 24, 20117 2:05 p.m. PRESENT: COUNCILMAN WILLIAM K. GREENLEE, CHAIR10 COUNCILMAN W. WILSON GOODE, JR. COUNCILMAN JACK KELLY11 COUNCILMAN JAMES KENNEY BILL 100303 - An Ordinance providing for the13 submission to the qualified electors of the City of Philadelphia of the proposal set forth14 in a Resolution approved by Council proposing an amendment of The Philadelphia Home Rule15 Charter providing for a mandatory Budget Stabilization Reserve...16 RESOLUTION 100314 - Resolution proposing an17 amending to the Philadelphia Home Rule Charter providing for a mandatory Budget Stabilization18 Reserve... - - -20 2
Good2 afternoon, everyone. This is the3 Committee on Law and Government.4 For the record, we have a5 quorum with myself, Councilman Kenney,6 the Vice Chair of the Committee,7 Councilman Goode and Councilman Kelly.8 Ms. Marconi, will you please9 read the bill and resolution before us.10
100303, an11 Ordinance providing for the submission to12 the qualified electors of the City of13 Philadelphia of the proposal set forth in14 a Resolution approved by Council15 proposing an amendment of The16 Philadelphia Home Rule Charter providing17 for a mandatory Budget Stabilization18 Reserve; and authorizing the appropriate19 officers to publish notice and to make20 arrangements for the special election.21 Resolution No. 100314,22 Resolution proposing an amendment to the23 Philadelphia Home Rule Charter providing24 for a mandatory Budget Stabilization25 3/24/11 - LAW & GOV'T - BILL 100303, ETC.1 Reserve, and providing for the submission2 of the amendment to the electors of3 Philadelphia.4
Thank5 you.6 Ms. Rhynhart, would you like to7 be our first witness.8 (Witness approached witness9 table.)10
These11 will be a lot easier than these budget12 hearings. Nice break for you here.13
Good afternoon.17 Rebecca Rhynhart, Budget Director.18 Good afternoon, Councilman19 Greenlee and members of the Committee on20 Law and Government. I am Rebecca21 Rhynhart, Budget Director for the City of22 Philadelphia. I am here to testify on23 behalf of Bill No. 100303 and Resolution24 No. 100314.25 3/24/11 - LAW & GOV'T - BILL 100303, ETC.1 Bill No. 100303, introduced by2 Councilman Kenney, provides for the3 submission to the voters of a ballot4 question approving an amendment of the5 Philadelphia Home Rule Charter. The6 Charter change language is set forth in7 Resolution 100314, which establishes8 requirements for the creation of a9 mandatory Budget Stabilization Reserve,10 more commonly known as a rainy day fund.11 The establishment of formal12 requirements for a rainy day fund is a13 prudent budgeting practice, as it14 provides a financial cushion to be used15 only in times of significant financial16 distress. We commend Councilman Kenney17 for his leadership on this issue and18 strongly support this proposal.19 This proposal would require20 deposits into the fund when the City's21 projected fund balance is at least three22 percent of General Fund appropriations.23 Once deposits are made, the proposal24 would cap the Budget Stabilization25 3/24/11 - LAW & GOV'T - BILL 100303, ETC.1 Reserve at five percent of General Fund2 appropriations. If such an amount is3 amassed in the fund, no further deposits4 need to be made, even if the City is5 running a surplus.6 The proposal also provides7 restrictions on when money in the fund8 can be utilized so that the fund can be9 tapped only in situations, for example,10 when the City faces a significant11 economic downturn and revenue receipts12 are significantly lower than anticipated.13 We have seen over the last few14 years the significant impact the economic15 downturn has had on the City's budget.16 The formation of a rainy day fund would17 help cushion the blow of future economic18 downturns or other major disruptions to19 the City's revenues or expenses.20 Our understanding is that the21 sponsor has an amendment to establish the22 date of the special election at the23 General Election in November. We have24 also worked with the sponsor on some25 3/24/11 - LAW & GOV'T - BILL 100303, ETC.1 proposed clarifying amendments regarding2 the Charter change language. With those3 amendments, the Administration strongly4 supports this proposal, which hopefully5 will help us deal more easily with times6 of financial difficulty in the future.7 This concludes my testimony and8 I'm happy to answer any questions you may9 have.10
Thank11 you, Ms. Rhynhart.12 Are there any questions?13 (No response.)14
We're15 just agreeing all over the place today.16 This is great.17
Thank20 you. Yes. I said it was going to be21 easier than the budget process.22
See,24 Councilman Green is not here either.25 3/24/11 - LAW & GOV'T - BILL 100303, ETC.1 Sir, do you want to testify?2 UNIDENTIFIED SPEAKER: Sam is3 on his way.4
Mr. Katz5 is on his way? Okay. We'll wait. We're6 in a good mood today. We'll wait.7 Councilman Kenney.8
Thank you,9 Mr. Chairman. Let me explain. The10 initial amendments are changing the date,11 which was incorrect, for the November12 election for the Charter change, also13 adding additional information relative14 to, I think, legislation we recently15 passed regarding general circulation16 publications.17 The other amendments are on18 at the bottom. It says that, "The19 annual operating budget ordinance shall20 provide for appropriations to a Budget21 Stabilization Reserve, to be created and22 maintained by the Director of Finance as23 a separate" -- actually, I think you can24 probably read all this that's in italics.25 3/24/11 - LAW & GOV'T - BILL 100303, ETC.1
There's3 some additions there. On Paragraph 2,4 "When the Projected General Fund Balance5 for the end of the fiscal year to which6 the operating budget relates (the7 'upcoming fiscal year'), without taking8 into account any deposits to the Budget9 Stabilization Reserve required by the10 subsection (2), equals or exceeds three11 percent of the General Fund."12 So not until we hit three13 percent do we start putting it in, and I14 believe it's capped at five.15 So one of the things I think is16 important to recognize is that we're not17 looking to take money that could be used18 in future years for service provision,19 but taking a portion of the surplus and20 putting it aside for times like we've21 just been through in the last couple of22 years.23 So everyone has a copy of the24 amendment. Do you want to go into the --25 3/24/11 - LAW & GOV'T - BILL 100303, ETC.1
Yeah.2 All right. We'll conclude our public3 hearing temporarily, in case somebody4 else wants to say something. But we'll5 go into the public meeting, and the Chair6 recognizes Councilman Kenney.7
Thank you,8 Mr. Chairman. I move that the amendments9 to Bill No. 100303 be approved.10 (Duly seconded.)11
It's been12 moved and seconded.13 All in favor please say aye.14 (Aye.)15
Hearing18 none, the amendments are approved.19 Councilman Kenney.20
Thank you,21 Mr. Chairman. I move that Bill No.22 100303, as amended, be reported out of23 this Committee with a favorable24 recommendation and a request made for25 3/24/11 - LAW & GOV'T - BILL 100303, ETC.1 rules suspension to allow first reading2 at our next Council session.3 (Duly seconded.)4
It's been5 moved and seconded.6 All in favor say aye.7 (Aye.)8
Hearing11 none, the bill, as amended, is reported12 out of Committee with a favorable13 recommendation and a rules suspension.14 Once again, the Chair15 recognizes Councilman Kenney.16
Thank you,17 Mr. Chairman. I move that Resolution18 100314 be amended accordingly.19 (Duly seconded.)20
It's been21 moved and seconded.22 All in favor please say aye.23 (Aye.)24
Opposed?25 3/24/11 - LAW & GOV'T - BILL 100303, ETC.1 (No response.)2
Hearing3 none, the amendment is adopted.4 Councilman Kenney.5
Thank you6 very much, Mr. Chairman. I move that7 Resolution 100314, as amended, be8 reported out of this Committee with a9 favorable recommendation.10 (Duly seconded.)11
It's been12 moved and seconded.13 All in favor?14 (Aye.)15
Hearing18 none, the resolution, as amended, is19 reported out of the Committee with a20 favorable recommendation.21 For the record, the testimony22 of Mr. Katz and Mr. Butkovitz will be23 made part of the record.24 Oh, he just walked in.25 3/24/11 - LAW & GOV'T - BILL 100303, ETC.1 Well, Mr. Butkovitz, your2 written testimony wowed us so much, we3 already approved the bill and resolution.4
Thank9 you, sir.10 So as I previously stated, the11 testimony of Mr. Butkovitz and Mr. Katz12 will be made part of the record.13 There being no further business14 before this Committee, the Committee is15 adjourned.16 (Committee on Law and17 Government concluded at 2:15 p.m.)18 - - -19 13 CERTIFICATE2 I HEREBY CERTIFY that the3 proceedings, evidence and objections are4 contained fully and accurately in the5 stenographic notes taken by me upon the6 foregoing matter on March 24, 2011, and that7 this is a true and correct transcript of same.8 9 10 11 12 --------------------13 MICHELE L. MURPHY14 RPR-Notary Public15 16 17 18 (The foregoing certification of this19 transcript does not apply to any reproduction20 of the same by any means, unless under the21 direct control and/or supervision of the22 certifying reporter.)23 24 25