Committee Hearing, February 19, 2002

COUNCIL OF THE CITY OF PHILADELPHIA PUBLIC HEARING BEFORE THE COUNCIL COMMITTEE ON APPROPRIATIONS (FY '03 BUDGET HEARING) - - - Room 400, City Hall Philadelphia, Pennsylvania Tuesday, 2/19/02 9:55 a.m. - - - BILL 020037 Authorizing transfers in appropriations for FY '02 within Grants Revenue Fund from the Director of Finance - Provision for Other Grants to the Police Department and the Board of Trustees of the Free Library of Philadelphia. BILL 020038 Authorizing transfers in appropriations for FY '02 from the General Fund, certain or all City offices, departments, boards, and commission 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. BILL 020039 Authorizing transfers in appropriations for Fiscal Year 2002 within the Aviation Fund from certain or all City offices, departments, boards, and commissions to certain or all City offices, departments, boards, and commissions. COUNCILMEMBERS PRESENT: Joan L. Krajewski, Chairperson Michael A. Nutter, Vice Chairperson Jannie L. Blackwell Darrell L. Clarke Donna Reed Miller Angel L. Ortiz - - - VINCENT VARALLO ASSOCIATES, INC. Registered Professional Reporters Eleven Penn Center, Suite 600 Philadelphia, PA 19103 (215) 561-2220 2 2/19/02 APPROPRIATIONS COMMITTEE HEARING INDEX WITNESS Robert Dubow, Budget Director.................... Rick Tustin, Capital Program Office.............. 6 Thomas Costello, Commissioner Of prisons......... 22 7 Ed McLaughlin, Commissioner of L&I............... 34 8 Robert Solvibile, First Deputy Commissioner, L&I 34 9 Patricia Smith, Director, NTI.................... 39 10 Mary Platt-Coles, Deputy Commissioner............ 67 Department of Recreation Donna Mouzayck, Esquire, Law Department.......... 71 Nelson Diaz, Esquire, City Solicitor............. 73 Eva Gladstein, Executive Director................ 80 Philadelphia Empowerment Zone Linda Berkowitz, Deputy Secretary................ 82 Financial Oversight Karl Bortnick, MOIS.............................. 89 Kevin Cross, Deputy Court Administrator.......... 93 Financial Services, First Judicial District William Mifflin, Executive Director.............. 96 Fairmount Park Commission 3 2/19/02 APPROPRIATIONS - BILLS 020037, 38, 39

Good morning. The Committee on Appropriations is now in session. Will the clerk please read the title of the bills.

Bill No. 020037, an ordinance 6 authorizing transfers in appropriations for Fiscal Year 2002 within the Grants Revenue Fund from the Director of Finance - Provision for Other Grants to the Police Department and the Board of Trustees of the Free Library of Philadelphia. Bill No. 020038, an ordinance authorizing transfers in appropriations for Fiscal Year 2002 from the General Fund, certain or all City offices, departments, boards, and commission 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. 020039, an ordinance 20 authorizing transfers in appropriations for Fiscal Year 2002 within the Aviation Fund from certain or all City offices, departments, boards, and commissions to certain or all City offices, departments, boards, and commissions.

Before we begin, 4 2/19/02 APPROPRIATIONS - BILLS 020037, 38, 39 I would just like to take a moment to recognize Troupe from the Boy Scouts of America. They're 4 here today with their troupe leader, Mr. Wayne 5 White, working towards their citizenship merit 6 badges. Welcome. 7 Do you want to stand up so we can see you? 8 (Troupe members stand up.) 9 (Applause.) 10

Welcome to City 11 Council. You are indeed a credit, believe me. 12 Do we have someone from the Administration 13 to testify? 14 (Witness comes forward.) 15

Good morning, Councilwoman 16 Krajewski and members of the Appropriations 17 Committee. My name is Rob Dubow, and I serve as 18 Budget Director for the City of Philadelphia. 19 I appear before you today to offer testimony on Bills No. 020037, 020038, and 020039, which make Fiscal Year 2002 budget appropriation transfers between and among classes and departments in the City's General Fund, Grants Revenue Fund, and Aviation Fund. I have shown in Exhibit A, attached to 5 2/19/02 APPROPRIATIONS - BILLS 020037, 38, 39 this testimony, that there is a total of 36 transfers requested in Bill No. 0020038, including transfers involving a net change in departmental 5 appropriations and 9 transfers between classes 6 within departments that do not result in any net 7 change in appropriations. 8 The largest increase in appropriation 9 requested is $12 million in Class 200 funds for the 10 Department of Licenses and Inspections to cover 11 demolitions and other NTI-related activities. 1 million in Class 100 and 200 14 appropriations for the Philadelphia prison system 15 to cover overtime expenses resulting from 16 higher-than- anticipated inmate population levels 17 and the cost of inmates being housed in Delaware 18 County. 8 million for the Department of Public 21 Property's Class 200 appropriation of which $3 million is an internal transfer from its Class 800 and $1 million transferred from telecommunications Class 200 appropriation. The increased appropriations will cover the costs of 6 2/19/02 APPROPRIATIONS - BILLS 020037, 38, 39 security upgrades in City facilities made in response to the terrorist attacks on September 11th. 1 million is requested in the Fire Department's appropriation to offset overtime expenses incurred as a result of the bioterrorism response and costs related to the arbitration award. 5 million to fully fund expected contractual obligations for outside legal counsel. Increases are requested in the Department of Recreation's Class 200 Veterans Stadium Complex appropriation in the amount of $413,698 to cover higher insurance costs and contract costs due to prevailing-wage rate clauses. And in the Department's Class 100 appropriation, the amount of $73,197 to cover overtime costs related to conversions of Veterans Stadium field for football and baseball uses and for salary increases. The Sheriff requests an additional $400,000 in Class 100 appropriation to cover overtime costs related to increased anti-terrorism 7 2/19/02 APPROPRIATIONS - BILLS 020037, 38, 39 security in. Additionally, the Administration requests $361,875 to fund increases in the City's contract for legal services with the Defender Association of Philadelphia to cover office moving expenses and additional rent in the Association's new location. An increase of $327,509 is requested from the Mayor's Office of Community Services to fund Empowerment Zone staff salaries and related expenses that were previously funded through a grant. The Administration also requests $300,000 in the Director of Finance Class 200 appropriation and $289,938 in the First Judicial District appropriation for lease payments for Community Court. Another increase in appropriation is requested for the Fairmount Park Commission. This appropriation of $240,731 is primarily to fund volunteer coordinator positions and maintenance of the Johnson art collection. Other departments requesting increases include the Commission on Human Relations, $105,000; and the Atwater Kent Museum, $9,809. 2 million from the Director of Finance - Employee Benefits line -- those funds are available because there were fewer employees than had been included in the budget. Additionally, there's $872,493 available from the Department of Human Services because the State did not include funding for some requested support in the needs-based budget.

Internal transfers, where there's no net increase in appropriation level, includes $469,108 from Class 100 to Class 200 within the Mayor's Office of Information Services to cover contractual staff support; $225,00 from 200 to 300 and 400 within the Department of Public Health to purchase medical supplies for neighborhood health-care centers and the public lab; $129,062 from Classes 300 and 400 to Class 200 within the Police Department to cover drug testing, helicopter 9 2/19/02 APPROPRIATIONS - BILLS 020037, 38, 39 insurance increases, and automated fingerprint identification system maintenance. Other internal transfers include the Office of Fleet Management for $85,842 to be transferred from Class to Class and 400; City Treasurer for $19,844 from 2 to 100; and the Capital Program Office for $4200 from Class 200 to Classes 3 and 400. I have testimony on the other bills. Would you like me to read those now, or should we just do questions on the first bill first?

No, we'll go with the first bill.

Okay.

My question is, can someone give us more detail regarding the security improvements planned for City Hall and the MSB?

Yeah.

What kind of improvements? how long will the improvements take? and when will they begin?

I'm going to have Rick Tustin of the Capital Program Office to come up here and give that detail. 10 2/19/02 APPROPRIATIONS - BILLS 020037, 38, 39 (Witness comes forward.)

Good morning.

Good morning, Councilwoman. My name is Rick Tustin and I'm actually the Director of the Capital Program Office. After the events of September the 11th, our office was asked to come in and look at City Hall, MSB, and One Parkway as the initial areas of improved security, for improved security. We met with several firms, outside firms, to put together a plan of what we feel needed to be done for these three buildings to increase the security. And we actually ended up with a detailed list of for 15 City Hall in particular, 16 subprojects that we 16 felt needed to be done. Those projects include: Site security work, which includes installation of new bollards around the perimeter of City Hall. These are what they call "pipe bollards," which actually go at the curbline, which protect the building from vehicles being able to be driven up on the sidewalk and getting underneath the building or adjacent to the building. Addition of some security cameras around 11 2/19/02 APPROPRIATIONS - BILLS 020037, 38, 39 the exterior of the building as well so that security personnel can see what's happening outside the building before it gets inside the building and hopefully be proactive in taking counter measures. In addition to that, we would be making security improvements to all the exterior doors, looking at putting in a card-access system on all the exterior doors so that people who want to access the building, employees in particular, would use a card-swipe system that would allow them to enter the building at any time. It would also record the time and date that they entered the building as well. In addition to that, on the exterior of the building, we would be putting in new portal gates around the exterior of the buildings. Those portal gates would be opened and closed daily by the Department of Public Property so that it would restrict access to the courtyard of City Hall during after-hour times. And, also, we looked at how you could enter the building of City Hall, because that's always a concern, how you can get unauthorized entrance to the building. We found there are 12 2/19/02 APPROPRIATIONS - BILLS 020037, 38, 39 several ways of getting entrance to the building itself without being observed. One area is through the basement area. On the northeast corner, there's an old tunnel that goes into a concourse entrance that has been inactive for years, but yet it's still -- people can get through if they want to, so we'd be sealing off that entrance. We'd also be looking at securing all of the grating around the perimeter of City Hall. Right now, the grating, which goes over an area, which would then lead you down into the basement area, can be picked up. They're only in four-foot sections of metal grating, so we would have to secure that so it would not be able to be picked up and get moved so people could get access down there. In addition to that, after we looked at the exterior of the building and how you get into the building, then we started to look at the interior of the building itself and what we could do to improve security within the building. The northeast corner and the northwest corner have been traditionally the public access into City Hall during normal working hours. We met with the 13 2/19/02 APPROPRIATIONS - BILLS 020037, 38, 39 Department of Public Property and the Police Department and other departments as well to look at putting in a security kiosk at each one of those entrances that would have security personnel staff there, as well as a turnstile system that again would be activated through a card access. There would also be a queuing area for visitors to come and sign in, to leave some form of identification, at which point they would be given a security badge to go into the building.

We have not resolved the issue of whether those people should be escorted from staff within the building up into the building or whether they would be just given a visitor's badge, and as long as they had some sort of identification that they would leave at the security desk, they would have to come back and pick it up. In addition to that, we're also looking at improving the security within the floors of City Hall. We're looking at doing that through a series of cameras within the hallways of City Hall as well as metal detectors as well at several of the entrances. In addition to that, we're looking at 14 2/19/02 APPROPRIATIONS - BILLS 020037, 38, 39 this City Council chamber here. We've been asked to look at what we can do to secure this room and provide some sort of a separation between the gallery area and the Council area itself up front here. We've looked at putting in some sort of a plexiglass system so that people would be able to observe what's going on, but there would be a level of enhanced security, enhanced security, for City Council sitting in chambers. In addition to that, we're going to create a security fire command center, which will be located in the northeast corner behind what's known as freight elevator, and that security console and that security command center will be the point where all the cameras throughout City Hall as all of the detectors on the doors would be tied back into that station. People manning those consoles will, through walkie-talkies, have direct access to the security staff that would roam through City Hall, and so if there was a breach of an entrance or if they were notified of something that was inappropriate, they would be able to contact somebody to go investigate it right away. So we've actually looked at many, many 15 2/19/02 APPROPRIATIONS - BILLS 020037, 38, 39 ways of improving the security of City Hall, and we've put together some preliminary numbers to do that work. And although I've just given you a brief overview, we actually do have a full PowerPoint presentation -- I'd be willing to come and give you one -- of the actual security of the building. As far as timing is concerned, several of the projects I just mentioned we've already designing in-house: The bollard system around the perimeter, the securing of the tunnel, the grating around the perimeter, as well as the modifications of the first-floor windows we've already started documenting in-house. We can't implement it until we have the funding to do that, but we wanted to get the design done. We've met with the Historic Commission and Art Commission on several of the projects. We've discussed them with the Department of Licenses and Inspections and Procurement so that the normal time that it takes to move projects through, we can try to cut some of that down and move projects through quicker on this type of work, 'cause it is security for the building. 5 million of security.

There were recent articles in newspapers regarding federal money becoming available for the homeland security for cities wishing this type of improvement. This money would be available through grants. Will the City's expenditure, the $8 million or so, be replaced if and when the federal dollars become available? Could you walk us through this process? When will the federal money become available and what other plans does the City have for federal money?

We're actually in the process -- let me take a step back. As we understand what President Bush included in his budget was reimbursement for costs going forward for security matters that we're actually putting together estimates of our costs like from this point forward and we'll put it in a package that we'll send to the feds to seek reimbursement, and we will include these costs in that package. We're not sure of what their timing is and we don't know what amount of money we would get out of that.

But it will 17 2/19/02 APPROPRIATIONS - BILLS 020037, 38, 39 become available?

There's money available in the federal budget, but we don't know what they'll wind up approving and what they won't approve.

I understand. Any questions?

A couple.

Councilman Nutter.

Thank you, Madam Chair. Mr. Tustin, thank you for the overview. Now, does that somehow relate to -- testimony in our package today in Public Property talks about security improvements to City Hall, MSB, and One Parkway. These improvements include close-circuit cameras, etc. The estimated cost of these improvements is $8 million

Yes.

Is that the same as the -- is the 6.5 million for City Hall a part of the 8 million?

Yes, yes it, does, Councilman. 18 2/19/02 APPROPRIATIONS - BILLS 020037, 38, 39

All right. And let's talk about funding. I understand from Mr. Dubow's testimony that we're going to make application to the federal government, but as he indicated, and I think as we all know, that remains to be seen, and the feds' fiscal year starts in October. What are we going to do on our own to speed up this process and allocate any dollars to make sure that funds are available for these three main buildings here in Center City? The $8 million in the Public Property testimony, where is that?

It's a transfer ordinance. That's what we're --

That's what the $8 million is for?

Yes, yes.

Okay, so you're doing these out of operating?

That's right.

Okay, all right. And what's the timetable for these various projects?

Well, as I said previously, we've broken 'em down to 16 subprojects because it was a good way of us getting our hands around the 19 2/19/02 APPROPRIATIONS - BILLS 020037, 38, 39 amount of work. The first four projects, which are the bollard projects and the security grating enclosing the tunnel area and the windows, we would hope to start the implementation of that as soon as the transfer money is available. As I said, the design work is almost complete for those four subprojects, so we'll be able to move on them very quickly once we have money available. One of the things I forgot to mention was the elevators on the northeast and northwest side of the building will also be improved as part of the security. We will be adding some additional cameras to that as well. And that design work is actually already underway; we had funding to proceed with hiring a design firm to evaluate all of the elevators within the building and then give us the cost to upgrade the elevators, particularly in the northeast and northwest corner. So that work underway as well. And actually, none of the installation can actually start until we have the funding approved through this transfer ordinance to start the work.

Can you forward to the 20 2/19/02 APPROPRIATIONS - BILLS 020037, 38, 39 Chair a fairly detailed schedule with your estimations on start and completion date of the various projects?

Yes.

And, Mr. Dubow, just so that I better understand, on your Schedule A, the reason I asked the earlier question, I didn't see $8 million for Public Property.

Oh, because there's some internal transfers in Public Property, so you see less than the full amount because there are savings in their Class 800, which is the water bill, and there's savings in 100, which is telecommunications, so we used that to offset some of these costs

Okay, all right. Thank you. That's all I have on that particular issue, Madam Chair. I will have other questions.

No other questions?

I have other questions that are not related this.

I would like to 21 2/19/02 APPROPRIATIONS - BILLS 020037, 38, 39 get into the prisons.

You mean questions about prisons.

You don't really want to get into the prisons; you just want to talk about them. (Laughter.)

Do we have someone here?

Yeah. The Commissioner is coming up.

Okay. (Witness comes forward.)

Good morning, Commissioner. COMMISSIONER COSTELLO: Good morning, Councilwoman.

As much as I respect you, I take back that other statement. What is the current prison population? COMMISSIONER COSTELLO: The current prison population today is a little over 7600.

I'm sorry, I'm sorry, excuse me. Please state your name for the 22 2/19/02 APPROPRIATIONS - BILLS 020037, 38, 39 record. COMMISSIONER COSTELLO: Thomas Costello, C-O-S-T-E-L-L-O, Commissioner Of Prisons. To my left Ed Semanski, who is our Fiscal Officer.

Thank you. You may continue, Commissioner. COMMISSIONER COSTELLO: Our population today -- I just received the latest number -- is a little over 7600; that's the total population that the prison system is responsible for. The actual number is 7667, and that includes 6,860 males and 797 female inmates.

Excuse me, repeat that. COMMISSIONER COSTELLO: That's 6,860 male inmates and 797 female inmates.

What is the capacity for prisoners outside the City, for example, in Delaware County and other areas where we transport our prisoners when our jails become overcrowded? COMMISSIONER COSTELLO: The capacity right now is 450.

Is the prison cap 23 2/19/02 APPROPRIATIONS - BILLS 020037, 38, 39 going to become an issue again, do you believe, and what is the City doing to address the growing number of prisoners in our prison system? COMMISSIONER COSTELLO: I'm sorry, Councilwoman. Could you repeat the first part?

Is the prison cap going to become an issue again? What is the City doing to address the growing number of prisoners in our prison system? COMMISSIONER COSTELLO: The City cap -- the actual cap for the prison system, as far as the courts are concerned, was eliminated in 1995. The last cap, the official cap that we had, was 5600. We do have a goal to reduce the population at least to the level that we would not require to take inmates or house inmates outside of the prison system. Looking at the numbers today, the self-imposed goal, I guess, for the City would be around 7,000. Given the numbers that we're housing outside the prison system, that would be a reasonable goal to try to maintain. There are a number of initiatives that are -- that have been undertaken by the Office of Population Management, including a lot of 24 2/19/02 APPROPRIATIONS - BILLS 020037, 38, 39 alternatives to incarceration. There are -- there's also a new facility being constructed that will open in the early part of 2003, which will also will add relief to the system and provide additional beds, about 768 additional beds total.

Thank you. Are there any questions?

Yes.

Councilman Nutter.

Mr. Costello -- or Commissioner Costello, I didn't understand a part of your response. The cap that had been lifted was 5600; did you say that? COMMISSIONER COSTELLO: Yes, sir.

Okay. And where did that number come from? COMMISSIONER COSTELLO: That number came from the court, from the federal court.

Okay. And what was that based upon? COMMISSIONER COSTELLO: That was based upon the standardized capacity of the Philadelphia prison system, I believe, in 1990, when the 25 2/19/02 APPROPRIATIONS - BILLS 020037, 38, 39 moratorium first kicked in.

Okay. And so why would we have a goal that is 1400 more? COMMISSIONER COSTELLO: Because since the time of the cap that was placed on the City, we've added several thousand beds to the system.

Well, what's the capacity of the system now? COMMISSIONER COSTELLO: Well, the operating capacity right now inside the system would be determined on the classification of the overall population and how much space would be needed to dedicate to each aspect of that classification. On a normal day, with the number of beds --

I have no idea what you just said. I heard the words; I do not know what they mean. COMMISSIONER COSTELLO: For example, we have about 850 beds dedicated to the female population. On any given day, if the population is below 850, then those beds -- then we do not take -- we have -- that's the capacity for the female population. If the population grows and we 2/19/02 APPROPRIATIONS - BILLS 020037, 38, 39 have to -- based on the classification of the inmate, that would be the first classification right now, male and female. If the population would increase, then we would have to take beds away from the males, and that would affect the total number of male beds that would be available. So --

Do you move the females into the male area? COMMISSIONER COSTELLO: We would not move the females into the male area; we would take beds from the male population and --

Physically move beds out of the male area into the female area? COMMISSIONER COSTELLO: Not move beds. Probably operations, or pick a part of the facility or another small facility.

All right, let me ask it this way: How many beds do we have available for people to sleep on? Or how many cells do we have to house people? What -- I mean, I'm still back at the first question. What is the capacity of the system?

Councilman? 27 2/19/02 APPROPRIATIONS - BILLS 020037, 38, 39

Yes?

Councilman Ortiz.

We keep speaking about beds and you could place beds in the hallway.

No, I understand that; that's why I wanted to talk about cells.

Okay, that's the point that I wanted to get to. COMMISSIONER COSTELLO: There are no beds in the hallway, Councilman.

All right, good. COMMISSIONER COSTELLO: Councilman Ortiz, there are no beds in the hallway.

How many cells are there, how many rooms are there? What is the physical capacity of the system? COMMISSIONER COSTELLO: Councilman, I will give you the physical capacity of the system. I will give you the number of beds in the system, but that will not give you the physical capacity at any given time.

Why. Does everybody not get a bed? COMMISSIONER COSTELLO: Because there are 28 2/19/02 APPROPRIATIONS - BILLS 020037, 38, 39 beds that are dedicated to certain classifications that cannot be used for anything but that classification. For example, we have 400 beds dedicated for intake; those 400 beds have to be available at all times for an intake population that cannot used by anyone else but new inmates coming into the system that are quarantined for three days.

Right. COMMISSIONER COSTELLO: So even though I'm going to give you a number, the number will not reflect, for instance, the number of inmates that we can hold in the prison system under standardized conditions. And that number is 7256.

What? What is 7256? COMMISSIONER COSTELLO: 7,256 beds within the system either in cells or in dormitory settings.

All right, why don't we do this: Why don't you give us, through the Chair, a chart laying out all of the facilities, all of the beds, who they are dedicated to, and how they're used; and then in a separate box, show me how they are being used today, as we speak, for the 29 2/19/02 APPROPRIATIONS - BILLS 020037, 38, 39 population that you have. COMMISSIONER COSTELLO: Okay, Councilman.

That would be helpful 'cause, I mean, we could, like, stay for the rest of the day, the Chair would be very upset with me, and eventually we could get, like, to an answer, but why don't we do that. COMMISSIONER COSTELLO: Okay.

Thank you.

Councilman Ortiz.

You said cells and dormitory settings. What is the difference between a dormitory setting and a cell? COMMISSIONER COSTELLO: A cell holds no 16 more than two inmates. Under the American Correctional Association's definition for a cell, under the physical plant standards, a cell holds one or two individuals. A dorm holds anywhere between 3 and 50. So 3 and 50 are considered dormitories -- a dormitory, and a cell would be considered one or two.

How many of the inmates today are in dormitory settings? By "dorm," you mean sort of like a barracks-type of setting in 30 2/19/02 APPROPRIATIONS - BILLS 020037, 38, 39 which they share one bathroom, the shower, or whatever it is? COMMISSIONER COSTELLO: They would be in an area that would hold less than two and three or more. I could give that information to you, Councilman. I'd have to break it down.

You don't have how many there are today in dormitory settings? COMMISSIONER COSTELLO: I have the number here. I have the housing and assignment plan which delineates each area, but I would have to break that down in each facility because, for example, some facilities have both dorms and cells. So I would have to break that down and just tell you how many dormitory beds are available in each facility and how many cells are available.

I took a tour the other day, and I -- well, it was more or less the medical facilities, so I didn't -- I didn't go through the whole system, but, yeah, I'd like to see the Chairperson get a framework of where these dormitory settings are and how many are currently in the system at this point. And I would like to -- for you to give us, 31 2/19/02 APPROPRIATIONS - BILLS 020037, 38, 39 if you can, the number of -- I know that it's not here, but the number of prisoners diagnosed with hepatitis C and HIV as they come into the system, the current number of prisoners with hepatitis C and HIV. COMMISSIONER COSTELLO: Okay.

Is any of this money going for the prison system health contract? COMMISSIONER COSTELLO: The transfer ordinance, no, sir.

No more questions, Madam Chair.

Thank you. Councilwoman Miller.

Thank you, Madam Chair. Good morning, Mr. Costello. COMMISSIONER COSTELLO: Good morning, Councilwoman.

How many inmates do we have housed in Delaware County? COMMISSIONER COSTELLO: This morning, we have 414.

Okay, so when you 32 2/19/02 APPROPRIATIONS - BILLS 020037, 38, 39 speak of completing a new facility that will allow you to have a greater capacity here in Philadelphia, you're talking about the female facility that you're currently building? COMMISSIONER COSTELLO: Yes, ma'am.

Okay. COMMISSIONER COSTELLO: The female facility that's going to provide us relief next year.

Next year is when it's completed? COMMISSIONER COSTELLO: Yes, ma'am.

Okay. So then, therefore, you won't need to send people to Delaware County, hopefully. I mean, it depends on how many people get arrested, I do understand that. What is the capacity at the women's facility at 17th and Indiana? COMMISSIONER COSTELLO: 232.

What is the current population? COMMISSIONER COSTELLO: Today the population there is at 223.

Okay. So it's 33 2/19/02 APPROPRIATIONS - BILLS 020037, 38, 39 almost at full capacity, actually. COMMISSIONER COSTELLO: Yes, ma'am.

Okay. All right, those were my questions. Thank you.

Thank you very much, Commissioner. COMMISSIONER COSTELLO: Thank you, Councilwoman.

Mr. Dubow, could you tell me how much money has been appropriated to L&I specifically for demolitions since January the 1st? I recall a $10 million appropriation and there have been others.

The original FY 2002 budget had $2 million for demolitions, and then we added a transfer that had $8 million, to bring the total to 10.

How many buildings have been demolished under the program since last year? Are broken down by Council Districts or Council offices receiving a list of properties scheduled for demolition in their districts? 34 2/19/02 APPROPRIATIONS - BILLS 020037, 38, 39

Commissioner McLaughlin, do you have that? (Commissioner McLaughlin and Bob Solvibile come forward.)

Good morning, Commissioner. Please state your name for the record. COMMISSIONER MCLAUGHLIN: Ed McLaughlin, Commissioner of Licenses and Inspections.

Robert Solvibile, First Deputy Commissioner for L&I.

Good morning, gentlemen. You heard the question? COMMISSIONER MCLAUGHLIN: I'm sorry, what was it?

Shall I repeat it? COMMISSIONER MCLAUGHLIN: Yes, please.

Can you tell me how many buildings have demolished under the program since last year? Are they broken down by Council Districts? Are Council offices receiving the names of the properties within their Council District? 35 2/19/02 APPROPRIATIONS - BILLS 020037, 38, 39 COMMISSIONER MCLAUGHLIN: We do break it down by Councilmatic District, and I don't have that with me, but we can get that information

You can get it to the Chair? COMMISSIONER MCLAUGHLIN: Yes.

Thank you. COMMISSIONER MCLAUGHLIN: Can we expand on that?

Also, Councilwoman, we manually send out a monthly report to the Council Districts with the addresses of the buildings that were demolished. We had some difficulty 'cause the young lady doing it is ill with a serious problem, and we haven't done it for a month, but we did catch up recently, and you should get that now on a steady basis, on a monthly basis, a breakdown of the buildings demolished in your districts.

Yes, by Council Districts?

Yes.

Thank you. While we're on the subject of demolition, I'd like to go one step further and discuss vacant 36 2/19/02 APPROPRIATIONS - BILLS 020037, 38, 39 lots. I have been trying to get various fencing jobs completed at recreation centers in my district. Some of these jobs have been pending since last year. When our office calls to inquire about these ridiculous delays, we are given all kinds of excuses. The new one is that the contractor executing the City while fencing contract is busy fencing vacant lots. I wasn't aware that we were fencing vacant lots under the vacant lot program. Are we fencing vacant lots? COMMISSIONER MCLAUGHLIN: No, not unless we get a special request, but nobody should be busy because they're doing vacant lots. That is not correct.

Well, that's what we're being told. COMMISSIONER MCLAUGHLIN: By who?

The Recreation Department, 'cause we need fencing in the recreation centers and they said they're too busy putting fencing around the vacant lots. I'll have to look into that, but that's what we're being told. 37 2/19/02 APPROPRIATIONS - BILLS 020037, 38, 39 COMMISSIONER MCLAUGHLIN: For me, I can tell you that we're not putting any burden on anybody.

Maybe he's not telling the Licenses and Inspections that they're doing that.

We'll look into that and see what's happening there.

Because we are having a problem getting fencing in the recreation centers, but they're saying this is what they're doing. Okay, you will get back to me on that, Mr. Dubow?

Yes.

Thank you. Councilman Ortiz, do you have questions?

Yes. Commissioner and Mr. Dubow, with the 10 million plus the $12 million, that's $22 million that have been transferred to Licenses and Inspections during the current year for demolition and other NTI-related activities. Do you have a record of -- the Chairman asked you for the 38 2/19/02 APPROPRIATIONS - BILLS 020037, 38, 39 demolitions. What other related activities -- this goes beyond the bond issue that we have that we passed the other day, right?

That's correct.

Is this an advance on the bond issue, or is this going to be deducted from the bond issue?

Last January when we testified on the budget, we said that if we did not pay the full -- at that point, we had $20 million budgeted for debt service on the bonds. We said if we did not spend that on debt service, we would apply it to other NTI activities. So it's separate from the bond issue. In other words, the money's available because the bond issue's being issued later than when we had anticipated.

So it's added on to the $290 million bond issue?

That's correct.

Do we have details as to what the $10 million and the $12 million have been used in terms of all of the related NTI activities? I see Pat shaking her head so --

Yeah, the 10 million is what 39 2/19/02 APPROPRIATIONS - BILLS 020037, 38, 39 Commissioner McLaughlin committed to getting more detail on, and I'll let Pat Smith answer about the additional 12. COMMISSIONER MCLAUGHLIN: But the answer is yes, we do have detailed information.

Good morning. My name is Patricia Smith, the Director of Neighborhood Transformation Initiative. In addition, the $12 million will be broken down into basically four categories. Approximately a little bit more than 6 million will continue to support demolition activities through the end of the fiscal year. In addition, we are allocating $4 million to support acquisitions that have been in the pipeline for which we did not have sufficient community development block grant activities 'and that represents, I think, about eight or nine projects for which there were acquisition requests, and it's a combination of supporting Act 94 and urban renewal taking. In addition, the City to date has encapsulated approximately 54 vacant properties to prevent deterioration. We will also use some of the 4 million to support the Act 94 condemnations 40 2/19/02 APPROPRIATIONS - BILLS 020037, 38, 39 of the encapsulated properties so that we can be in a position to have them rehabbed and put back into occupancy, as opposed to their staying there. I do have a list of the projects available for the committee. We've also --

The work that has already been done, not what is being planned only, but what already has been done.

Well, out of the million, 12 this is all going forward as opposed to retroactively, so this is new activity.

Okay. You will have that available?

I'm sorry?

Yes. You'll have a combination between what the Commissioner's giving you of what we've done so far and what Pat's giving you of what we're going to do. So between those two things, you'll have all $22 million.

All right, okay. Normally in a transfer ordinance situation -- I'm sorry, Councilman.

Go ahead. 41 2/19/02 APPROPRIATIONS - BILLS 020037, 38, 39

Often, we're giving the department money to pay for things that have actually already been done in some instances.

That's right. This is actually for stuff that will be done.

I understand, okay. I have my own questions about these issues but, Councilman, I cut across you, sorry.

Go ahead.

Miss Smith, were you saying that you're going to give us -- I'm looking at the Commissioner's testimony for Bill 38, and there's $6.4 million for demolition and activities related to demolition, $4.1 million for redevelopment activities?

And that is what is our land acquisition/land assembly pipeline. I do have a list of the outstanding -- what we've been calling "the acquisition pipeline." These represent projects that we hadn't been able to fund the condemnations either through Act 94, urban renewal takings.

Why?

Because they hadn't been 42 2/19/02 APPROPRIATIONS - BILLS 020037, 38, 39 sufficient. It's sort of like the demand was greater than our resources out of CDBG for the past year or so. So this is representing us clearing up that backlog of outstanding requests.

Well, how long have these projects not had money available?

I couldn't speak to the exact timeline; these are just funded requests that we have not been able to support out of the CDBG block grant. I could find out specifically how long they've been in the pipeline.

Out of -- now, what year are we in, 26? Or are we in 27?

On the community development block grant?

Yeah.

We're in Year 27.

Year 27. And you're saying out of the -- what was the Year 27, $71 million, 77?

That's correct, somewhere in that area.

That we didn't have $4.1 million for acquisition -- 43 2/19/02 APPROPRIATIONS - BILLS 020037, 38, 39

No, the money was all committed mostly to other developmental activities, and I can have, you know, the Office of Housing and Community Development speak specifically to that. We did not allocate any funds for acquisition in Year 27.

Why?

Because, you know, you have X-amount of dollars that are available, and there were a number of development projects that were in the pipeline that were funded as well as the other traditional, you know, OHCD-type activities.

Councilman, is there a timeline being set now? Is there a timeline that you're setting for the expenditure of the monies that you're asking for?

Yes. I mean, as usual, to complete the whole process for urban renewal taking or Act 94 taking can take, you know, anywhere up to 12 months. What we would be doing is to begin to contract with the RDA to fund up to $4 million by the end of the year then begin to put together specific acquisition budgets for projects that are in the pipeline. Like I said, I have a list of 44 2/19/02 APPROPRIATIONS - BILLS 020037, 38, 39 projects that we're looking at. We're also looking at initiating the Act 94 condemnations for encapsulated and stabilized properties that haven't been (indiscernible) over the last year or so.

Councilman, if I may.

Go ahead.

One last intervention. Out of this money, how much of it is being contracted out and how much is being done by L&I in-house?

My understanding with demolition, that's all purchase of services activities. The Act 94 activities, the City contracts with the Redevelopment Authority and funds that activity. The preservation and stabilization activities, again, that's been primarily funded -- done through a contract with the Housing Authority, but the preservation activity also includes a home improvement grant program called "It's Your Turn," which is the City's contribution.

Do we have details as to those transactions, and can those details be 45 2/19/02 APPROPRIATIONS - BILLS 020037, 38, 39 given to the Chair?

oh, yes, I can do that

We would like to see a list of people that have been contracted out and to whom and what is the timeline and the amount of monies.

You'll send that information to the Chair?

(Nods head.)

Miss Smith, again, I thought there was some discussion about this back in the spring of '01 when we were dealing with the Year 27 CDBG budget. I'm still, I guess, not really understanding why we wouldn't allocate some of those dollars for acquisition activity especially for projects that are, quote/unquote, in the pipeline. I mean, what was -- when did you think these dollars were going to become available or where were they going to come from?

Well, initially when we were putting together the block grant application for Year 27, in the preliminary plan, we indicated funding acquisition land assembly out of bond 46 2/19/02 APPROPRIATIONS - BILLS 020037, 38, 39 proceeds in the upcoming fiscal year. That freed up, you know, the dollars to go ahead to fund a number of development projects and other --

Well, I understand that, but my recollection is that by the time -- by the time the CDBG final plan was approved, I think that that was in early June?

Mm-hmm.

And in another couple weeks, the session was ended, so I think it was pretty clear by CDBG time that there weren't going to be any bond proceeds, right?

Well, we were still hoping that we would be able to get, you know, the ordinance and everything passed and some time to do something this fiscal year.

Well, I understand that, but then this past fall, we also had a budget transfer ordinance. Do you have any recollection of that? Or, Mr. Dubow, weren't you here sometime last fall on a transfer ordinance?

The demolition portion of the transfer ordinance, you're talking about? 47 2/19/02 APPROPRIATIONS - BILLS 020037, 38, 39

Could have been. I just remember there being an Appropriations Committee hearing sometime last fall.

We came in for a transfer ordinance in the fall for increases in appropriations for commissioners, sheriff, and the defender. We had promised to make those transfers as part of the process last year.

It was probably September, October?

Yeah, and that's all we included in that transfer. They were the things that we had promised to do in the budget process.

Well, I understand that. Did someone consciously decide not to include either this demolition money or this acquisition money at that time?

We consciously decided --

And we're now dealing with it here in mid-February?

We consciously decided that that transfer ordinance was going to have only the things we promised to do in budget, so that was all it was. 48 2/19/02 APPROPRIATIONS - BILLS 020037, 38, 39 I mean, this is typically when we come with our transfer ordinance.

Okay. Now, Miss Smith, did you commit to one of my colleagues that there would be a detailed listing of the $4.1 million?

Actually, I have a listing now of the acquisition pipeline and the projects listed.

Okay. And what's the $1 million for preservation activities; what does that mean?

That would include what we call our preservation, encapsulation, stabilization work going forward.

Okay. Where will that take place?

That's basically citywide, and what we said we would do is work with the Councilperson on identifying properties to be stabilized within their Council District. It also includes money for the It's Your Turn Program in West Oak Lane.

The what? 49 2/19/02 APPROPRIATIONS - BILLS 020037, 38, 39

It's Your Turn program is a program, a home-improvement grant and program initiated by the local initiative support corporation, GMAC, and the Nationwide Insurance Company. It was a program working with a CDC in the northwest to provide over 700 loans and grants to home owners in that area to do home-improvement loans.

How many encapsulations do you think you'll be able to do?

We generally budget between -- I mean, we probably -- I think we do around 30 or 40 a year. So I think we'll be able to do about 50.

Okay. And what's the $500,000 for?

Pardon me?

$500,000 for MIS and IT activities.

Yes.

What is that, Management Information Systems and -- what's IT, Information Technology

Yes. That includes what we 50 2/19/02 APPROPRIATIONS - BILLS 020037, 38, 39 call the "seamless digital parcel base map." As you know, one of the things we need to do in the City is to move our land title registry maps from paper to digital form. These registry maps date back to 1995 and will be updated, and it will resolve any conflicts in information and assign a unified identifier to each parcel. And this seamless digital parcel base map, if I may, is sort of like the foundation on which the City's GIS system is rooted in. And in order for us to go to the next step in beginning to implement or designing a vacant property tracking system, this is sort of like, you know, foundation work. And then a small portion of the money will be used -- and I don't have extra copies of this, just a little description. There's the University of Pennsylvania Neighborhood Information System. The University of Pennsylvania has asked the City to match a grant that it receives so that it continues to support that system. It enables community-based organizations and CDCs to access data about vacant properties. I believe Council is also a part of that system as well as City 51 2/19/02 APPROPRIATIONS - BILLS 020037, 38, 39 agencies. So we can look up information on vacant properties.

On the document that you just handed us, the acquisition pipeline February 2002, could you update this document and forward it to the Chair to indicate how the $4.1 million will actually be matched against these various projects?

The actual amount for each one of the acquisition budgets?

Yes.

Some of them we're in the process of developing the acquisition budget for we can give an estimated number, but the Authority usually bases its acquisition budgets, I believe, on, you know, going out and looking at the fair market appraisal, so it will be an estimated number. And they don't do that work until they have a contract that says it's going to be funded

Okay. Well, then how do you know you need $4.1 million?

It's what we're estimating based on -- as I said, it's an estimated number.

Okay. So why don't we 52 2/19/02 APPROPRIATIONS - BILLS 020037, 38, 39 put the estimates with the --

Okay.

Okay, thank you. Lastly, Commissioner McLaughlin, has there been any interruption in the Department's ability to do demolition work? Over the past year or so, I know there have been a number of transfer ordinance, a couple million dollars here, $8 million dollars there. Are you able to do what you need to do both for imminently dangerous buildings and other work that needs to be done out in the street? COMMISSIONER MCLAUGHLIN: Absolutely.

Okay. And has there been any slow-down or stoppage in the work because of any funding problems? COMMISSIONER MCLAUGHLIN: None whatsoever.

Thank you. And what do you estimate from a demolition standpoint the City will do in terms of the number of buildings, primarily residential structures?

I think in my last number, I had -- we had about 1,000 that we completed thus far this fiscal year, and I think we'll probably 53 2/19/02 APPROPRIATIONS - BILLS 020037, 38, 39 keep pace with our historic number, which is about 1300, I believe, or 1200 a year. So this should enable us to keep --

For this year. Okay, thank you. Thank you, Madam Chair.

Councilwoman Miller.

Good morning. I have a question as it relates to the demolition and demolition-related activities. This $6 million is not part of the NTI money; this is outside of NTI activities or NTI funding for demolition activities. Is that correct?

It includes both. It would include funding, for example, of what we've been calling "the demonstration NTI," where we focus on geographic area to prototype areas. It also includes the regular demolition activities that L&I needs money to carry out. It includes some resources for commercial buildings, large buildings which we tend to do at the end of the year. So that's what we -- as well as things like insurance costs and things like that. 54 2/19/02 APPROPRIATIONS - BILLS 020037, 38, 39

Okay. You have three developments, three major demos planned, and I can't remember all three. It's Strawberry Mansion. What are the others -- somewhere in West Philadelphia? Um...

We just have two prototypes that have --

That are scheduled in Year 1.

For this year, we have two prototype demolition projects. One was -- we targeted the Strawberry Mansion area. I believe that's going to be in the area of about 120 properties within a defined geographic area. And then we have a second prototype bid package, which will be smaller in number, somewhere around 15 and properties, which is more of a scattered site, 19 and we targeted an area in and around, I think, 20 Frankford and Oxford to do the smaller bid package. That's what we're calling "the prototype." And the purpose of the prototype demolitions is to test out some of our operating functions, field survey work, how long it actually takes to do it, the size of the bid package that we 55 2/19/02 APPROPRIATIONS - BILLS 020037, 38, 39 can reasonably manage, that sort of thing.

Okay, because -- so once you find out how the prototype works, will you be developing other geographic --

Yes

-- scattered site -- I mean, 'cause in my district, we don't have a large area that needs to all come down at once, but we certainly have many, many scattered sites, particularly in the North Philadelphia part of my district. And so originally, my question was going to be, could the 66 million be used -- if it wasn't going to be used for NTI demos, the prototype that you're talking about, could it be used for -- in Council districts that are not a part of this prototype Year 1, I guess, demonstration project?

Yes. And the regular demolition activities will be handled in a way that L&I has traditionally worked with the Council District persons. A lot of this goes to curbside emergency-type situations, my understanding, as well as some commercial property demolitions which are slated. 56 2/19/02 APPROPRIATIONS - BILLS 020037, 38, 39

Okay, so things will be going on business as usual --

Mm-hmm

-- in addition to the NTI activities

In addition to the two prototypes, and this is just to the end of this fiscal year.

All right. Okay, thank you. Thank you, Madam Chair.

Any other questions? Councilman Clarke.

Yes, Madam Chair. Thank you. Good morning. I just want to ask a brief question with respects to demolition and encapsulation to a degree, and I probably should have asked this question last Friday. What's the mechanism that triggers an acquisition strategy?

For the encapsulated properties? 57 2/19/02 APPROPRIATIONS - BILLS 020037, 38, 39

And demolition.

Right. For encapsulated properties, what we said in the NTI framework is that any property we encapsulate we're going to initiate acquisition of that property, because the intent of the encapsulation work is to stabilize so we can get it back into private hands.

That's a hundred percent sure when you encapsulate, there's automatically an acquisition strategy --

Yes. We want to start that because it takes time.

What about demolition?

For demolition, that's something that we would talk with each District Councilperson about. For example, do we want to immediately acquire a property where we're taking down a building or do we want to do more strategic acquisition in the area? And we really envision that as part of the planning when we sit down and put the master schedule together, you know, which of the demolished properties immediately should be acquired and which ones should not, which ones, you know, because, you know, there may be strategic 58 2/19/02 APPROPRIATIONS - BILLS 020037, 38, 39 acquisitions we want to do within a Council District.

And that's done -- and you anticipate doing all of those under Act 94?

Or urban renewal at this point in time, yes.

What about certifying properties for sheriff's sale? One of the things I never understood is, why don't properties immediately get certified for sheriff's sale regardless of as to whether or not the City has a strategy to acquire them? Why don't we just -- I mean, why don't we immediately put that property on the jurisdictional sales list

My understanding is that historically, the City has not just taken in or initiated a sheriff's sale on vacant property when there was a concern about the ownership. That's the concept of land banking where even if we don't -- where we only did it in those instance where we knew we had an immediate end-user in mind or identified. So that's been kind of like the general policy. We do belive that the policy needs to be reversed. 59 2/19/02 APPROPRIATIONS - BILLS 020037, 38, 39 We also need to be a little bit cognizant of the fact of where -- to be quite frank, we've got a large backlog now. In our data and IT and MIS systems, unfortunately, it's hard for us to track even what we own now. And so I would be a little cautious since we're just beginning to take in a lot of property when we don't have the appropriate information to track it over time.

When you say "take in," what do you mean?

I mean initiate the sheriff's sale and then being able to track it, because not everything that goes up for sheriff's sale will end up in private ownership. You know, the City can bid up its equity liens. And right now, we don't have a lot of the infrastructure in place to kind of track what's happening to these properties. The Act 94 eminent domain, I think, process is a little bit more defined, and we're in a better position to kind of track that information.

I'm fine with that. I'm just trying to understand -- I call the 60 2/19/02 APPROPRIATIONS - BILLS 020037, 38, 39 commissioner or the deputy, I need a property knocked down -- I'm thinking about one in particular across from Strawberry Mansion that I know that's on the list hopefully soon, Strawberry Mansion High School. That property gets demolished, there's immediately a 6, $7,000 lien, and the vacant lot just sits there with this lien forever, sometimes ten years.

Right.

Why isn't that property put on the judicial sales list?

Again, as I said --

And then we don't discover it until maybe five, six, seven years down the line when we decide that we want to build something in that area and we find out that the property is substantially delinquent. I mean, what is -- I'm just trying to get a sense of how we dispose of all of these vacant properties, 'cause most of the vacant property in the City of Philadelphia is, in fact, not publicly owned.

That's correct. 61 2/19/02 APPROPRIATIONS - BILLS 020037, 38, 39

And I don't see a mechanism that gets us in a position where we can dispose of these properties if somehow we decide that as a part of some strategic initiative or development plan, we in fact would like to acquire it when we have the wherewithal to bid it at sheriff's ourselves, but we don't bother to list these properties at all, and they just sit there with substantial municipal liens and we don't do anything. I just don't understand why we don't aggressively do that.

As I said, that's been the policy. What we've said with this administration is that we are going to begin to proactively, you know, initiate or acquire the vacant properties, even when we don't have an immediate development purpose, you know, lined up for it. My understanding is that historically, we only went after a property when we knew we had like, for example, an end-user in hand or if an individual comes in and initiates the sheriff's sale. So that's been -- we recognize it's been the past policy, but we don't think it's an appropriate policy, and we do believe that getting the property 62 2/19/02 APPROPRIATIONS - BILLS 020037, 38, 39 into public ownership is the first step. And right now, we've been focusing on using the Act 94 urban renewal taking process.

All right. And beyond that, I just want to know a simple question and --

I can't answer why --

Okay, I want clarity. Are you telling me now that when we demolish a property, the policy will be now to immediately list that property for judicial sale?

Yes. We can make that the policy, but that doesn't necessarily mean it will get into public ownership.

I don't want it to get into public ownership. I think you're missing me. Miss Smith.

Okay.

These properties are delinquent, you know, and I want them on the list. Do you understand what I'm saying? I'm just trying to -- I mean, is there going to be a policy now that when there's a municipal lien, a substantial municipal lien, placed on a property as a result of a demolition, can that property immediately get 63 2/19/02 APPROPRIATIONS - BILLS 020037, 38, 39 certified for sheriff's sale and get listed on a sheriff's sale list and go to the judicial list in process? That's what I'm just trying to understand.

Yes. I will discuss that with the Revenue Commissioner, 'cause they generally initiate that. So I will --

Can you, please, 'cause I need to -- that needs to happen. I just don't understand why we do this, and we don't ever put 'em on the list. Thank you, Madam Chair.

Madam President, I have one more question.

Councilwoman Miller.

Thank you. Excuse me, Pat, what is your title, Director of?

Director of Neighborhood Transformation.

Okay. I just want to put a suggestion out here just so it will be on record, and that is that we need to have a session 64 2/19/02 APPROPRIATIONS - BILLS 020037, 38, 39 that helps Councilpeople and their offices understand how NTI can work for us.

Right.

So we can ask all of the questions, because there is still just lots of questions and information that we need, and we probably need to have a joint session, not separately, because maybe I could benefit from Councilman Nutter's or Councilwoman Krajewski's questions, and maybe they can benefit from mine. But we've been talking about this now for so long and it's really time for us to completely understand what's going on or what can happen, and also to bring in Hill International, 'cause many of us have not met the individuals from Hill, and we need to figure out how we'll work together on getting out there and do the outreach to the stakeholders.

I'll be happy to set up that meeting.

Thank you. Thank you, Madam Chair.

Any other questions? 65 2/19/02 APPROPRIATIONS - BILLS 020037, 38, 39 (No further questions.)

Thank you. Thank you, Commissioner. COMMISSIONER MCLAUGHLIN: Thank you. Mr. Dubow, we can go into our other bills.

Councilwoman, are we still on 38?

I'm sorry, I'm sorry.

Mr. Dubow, let's talk about -- we've got the Law Department here for $3.4 million for outside legal counsel, which I thought that we had dealt with the outside legal counsel issue the last time we were here on a transfer ordinance.

That was the FY 2001 -- that was the year-end, that was --

That was the year-end transfer?

Yes.

Okay. And we've got the Recreation Department with higher insurance costs and costs due to prevailing-wage rate causes, which I actually don't know what that means. 66 2/19/02 APPROPRIATIONS - BILLS 020037, 38, 39

That's for their contracts, the prevailing-wage rates. We're paying the prevailing-wage rates on our contracts now, so it's a higher rate for contractors so the cost of our contracts are up.

What contracts?

For -- I'd actually have to ask someone from Rec. to come up and give you specific contracts, but I mean security contracts at the Vet.

Scott Rolen's contract.

I think the security contracts at the Vet and maintenance contracts at the Vet. The cost per hour for the contractors went up, and they passed those costs along to us.

And then we have these overtime costs related to the conversion of Veterans Stadium, baseball to football. Is this the August 13th debacle?

Yes, and then the conversions after that.

How many were there?

Four.

The City employees did 67 2/19/02 APPROPRIATIONS - BILLS 020037, 38, 39 them or outside people did them? Is there anybody here from Recreation?

It's a combination, it's a combination of City and outside. I thought there was someone from Rec. coming up, actually.

Is there anyone here from Recreation, Mr. Dubow?

Yeah. They're coming up.

They weren't exactly rushing to the table. (Witnesses come forward.)

Good morning. Would you please state your name for the record.

Good morning. I'm Mary Platt-Coles, Deputy Commissioner for the Department of Recreation. To my left is Joanne Mangano, Administrative Services Director for the Department.

Okay. Did you hear the earlier question with regards to your $413,698 on your higher insurance costs and contract costs relating to prevailing-wage rate clauses and the $73,197 on the conversion issues? 68 2/19/02 APPROPRIATIONS - BILLS 020037, 38, 39

Yes. The conversions were for four conversions, and they were performed by the maintenance employees of the Department of Recreation at overtime costs.

Okay. Why were they done on overtime?

I'm sorry?

Why were they done on overtime?

Because of the timing of the games. If there's baseball games on Fridays or Saturdays, and then a football game on Sunday, it would be at an overtime rate.

Did we anticipate those things in the FY -- this is for FY '02, right?

Yes, sir.

Okay. And we knew this was coming up, right?

That is correct, but due to some of the turf issues, there was increased amounts needed, increased personnel needed, and it took longer to do the conversions.

Okay. Well, I mean, I 69 2/19/02 APPROPRIATIONS - BILLS 020037, 38, 39 know everyone was obviously significantly sensitized by the August 13th event, so did you just add in extra people just to make sure that it went quickly or we didn't have the same problem, or did we have extra people with extra duct tape? I mean, why did you have the extra folks out there?

Due to the nature of the turf problems, it took more people. As I said, it took more staff to perform the conversions and a longer time period.

Okay, all right. Okay, thank you, Madam Chair.

Councilman Ortiz.

I have no questions on the stadium other than Scott Rolen is not signing the contract and I'm concerned about the Phillies season and how we're going to be able to overcome the Mets and the Braves without him, so I have no 20 questions of the Recreation Department. In terms of the $7 million for Fire Department and bioterrorist overtime, could we have some details on that? This expenditure came up after the September 11th, I imagine, and I'd like to see any detail as to what occurred and what 70 2/19/02 APPROPRIATIONS - BILLS 020037, 38, 39 transpired and how we came up to $7 million expenditures on that.

Yeah, we can give you that. It's a combination, though, of that plus the costs from the arbitration award, the full cost of the arbitration award. So it's not just the response to the bioterrorism threat. So I will get you that.

The arbitration award in relating to hepatitis C, is that it part of it?

No. Just the entire cost of the arbitration award wasn't fully -- at the time we did the '02 budget, the whole arbitration award issued hadn't been resolved, so the full costs of it weren't in there.

And in the Law Department expenditure, that goes from -- you spoke about the '01 expenditure for outside counsel; is this added on to that expenditure? And what has been the expenditure for outside counsel up to this time?

I'm going to ask someone from the Law Department to come up and answer that. The answer to the first part is yes, it's 71 2/19/02 APPROPRIATIONS - BILLS 020037, 38, 39 for a separate year.

Right.

So the '01 was a distinct cost and then this is the '02 costs, so --

Right. So what happened to the '02 costs up to this point, and why are we adding $3 million? What have we taken on that needs close to $3.5 million more?

Someone from the Law Department's coming up. (Witness comes forward.)

What issues are we hiring outside counsel for?

Good morning. Donna Mouzayck for the Law Department. There were a number of unanticipated expenses that account for the $3.6 million. The first category of expense I would attribute to a case called "the Miller case." I know that those of you who have worked on recent L&I issues are probably familiar with that. Under Miller, we're required now to give notice to anyone who has an interest in the property which requires additional title searches. 72 2/19/02 APPROPRIATIONS - BILLS 020037, 38, 39 So a number of those expenses for title certificates are put as over budget; and in fact, I think it comes up to like $230,000. There are a number of other areas as well. I think that there were significant litigation activities or matters that were unanticipated last year. Certainly the biggest of those would have been the Parking Authority and the School District. I think if you took those two expenses together, that probably accounts for over 30 percent of the additional money that we're asking for in the transfer.

The money that you're asking for is going to pay for the litigation on the Parking Authority and the School District most of it?

Yes.

Most of it?

Over 30 percent of the 3.6.

Over 30 percent?

Are attributable to those two areas.

Councilman, if I can -- 73 2/19/02 APPROPRIATIONS - BILLS 020037, 38, 39

Go ahead.

What firms were involved in those two particular matters.

Councilman, Nelson Diaz, for the record. In addition to Councilman Ortiz's question, there were a number of legal services totally involved with regard to this, but the two major firms, as I recall, in the School District case was the Ballard firm, and the Aronchick Hangley firm were two major firms in the representation of the School District cases. And in the --

Was it out of that activity that the 65-page memo was developed?

That's correct. But as I saw also the contracting area there were -- there was a considerable amount of payment also with regard to the stadium deals.

I'm sorry, Solicitor, I don't mean to interrupt you. So, I mean, the conclusion of that is, which I guess we didn't know at the time, is that we actually paid for that.

Yes, we did. 74 2/19/02 APPROPRIATIONS - BILLS 020037, 38, 39 I'm sorry, the other film that also we paid for was the Dilworth firm on the School District case, but the Dilworth firm was more involved in the litigation end of it, and the Aronchick Hangley and the Ballard firm were more involved in the strategy issues that you question about --

With regard to the 65-page memo.

That's correct, right.

Okay. So, I mean, we now subsequently learn that we actually paid for that.

That's correct.

Okay, all right.

What about the Parking Authority litigation; what was that firm?

The Parking Authority litigation is Ballard and Spector Gadon.

And that's still in litigation, right?

Correct, it's still in litigation, but right now, there's a stay pending a jurisdictional issue before the Supreme Court. 75 2/19/02 APPROPRIATIONS - BILLS 020037, 38, 39 Until the Supreme Court decides the jurisdictional issue, we have no idea of whether to proceed forward. The jurisdictional issue relates to whether or not it should have been filed in the Commonwealth Court or the Common Pleas Court.

So we're asking the Supreme Court to decide which court it should go to?

They're waiting for us to decide that.

Okay.

You said the Dilworth firm did the litigation on the school issue?

The Dilworth firm prepared all of the documents for preparation for the litigation, but the litigation was never filed.

Never filed?

Yeah. The agreement entered and the partnership then entered into by the Mayor gave us the response not to proceed with the litigation so, therefore, that litigation and that part of the engagement is over.

Has that agreement, by the way, I'm just kind of wondering. Has the 76 2/19/02 APPROPRIATIONS - BILLS 020037, 38, 39 agreement that we entered into with the State, has that been drawn up and which firm is in charge of drawing that up?

I prepared -- I asked my corporate department area to give me a framework of developing an agreement, of taking the development of that agreement and giving it to Debra Kahn and asking Debra Kahn to fill in the blanks between her negotiations and the negotiations that they're having in the State, and then to give it back to us so we can refine it to make sure that it complies with all of the requirements of City Council, the City Charter, and all of the --

So how long is it going to take Miss Kahn to fill in the blanks?

The last e-mail that I saw between her and Richie Feder was that they're making progress, and they have certain areas that they've agreed to and some minor areas that they have to get the signoff, I guess, from the Commissioner or the Secretary of Education.

Just an aside, Mr. Solicitor. I thought we had an agreement and it seems like we're negotiating an agreement. 77 2/19/02 APPROPRIATIONS - BILLS 020037, 38, 39

I think we're trying to codify the agreement that they entered into, and it's been my recommendation that it be codified and not one that is in principle only. And that's why I believe that we are attempting to get it in the writing.

So that accounts for 30 percent of that, of the new money that is --

No, I think it's the -- there's the Testa case, do you remember the Testa litigation at the airport?

At the airport, right.

And that litigation is continuing. And also the Aronchick firm is involved in that case on behalf of the Mayor, and Pepper, Hamilton & Scheetz, in that case, on behalf of Franklin-Suber. The PGW and the issues of the PGW with regard to the questions that have arisen recently in addition to whether or not is going to be a proposed reform of that agency, has been part of the cost. There is one small item --

So this new $3.5 million is -- 78 2/19/02 APPROPRIATIONS - BILLS 020037, 38, 39

3.6

-- that's being requested is going towards that litigation and parking and schools and ...

Yeah. The outline essentially shows that the collections support and defense work, the stadiums, the Testa case, PGW, the RNC litigation, the Parking Authority litigation. Costs for the Police Disciplinary Task Force was also borne through this expense. And the School District litigation and some small amount of NTI implementation --

Excuse me, Mr. Solicitor. Have we hired counsel for each and every one of these litigations already?

Counsel has already been engaged in everything that I've outlined for you.

Could you send that to the Chairperson of the committee?

Yes, we can.

Thank you very much. I have no further questions for the City Solicitor.

Councilman 79 2/19/02 APPROPRIATIONS - BILLS 020037, 38, 39 Nutter.

Thank you, Madam Chair. No other questions for the Solicitor on this particular point, but you'll give us the detailed list of all that you've shared with us this morning?

Yeah, I'll mail it to you immediately upon --

Send it to the Chair.

Upon proper form, order, and process.

I deeply appreciate that.

May I be excused?

Yes.

Thank you, Madam Chair.

Thank you.

Let me go through these real quick. The Mayor's Office of Community Services, you've goat the Director of Finance doing a formal assessment of the City's benefit plan, Community Court, and $12 million is now available through Director of Finance - Employee Benefits because you 80 2/19/02 APPROPRIATIONS - BILLS 020037, 38, 39 have fewer employees than you had included in the budget. Let's talk about those items. One, the Empowerment Zone had been fully funded through a grant?

Yeah, it had been fully funded through federal funds through the middle of this year. The grant money ran out. We had -- when we put the budget together, we were going to look at other ways to try to get that funded; nothing else emerged, and so now we need General Fund support to continue that funding.

So is everyone from the Empowerment Zone being moved over into General Fund-supported staff? (Witness comes forward.)

Good morning. My name is Eva Gladstein. I'm the Executive Director of the Philadelphia Empowerment Zone. We've always had some matching funds from the City's community services block grant. That funding has diminished over time, but it still remains to this day. So we have, in addition to the General Fund, $250,000 of community services block grant. That's to support staff and the 81 2/19/02 APPROPRIATIONS - BILLS 020037, 38, 39 administrative costs.

I'm sorry, are you talking about a community development block grant or is this a different block grant?

This is a different block grant, the funds from the Department of Health and Human Services.

Hmm, okay. I'd probably like to know a little more about that; we can talk about that later. Any new source of funds is always of great interest. Mr. Dubow, what is this assessment that's being done of the City's benefits plan and the $300,000 to go with it? What's that about?

Linda Berkowitz is going to come up and talk about that.

Oh, I can't wait. (Witnesses come forward.)

That's the kind of welcome I usually get; I'm jealous.

Ladies and gentlemen, you may want to notify friends and loved ones. (Laughter.)

You may wish to order 82 2/19/02 APPROPRIATIONS - BILLS 020037, 38, 39 out for lunch now and anticipate what your dinner plans will be. (Laughter.)

With Miss Berkowitz at the table, we will be here a while. Miss Berkowitz, tell us about the formal assessment of the City's plan.

I'm Linda Berkowitz, Deputy Secretary of Financial Oversight. The term "formal assessment of the benefit plan" is somewhat of a misnomer.

Are we going to start with a definition of terms and disclaimers? Is this the way this is going to go? Go ahead.

As I discussed before the Committee on Law and Government during the late summer, the former personnel director for the City had pretty much negotiated the medical coverage portion of the City-administered health plan by herself, and given the fact that that is the most costly piece of the City's health plan, we decided to hire an expert consultant to help us do a number of things, including put together an RFP. There 83 2/19/02 APPROPRIATIONS - BILLS 020037, 38, 39 had not been an RFP for the medical portion of the plan in a number of years, and given the volatility in the health-care marketplace, we believed that it was prudent to invest in doing an RFP. We contracted with Brokerage Concepts Incorporated to assist us with the RFP process, the evaluation of the various proposals, and also to help us look, during the course of this fiscal year, at potential cost containment measures that we can use. As most of you know, because you're covered by the City-administered plan, our costs have risen dramatically.

Yeah. It's been a joy. So have you already spent the $300,000?

Yes, we have. It is a fixed-price contract

Right. And so what are they going to do? And who is Brokerage Concepts, where are they located, and who are the principals?

Brokerage Concepts, Inc. is located in King of Prussia. I believe they have 84 2/19/02 APPROPRIATIONS - BILLS 020037, 38, 39 a subsidiary office on Walnut Street. They are considered to be one of the leading firms in employee health-benefit consulting. And the principal is a gentleman by the name of Arnold Katz.

Okay. And so what are they going to do or what have they done?

Well, they've done a big portion of what we contracted with them to do. We asked for a very quick turnaround on the development of an RFP; in fact, we gave them only two to three weeks to develop it. They've developed it, they've put together a list of potential bidders. They handled the entire RFP process. They evaluated the proposals that the City received. They worked the City folks through the assessment that they prepared, and they then they actually worked with us in negotiating the agreement with Independence Blue Cross. That's what they've done so far.

And what business are they in?

They are in the employee health-benefits business. 85 2/19/02 APPROPRIATIONS - BILLS 020037, 38, 39

Okay, so --

They advise -- they do consulting for organizations, including governmental organizations, and I believe that they also do brokering services

Okay. And will they do any brokering services for us?

They were not doing brokering services for us, no. 11

Will they do them in the future?

I -- they only have a one-year contract.

And what's the nature of their relationship with the various benefits providers?

Well, I'm assuming that they've also negotiated with Independence Blue Cross on behalf of other clients.

And so you're saying --

Again, they're only doing the medical portion of the plan for us. And as most of you know, the plan consists of four major 86 2/19/02 APPROPRIATIONS - BILLS 020037, 38, 39 portions: One is medical, then there's dental, optical, and prescription.

And you're saying that the only benefit to the company out of this relationship with the City is the $300,000 flat-fee contract?

That is correct.

Okay. And no other dollars flow to them as a result of any negotiations for the development from outside parties?