Well, again, I actually think that a number of the -- maybe the majority or a substantial portion of the students who might choose to benefit from the core scholarship program might, in fact, end up attending Community College also.
But that's a might and that's not a definite and you don't know that, but we're still taking away $750,000 from Community to give into 68 03/31/04 - FISCAL STABILITY - RES. 040276 scholarships for kids who may go any place across the State of Pennsylvania and leaves the this college absent $750,000. Thank you.
What's the State law, do we know, regarding the City's funding requirement to the Community College? And is the City meeting its obligation?
We'll get back to you on that. We were unclear whether it's a State law or something else that requires the one-third/one-third/one-third match, but we'll get that source of obligation information for you and also exactly where we are in reference to an absolute one-third/one-third/one-third funding formula.
I guess it's more or less a statement in the same area with the scholarships and I think it's worth repeating. I said this at the onset, and I believe I know all of us in Council support 69 03/31/04 - FISCAL STABILITY - RES. 040276 higher education opportunities. But we talk about -- and I support a program that will provide financial assistance. We talk about the brain drain. We spend thousands and thousands of dollars and tens of thousands of dollars to figure out a way in which we can keep students who attend local colleges in Philadelphia from leaving. Now we're going to provide them with a tool, as Councilwoman Tasco said, to take that money and maybe go elsewhere. I mean, it's counter to the brain drain program that we've all been talking about for the last decade. So I think you need some refining in this program, look at the possibilities of maybe limiting the colleges to within the City of Philadelphia's boundaries if that's possible. We do have enough universities and colleges, and I certainly would say, yes, Community College first, but at the very least limit it within our borders. It's a statement more or less as opposed to a follow-up question. Thank you.
Thank you for being so patient. I just want you to know 70 03/31/04 - FISCAL STABILITY - RES. 040276 because of your patience, you now have minutes.
I want to try not 5 to take up all of 10 minutes. 6 Concerning self-insurance -- this is 7 not a question for Secretary Kahn. It is very 8 clear that the Administration is set on moving 9 from how healthcare is provided, which is also 10 part of the collective bargaining agreement with our two municipal unions, to go into this area of self-insurance. And I am concerned about the tone of this, not that it's a mean-spirited tone, I'm not implying that whatsoever. But it seems as though the Administration is taking the position that it's either self-insurance or nothing. And they make a very good argument for self-insurance. But I know that if you don't negotiate this with our municipal unions that this could lead to a crippling strike in this City of basic City services, and none of us in this City want to face any strikes or a strike of that nature that will cripple basic services. 71 03/31/04 - FISCAL STABILITY - RES. 040276 Does the Administration have another backup plan in the event that this doesn't go? And also, part of my consternation about this is that we now have heard a couple times the use of the word "layoff." It kind of sounds like if we don't do self-insurance and if the unions don't agree to it and if we don't come around to it, there's going to have to be layoffs. And my basic question is, is there a backup plan to your self-insurance plan in the event that it's not in our agreement or probably more importantly in the agreement of your obligations with the two municipal unions?
The Administration is not wedded to self-insurance per se. Ms. Davis outlined a number of different alternatives that we were taking a look at. What we do have to accomplish is a more efficient way of delivering health benefits for union members. Our understanding is the current formula isn't working for anybody right now, that the unions -- we give a per capita rate to the unions. They've then got 72 03/31/04 - FISCAL STABILITY - RES. 040276 to go out and try to buy the benefits. And it's presenting a challenge for them as well. We're not whetted to self-insurance. We're willing to take a look at the health reimbursement initiative that Janice talked about. With respect to layoffs, the Mayor's position is that we will avoid layoffs at all cost. Our goal is to try to balance the City's finances without having to resort to layoffs, so we're doing things like clustering in order to save on administrative costs and then taking employees that are no longer needed to support the administrative side of department work and giving them first option at jobs that are becoming available as the result of the DROP Program. We're trying to deliver government in a more efficient way, doing everything possible to avoid layoffs. We've got proposals on the table that would cut overtime in various departments in the City. We're trying a lot of different strategies for operating this government and achieving the savings that we need to achieve 73 03/31/04 - FISCAL STABILITY - RES. 040276 without having to resort to layoffs. We do not want to have to resort to layoffs. The Mayor makes the point time and time again that layoffs have a devastating impact on people who are put out of a job and we will do everything possible to avoid that. We can only accomplish that, though, if we're willing to operate the City in a different way. We've got to make some of these changes that aren't going to be easy, that are going to force us to do things in a dramatically different way, but we think that's the only way we're going to be able to achieve the various things we have to achieve: Quality services, growing the economy through tax cuts, and strategic investments.
These are proposals, especially in this area of alternative insurance coverage, they're very different than the way that we have been doing things for many years around here. Are talks going on with the unions? I mean, this is big, and contracts expire soon. What kind of progress has the 74 03/31/04 - FISCAL STABILITY - RES. 040276 Administration made with talks? I don't even know if you've started formal negotiations with them, but I would suggest that if they have not started, we need to step on the pedal and get this going in a very serious way with our two municipal unions.
How far? Recently begun? Are you tackling this issue of self-insurance now or is this coming up in a couple weeks.
We're negotiating with -- it's begun with the AFSCME unions, and the FOP positions have been exchanged. The process began formally probably in November for some of the unions.
I was referring to our two -- District Council 33 and 47, have we started talking to them?
With them as well? 75 03/31/04 - FISCAL STABILITY - RES. 040276
Just one final question. You stated in your address to us of a $500 million economic development fund and I've heard this proposed and I've read it in the Mayor's address to us, and it stays that $125 million will go to this new River City concept that I think is a very good concept and very interested and excited about the idea of our riverfront being developed. Can you tell me where this $125 million came from?
It's anticipated that it will come from the restructuring of the debt service reserve fund for the water fund. This first 125 million would be directed towards water-related infrastructure; and for that reason, those reserve funds would -- 125 million of the reserve funds would be utilized in -- a surety policy would be substituted in their place. 76 03/31/04 - FISCAL STABILITY - RES. 040276
Madam Davis, anticipated means that there's a chance that we might not be able to get it for this project? Is there any way we do not get that besides whatever we decide here?
We've looked at it, we've talked to the rating agencies, we've had preliminary discussions with surety providers, and at this point there's nothing that would lead us to think that we wouldn't get it.
Where are we going to get the rest of the balance of that $375 million?
The plot thickens. That's yet to be determined. We would anticipate that it would be a borrowing of some type supported perhaps by the City being freed of its obligation at the Convention Center and then utilizing those dollars in combination with some other dollars. Right now we're providing a subsidy to the Convention Center of about $17 million. So we'd use that 17 with perhaps some additional proceeds from gambling or some other source to 77 03/31/04 - FISCAL STABILITY - RES. 040276 fund the debt service on the $375 million deal.
If none of that happens, which I hope it does, are you thinking of floating another bond?
Well, it will be another bond, but we have to find the source to fund the debt service first. So that's our mission, if those things don't materialize to find some substitute pool of revenue.
Can you talk very briefly on what -- do you have any projects already earmarked of how you would spend the $375 million?
I've asked representatives Peter Longstreth to come over to talk more specifically about the plan for the naval yard so that he can comment directly on how those funds would be used.
There are other places where -- 78 03/31/04 - FISCAL STABILITY - RES. 040276
The Mayor has identified a number of different areas for the capital investment. As you know, the City has a 15-mile stretch along the North Delaware that is largely underutilized.
We know what you're going to do with the 125. It's a magnificent proposal, but what about the other -- you said the naval yard. Anywhere else?
The naval yard, the North Delaware, and the Schuylkill. The Commerce Department has been working on Schuylkill River initiatives, and the Mayor also would propose spending some on select NTI communities and those have not been identified yet.
I have some follow-up questions about that last answer, but I'll yield my time before that alarm clock goes off. Thank you, Madam Chair.
You're welcome. The Chair recognizes Councilman O'Neill. 79 03/31/04 - FISCAL STABILITY - RES. 040276
I just have a quick question, and I think everyone up here is feeling the same way. This is such a tough budget and we're trying to do things more efficiently, it's stated, and we're trying to downsize government. And we're looking at about 60 or 70 of our best and brightest out here. They've been here for a couple hours now. And this isn't the first time, it's a tradition. But it might be a good time to break with that tradition in terms of if we need them, they all have either cell phones, beepers or both, or they're across the street or around the corner and we'll be here and you'll be here and we can either get them by phone or have them come in. To the extent that we could. I think we'd all feel better if we weren't staring at this unproductive group of high achievers, and I mean it very seriously. If we could take advantage of our technology and know that we're as lean and mean here at this hearing as we can be, I think it would send the right message. And we're going to be breaking for lunch and 80 03/31/04 - FISCAL STABILITY - RES. 040276 hopefully you'll get some lunch during that time and they can get an early lunch if they are hungry if we get them out of here.
The Administration brings -- if we can agree to limit the scope of what's going to be asked, we'll gladly send people back.
I think we'd be willing to have them called or called back, just not be sitting here with the 1 in 70 chance that they may be called for five minutes or 10 minutes. I think we can just break with that tradition. At one point, someone may have demanded that all these people be here at the ready in case they were needed, but I think we're at a point in time now where we can break from that. Thank you.
Before everybody leaves, we ask people to come to be prepared to respond to questions by City Council Members.
There are 81 03/31/04 - FISCAL STABILITY - RES. 040276 going to be a number of questions on economic development so whoever can respond to those questions should remain.
If anybody else -- otherwise, if you don't want to receive testimony from them, they can, of course, leave.
The Chair recognizes Councilman Clarke. (Pause.)
Can we have everyone's attention please? Anyone having conversation, please do so in the corridor. Thank you. The Chair recognizes Councilman Clarke.
Thank you, Madam President. Madam President, I think I saw a couple of people leave that I wish to come back and respond to some questions I have -- I'm just kidding. (Laughter.) Good morning. Real quickly before I ask my 82 03/31/04 - FISCAL STABILITY - RES. 040276 questions, in follow-up to earlier discussion about the --
Councilman, just a moment. Please, can we have silence? If you're having conversation, do so in the corridor.
Thank you, Madam President. A follow-up on an earlier question with respect to the funding from the School District for the scholarship program and a question was asked about limiting the scope of the applicants to City of Philadelphia schools, and my question is, is a part of the arrangement to have the School District's contribution, the $6 million that I'm assuming has something to do something with the State was a part of that agreement that all state universities had to be involved or state-related universities had to be involved as a result of the $6 million School District funding? Actually, Madam President, if I can 83 03/31/04 - FISCAL STABILITY - RES. 040276 since I have a number of questions and I want to sneak them in in my minutes, can I ask 4 questions and get responses? 5
I learned how to 8 do this last year. 9 With respect to one of the issues on 10 the 100 percent valuation assessments on real estate, in the testimony you indicated that there would be a pilot program and subsequently an adjustment in millage, and I was assuming that would be to ensure that people didn't get a drastic increase based on this 100 percent valuation. I'd like to get a sense of the timeline of that adjustment and millage because it's not clear in the testimony. Would this be a year out, would this be two years out? My concern is that property owners would get a potentially drastic increase based on analysis that I saw some time ago when we go from 71 to a hundred percent. That could have a significant impact. I'm concerned that the adjustment and 84 03/31/04 - FISCAL STABILITY - RES. 040276 the millage wouldn't happen until out years and for a couple years there could be a problem.
The 100 percent assessment and the adjustment in millage would happen in FY '06.
That's right. And so when we come next year this time, we will have a proposal for adjusting the millage.
On the economic development fund, understanding that the first $125 million is targeted for the aforementioned initiatives, one, the waterfront and the navy yard, and based on the type of funding I understand that it has to be for improvements. To some degree you answered that question. What I wanted to know, in that discussion, were you looking at targeted commercial corridors in neighborhoods in the initial $125 million investment or --
We have not developed the program for that yet. It's 85 03/31/04 - FISCAL STABILITY - RES. 040276 something that will have to come back to City Council for approval, and we hope to have a defined program where those investments would be able to define more clearly the nature of the investments.
And in that initial $125,000 (sic) it would be related to water or sewer.
Period. Wherever they are, they'd have to be related to water and sewer.
My understanding is that a part of this initial investment was going to be for access roads to the navy yard.
Only if we were removing roads to put down water and sewer infrastructure. Because of the source of the funding, it has to be related to water and sewer infrastructure. So if there is some damage to roads because of the work being done to lay water and sewer, then that would be a permitted use, but because it's water and sewer generated, it would have to be -- 86 03/31/04 - FISCAL STABILITY - RES. 040276
So there's no 3 plan in place for the initial 125 to go towards the construction of an access road to the naval yard, which is what I thought I heard the Mayor talk about on numerous occasions?
We don't have the details. Those are the kinds of elements that we want to fund. And frequently what you'll find -- I can talk about the Mill Creek development as an example. And a lot of these large developments, there's so many different elements and so many different pots of money that it's a case where you might shift the source of funding for an activity. So in Mill Creek we were basically rebuilding a public housing development. Some of that development happened with Water Department funding because there were enough water infrastructure issues that we had to address. We don't have the program details exactly how the various elements of the naval yard would be funded. Having water infrastructure funding available will free up 87 03/31/04 - FISCAL STABILITY - RES. 040276 other dollars that might more appropriately be spent for roads. But we will be developing that level of detail when we come back to City Council for approval of that initiative.
I've got to get my questions in first, because that bell is going to go off.
I think you should try to answer the Councilman's question. What was your first question for Deborah Kahn? We're going to forget what your questions were.
Something about the inclusion of the colleges in the state system. And I would say we chose those schools as eligible schools because those are the schools that the majority of our public school students choose right now. It does, in fact, give them some choice because not all 88 03/31/04 - FISCAL STABILITY - RES. 040276 educational programs are offered at every school and they are the most affordable options first.
So it had nothing to do with an arrangement for School District funding, i.e., state funding that there will be a --
No, although it's been great to get the cooperation of the Chancellor of the state system in administering the program.
But it also makes sense, of course, because these are state institutions and of course --
No, I thought it was linked to the funding from the School District, that's all.
Sometimes arrangements are made pursuant to certain understandings in terms of where the funding comes from and people have an interest in other institutions and they get funded as a 89 03/31/04 - FISCAL STABILITY - RES. 040276 result of that. But you said that wasn't the case, so the point is moot.
On police deployment, you talk about uniformed officers that are currently not on the street being deployed on the street and the shift will provide an additional $10 million of on-street resources. First, can you explain that? And second, I'd like to get a sense of how this redeployment will impact on the rising homicide numbers and violent crimes as it relates to weapons? Or were we essentially just focused on shutting down drug corners?
I'd rather have the Police Commissioner respond to the deployment issues. And that can either be addressed when the Police Department testifies or I can bring him back after his lunch break to talk about that now.
What about the $10 million? Does this mean that there will be $10 million in savings? 90 03/31/04 - FISCAL STABILITY - RES. 040276
The next savings out of the Police Department are derived from the proposed elimination of the mounted police. We propose a $2 million savings as a result of cuts in court overtime, and there's a $5 million grant that's been identified that will be additional revenue to the department. Rob, if you could talk about the $10 million issue. And if you'd like, I can ask the Police Commissioner to return to talk about deployment issues or it can be addressed when the Department speaks. However you want to handle it.
I'm fine. I can wait until the Police Department speaks because that's an issue that we'd probably want to discuss in some level of detail. But speak to the money issue, Mr. Dubow.
What the money issue meant was that by increasing the percent of officers who are on the street from -- I think it's about 87 percent now to 92 percent, you would have the equivalent of $10 million more 91 03/31/04 - FISCAL STABILITY - RES. 040276 in police presence. It's not an actual reduction in their budget of $10 million; it's just a more efficient deployment. So in other words, you have -- I forget the number -- but you have several hundred more police on the streets and it was a calculation of the value of those police.
What are those police officers doing currently? I know I'm over my time.
I think that's probably a Police Department question, how they're deployed now. But they're not on the street.
Because this suggests that the work that they're currently doing is not something that's a cost to the City of Philadelphia. And by redeploying them, you add an additional $10 million. My question is, what are they doing now?
I understand. We need the police to go through what they're doing now and why this is an actual benefit. 92 03/31/04 - FISCAL STABILITY - RES. 040276
I don't think so. The Chair recognizes Councilwoman Brown.
Thank you, Madam President. This is not a part of my questioning, but I would be remiss not to acknowledge the very legitimate questions that have been posed around the Core Philly Scholarship Program. And I will take some responsibility in not getting back to Councilmembers to give you more detailed information, a fact sheet on the Philly Core Scholarship Program that I have in front of me that I will make sure you get now. Secondly, I wanted to offer a friendly reminder that when I approach my colleagues about the Core Scholarship Program, 93 03/31/04 - FISCAL STABILITY - RES. 040276 I actually acknowledge in that letter a couple things, and I quote, one of them was that this program was intended to provide start-up costs, brand-new, and I was asking for your support to be supportive or in favor of start-up costs for this program. That's item Number 1. Item Number 2, I acknowledged in that letter of October 2nd a couple of things; and they were that you work with us to discover ways to assist students who are not in the public school system. I acknowledged in the letter that there are many Philadelphia students in the parochial and private schools that are also in need of dollars to close the gap and that I was willing to sit with my colleagues to carefully work through and walk through how we move towards ensuring that all deserving students get access to the scholarship. But the initial conceptual idea around this was to offer start-up costs for public schools only. As Councilman Juan Ramos has indicated, he's been in serious lengthy discussions with the Congressman and Deborah 94 03/31/04 - FISCAL STABILITY - RES. 040276 Kahn and the Archdiocese to figure out how we can include young people who do not attend the public schools. So I needed to put that on record because it was discussed at length in in October wherein I was able to secure the support of the colleagues. And now other legitimate questions have been raised that we will indeed tackle with. So my staff will circulate the fact sheet on the Core Philly Scholarship Program. With regard to MBEC, it's mentioned in the Five-Year Plan that there will be a restructuring of MBEC. Please let us know where you are in the process and help me understand at least what restructuring means and provide for me some detail on how these $700,000 will be spent with regards to improving MBEC's technology.
I'll answer your last question first. The majority of the $700,000 will be used to provide technology support for MBEC. The department suffers from a lack of an efficient way to track participation and to track the business being awarded in the City. 95 03/31/04 - FISCAL STABILITY - RES. 040276 So the majority of it, probably 600,000 is focused on technology. The remaining money will be used for consultant support in the actual redevelopment of a plan. When we talk about restructuring MBEC, we talk about looking at its focus and direction. Right now, the majority of MBEC's time is spent in the certification process. That is perhaps not the area that is of greatest need. The area that requires greater assistance if minority businesses, minority, women, and disabled businesses are to become a part of the economic development engine in the City it's technical assistance and outreach to those businesses. And so our refocussing of efforts will be in technical assistance, support of that nature, and also an outreach putting together the primes and minority businesses and monitoring that the businesses are, in fact, getting the work that has been promised in the awards. What we do now is report on awards. What we intend to do is report on actuals. 96 03/31/04 - FISCAL STABILITY - RES. 040276 The disparity between an award and the actual is sometimes so great that you wouldn't recognize the actual based on the award. So our whole refocus is to make this an organization that does what it is supposed to do, and that is to develop small economically disabled, disadvantaged minority and women businesses to become a part of the mainstream of Philadelphia, not to become permanent subs on City of Philadelphia work, but to become viable engines in the economy of Philadelphia. And that's where our refocussing and restructuring is going to take place.
How do you weigh that or stack that against the Administration's now focused to work smarter and part of working smarter is decreasing the number of staff to make sure that the same functions are achieved?
We have more people identified for MBEC, but to the extent that our efforts at restructuring don't mandate that we use all of the positions, we won't -- we're not going to fill positions 97 03/31/04 - FISCAL STABILITY - RES. 040276 gratuitously. I personally believe there may be a way to achieve our certifications in one body outside of City government that's supported by multiple organizations. It's a method that I've seen done in other places where individual agencies fund collectively a certification process, in which case the City would not be doing certifications. And if I didn't need certifiers then I'm not going to hire people just to hire people. But we have those positions available because we don't feel that we've been servicing the minority, women, and economically disadvantaged entrepreneurs of this City adequately and those positions are there to ensure that we have the resources to provide the level of support that's required.
And finally on this issue, in terms of time frame or deadline at the end of this restructuring, when do you see this new configuration of MBEC?
Once we get a new leader of MBEC in place, I anticipate that we're looking at no more than 90 days before we 98 03/31/04 - FISCAL STABILITY - RES. 040276 unveil the new MBEC. But it's something we'd want to do in conjunction with your Executive Director and his top person.
Sure. Now, moving to the rec centers. The Rec Commissioner is no longer with us, so how do we propose we approach this?
If you have general questions, the Managing Director can answer. If you have more detailed questions, we'll need to --
I think this falls under the general category. I know when I came here there were 100,000 young people that had no place to go after school. And now I know that figure has dropped to about 65,000 who we're still trying to find the dollars to make sure they're in safe, structured, secure, stimulating after school programs. And I've heard rec advocates speak to the notion that there has been, I quote, a zero out of the dollars for after school programs and rec centers. How do you weigh that against the 99 03/31/04 - FISCAL STABILITY - RES. 040276 text on that says you're actually going to hire an additional 60 after school staff for the new arts and cultural programs you want to put in place? Just discuss with me, is that true, is it not, what are the facts with regard to saving? Because even if we have to move towards the difficult decision of closing down rec centers, those programs can be moved to someplace else. So walk that through with me.
Phil Goldsmith Managing Director. As we're going about looking at the rec centers and going about our conversations, one of the things that we are looking at is all the activities that are taking place in individual rec centers and making sure that if a particular rec center was going to be closed down that we would have other available places for those activities to take place. There may be a school across the street. There may be some other rec center not too far away and so forth. So we would not see the closing of a center, hopefully, doing away with after 100 03/31/04 - FISCAL STABILITY - RES. 040276 school programs that are there. We think that they're absolutely essential to what the Administration is trying to do. So that's all part of the planning process that we're going through.
And are you at liberty to share, at least at this juncture -- you say the planning process -- how far along you are with regards to those decision?
We've done our own internal planning which has been driven by the Recreation Department and has involved others in the Administration. Based on certain criteria, we are now engaging Councilmembers in those discussions. We have started with District Councilmembers and we will with at-Large Councilpeople. But we have started those conversations I think yesterday sharing with them our information, basically saying we obviously want to get their input and hopefully we can come to a solution that meets everyone's objectives. I think the first several meetings we've had have been very productive. 101 03/31/04 - FISCAL STABILITY - RES. 040276
That's all for now on the recreation centers. Thank you.
Second go around. The Chair recognizes Councilman DiCicco.
Thank you. My question, I'm not sure who would be the right person to answer it. It does has to do with the Police Department, but it has to do with a question that has been going around as to what, if anything, is the City doing in the area of collecting overtime dollars that are due to us from third parties? I mean, it's going around for a long time. We're talking about collections with PGW and, here again, we're talking $2 million more or less. Where are we with that?
I think we're in a good place here. Several months ago, we worked with the Police Department expanding their program to make sure that all the charges that the City was incurring for those types of overtime were, in fact, included in 102 03/31/04 - FISCAL STABILITY - RES. 040276 our fees. So at that point in time, the only charges that we were being asked to be reimbursed for was the cost of the officer or officers that were on the detail. We have since gone back and looked at what we would consider a more complete cost structure, including the cost of the automobile, including the fleet, including insurance, depreciation and so forth. We looked at a number of cities to see how they went about it. So we, number one, revised what our cost factor would be. We've also issued a new directive that the Police Commissioner issued that basically says that any variance or exceptions to those charges have to be approved by the Police Commissioner and the Managing Director. And we are also monitoring from the Managing Director's Office, with the help of the Police Department, monthly reports that tell us what the past dues are, whether it's 30, 60, 90 days past due. And I believe, I'm not certain, anyone that's 60 days past due can no longer get services. So I think, one, we have a much better cost factor for 103 03/31/04 - FISCAL STABILITY - RES. 040276 what we're doing; we have a better monitoring process in place; and thirdly, a better exception policy. What remains to be done is to ultimately remove the collections from the Police Department to the Finance Department, and we're just waiting for some software ability to do that.
I'm not sure if I'm clear on this. It sounds as though you're talking about looking at recapturing some of the costs as it relates to the scope of the services. My concern is if an entity requests police presence on their premises and we charge them, the City of Philadelphia, the Police Department charges for that basic service, notwithstanding the other areas that you're looking at, fuel for the car, wear and tear on the car, that's done by contract? I own a bar restaurant on Delaware Avenue, I own a club, and I'm looking to hire some police personnel to work at my facility, at my club. There's a certain fee that, obviously, I have to pay. Is that done by contract? 104 03/31/04 - FISCAL STABILITY - RES. 040276
I believe it's contract. And that contract has been revised to reflect our new policy and what the charges are.
Now, again, notwithstanding those other charges that we may want to incorporate into it. Is there not money owed to the City, to the Police Department, to the City of Philadelphia on the basic fees that were being charged? Isn't there a balance out there? I mean, the City Controller mentioned something about $2 million that is due to the City by a third party. So if I'm paying, just by way of example, $15 an hour for that police officer, are there places, entities, that have not paid the basic rate, again, notwithstanding the broader scope of what we may look to recapture going forward?
There probably is some dollar amount still due. I don't know what that is. I can find out the number. But if it's over a certain period of time, that organization should no longer be getting 105 03/31/04 - FISCAL STABILITY - RES. 040276 services and we should be trying our best to collect that money.
Agree. And that's, I guess, where I started my questioning. What have we done to collect that money? And not providing a service is one thing, but shouldn't we be looking at since there's a balance due to the City, it's almost like a tax, shouldn't we handle it the way we would do any other business who fails to pay the appropriate taxes to the City of Philadelphia; and that is not renew the license until the bill is paid? Because if you don't do it that way, people will continue to operate and we're stuck for the money. What I'm getting at is we need to be more aggressive. If you contract with us and we provide the service, we're certainly entitled to reimbursement. And to not to provide the service is one thing, but if we just let them go because they didn't do it, who's to stop the next person. It kind goes like PGW, you know, one person doesn't pay and 106 03/31/04 - FISCAL STABILITY - RES. 040276 they find out the gas didn't get cut off; the next door neighbor finds out and then, before you know it, we've got a hundred thousand people or more who are not paying their gas bills. And I know a little bit about this, Mr. Goldsmith, because Delaware Avenue, as an example, is in my district and I know when I first came in Council back in the middle '90s we had a patrol down there. And many of the club owners were delinquent in paying for that service. They're still operating or they remained operating. The only reason they're not all operating today is because the business wasn't there or they closed down. But we really haven't done a good enough job. And I think it's something we should be doing.
I think we've become more aggressive, and I think the new directives that are out there, I will take a look at how much money from the old policy is still left over. And I agree, if people haven't paid, particularly businesses, we should be going after them. 107 03/31/04 - FISCAL STABILITY - RES. 040276
I'm not sure if we have the legal right to do that or not. But if we have a legal right, I would tend to agree with that.
Again, I'm not a lawyer. I don't know what the contract reads, but if it's a contract and it's reimbursable to the City of Philadelphia, there is a delinquent payment.
I think we've become more aggressive and we will continue to do so.
The other question I had would be for Ms. Wilkerson or whoever. In the proposed budget, we're talking about increasing the parking tax at parking lots from 15 to 20 percent.
Do you happen to know what that would mean to the average hourly rate for a customer, that increase?
I don't have that. 108 03/31/04 - FISCAL STABILITY - RES. 040276 I'll get you that figure rather than speculate.
I have a concern. Again, I understand this is about raising revenues and all but, you know, here we go again; we're encouraging people to come into the City of Philadelphia, we want people to come to our restaurants and cultural venues, and they're paying exorbitant amounts. And I hear that all the time about the cost of what it takes to park. You go to dinner, it's going to cost you an extra bucks minimum to 14 have dinner in the City of Philadelphia if you 15 do the right thing and park your car at a lot, 16 notwithstanding if you do a valet it's an 17 extra 10, $15. You know, I don't think this 18 is a good way of inviting people into our 19 City, to start increasing the cost of coming 20 into the City. I just don't think it's good 21 business. 22 It's a statement and a question at 23 the same time. I have a tendency to do that. 24 But I think it's important that I let my 25 feelings be known. "Welcome to Philadelphia. 109 03/31/04 - FISCAL STABILITY - RES. 040276 Come and enjoy our venues. Experience the great opportunities we have. Come to our restaurants. And bang, you're going to pay an extra bucks for the privilege of coming in 6 and dining at one of our fine restaurants." 7
I think the way the math 8 works, if the base rate is $20, a 5 percent 9 increase is a dollar. 10
In a City that, I believe, based on the medium income or however you do it, has probably one of the highest parking taxes already. We're getting very close to New York when it comes to charging.
What the Administration was attempting to do with all the tax reform initiatives is really look at them as a package. The Administration was trying to accomplish the single factor apportionment, was trying to generate -- 110 03/31/04 - FISCAL STABILITY - RES. 040276
But in challenging financial times like these, it wasn't easy coming up with a package of tax reform that was going to generate sufficient revenue to cause the reform. When you look at what the Tax Reform Commission suggested, this was something they had put on the table. They talked about increases in property tax. We rejected the increase in the property tax but thought it was sufficiently important to have the reform in the BPT that we decided to propose the change in the parking tax. We talked about it a lot because it does have the impact of making it expensive for people to come into town. On the other side, we do have a very robust public transportation system. A lot of other cities don't have that. And that's the simple answer. But it all goes into being part of what we considered when we decided to propose the single factor apportionment and balance against that the parking tax change. 111 03/31/04 - FISCAL STABILITY - RES. 040276
And I agree about the transportation system. It's unfortunate, it's a cultural thing. Society in America, people drive two blocks to go pick up a pizza rather than walk two blocks. And I know that from people in my neighborhood will drive two blocks. Years ago they would walk six blocks to go shopping. Now, if they don't have a place of park, they'll drive to New York to shop because they've got a place to park as opposed to walk.
And our rationale was in part that, also that it was important enough to take away the disincentive to bring jobs and businesses into the City that we went with the increase.
Well, if it's possible, maybe if the increase becomes a reality if there's a way in which a portion of that dollar or those dollars could be used to put a plan in place for a mass transportation initiative plan on how to move people around more efficiently and effectively within the City of Philadelphia. I attempted to do that 112 03/31/04 - FISCAL STABILITY - RES. 040276 about five years ago with the eastern part of what I call the Center City quadrant which I represent when the Simon project was still on the table about how we move people around the Constitution Center, Center City, both for commuters and tourists. SEPTA at the time was willing to put in $5 million to put a trolley system in, an authentic trolley, the one that runs on a rail as opposed rubber tires, as a sexy way, if you will, of moving people around. And I would support something that may have some sort of an increase providing some of those dollars went into creating a better, more friendly transportation system within Center City. So that when those tourist may come and visitors come from New Jersey, as an example, they would park their car on the Jersey side, if the tram ever gets built -- or another way, if they came into the City, park their car at a certain location and then get on a public transportation system that will move them around and feel part of the fabric of the City as they're moving around as opposed to just getting on a bus. 113 03/31/04 - FISCAL STABILITY - RES. 040276
Maxine Griffith, the City Planner, is not here right now. She's been taking a look at some of those issues, the parking issues and how transportation moves around Center City.
She and I did have conversations early on, but I haven't heard from her for a while.
I think those dollars have been put in place for that study to move forward. It is a huge problem. We're rapidly reaching the point of gridlock in Center City during a large part of the day, and she's working on thinking through those issues and she'll be here and able to respond later.
Talking about the parking tax for just a minute, I'd like to piggyback on that. I think nothing infuriates me more than to go to a restaurant in Center City and have a sign, "Valet Parking, $17." You pay your $17, you go in to 114 03/31/04 - FISCAL STABILITY - RES. 040276 have your dinner. You walk out of the restaurant and low and behold your car is parked right across the street. How much money are we losing as a result of that? I thought we passed legislation several years ago -- I think it was Councilman DiCicco's bill -- that very clearly spelled out what the requirements were for valet parking. Whose responsibility is it to enforce that legislation?
We share a pet peeve. The Parking Authority is responsible for that and L&I is responsible to ensure that there's proper insurance. We recently had the two agencies working together to go to the valet owners and wanted to make sure that their insurance is in check. Sometimes they get insurance for a day and that's it. In some cases, they've been taking more spots on Walnut Street. It's been terrible. They've taken five or six spots. I think we've put an end to that. If you see any spots, let me know. 115 03/31/04 - FISCAL STABILITY - RES. 040276 I've gotten a lot of complaints from people, they're charging the money, as you say, and then taking spots that people coming in can't park at. So it's something that we've tried to get both the Parking Authority and L&I engaged in. And if there's legislation that's needed to tighten that, I, for one, would certainly be supportive of it.
You will let us know if that's a requirement? Because, as I said, I find that very infuriating, I really do. Thank you.
Just a follow-up. We did legislation three, four years ago, maybe five years ago. Certain requirements on insurance and the operators, the people who were valeting cars would have to properly be licensed, valid licenses, et cetera. There's a lot of things that continue to fall through the cracks. And I can't fault the Park Authority or L&I. It's just a massive problem. You have the drivers, the 116 03/31/04 - FISCAL STABILITY - RES. 040276 valet people, who will literally park their cars on the street so that they can then jockey the car out and put a car that someone paid for a valet and pocket the money. To add insult to injury, in many, many cases, a customer who will pay for valet whose car ultimately gets left on the street, the car will get a ticket. The customer doesn't know about the ticket until 10 days later when they get a notice from the Parking Authority that their car was parked illegal. And if you want to talk convincing people never to come back to the City of Philadelphia, they paid the valet, now they get whacked with a $25 ticket, thinking that their car was parked in a secure place. They're not coming back. And I know restauranteurs who literally have stacks of tickets that are sent to them by the customer who came to their establishment to dine, complaining about it, and those restauranteurs in many cases are paying for the ticket so not to lose a customer.
But if the restauranteur has a sign outside of his 117 03/31/04 - FISCAL STABILITY - RES. 040276 establishment saying --
The restauranteur contracts with the valet service. I own a restaurant, I contract with a valet service. The valet service then is supposed to perform the service of parking that car in a lot off the street. The restauranteur is getting banged in every direction because they don't know. They're paying for that service and then the customer is getting a ticket. It is a serious problem. I'm happy you brought that up, Madam Chair. And I know in Old City in particular, it's out of control.
This is one of the issues when we talk about the Parking Authority being a separate agency where I think it hurts legitimate coordinated enforcement. Now, we try to work together on this, but it's a serious issue. In some cases where they're required to get insurance to get whatever license, we just see it for that day and there's been instances where it's a 118 03/31/04 - FISCAL STABILITY - RES. 040276 one-day insurance policy. While we're on topic, they've got too many valet signs out there. We're trying to work with them to reduce the number of valet signs. But I think it's a big problem and it goes to the point, you were saying, people come into town to park and they're sort of getting ripped off.
Yes, they certainly do. The Chair recognizes Councilman Kelly.
Mr. Goldsmith, you might as well stay there. I have a question for Ms. Wilkerson. Earlier in her testimony she mentions something about the City workforce. I think everyone knows that we have a heck of a deficit facing us, over $200 million. Now, personnel costs account for more than almost 58 percent of our budget. And you mentioned earlier that you certainly are not anticipating any layoffs whatsoever. I just want to know if you plan on cutting 119 03/31/04 - FISCAL STABILITY - RES. 040276 back the size of the workforce which almost comes to 25,000 people through attrition or through outsourcing or any other means?
The Administration will continue to be very aggressive in taking full -- in making good opportunity out of the DROP Program. Currently, we have about 800 fewer employees on payroll than we had in 2001 when we started our freeze. We've accomplished a lot of that by our DROP policy. We replace, at best, 50 percent of the non-uniform employees who leave through DROP. Every position, even within the 50 percent that's filled, is filled after review by the Managing Director and the Budget Director. So we've made good use of the DROP opportunity. The same is true of positions that are vacated through attrition. We have on the books a couple of initiatives for outsourcing. One has to do with providing janitorial services, so we're taking a look a that. Have not made a final decision about moving forward with that. But the largest part of our strategy comes from 120 03/31/04 - FISCAL STABILITY - RES. 040276 taking advantage of the DROP opportunities that are created.
What do you anticipate for the forthcoming year at least?
Since the hiring freeze began, we're down about 850 positions. And we project that next year we'll be about 23,800 is where we'll be in terms of the number of positions.
We haven't looked at it that way. We've looked at it kind of initiative by initiative. So we can get back to you with the dollar savings from the reduction in workforce.
It seems to me that -- I know what the Administration is attempting here by closing a recreation center here and there and raising some fees and raising parking fees and a lot of other things. I just wonder if this is a Band-Aid 121 03/31/04 - FISCAL STABILITY - RES. 040276 approach to a hemorrhage, more or less. Because I think that it seems to me with a deficit we're facing, we may have to do a 5 percent reduction in the workforce to get by. 6
I think one of the 7 challenges is if you look where -- there's 8 certain departments that have been absorbing a 9 lot of the cuts, and at the same time there 10 are departments where we've been experiencing growth in the workforce. Those tend to be the departments that fulfill the county functions. And so it tends to be in the prisons, DHS. In the departments where we have complete control, they are down to bear bones in a lot of instances. If we're going to cut further, we're going to be seeing serious erosions in service. The library, for example, is so tightly staffed that any additional cuts will mean cutting back on the hours. We'll start seeing Sunday hours go, Saturday hours go. We already have spot times when we can't keep a branch staffed adequately to have Saturday and Sunday hours. That's how close to the margin they're operating. 122 03/31/04 - FISCAL STABILITY - RES. 040276 So we're trying to take advantage of opportunities. Saying that we're going to do another across-the-line cut in personnel is something we're not contemplating right now.
To add onto that, to look at where the biggest reductions have been is in kind of back office departments like Public Property, and like Fleet. I mean, eventually, if you cut too far, that winds up having an impact on service because they don't provide the support they did. But that's what we've really looked to do, to reduce positions in the agencies that the public doesn't see.
And as far as the Administration, I believe, is not going to affect the Police or Fire Departments, is that correct, as far as reduction in personnel?
We are looking at deployment changes in the Fire Department.
I would say in both those areas that the commitment is to do nothing that would jeopardize public safety. So in some cases, for example, in the Police Department, I think the Police Commissioner -- 123 03/31/04 - FISCAL STABILITY - RES. 040276 and this gets a little bit to Councilman Clarke's question earlier -- is looking to reduce the administrative ranks and having deputy commissioners and fewer captains and so forth and really use those positions to get people out on the street. Now, there could be a dollar savings, but we think at the end of the day, it's going to enhance public safety, not distract from it. The same thing in the Fire Department, no fire stations closed. There have been a reduction in structural fires over the past four years and fire deaths. We think we're really have to increase our EMS service, particularly in light of some of the things at MCP and some of the emergency diverts and so forth. We are looking at a way to reconfigure EMS support, the EMS system. So again, at the end of the day, we think we're going to be providing better public service, but we will not be laying anyone off.
But there may not be as many. In order to send out an EMS vehicle, you have fewer staff than you do if you're 124 03/31/04 - FISCAL STABILITY - RES. 040276 going to send a ladder company to do the same EMS-type run.
I understand that. This goes back quite a few years, I think, in trying to get clerical people to replace police officers and Fire Department personnel who were highly trained, and the cost of that training is substantial. I wish you luck. I wish the Commissioner luck in trying to do that because I know I've heard that for at least 12 or 15 years and nothing has ever been accomplished, as far as I know.
We also have the same issue to a lesser extent in the prisons where we have correctional officers doing non-correctional-officer work.
And that's another question that I have about, of course, the prison overtime. There's another area that we have to look at very, very closely. I think that maybe we don't have a sufficient amount of people working on a daily basis and we're trying to offset that by having a lot of 125 03/31/04 - FISCAL STABILITY - RES. 040276 people work overtime.
I think the overtime, I think the City spends $117 million in overtime. It's pretty much territory to a couple departments, and I'll lump those departments in the public safety arena. What we have done is issued a directive to each Commissioner to ask them that they are personally responsible for overtime approval, that if they're delegating it, they've got to tell me who they're delegating it to. What the approval process is, for emergency overtime, they've got to define what an emergency is and have report on a biweekly basis how much emergency overtime is being run up. In some cases like the prisons, that could be a combination of a shortage of not having the right number of people or the right type of people. And in some cases, I think the one that sort of becomes somewhat infamous, you had someone that kept on volunteering for overtime. But we've also asked the Prison Commissioner and others to look at, is it the type of work that's got to 126 03/31/04 - FISCAL STABILITY - RES. 040276 be done at all and does it have to done on an overtime basis. So there's a whole re-looking at what we're doing in overtime.
Thank you, Madam Chair. Ms. Wilkerson, do you have economic development officials you wish to bring forward?
Yes. You had asked a question about how the Administration would spend the half billion dollar infrastructure fund and I talked about the naval yard. I wasn't able to answer your follow-up questions satisfactorily, and I appreciate that and asked Mr. Longstreth to come and also Stephanie Naidoff the City Rep and Commerce Director to talk through in more detail what we propose.
If they both could approach the witness table. Actually, I have some preliminary 127 03/31/04 - FISCAL STABILITY - RES. 040276 questions before we get back to what you specifically have planned. Good afternoon, Mr. Longstreth.
Would you agree with the statement that you can't transform neighborhoods just by dealing with housing needs?
Would you agree with the statement that you can't transform neighborhoods by just dealing with housing needs?
Yes. I think it has to be a more comprehensive approach. I agree.
Well, how is PIDC involved in the Neighborhood Transformation Initiative?
On a somewhat limited basis because I think where that particular program is right now is in planning, site assemblage, demolition and the 128 03/31/04 - FISCAL STABILITY - RES. 040276 development that will follow and include a commercial and industrial piece which hasn't really materialized yet, but we anticipate it will.
Is there any strategic planning that is accomplished so far in terms of economic development?
Not of any substantive nature. It's been conversations in anticipation of reaching that phase. And I defer to Joyce or anyone else who knows more about that than I do.
Actually, I was speaking specifically about PIDC's involvement.
It's been limited to date for the reasons I tried to describe.
My second question then is -- I'll move on to the economic development investment fund. How many businesses and permanent jobs can you 129 03/31/04 - FISCAL STABILITY - RES. 040276 create with half a billion dollars?
I don't know. It gets back to the sort of rules of thumb that we were discussing a little bit yesterday. If you use a or $30,000 number which might be 7 an industry standard and divide it into 500 8 million, you get a lot of jobs. 9
I'm not even 10 asking that we present a formula. If I were 11 to present a formula, I would say that 12 hundreds of millions of dollars should give us 13 a net gain of tens of thousands of jobs or 14 close to that. I'm just more so asking in 15 terms of -- I'm assuming you are involved in 16 the planning of economic development 17 investment fund, and I'm asking do you have 18 any job goals or projections or do you have 19 any goals in terms of business creation that 20 are hard numbers so far in terms of a half billion dollar public investment?
I think -- and once again, I'm speaking a little bit on behalf of the Administration but, as you know, we're somewhat of a separate entity. My impression 130 03/31/04 - FISCAL STABILITY - RES. 040276 is -- or I'll give you my impressions and then obviously stand corrected if the Administration sees it differently. My sense is that this goal to raise $500 million, that there's an economic development summit which will occur in the next several months that will provide the kind of structure and specificity to how that might be, one, where it would come from; and two, how it would be used. Since that hasn't occurred yet, it's still very conceptual.
So there are no 14 specific goals yet in terms of number of businesses or jobs to be created?
Is any portion of the $500 million spoken for in terms of concrete strategy?
No. This is Stephanie Naidoff, I'm the Commerce Director. This is all very preliminary, Councilman. The $500 million has been approached very conceptionally by the 21st 131 03/31/04 - FISCAL STABILITY - RES. 040276 Century Policy Forum and the Regional Cooperation Committee headed by Nick DeBenedictis actually took a look at it and made some recommendations to the Mayor, but that is all very preliminary. And what we propose to do is, as Mr. Longstreth said, have an economic development summit where we get the broadest possible perspectives from the stakeholders in the community and develop a plan to deal with the allocation of the $500 million investment fund.
Could you respond to a study by the National Community Reinvestment Coalition that said that Philadelphia ranked dead last of the top 100 metropolitan areas in terms of lending to lower income and minority census tracts, small business lending in particular?
No, I can't. I don't know about it, but I'll look into it and I'll 132 03/31/04 - FISCAL STABILITY - RES. 040276 try to get back to you on that.
Does that sound like it would be accurate, that Philadelphia would rank dead last in the top 100 metropolitan areas in terms of small business lending to economically distressed areas?
I have hard time believing that, but I'm very new to all of this and I'll try to look into it.
It just doesn't sound like the result that I would expect in terms of what is going on in Philadelphia.
Thank you. Do we have any other questions of these witnesses?