COUNCIL OF THE CITY OF PHILADELPHIA PUBLIC HEARING - COMMITTEE OF THE WHOLE - - - Room 400, City Hall Philadelphia, Pennsylvania Tuesday, April 13, 2004, 10:18 a.m. - - - BILL 040255 - An Ordinance adopting the Operating Budget for Fiscal Year 2005. PRESENT: COUNCILWOMAN JANNIE L. BLACKWELL COUNCILWOMAN BLONDELL REYNOLDS BROWN COUNCILMAN DAVID COHEN COUNCILMAN W. WILSON GOODE, JR. COUNCILMAN JACK KELLY COUNCILMAN JUAN F. RAMOS COUNCILMAN FRANK RIZZO COUNCILMAN FRANK DI CICCO COUNCILMAN MICHAEL A. NUTTER COUNCILMAN DARRELL L. CLARKE COUNCILWOMAN JOAN L. KRAJEWSKI COUNCILWOMAN DONNA REED MILLER COUNCILWOMAN MARIAN B. TASCO COUNCILMAN BRIAN J. O'NEILL 2 Bill 040255 - 4/13/04 P R O C E E D I N G S - - -
A quorum being present, the committee of the whole is called into session, regarding Bill 7 040255, an Ordinance adopting the operating budget for fiscal year 2005. So we thank you all for being here, and we're ready to begin. We will ask the... Clerk will read the title of the Bill. Thank you. MR. McPHERSON: Bill Number 040255, an Ordinance adopting the operating budget for fiscal year 2005.
Thank you very much. We'll ask the Administration to come forward, begin your testimony.
Good morning. My name is Joyce Wilkerson. I'm Chief of Staff to the Mayor. I'm here to present testimony regarding fiscal year 2005 operating budget to the Office of the Mayor. 3 Bill 040255 - 4/13/04 Because the amount requested for the Mayor's Office from the General Fund for fiscal year 2005 is $80,395,773, an increase of $4,412,366 over FY 2004 estimated obligations. Of this total amount, 4.195773 is for employee compensation and purchase of services, material, supplies and equipment. The largest portion of this request, the Class 100 appropriation, includes approximately $3,335,849 for 46 positions and represents an increase of $430,086 over 2004 estimated obligations. The 46 positions represent a reduction of three positions from the authorized level for FY '04, and the requested Class 100 appropriation reflects a 14 percent increase, resulting mostly from additional staff in the Office of the Inspector General and the Office of External Affairs. There is also an increase of $11,588 in Class 200 appropriation and a reduction of $28,732 in Class 3/400 appropriation. 4 Bill 040255 - 4/13/04 The increase in the Class 200 appropriation results mostly from additional funding for the Office of the Inspector General to contract for forensic auditing services. The remaining portion of the General Fund total, $4,200,000, is for the City scholarships. This amount will fund a dramatic new program intended to help Philadelphia high school students graduate -- graduates attend college. Through a partnership between the Mayor, School District CEO Paul Vallas, and U.S. Representative Chaka Fattah, the new non-profit organization, College Opportunity Resources for Education Philadelphia, will provide college scholarships of up to $3,000 each for needy Philadelphia high school graduates who might otherwise not be financially able to attend college. This makes Philadelphia the first city in the country to have a system wide scholarship program for graduating high school students. 5 Bill 040255 - 4/13/04 The City's contribution was budgeted to be $4 million per year for the next four years, while the School District will contribute $6 million per year. This is truly a ground breaking opportunity to develop our youth and our future workforce. The grants revenue request for fiscal year 2005 is $1,252,355, a decrease of $1,043,123 from FY '04 estimated obligations. The remaining grants are principally from the state to the Mayor's Commission on Aging. The grants will enable funding for occupational training for older adults. This substantial reduction in grant requests to the Mayor's Office results mostly from the Administration's decision to place literacy and transportation grants and programming under the direction of the Free Library and City Planning respectively. It is our expectation that connecting literacy and transportation to city agencies that share their mission will enhance the effectiveness of the respective 6 Bill 040255 - 4/13/04 programs. This budget also includes three additional staff in the office of the Inspector General, which will allow the Administration to keep its commitment to promoting high ethical standards in municipal government. In addition, this budget includes additional staff in the Office of External Affairs, which will allow the Administration to more effectively communicate the City's priorities to local, state and federal officials. You will be hearing from the Mayor's Office of Community Services, the Office of Housing and Community Development, the Office of Labor Relations, and the Mayor's Office of Information Services on their fiscal year 2005 operating budget requests later in this these hearings. Thank you for your support. I will be happy to answer any questions you may have.
Thank you 7 Bill 040255 - 4/13/04 very much. Can you explain why the Mayor cut elected officials' budget at the same time he was requesting to increase his General Fund budget $412,366, which equates to an percent increase? 8
Well, some of this 9 is because the City for decades has under 10 funded the Office of the Inspector General. 11 Historically, we've only had three people in those -- in that position, growing out of -- in part growing out of the 21st Century forum. And also, out of our experience over the last three years, we recognize that we needed to do a better job working across the City on internal controls, and also trying to address the various ethical challenges in government. And so, the decision was made to increase that funding. We also, over the last several years, have had enormous challenges trying to represent the City effectively in Harrisburg and also in Washington. 8 Bill 040255 - 4/13/04 The City has increased the seniority of people in those positions, to try to better advocate for the City's position. We have confronted challenging issues, ranging from the City's tax structure to the Parking Authority, governance issues, to Convention Center governance issues, and thought that we needed to bring more senior staff to the table in some of those areas. That's the basis for the change.
Let me be more specific. In Class 100, you requested an increase 15 percent, $430,086. Would you explain what this increase is for and why it's needed?
Well, what we have done is, we've increased the number by $300,000, the number of employees we have, the compensation and number of employees we have working for the office of the Inspector General. That -- Those are all funded out of the Mayor's Office. We've also increased the External 9 Bill 040255 - 4/13/04 Affairs by two persons, in order to better address the challenges we have in Harrisburg and Washington.
In your Class 200 -- In your Class 250 budget, you're requesting $250,000 for Internal auditing services. What audits are you requesting and why can't the Controller perform them?
These are in connection with forensic audits, done by the Office of the Inspector General. The Inspector General serves two primary functions. Some of them are criminal in nature, investigations that are criminal in nature. There have been reports over the last year about issues across government. Frequently, those results are either anonymous calls to the I.G. or at times they are instigated by the Administration. We don't have in-house capacity to conduct forensic audits, and so, have those things done by the Inspector General. It's a 10 Bill 040255 - 4/13/04 different type of investigation from that done by the Controller's Office.
Due to federal government actions, during a budget crunch, decide this is the time to bring that department up to snuff? This is... My experiences over the last... over the last at least decade, the City has had -- has not paid sufficient attention to some of the internal controls. It came to the attention of the Administration through... I think it was back in 2001, where we had a number of inspectors in the Water Department, who were indicted federally. And what we did was, ask ourselves, how could something like this happen; and sat down with a group of people across government, and ended up retaining consultants to work with us, trying to figure out how could a problem like this happen. I believe it was 19 employees that 11 Bill 040255 - 4/13/04 were involved. And what we found was that the City had very little, in terms of consistent internal controls. And we've been working since that point in time trying to help departments put systems in place, consistent standards in place, to deal with things like contracting, monitoring contracts, invoicing. A lot of the systems that you would expect to be in place have deteriorated over the years. And I think that in the long run what we'll find is that the City is much better off, that we are more efficient, that we are not losing money, if we go on and spend the time now, in trying to figure out what kind of commitment we ought to make to the Office of the Inspector General. The 21st Century Forum did a survey of about eight different jurisdictions across the country, and found that some were substantially larger than 12 Bill 040255 - 4/13/04 Philadelphia. Although Chicago is a much larger City, it had an internal -- it had an Inspector General's budget of several million dollars. Other jurisdictions had considerably less money being allocated. But I think in the long run what we'll find is that the City is better off, that the work we do we'll do more efficiently, and that we'll be able to hold everyone across government to a much higher standard if we go on and spend these dollars now, even in difficult financial times.
Thank you. We're going to open the floor to my colleagues, so we'll try to do five minutes around, if that's acceptable to everyone. Councilwoman Krajewski.
Thank you. Joyce, my question is regarding the scholarships. Can you explain, when they make a decision to exclude the Catholic schools, especially in light of the fact 13 Bill 040255 - 4/13/04 that the parents still have to pay the taxes that save the City and the state millions and millions of dollars.
I'd like to ask Debra Kahn to come up to address that issue.
We still can't hear you. Can you move the mike closer.
I'm sorry. The core scholarship program was initially proposed by Congressman Fattah. And discussed it with both the Mayor and the School District CEO Paul Vallas. And there were -- Really, the 14 Bill 040255 - 4/13/04 principal driving motive behind it was to be able to increase the college-going rate among students in Philadelphia which is -- had been lower and is lower, compared to other competitive cities. And in some school districts, the college-going rate especially, we think that it's about -- around 30 percent range right now. And we need to get that higher to be competitive. So it wasn't so much a decision at all to exclude the other, you know, children, and particularly those who attend private and parochial schools. It was really about how could we address within the resources we thought we could raise the largest number of students, and really address the biggest problem, which was to increase the college-going rates, whereas we're told in the parochial system, for example, you know, those college-going rates are much higher than the majority schools --
At this time, when the group made that decision, again, it was made by the people who -- you know, those of us who designed the program initially, among the Congressman, the Mayor, you know, the School District. But again, it wasn't so much as a way to exclude. It was a way to say, within the resources that we have -- Actually, we achieved the primary goal that we have, increasing the college-going rates, and to be mindful of the budgetary constraints, that this was the place that we would start. Recognizing it -- And I think it's important to keep remembering that the public funding commitment for his is always intended to be temporary. The Chief of Staff described what's 16 Bill 040255 - 4/13/04 in the City's budget now going forward for the next four years. And the School District's made a similar four-year commitment. But the idea is, at the end of those four years, that -- and the Congressman has taken on this leadership role and this responsibility -- they will be raising private funds to be able to replace all the public funds, so that this would be a publicly financed program. But having said that --
What would it cost to include the Catholic schools? How much difference?
Well, it really depends on how it was structured. And there are a number of options. And I guess it was the last week or the week before when we discussed this, you know, pretty extensively in the hearings. I certainly heard the sentiment from, you know, a number of your colleagues, other members of Council, who 17 Bill 040255 - 4/13/04 have expressed the need. And what I said was, you know, we had been working with Councilman Ramos and members of the Archdiocese. And we continue to discuss it, and are willing to do that, different options.
Well, they certainly, you know, are very interested in being able to figure out a way for their students to participate.
I certainly will be looking at it, because I feel that they should be included. I mean, as I said before, they're saving the City and the state millions and millions of dollars by sending their children to parochial schools. Is there any chance that we can work 18 Bill 040255 - 4/13/04 on that to see that they are included?
Yeah. We are continuing to discuss it and will get different options.
You are going on a continuous basis, looking into the parochial schools.
And you say that the charter schools are involved as well.
We likewise thank Councilwoman Blondell Reynolds Brown for the information we received and the correspondence that she circulated 19 Bill 040255 - 4/13/04 regarding the schools core scholarship program. Are there more questions on education?
Miss Kahn, isn't the... Congressman Fattah initiated money, federal money, that the School District is using? They're not using any local tax dollars, are they?
Right now they are pledged up to 6 million a year for each of four years. Of that 6 million, they expect that 3 million of that would be originating as federal funds.
Right now I think they're looking at a variety of different funding and other sources, but I'm not -- but I do not believe at this time that they're 20 Bill 040255 - 4/13/04 looking at tapping into their operating funds.
Okay. I would just ask you to urge everyone involved with the scholarship program to decide... If they're going to make a decision to open it up, make the decision prior to the time we have to pass this budget because it's not going to do much good afterwards, people making decisions on the schedule. Because this is a black and white line for me. I can't go home back to my District and say, you know, I voted for a City budget that not only discriminates when it was intended initially not to discriminate; it is a fact that it discriminates. Everyone's aware of it now. I know there's been meetings, led by Councilman Ramos, Councilwoman Brown. And they've got the right people in the room to go over this. 21 Bill 040255 - 4/13/04 But I just want the Administration and the School District particularly to know how important many Council members -- There are a whole lot of issues in this budget, but this is one that just goes against the grain of everything I come down here to serve Council for. So if you could at least put that time line on it, I'd appreciate it. Thank you.
Thank you. Councilwoman Tasco, and then Councilman Rizzo.
Are the charter schools requested to have to put up money for the scholarship program, contribute?
So would the parochial schools, would the Archdiocese, be required to come up with dollars for the scholarship program?
Well, when we had 22 Bill 040255 - 4/13/04 discussed the different models, certainly the model of the program as it's currently structured is that the City would put up a share of the funding for this, and the School District on behalf of its students, public school students, would also be putting up a share, you know, a matching -- not an equal matching; in fact, a greater proportion of the dollars. So that if we held to that model, what is in effect a cost-sharing model, certainly we would have liked to see and would still like to see some type of cost-sharing also between the City and any other school provider, whether it's parochial schools or other non-public schools. So that certainly one of the options, and frankly the option that the Administration had preferred. You know, whether or not that can happen, you know, remains a question.
Is that one of the... Is that part of the discussion 23 Bill 040255 - 4/13/04 going on with the Archdiocese now, in terms of their contribution?
It is part of the discussion. It is not -- not the only discussion.
Thank you. Councilman... Okay. Are your questions related to education? UNIDENTIFIED
All right. Then we'll come back. Councilman Rizzo.
Thank you, Madam Chair. I'd like to go on record also. This is very difficult issue to try to explain to my constituents, our constituents, that a program could even be devised that would exclude, like Councilwoman Krajewski said, parents that are struggling to send their kids to other than public schools and not be included in this program. 24 Bill 040255 - 4/13/04 So, I want to go on record also. I'm having a difficult time understanding how we could even introduce something like this that wouldn't be all-inclusive. Thank you, Madam Chair.
Thank you very much. Councilwoman Krajewski, of course, a point of information.
I understand that the School District is given 6 million, is that right, for this program?
Okay. Has the Archdiocese ever been asked to participate in it, as far as -- as well as the School District? Did anyone contact the Archdiocese about becoming part of this program?
Do you mean to make -- As we sit here, I said we have had discussions -- 25 Bill 040255 - 4/13/04
No one has been in touch with the Archdiocese; is that true?
It was my impression that they were never asked, as far as I was concerned.
Okay. I'll be back again with them again this afternoon. Thank you.
Thank you, Madam Chair. I just want to reiterate some thoughts and some information that I've shared before here at these committee hearings concerning the subject of the core scholarship. I initiated a meeting about six, Bill 040255 - 4/13/04 seven weeks ago, where I called, asked the Archdiocese, Congressman Fattah, Debra Kahn, a prominent business leader and myself to talk about this issue. It was agreed at that meeting that particularly the Archdiocese, and the City, and the Congressman, and myself would continue to find a way to make this work for all the kids in Philadelphia. A number of proposals have been presented. One proposal that the Archdiocese at this time cannot accept is their contribution to this fund. And they explained, to my satisfaction, their fiscal situation which would prevent them at this time, because of the closing of schools, the competition with the charter schools, and the neighborhoods of parochial schools, that they would not be able to contribute to this funding. It is my -- I share the same concern that my colleague, Brian O'Neill, shares that I prefer, which is why I took the 27 Bill 040255 - 4/13/04 initiative that this not come up for a vote. I think this stands to be very divisive. And this is a City Council that works toward having unity within this body. And to that end, I continue to be involved, and all parties, Councilwoman Krajewski, are involved in trying to find a way to make this work. And the way it should work is that the parochial school students and other students, besides the parochial school students outside of the public school system, are included as well. Thank you, Madam Chair.
Thank you, Madam Chair. Miss Kahn, let me ask a couple background questions first. The testimony makes reference to a new non-profit organization, College Opportunity Resources 28 Bill 040255 - 4/13/04 for Education Philadelphia, also known COREP. When was this created?
We're in the midst of creating... you know, filing the necessary papers.
Okay. And how will it function or operate or who will run it? What... It's a...
First of all, the function of that organization is really supposed to be the vehicle through which the private fund raising can occur. And so, as I said earlier, the Congressman has taken on the challenge of raising sufficient private funds so that going forward the scholarship program will be able to be funded in perpetuity with private funds.
Right. No; I understand. And I certainly want to preface my comments by saying I support the goal and the idea. But as has been expressed earlier, there are a number of us asking the 29 Bill 040255 - 4/13/04 question. So, you're in the process of establishing the non-profit. So I guess at the moment who is going to run the program, who administers the funds, who decides who gets the scholarship?
There have been administrative funds that were secured by the Sallie Mae foundation and by the Congressman, so all the public scholarship dollars right now, whether it's the City's contribution or the School District's contribution, would be going -- 100 percent of those funds would be going to support the actual college scholarships themselves. And those dollars, the administrative dollars, are being used to contract with the Philadelphia Education Fund which currently runs a scholarship program for a certain number of high schools, and a very similar type of scholarship program. So it was thought that because they had the experience -- 30 Bill 040255 - 4/13/04
All right. So they're going to provide administrative support?
Okay. Who's actually going to decide which individuals get a scholarship and where does the City's $4 million go? Who's that get transferred to?
The... First of all, I mean, the way the program operates, as long as the student meets the eligibility criteria. So it's not like a competitive scholarship program, the way some other programs are. As long as the student meets the eligibility criteria of, of course, 31 Bill 040255 - 4/13/04 graduating from high school, and then being admitted into one of the eligible colleges, then that student would be awarded a scholarship.
And regardless of the number, I guess, you know, we'd like to be in this kind of situation, but I mean, it sounds like as long as you're eligible, going to one of the schools and meet all the other criteria, anyone who applies would get a scholarship --
-- and it's up to $3,000, and it is dependent upon circumstances. So each student, for example, needs to also complete -- each applicant also needs to complete a financial aid form. And so, you know -- 32 Bill 040255 - 4/13/04
And you have to get whatever financial aid package might be forthcoming from the state --
There is going to be -- And we have not... In discussion right now, the exact methodology is that is being used. The Philadelphia Education Fund does, in fact, as I said, award these scholarships, and is used to doing this kind of packaging. And so there is the discussion under way. We're reviewing the criteria that 33 Bill 040255 - 4/13/04 they use now, sort of the formula, the approach that they use. And -- And we are discussing that now. And then, once the parties that are involved in funding this, you know, are comfortable with that approach, then they will, the Education Fund, would actually end up awarding the packages, according to the methodology that's agreed upon.
And is the City's $4 million, is that going to be transferred to the Philadelphia Education Fund?
Yeah. We have not established the actual mechanism for that yet, but it is anticipated that when, on a twice a year basis, because this is done on a semester-by-semester basis. On a twice-a-year basis the Education Fund would notify both the City and the School District as to what the anticipated need is. And then the City and the School District would in turn, you know, provide 34 Bill 040255 - 4/13/04 those dollars so that the Education Fund could actually issue the checks to the respective colleges and students.
So you're saying at some point there would be a transfer of City dollars to PEF.
Correct, solely for the purpose of issuing the scholarship checks.
Okay. And would that be done as a grant directly from the Mayor's Office to PEF? Do you have to come back and do a transfer ordinance? I'm trying to understand the mechanics.
I don't think that it would need a transfer ordinance, but we're still looking at, you know, the various... what the contractual, you know, options would be.
When do you expect to be able to award scholarships? The application deadline is May 28th; do I understand that?
No. It's actually April 35 Bill 040255 - 4/13/04 15th, unless it's been changed. And I'm not aware of that, but I thought that it was April 15th. But the scholarship checks really don't typically go to the colleges until August and September, until after all the enrollment is done, you know, for the fall semester. So none of the dollars were contemplated being needed before Fiscal Year '05.
I thought that the application deadline within the public schools -- And we had moved it back a couple of times, to make sure that we get maximum participation -- was now set at April 15th. And once those applications are coming in to various counselors at all of 36 Bill 040255 - 4/13/04 the high schools, and to the School District's High School Office, they are then reviewing all the folders, to make sure the information is complete; and, you know, if any additional information is needed they'll get back to students. And then those folders in turn and those applications would be turned over to the Education Fund.
Okay. How many graduates from Philadelphia public schools -- We'll just have that discussion for the moment. How many graduates of Philadelphia public schools went to college last year?
You know, one of the things that we're very hopeful that the scholarship will do is to be able to provide us with better data than we have now, because none of us have been really very, very comfortable with it. And I know I should have those numbers with me, but I don't. But I think that the last seven numbers -- and I don't 37 Bill 040255 - 4/13/04 think they are last year's that I looked at -- showed that it was something about... And I'm sure -- Maybe about 3,000 students, something maybe in that ballpark, maybe a little less than that.
Well, how many students graduated from high school last year?
You know, again, something about eight or nine thousand. I don't have the exact numbers. But what we have always --
How many students are in high school? How many students are in high school right now? (Ms. Kahn began speaking simultaneously with Councilman Nutter, not reportable.)
-- seniors right now. I think about 40, 50,000. Something like that. The graduating class, when we look at the seniors, is roughly about 9,000.
What's the current census at the District? Is it 212, 38 Bill 040255 - 4/13/04 220? How many students -- (Ms. Kahn began speaking simultaneously with Councilman Nutter, not reportable.)
And you're saying that there were 450,000 seniors -- I mean -- I'm sorry -- Take that back -- 450,000 high school students.
And we think that there were eight to nine thousand graduates, but you're not sure.
That's what I said. I can confirm those numbers. 39 Bill 040255 - 4/13/04
I can check my file. I just don't recall the numbers. And rather than give you incorrect numbers, I'd rather check the information that I have.
Well, all right. How many do you think did not go to college because of financial problems?
The research and the experience tells us -- and while I can't know it exactly, that that number can be substantial -- But even more than the financial problems, the issue is really one of being able to increase expectations and create a college-going culture, and atmosphere, and expectation, and opportunity on the part of our students and many, many other urban students across the country. So that, again, another really driver for putting this program in place was, in addition to trying to provide additional dollars, it was really a way to 40 Bill 040255 - 4/13/04 provide motivation, and expectation, and opportunity, and send a message loud and clear that there can be a future for you...
Sure. And I agree with that, but... And I mean, and you're saying that the missing piece here or that last driving piece is to also let the students know that there would be up to $3,000 of... I think it's been characterized as this is last... Is this also considered last-dollar money? I mean, you already have to... I'm assuming you have to apply to college, get accepted to college, fill out a financial aid package to college. And then if you come up short or think you might come up short, then you apply to this program, right?
Yeah. We are encouraging every student who's applying to one of the 41 Bill 040255 - 4/13/04 eligible colleges. Number one, they are required to, yes, fill out the financial aid forms.
But two, they should also be at the same time filling out the application for the core scholarship.
Okay. And then I guess lastly, I mean, we are actively, with or without the program, trying to encourage students to further their education and desire to go to college. I mean, that doesn't start in 11th grade, does it?
No. That's exactly correct. And a lot of what's happening and been happening in the School Districts is to create that culture earlier and earlier. That's why... I mean, the fact that here our program that Congressman Fattah authored and that is now, you know, certainly gone national, starts lower and lower.
And making those opportunities and experiences available for younger students.
I understand. And do you have any information with regard to how many students who graduated last year, who went to college, found themselves short, somewhere in the neighborhood of up to $3,000?
I don't have any specific information on that. Again, we do have, I mean, a couple of things. One is the experience of the Last Dollar Scholarship Program, the Philadelphia Scholars. And we know that those students come in the eligible high schools, and certainly had gaps in their financing.
I also know, and I have first-hand experience, having learned at Philadelphia Futures, the college program 43 Bill 040255 - 4/13/04 there, that that freshman year in college, which is right now all the scholarship program is geared towards, is really critical. And to the extent that the financial obligations...
...on the part of students can really be minimized, which either means they have to put in less work or, frankly, less worry about how, you know, the gaps would be closed to pay their bills. That means they can devote more attention to their studies, because if they get through the first year, there's much more likelihood that they'll be able to actually graduate.
No; I understand what you're saying. And certainly as a beneficiary of college financial aid, I mean, I certainly have a deep personal appreciation or understanding of the need to have those dollars available. 44 Bill 040255 - 4/13/04 I probably could still pay a lot more attention when I was in college to what was going on, as opposed to some other things I was doing, but we'll put that aside for the moment. The core... And I would also thank Councilwoman Reynolds Brown for the information and the fact sheet this morning. I was interested to know a couple items. One, it makes reference to the other scholarship programs that we have. There's the Mayor's Scholarship. Now, is that the University of Pennsylvania?
The Philadelphia Scholars Last Dollar Scholarship. I think that's the program you made reference to with regard to PEF?
Education Fund. And The City of Philadelphia Scholarship, which is not the University of 45 Bill 040255 - 4/13/04 Pennsylvania Scholarship but just a general scholarship program that the City has. We've had that one for a long time, right?
Right. I just want to make clear because Philadelphia Scholars is not funded in any way by the City.
The fact sheet is trying to tell you that just because you apply to any one of these, you still apply to the program under question. Now, do any of those three programs have... And I understand that -- So why don't we take the Last Dollar Scholar Program out of this question. But the Mayor's Scholarship and The City of Philadelphia Scholarship Program, do they have any restriction with regard to what school system the young person may be graduating from, in terms of eligibility?
The City Scholarship does not. I don't believe the Mayor's 46 Bill 040255 - 4/13/04 Scholarship does either. But of course, the Mayor's Scholarship is only for students who are admitted to the University of Pennsylvania.
Right. No; I understand that. That's from a previous agreement between the City and the University. And can you tell us the nature of... And maybe it was just the participants' as you phrased it, determination. How many students went to the schools that are 14 listed for use by the core scholarship last 15 year? 16
Again, I don't have the 17 exact number, but it is -- But of all the 18 colleges to which our students do go, those 19 publicly funded schools represent the lion's share of the schools that our graduates from public schools attend.
Okay. I guess 47 Bill 040255 - 4/13/04 the last question on this -- And I know you're going to get us some additional information about it -- is for the City portion of this, the $4 million, how would you explain or justify to a non-public school Philadelphia tax-paying person that their child would not be eligible for a City of Philadelphia taxpayer-funded scholarship?
Well, again, I think that what we need to do is start from the premise and understand the origin of it, that the intent was really not to exclude anyone. It was really about trying to include the largest population, that -- that needs to significantly increase college-going rates which benefits not just --
No; I understand what you're saying, and I understand the intent. I'm asking for an explanation to the person who is a taxpayer who, for whatever reason, and that was their right and that was their decision, to send their child to some other school system. But now they're moving on. They're moving out of elementary or secondary education. They're not tied to any system. Their tax dollars are helping to fund a program that, at least at the moment, they can't participate in it. I would like to understand the justification for that, putting aside what the intention is. It's a more than appropriate intention to try to increase college attendance by graduates of any system and certainly our public school system, but I think there's a taxpayer issue here. 49 Bill 040255 - 4/13/04
I think that taxpayers in this City and certainly other jurisdictions across the country make contributions, if we can refer to tax dollars that way...
I don't think any of us would consider taxes to be a contribution.
A contribution is -- Right. That's, I guess, something in the mail. I decide to, I decide not to send a check to some organization. That's a contribution.
The City of Philadelphia takes what it wants every two weeks out of my paycheck, whether I want to or not.
And it does for the other million or so people who work here.
But what I meant was, when we pay our taxes, those taxes are used for a variety of reasons. And we don't always have a direct say in the different places that they go.
They're used for a variety of reasons, to pick up the trash or people who work wherever they work and send their kids wherever they send them. We send the Police Department to their house when they call 911. We actually... I mean, the public school system provides services to non-public school students. This is... I am asking how would you -- How do you explain on a street... I have a District Office in Wynnefield. So, I'd like you to explain: When the parent down the street from my office calls about this program, and their child goes to Overbrook, and I give them an 51 Bill 040255 - 4/13/04 application; and two minutes later the parent comes in whose child goes to Our Lady of Victory and I tell them that you're not eligible, what's the explanation? What's the justification for that to a taxpayer?
I think there are two things I would say to them. One is that there are a variety of purposes to which tax dollars go, from which every single resident, every single taxpayer is not a direct beneficiary, number one. And number two, I think that, and I actually believe one of the newspapers referred to this that way.
I'm sorry to cut across you; but, one, I think we would be hard pressed to show many examples of that; and second, most of them are probably based on either state or federal guidelines regarding income eligibility, not whether you go to a public school system or non-public school system for any City service. 52 Bill 040255 - 4/13/04 Can you tell me any other service that makes that distinction, that this City government provides?
I'm not familiar with every City program, but there are some services.
For example... Well, yeah. I mean, for example, you know certain organizations that might be funded through City tax dollars, somebody may not be a direct user or direct participant in some of those activities.
But I think for the particular point here, I mean, in terms of the scholarship program, I believe that, you know, another point is that anybody is free to be involved in public schools. And to the extent that this program could be looked at as a benefit, as a reward, as even -- and I do believe one newspaper referred to this as the public 53 Bill 040255 - 4/13/04 school advantage, a way of looking at this program as, again, another benefit, another opportunity that a student gets who chooses to attend public school. And I combine that with --
I hear what you're saying, but you only get the benefit after you've been a graduate. So you're not in public school any more.
You get the benefit because you have been in public school and because you have graduated from public school.
Well, I appreciate your effort to respond to the question. I think that's probably not a response that I'm going to give in the example that I pointed out. And I think they'll probably be a little more conversation and discussion. My last question is, how many students do you expect will apply?
Right now I think the number might be anywhere from -- And I 54 Bill 040255 - 4/13/04 don't have the finals, but -- you know, maybe about 2500 to 3,000 students right now. But it could have jumped since the last time I checked.
So you're saying every graduate? Every graduate is going to apply?
No. I didn't say they would because not every graduate would have plans right now to go on to college.
No. I'm sorry. Let me take back the question. You said earlier you thought that about 3,000 young people had -- of the eight or nine thousand who graduated last year went to college. So now you're saying that every young person who's going to college is going to apply?
I'm saying we are encouraging as many students as possible because as I'm sure, you know, students may be applying to a variety of colleges, some of which might be eligible for the core 55 Bill 040255 - 4/13/04 scholarship and others of which would not. So we would certainly encourage every student who has plans to go on to college and encouraging students to make those plans to also fill out an application.
No; I understand that. My question is: You've got 11 schools. What I want to know is, what's 12 your anticipated application for the 13 scholarships to these 19 schools for the 14 upcoming graduating class? 15
Your response 17 was 2500 to 3,000. Your earlier testimony 18 was that only 3,000 students from last 19 year's graduating class went to college.
And I also said I wanted to check those numbers; maybe it was a little bit higher. But the same students who could -- I'm not sure why that's a...
No. But that's what I'm 6 saying. But the same student who might 7 have applied, for example, to a private 8 university might also apply to West 9 Chester. And as of April she may not know 10 which college she will ultimately attend. 11
So she would... And we 13 would encourage her to also complete the 14 application for the core scholarship even 15 if she ends deciding to go to Gettysburg. 16
I understand that. Then those dollars are available for someone else.
Thank you very much, Councilman. Councilwoman Blondell Reynolds Brown.
Thank you, Madam Chair. I would be remiss not to comment on this important educational issue, since it was our last October that brought it to the attention of my colleagues. And I need to do a couple things: One, acknowledge and assure or reassure my colleagues that under the leadership of Juan Ramos, I am completely optimistic that we will resolve the issue of insuring that all Philadelphia students who deserve this educational opportunity get it. That was the intent at the door. And we're working daily to make sure that we resolve this prior to the close of budget; and secondly, to say thank you for initially at least supporting the concept 58 Bill 040255 - 4/13/04 last October of a core scholarship program. You'll recall that in that initial correspondence, we asked for and received your support to support the concept for startup costs, knowing full well, as is indicated also in that correspondence, that we had a lot of work to do to ensure and make sure that parochial students and private school students get this opportunity as well. So in closing, again, Juan Ramos, Councilman Ramos and I are in conversation, dialogue regularly, because we recognize we have to get over this hurdle and make it an inclusive opportunity for every single high school student in the City of Philadelphia. Thank you, Madam Chair.
Yes. Thank you, Madam Chair. Miss Kahn, I found it startling, not just interesting but startling. Councilman Ramos mentioned meetings with still an 59 Bill 040255 - 4/13/04 ongoing conversation. Talking about how difficult explaining something is. We have a deadline of April 15th. And I want to go back on the applications. Nothing's been pushed back in case there is a decision to allow all Philadelphia... all students of Philadelphia taxpayers. So it seems to me that the decision's been played. At the same time we're going to keep the conversation going, which means nothing, if the decision's been made and April 15th is the last day. So, I'm going to assume on April 13th that if come April 15th that's still the deadline, that the decision has been made, and people are going to have to act accordingly. Discrimination... Whether it's intended... A lot of times it isn't intended. Councilwoman Tasco just -- and I were just having a discussion earlier about an Ebay situation. It was not intended by 60 Bill 040255 - 4/13/04 Ebay. But once they discovered it, once they saw the magnitude of it, they have entered into a conductive dialogue. I don't want to jump the gun on anything, but it seems like it's been much more productive than this one. And I don't know how you defend this kind of discrimination, once it's been presented, once it's been made clear. And when you have a situation that is inherently unfair to begin with, that everyone is willing to live with... Last year, the last term, when, you know, some people in Council were accused of being pro Street and others anti Street, there was some uniting issues. One was condominium trash pickup. People paid taxes and didn't have their trash picked up, and other people paid tax and had their trash picked up. And there is a large discrimination issue. The Mayor didn't want to either pick up their trash or give them a credit. 61 Bill 040255 - 4/13/04 I believe the vote in City Council was nothing. And I think it was the same after a veto. I believe the matter's in Court. But Council members felt very strongly a nerve had been hit. Every once in a while a nerve gets hit in this City among a fairly quiet populous, just the average taxpayer. And PGW hit one in the last couple of weeks, with their surcharge. And I believe among all those people that have the extra sacrifice of sending their kids to a parochial, private religious school in this City, knowing full well they still have to pay the same taxes as if they have their children going for free to the public school, and are willing to accept that, that this crosses the line. And I don't know how you expect Council members, who feel so strongly about trash discrimination, to feel any differently about education discrimination, whether it's one of the finest Congressmen in the country who initiated the program or 62 Bill 040255 - 4/13/04 whether it came out of the Mayor's Office or any place else in the School District, it still has the same problem attached to it. And so I'm going to assume that I don't expect to hear anything in the next two days that I haven't heard in the past several months, that the decision's been made. Maybe sometime in the future it will change. 2 isn't in the budget until it passes. It's just a recommendation. So, I think, number one, it speaks volumes of... I can't call it anything else but arrogance, that you would have a deadline without a decision by the legislative body to put the money in the budget, with many Council members 63 Bill 040255 - 4/13/04 expressing different levels of concern, and I think concern throughout the Council, that this is discriminatory. Councilman Nutter brought out some great areas. You've got people going to the same schools that students went to last year.
You have no way of distinguishing whether -- This is in the public school system, now -- whether we're just going to get an extra $3,000 -- and certainly you're entitled to anything they can get, as any student is -- but that we're going to put one more person in college. These are structural problems within a school system. These are not wave $3,000 out there and all of a sudden you're going to increase the situation. Kids in Catholic schools and other private religious schools aren't any richer. In fact, they may be poorer because of the extra expense that their parents have. Yet they have higher percentages. Are we talking to the parochial schools and 64 Bill 040255 - 4/13/04 the other schools that have the higher college percentages and saying, what are you doing differently culturally in your schools that takes the entire four years into consideration, not waving money at the last minute and hoping that there's a change, a change you can't define. It sends such a bad message that I hope somebody is listening, whether it's at the Parkway, 21st and the Parkway, whether it's in Congressman Fattah's Office, whether it's Mayor Street's Office, that this really is intolerable situation. This isn't just we'll try -- we'll try to make it better. It's -- Either it is discriminatory or it isn't. Right now it is. And I hope we can't treat it any differently than we did condominium trash. Thank you.
Thank you. Over the weekend the Philadelphia Inquirer released a study that showed our 65 Bill 040255 - 4/13/04 City lost the most people, that is, residents out of a City; that they went to Jersey or suburbs, or where have you. With that in mind, the core scholarship program discredits the hard-working middle class taxpayers of my District and gives them fewer and fewer reasons to stay. More than 60 percent of parents in my District send their children to private or parochial schools. First of all, they would have not opt out if the public school system worked. So now they have to pay school taxes for schools they don't use. They sacrifice and pay tuition for their children's school, the child's school. And you want me to tell them that the tax dollars again will help everyone but them. So tell me, why should they stay?
Well, again, we do hope that the program, however, also gives credit to the 40 percent who, you know, 66 Bill 040255 - 4/13/04 members in your District and the thousands of families across the City who do choose public school. I do, you know, hear your concerns, as I heard them last week.
No. I hear your objections, however you would characterize it. I would just want to clarify one thing, and a point that Councilman O'Neill raised. The deadline was set for when it was. And in fact, we did move it back, I think, at least once or twice, in order to get the maximum participation. But the volume, in any event, of the public school students would be greater, you know, than students in any other schools, so we needed that time to be able to process the applications and make sure they were all correct. Certainly if any kind of arrangement can be worked out, then it would be done not in a false way, and there would be 67 Bill 040255 - 4/13/04 accommodations made, certainly, on the rest of the timetable, so that if in fact a decision is made for other students to participate, that they would in fact be able to do that.
Well, I, like Councilman O'Neill and Councilman Rizzo and others, I'm not prepared to vote on this at all. I just feel it's the worst discrimination against any schools that I ever heard of.
Yes. It was my understanding that the deadline had been extended again. Is that true or... It was my understanding that it was extended further past April 15th.
It was, again, originally, I think in March. And then we moved it to April 15th. If it has been, I am not aware of it. I can certainly go back and check. But again, that was -- that was a 68 Bill 040255 - 4/13/04 timetable for the current -- currently participating students, the public school students, and what was thought to be needed for those students. Of course, if any kind of arrangement is in fact worked out with the Archdiocese or any other schools, then we would make yet another adjustment in order to allow those students to participate.
So I think you need to extend this indefinitely until we can come to agreement of this City Council.
Make it very simple. You hear the sentiment of this Council. And I don't know if there's anything to work out with the Archdiocese. When you have taxpayer dollars being used, as Councilman Nutter pointed out, for a 69 Bill 040255 - 4/13/04 program or a project, there should be no 3 discrimination. So, shouldn't be any discussion about ongoing dialogue, going to a discussion. Should be a decision made that the program will be open to all school children, period. That's what you should be saying, bottom line. Because you cannot discriminate with taxpayers dollars: Who gets it, who doesn't get it, unless it's based on some other income kind of thing that's been established. But when you talk about those dollars, those parents pay those dollars just like we all pay, through Wage Tax, through their employment. And I just agree there can be no discrimination. So, you know, that said, it should be just, look, we're going to make it happen, bottom line. Because it's not going anywhere. D.O.A.
Thank you. Councilman Rizzo and then Councilman 70 Bill 040255 - 4/13/04 Nutter.
It's just a point of information. I'll be brief. I think what I need to hear today -- And I think you're hearing from it my colleagues. We need some specifics here. We need to hear you say absolutely that there's no April 15th deadline. We need you to tell us a date certain of when these conversations would be completed with the Archdiocese, because I can't imagine the Archdiocese not wanting this, and I think they'd do marathon around the clock to nail down opportunities for their students to receive scholarships. So, I think what I need to hear from you is give me a date when you'll have a decision for us, because I'm having really a problem, and I think you're having a problem here today trying to convince us that there's work in progress here. But I need to know when you're going to have a definitive answer about this program.
I certainly hear loud and 71 Bill 040255 - 4/13/04 clear that you want to have an answer to this program before the decision will have to be made on the budget. I do not, quite honestly, have the authority right now to tell you that there can be that decision made on such and such a date. But I will certainly take this back and... you know, all of the comments that I -- you know, were made today.
Well, if the budget is not going to fly, I think that that -- I think I would whisper in the lady next to your ear or take a two-minute recess and figure this out, because this really needs to get addressed; it really does. And you tell -- Did I hear you say that you don't know the date? I mean, if you don't know, who does?
I said that I didn't have the authority right now to give you the date.
No, no, no. The 72 Bill 040255 - 4/13/04 April 15th date.
The date, again -- And I want to make this clear. I mean, that was the date that, of course, was established to apply for the students who are currently in the program, as we know them, which are the public school students. I actually am not aware of any reason why that timetable can't proceed because, again, there's time that's needed to make sure those applications are complete and thorough, and all the rest. But I don't see how that has any bearing, if another group of students ends up participating in the program. What I'm saying is, obviously, and certainly they would operate according to a timetable that was pushed back. And so, one set of deadlines for the public school students shouldn't have to absolutely apply to any additional students who would be --
I understand that. But you're telling me the date for 73 Bill 040255 - 4/13/04 the current eligible students is April 15th, and that ends on April 15th.
Again, that was the last information I had. If someone at the School District, again, for a reason that -- I mean because I'm not there on a day-to-day basis.
Don't you think that's something -- Again, I don't want to be disrespectful. You have a significant position in this Administration. Wouldn't you consider it an insult that you don't -- that they would change a date so significant that you wouldn't know that?
Thank you, Madam 74 Bill 040255 - 4/13/04 Chair. Miss Kahn, just a couple of other questions. First, the information, the series of questions that I asked you earlier, some of the more data-driven questions -- And I understand that you want to go back to the shop and be able to check. What I wanted to know is, when will you be able to forward that information to the Chair so that I could know what the actual answers are?
Certainly this week, if not today. Depends what time I get out of here. No. I mean, I can, you know, do it probably today or tomorrow at the latest.
Okay. So for those questions I'll have answers today or tomorrow about that.
Okay. In line with Councilman Rizzo's comments, I guess, which goes back to what I asked you 75 Bill 040255 - 4/13/04 earlier, in terms of just who is running the program, if... Councilman Ramos mentioned it. He thought the deadline had been extended. Who is actually in charge of the deadline and who could make that decision?
This is a brand new initiative that has a lot of parts to it. And so, we have been functioning as a... in a team approach initially, with me representing the Administration, where I want to --
Well, initially with the School District representative in charge of the high schools and --
Why don't we start with this. Who are the members of the team?
Craig Williams, who is 76 Bill 040255 - 4/13/04 the Deputy Chief Academic Officer for the School District, in charge of high schools.
And Jacqueline Barnett who is staff aide, staff member to Congressman Fattah.
We have done that collectively, and at the last time, again, in March, when the initial deadline had been set, we decided collectively that, in fact, that should be moved back.
April 15th. So the last collective decision was April 15th that all three parties signed off on.
So is there a requirement that all three parties agree? 77 Bill 040255 - 4/13/04
I'm wondering whether it would not be advisable for us to recess these hearings to give Miss Kahn a chance to talk or find out who she should talk to to get the information and report it to us, because it seems to me we've got to live or deal with the problem that we face, instead of being told these vague stories of maybe, and I don't know who. Let's find out the answers.
I would like to suggest, Councilman Nutter, if you would, that perhaps we ought to think in terms of recessing these hearings until we get these answers. 78 Bill 040255 - 4/13/04
Well, Councilman, I think under the circumstances, this is actually the first office that's up in hearings today. This is one component of, you know, a page and a half of testimony. I think that shortly Miss Kahn will probably be able to leave. We have many other people that we're going to ask questions of. And I think Miss Kahn should then be able to do exactly what you said, and even come back to us later on today. We'll probably be here for a little bit.
So, Miss Kahn, is there an agreement among the three parties that deadlines can only be changed with the agreement of the three parties? Is that the way it works in the team approach?
There's no written agreement to that effect, but our operating understanding is that that should happen, 79 Bill 040255 - 4/13/04 yeah.
Okay. Let me ask this question: If, along the lines of where Councilwoman O'Neill was, today's the 13th; the deadline is the 15th. If the decision with regard to participation by all students, regardless of system from which they may be graduating, if that component is not changed by the 15th and some how, some way it's not changed even prior to the budget being approved, come July 1, when the funds are available, will you go forward with the program as it is presently structured?
If the funds are included in the budget, then, yes, it would be the intention to proceed with the core scholarship practice, if that's...
Excluding the students outside of public school system at the moment, because you don't have an agreement on that. That was my question. If you don't make a decision to change the program by the 15th which is the current 80 Bill 040255 - 4/13/04 team decision deadline, if the budget is approved by May 31st, and these funds are included in the Mayor's Office budget for the scholarship program, if there's no 6 change in the guidelines of the program in terms of who's eligible and who's not at the moment, notwithstanding all the conversation and discussions and meetings that are going on, when the budget becomes available on July 1, 2004, will you take this program forward with eligibility only for public school graduates?
My understanding is that we would proceed as we have begun, and that, yes, the program would be put into effect as it has been previously described.
Okay. Now, with regard to all the discussions that are going on -- and I'm glad that you're having conversation with the Archdiocese -- and obviously you can have discussions with whomever you want to have discussions with. What I don't understand is, you don't need to have a discussion with the 81 Bill 040255 - 4/13/04 Archdiocese or anyone else with regard to the City's $4 million. You can make that decision today about our participation and who's eligible for City dollars. There's a subsequent argument that probably could be made by others in public or other forums in which they want to argue about the School District's money because the School District doesn't have any money of its own. It has money from taxpayers at the various levels that people pay their tax. It comes back to the District. The District has an obligation to provide some services to non-public school students, either by consent decree, court decision or just general good public policy. But there's nothing preventing you from making a decision with regard to the City tax dollars and participation at all, is there?
I think that the question has been the terms of the participation and the affordability of that participation. 82 Bill 040255 - 4/13/04
You don't know how many people are going to participate. We've already established that.
That's right. And that's a reason why we need to be a bit cautious. When the program was originally designed, again, there was no intent to exclude --
Well, your caution is determined by making a distinction between what school system you went to versus any other criteria, because your --
Let me finish. Your answer earlier was, as long as you meet the eligibility criteria, you can apply, and you'll probably get a scholarship.
The caution was actually in the original design, expressed in a variety of ways. One way was by capping the per student amount of the scholarship, number one. 83 Bill 040255 - 4/13/04
Secondly, by limiting the number of colleges. So limiting it to that subset of colleges.
I understand the decision. I may disagree, but I understand the decision. That --
That still doesn't exclude anyone, regardless of what school they went to, based on those criteria --
-- but I'm trying to explain to you why we're very cautious in our financial outlook. Thirdly, the decision was made that the scholarship funds could be available for only that first year, as opposed to continuing through. So, my point is --
-- that there were a variety of precautions, already limitations that were imposed on the program.
I can't vigorously disagree about any of it. It's only when you draw a line between two students who literally could live on the same block, whose parents made a decision, as is their right, to decide to send one kid to a public school, the other kid to some other school. They pay the same taxes on the same block to the same government, and we have no right under that circumstantial situation to tell the other parent, your child is not eligible for these City tax dollars to go on to college. We have no 20 right to do that. And you know that. I can't debate about a cap amount. I can't debate about, too vigorously, about the 14 schools, although I think we try to encourage the students to go to whatever school you can further your education in, 85 Bill 040255 - 4/13/04 and get an application approved. There are any number of limits that could be put on, which we could have differences of opinion about, but they do not materially go to the issue of making the fine line distinction between what system you happen to get your education from, and now you're trying to go on to another system. It's not like the money is going to the system. The money is going for the student, and more than likely, probably not even going into their pocket. I'm assuming a check is being written as a part of a larger package to the college or university that they're going to, right?
Okay. So you've now made the decision that regardless of what happens, if we pass this in the form that it's in, and all these other things don't get worked out, the program is going to go forward. I would like to better understand 86 Bill 040255 - 4/13/04 who makes the decision on the City dollar side. Again, you can have as many conversations with the Archdiocese as you want. That's a different discussion. $4 million, City money... We don't need to have an outside conversation with anybody about how our dollars are spent; isn't that correct?
Okay. Now, the $10 million... And if everyone received the max, will serve 3,333 students, right?
You're going to get the numbers on how many people graduated, how many went to college, how many went to the 19 schools. 87 Bill 040255 - 4/13/04
But you at least know that's the pool of availability. And do you expect that everyone will get the $3,000, and how will you -- Who will decide and how will they decide how much of the up to $3,000 a student receives?
Just simply based on the experience of, again, the students who have participated in the Philadelphia Scholarship Program.
And because the different schools have, you know, different amounts. For example, the students attending Community College, might -- their need might actually be, you know, less than somebody attending Temple, as an example.
Okay. So every 88 Bill 040255 - 4/13/04 time someone doesn't receive the max, that's more money that's eligible for a broader number of students, right?
Okay. You think you might have some information for us later today, if we let you out of here?
Councilman Ramos. I'm sorry, Councilman Ramos. Councilman Clark first, then Councilman Ramos.
Thank you, Madam chair. Good morning. I wanted to ask a couple of brief questions about the positions added to the Mayor's Office to deal with government entities: State, local and Federal. I'm glad to some of you to see... 89 Bill 040255 - 4/13/04
Councilman, can we finish on education and then call you?
Just for a point of information to my colleague, Councilman Nutter. Some of the research that I've done on this area of education will be eligible for scholarships. It is my... It is my understanding that there are approximately 3300 eligible seniors. And of those 3300, about 38 percent are from non-public high schools. As such a theory, there should be about 1200 plus non-public high school seniors that would apply that would qualify for or be eligible to apply for the core scholarship, if that's of any help to you. 90 Bill 040255 - 4/13/04
Thank you. More concerns on education at this point. Councilman Ramos.
No. I want to thank Councilman Clarke for letting me put that in.
Thank you. Thank you. Thank you. Thank you, Secretary Kahn. So we'll look forward to you getting back to us with regard to this whole issue. Let me ask, Madam Chief of Staff: I haven't read it, but I've heard that there's in the press today there are articles with regard to the PGW issue. Could you clarify that? Because we know that that would affect not only our budget but the entire five-year plan, so that we understand just where we are.
I 91 Bill 040255 - 4/13/04 understand this article says that the Mayor has agreed to forego the million for a 4 longer period, for four years, and also 5 that the 45 million be extended another at 6 least a couple years as well. So that 7 affects our entire five-year plan, and even 8 beyond the Mayor being in office. 9
The... The 10 Administration is... responds to concerns 11 raised by S & P, did represent that it 12 would not seek to collect the $18 million 13 for the next five -- this -- FY '04 and 14 four out years, and indicated that it would 15 approach City Council for legislation 16 authorizing the two-year extension on the 17 repayment of the $45 million loan. 18
Thank you. I have no idea what you said, but I'll catch up. Councilwoman Tasco and then Councilman Clarke. I'm sorry, Councilman, because you haven't had one time to speak. Would you yield to Councilman Clarke, please? 92 Bill 040255 - 4/13/04
I was up on the question on the matter related to the Mayor's Office.
I'm sorry. You are correct, Councilman. Please continue.
Because I'm concerned if we start talking about PGW, I'll never get my shot.
Thank you. Thank you, Madam Chair. I just want to ask, with respects to the three positions that were added for purposes of lobbying and interacting with government agencies -- and I'm glad to see that at least as it relates to... I'm 93 Bill 040255 - 4/13/04 assuming it was interacting with the City Council. Mr. Grace, who has done an admirable job to date, and given the fact that there's been a number of concerns raised throughout the past four years about interaction between Council and the Mayor, but I think that pales in comparison to the interaction between the state and the Administration. Can you talk to me about how that's structured and who in particular will be dealing with the state, given the recent takeovers, recent interaction, primarily in a negative respect, as relates to the state agencies and state legislators and the Administration in the City.
The Administration uses various resources in trying to interact with the state. We George Burrell, who's the Secretary of External Affairs is working with Shawn Foreman and Joe Grace and Kia Floyd, who are the members of the team. 94 Bill 040255 - 4/13/04 We also have under contract various lobbyists, that work with us on interacting with the state, and also in our federal interactions. And they will have the responsibilities for managing and developing and servicing the relationships with the various legislative delegations, primary responsibility. You know, and -- You know, the staff is not so large that anybody can have an exclusive legislative body with which it will be interacting as a result.
So Mr. Grace, as an example, may from time to time deal with Council but also state and federal elected officials.
that's my expectation on how it will probably work in reality, when Council is not in session. You know, my guess is Joe will be dragged into other issues, you know, if there are things moving at the Federal level. 95 Bill 040255 - 4/13/04 And we also have people throughout government that are involved. For example, every Friday, the Administration has a meeting with representatives from the Managing Director's Office, the Law Department, just across government, dealing in various areas. And they'll be working in this, providing the substantive background information that Joe or Shawn or George or the others will need.
Well, I think that, you know, the issues are interdisciplinary. A lot of... There are a lot of relationships to be managed. And it's more than any one person can do. Joe Grace, though, will have primary responsibility. When I look to somebody and want to know, you know, how does Council feel about a piece of legislation, my expectation is that Joe Grace will be the one that will have the, you know, the 96 Bill 040255 - 4/13/04 view -- you know, have met, have talked with the Council members or their staff and have the most up-to-date view on what's going on.
So if it's a Council related matter, and we need to get a follow up, we should deal directly with Joe or do we start with George or work our way down or what? I'm just trying to get a sense of how this is going to be structured.
I think Joe is the point person. Each Council member has -- You know, my experience is different Council members have different relationships, have different ways they want to approach the Administration. Some -- You know, some are... you know, have a relationship, a preexisting relationship with Joe, have confidence in him, and so will go to Joe. But there are going to be other Council members that have different relationships. So, you know, it doesn't -- 97 Bill 040255 - 4/13/04 It makes it challenging for everybody. But Joe is the person that I'll be -- you know, be turning to. It's Joe's job to... Joe has access to the Mayor, has access to me, has -- is developing relationships with all the Commissioners. They know and they hear from Joe that a Council member wants follow up on this or that, that they need to get back to Joe; that he is a point person, and that these the relationships with Council members are relationships that we value.
Talk to me about the state. Over the past couple years particularly there have been a number of problems with the state, i.e., either takeovers, i.e., legislation that we -- particularly the Administration does not see eye to eye. And without divulging your strategy, can you talk to me about what could possibly be done differently so we're not in a position to be concerned about the Redevelopment Authority or the Housing 98 Bill 040255 - 4/13/04 Authority or any of the other authorities being taken over or any legislation being passed at the 11th and a half hour that could drastically affect the City of Philadelphia? I understand right now there's actually a bill that talks about... Councilman Cohen, I think you might be interested in this... that talks about taking powers away from the City as it relates to development, that the Parking Authority finds itself in. And it essentially prohibits our ability to zone or have any interaction or any involvement in any development that the Parking Authority would embark on, just simply bypassing all traditional City signoffs and zoning, and things of that nature. What are we going to do differently to make sure that doesn't happen?
The Administration changed its strategy, actually, midway through the last term. We began meeting 99 Bill 040255 - 4/13/04 with groups of state legislators on a regular basis here, in both their concerns, and also trying to move the City's legislative agenda. We were very active with the delegation in -- in -- in working through the last budget, getting budget restorations around issues that were critical. And so we've got teams of City people working with legislators. And I think they would tell you that they understand the City's position on the various issues. Moving forward, we hope to have Shawn Fordham in particular playing a more direct role in trying to... in trying to lobby and manage those relationships -- develop the relationships and manage the relationships. We also hope to have, you know, the Mayor more directly involved; but, you know, there are no guarantees. It's a very -- 100 Bill 040255 - 4/13/04
You said you're going to have the Mayor more involved?
And he has been involved. But it's a very fluid and challenging dynamic up in Harrisburg. And my expectation is that, you know, there will continue to be challenges for the City. We will use the array of resources that we have, both staff lobbyists, and just the whole array of relationships, trying to defend the City's positions.
I guess my time is up. I just want to have a follow-up question. With respects to our lobbyists, hired lobbyists, first, will we be keeping the same lobbyists in place? And if so, what will -- I mean, I'm assuming you will ask them to do things a little differently because in some respects they were unsuccessful on several issues. And if we were going to hire a new one, who would that be? And to a degree what would their directive be, without divulging a 101 Bill 040255 - 4/13/04 strategy?
I don't have the list. I don't know if there's going to be a change in the lobbying team moving forward, but I can get back to you on that. I think the City -- this City has, you know, done we will on some fronts in Harrisburg over the last four years, so we don't want to change everything; but, you know... And I can get back to you with the list of the lobbyists that we intend to use.
Thank you, Councilwoman. And before I call on Councilwoman Tasco, I heard, Madam Chief of Staff, that you said the Mayor has agreed to forego the 18 million and defer, I suppose, the 45 million. 102 Bill 040255 - 4/13/04 But our question is, how does it affect our duties, in terms of voting for a balanced budget?
The Administration will probably will have to amend the proposed PICA plan, the five-year financial plan, in order to take this into account. And we don't have yet a specific proposal to make. When Joe was here, he indicated additional concerns. You know, I think the process over the course of the next several weeks is going to involve a lot of conversations with both Council and PICA, and the other -- you know, the other concerned parties, as we get a clearer sense of what the revenues are likely to look like moving forward.
Yes. Two items, one on that note. What action is required of Council on both issues of foregoing the 45 million, as well as the 18 103 Bill 040255 - 4/13/04 million?
The restructuring of the 45 million would require an ordinance 5 by City Council on the 18. There is no... In order to simply not collect the 18 million, there would be nothing required from City Council. But I'll have the Law Department giving some guidance on that issue. And I'll have --
The other thing, back to the lobbyist. In your budget, you have a reduction of lobbying services, $156,000. And then you talk about having lobbyists. Where is the expense for those lobbyists? Is it throughout various departments or where?
Most of it's carried in the Mayor's Office. 104 Bill 040255 - 4/13/04
I'm looking at the Mayor's Office. I'm looking on the of the Mayor's... Where it says increases and decreases in all funds. Maybe I'm missing it. MR. McPHERSON: .
We'll be spending approximately $582,000 on buying professional services. The firms are identified that -- I guess most of them are identified -- that we use. We'll probably be using less of the services, as we increase our staff and our in-house capacity. You know, there are less specific tasks that we'll be using the lobbyists to do for us.
You will agree that the success of the City and its relationships with Harrisburg rests and depends on the relationships between individuals. 105 Bill 040255 - 4/13/04
No matter how many people represent us in Harrisburg in terms of staff. The real relationship are the people who actually make the decisions, basically the Speaker and the Appropriations. The leadership in Harrisburg. What is the strategy in developing a better relationship? Because I think a lot of the actions taken by the Senate -- I mean, by the House or the legislature, to me, and maybe interpreted by other people, based on the relationships or lack thereof between the City and the legislature. And can the lobbyists and/or staff people fill that void?
I think that there, of course, has to be a major role played by the Mayor. I think in some -- in some situations, however, mediated relationships actually do work. Some of the lobbyists with which we work, frankly, have closer relationships with some of the people who 106 Bill 040255 - 4/13/04 are critical to, you know, the City's interest. And so, we will be using an approach that, you know, one draws directly on the Mayor, has staff people working in support roles in some situations, but also have found that frequently lobbyists can play an effective role, that they are frequently in Harrisburg on a daily basis. The Administration is not there with that kind of coverage. And so we, you know, we believe that if we use both consulting services, staff services, and direct involvement by the Mayor, that that will give us our best...
Well, what do you do if you -- Councilman Clarke mentioned the fact that there may be a bill 20 in Harrisburg to limit our ability to control development by the Parking Authority. And then we have the... in the budget dollars to take over the parking garages. I mean, it's that kind of 107 Bill 040255 - 4/13/04 activity between both parties that seems to be the political tension there. We're doing one thing or appears to be doing -- to take over the parking -- the garages at the airport, and this move in Harrisburg. I mean, how are you going to resolve all of that, when it boils down to the politics of this business?
Well, when you're submitting $164,000, all this money, $1 million on lobbyists, basically it boils down to the Mayor and to the leadership in Harrisburg.
Some of the money is 108 Bill 040255 - 4/13/04 spent in Harrisburg. I think that you can't discount how significant relationships are. Some of what we get out of lobbyists are people who are actually tracking legislation. There's a lot of legislation that you hear about that is not necessarily --
-- real. And it takes -- You know, it takes having a presence in Harrisburg, in order to have that kind of background information. But, you know, I think you're right. I mean, a lot of it is about relationships. But the Mayor is not in a position to be in Harrisburg on an ongoing basis. And so, you need support. I think at the federal level, we spend probably more of our resources lobbying on the federal level. We are using firms to help us track dollars for the City, NTI dollars, homeland 109 Bill 040255 - 4/13/04 security dollars, IT dollars. And without people following the opportunities, you really don't win out at the federal lobbying game.
Thank you. I'll keep my light on. I have more questions, but my time is up.
Thank you, Councilwoman. We'd like to call on Councilman Goode because this is his first opportunity.
Many people will focus on the number of cuts in this budget over the course of budget testimony, but there are a number of increases, including within the Mayor's Office and the Finance Department, some of which I assume are 110 Bill 040255 - 4/13/04 supposed to be strategic investments. But do we have any specific plans, in terms of what's going to happen, in terms of the Inspector General's Office? For instance, there are three more people, and it's supposed to promote new ethical standards for what specifically these three new people are going to do. And what are the actual outcomes from hiring these three new people?
I don't have that level of detail. What we've done historically is put a lot of money out in contracts. A lot of the forensic auditing has been done outside of the City. We want to increase to just a bare bones staffing, really, the Inspector General. But I'll have it --
So you believe that three additional people is cheaper than outsourcing.
Again, what is 111 Bill 040255 - 4/13/04 the proposed -- Again, what is the proposed outcome? Not necessarily a specific plan, but what is the proposed outcome?
The Administration has been focused on a number of things over the last few years. As I had mentioned earlier, the City has a substantial problem with internal controls. We've been working on projects now for probably a year-and-a-half, trying to rebuild some of the internal controls within government that have broken down over years. I would expect the Inspector General to continue with that initiative. We also have just calls that are made to the Inspector General on an ongoing basis about, you know, people having concerns about corruption in government.
But there's nothing specifically you can offer to me this morning that suggests that we need three more people, what those three new people are going to do specifically. 112 Bill 040255 - 4/13/04
Okay. I would also wait for the Finance Director to comment tomorrow on the new people at MBEC. But from your knowledge, what are the new people at MBEC going to do without a specific plan? And I think the previous testimony on the five-year plan, when the issue of minority participation was brought up, it was said that there is not a plan yet, that you were waiting for a leader. And after there was a leader, there would be a plan. But the question is, I believe there may be four new positions at MBEC. Do we know what those people are going to do absent a plan?
Thank you very much. 113 Bill 040255 - 4/13/04 The question is, if this area, not only including adding other staff members, but also that the service portion was also increased, then it seems to me that these people will be doing it in-house. Can you clarify that? Because it looks like not only have you increased personnel, but you've also increased the service part of the budget.
To the extent that -- We are out trying to fill those positions. To the extent that we bring all the people in-house, I wouldn't expect to use all the professional service dollars that have been allocated.
To the extent we're able actually to fill positions for the Inspector General's Office, my expectation is we wouldn't need to utilize all the contract and capacity we have for professional services.
How much 114 Bill 040255 - 4/13/04 excess, then, is included?
I believe... I think 200,000. I can get you the exact dollar figure.
I'm sorry, Madam Chair. I didn't mean to cut across your question. Is the Chief of Staff referring to the professional services item of $250,000 for the internal auditing services? Is that --
Thank you. Councilman Nutter, you can continue your questions. 115 Bill 040255 - 4/13/04
And afterward we'll call on Councilman Cohen. You'll be next after Councilman Nutter.
Thank you, Madam Chair. Well, it's actually on the same area. I guess I'm now trying to understand the Chief of Staff's response. Were you saying that to the extent that you're in -- response to the Chair. To the extent that you're able to fill the positions -- these are three positions -- you're saying that it would then reduce by some amount the $250,000 budgeted for the internal auditing services? Is that what you're saying?
Yes. I don't know whether it would get rid of it entirely, but it would --
Madam Chief of 116 Bill 040255 - 4/13/04 Staff, actually, I would like to have an opportunity to ask some questions of the Inspector General. Who is the Inspector General?
I could ask -- He's not here now. I can ask him to come over.
Okay. With the Chair's permission, if the Chief of Staff is able to track down the Inspector General, I'd like -- whenever he arrives, I'd like to have the opportunity to ask the Inspector General some questions.
I'll hold those 117 Bill 040255 - 4/13/04 questions until then. I don't think I have any other... Well, Madam Chief of Staff, I heard your response to the Chair's question, which I think was the first question this morning with regard to the proposed increase which I think is in Class 100, and is percent, 9 and then there were some reductions. 10 The net increase is 11 percent in 11 the Mayor's Office. At the same time, 12 again, the question revolves around the 13 other proposed cuts in the budget, 14 including other independent elected 15 officials. The answer was... or at least the explanation was what?
The explanation is that we have increased resources for the office of the Inspector General, and have decreased positions but increased the seniority of the positions that we've allocated for managing the external relationships, both in Harrisburg and at the federal level, and also with City 118 Bill 040255 - 4/13/04 Council.
Well, I certainly always look forward to more contact with the Administration. And... you know, however that's decided. Councilman Clarke raised some issues about things that are going on in Harrisburg. And I guess what I'd like to maybe better understand is for any number of things that have happened -- and we don't have to go into the specifics of what people liked or didn't like or how did they happen. But I guess... What kind of things did the people working on our behalf, I guess, either stop or prevent or shape in a way that without their involvement things would have been worse?
I think they had a critical -- they played a critical role with the state's budget, FY '04 budget, with assisting the Administration in servicing the needs of the delegation. I think they played a critical role 119 Bill 040255 - 4/13/04 in some of the tax proposals in Harrisburg last year that would have capped the City's ability to capture increases in the real estate taxes. I think they played a critical role around issues like reshaping the KOZ program. The City on a weekly basis tracks any number of pieces of legislation. Some were successful; others were not. We worked with members of the delegation on HB-300, trying to get additional dollars at the table for acquisition in support of the City's Neighborhood Transformation Initiative. There are a whole host of issues that we have been engaged with, and Human Service issues. I mean, just issues across the board. There's recording legislation. Public Records Act was changed. We think that, you know, working with -- Joan Deckert did a good job trying to shape that, to better serve or to reflect the City's concerns, their concerns 120 Bill 040255 - 4/13/04 about Workers' Comp that we've been pursuing. There are a lot of things that don't -- that don't surface, that the City is lobbying on on an ongoing basis. And I think that our Harrisburg delegation has been effective in representing our interests.
And at the same time it appears that all of the lobbying services contracts are decreasing from FY '04 to FY '05; is that correct?
Okay. And I mean, does that reflect any last need in Harrisburg or Washington or anywhere else that the lobbying is going on or is that more reflective of the current budget environment?
I think it reflects an increase or a change in the City strategy. Some of the work can be done in-house, and the intent to do it with in-house staffing. 121 Bill 040255 - 4/13/04 I don't think it reflects any diminution in our sense of how important it is to have effective relationships. But we do have fewer dollars to work with, and...
I understand. And the in-house staff has, I guess, in the Mayor's opinion or the Chief of Staff's opinion either the necessary contacts and relations to further these efforts?
How many lobbyists are there that works for the City substantially, whether they're on staff or whether they're outside of staff?
We have eight firms that are working for the City at the state 122 Bill 040255 - 4/13/04 and local level. And then we have three -- four members in the Administration in the Mayor's Office who are working either state, federal or locally. And as I indicated earlier, they are supported by individuals throughout government that provide the technical expertise that is frequently critical when it comes to developing the City's position or defending the City's position.
Well, maybe it's being cut down from what it's been in the past, but that seems like a tremendous staff of people. Is it that the Mayor doesn't like to be in touch with people? Because it seems to me the Mayor's always the best lobbyist for anything the City needs. And I get very uncomfortable when I hear the word relationship's so important. That sounds like the lobbyists that had been the subject of various articles for years in the newspapers, that lobbyists have relationships with people, as a result 123 Bill 040255 - 4/13/04 of which legislation occurs. I think people feel much better when they feel that legislation comes not from relationships but from needs that have to be addressed, and that competent people in government speak to each other. If the Mayor changed his tactics more and viewed himself as the chief lobbyist for the City, it would seem to me that maybe we could get rid of 90 percent of the lobbyists, and have a much better explanation of things, and have a much greater level of success. What's your thought on that? Why doesn't it work?
I think that there certainly is a role for the Mayor. A lot of what... A lot of the value that the lobbyists bring, they bring because they are actually on the ground either in Washington or Harrisburg and in a position to track the day-to-day developments with legislation. There are literally hundreds and 124 Bill 040255 - 4/13/04 hundreds of pieces of legislation that are moved in each forum. And the City does not -- Certainly the Mayor's Office doesn't have the capacity to track the legislation, to analyze the legislation as it moves to figure out what's real, what's not real. At the federal level, even when it's not legislation, it's trying to find opportunities to pursue earmarked dollars. A lot of the greening that happens in neighborhoods, the homeland security money, the City's lobbyists had a major role in putting together the team that went after first a legislative increase in the dollars available for homeland security. Ultimately, Philadelphia probably benefited to the tune of $15 million. The City had lobbyists actively engaged on that issue. So I think that, you know, the day-to-day pursuit of issues, analyzing them, following up on them, are the kinds of things that you can't -- that we don't have the capacity to do in-house. That's 125 Bill 040255 - 4/13/04 part of the value you get when you hire the lobbying firms. Somewhat -- And another part is the relationship. From time to time you are buying into relationships that some of the lobbyists have. But that by no means is all that you get from having some of those services available.
Well, it sounds to me like you do an excellent job preparing a brochure that a lobbyist's firm could circulate to other people. But respectfully, I have to say it doesn't bring with any real clarity, at a time, particularly, when the Administration claims that funds are short. I think the Administration has two clear, direct paths to dealing with finances. One is to decrease and honestly the costs of lobbyists; and, secondly, at the same time that we decrease those costs, I think we'd get a much more effective government response from the groups we're lobbying. 126 Bill 040255 - 4/13/04 I don't for a minute doubt the ability of a two- or three-person office in the Mayor's Office handling all of the details, maintaining whatever relationships, whatever that may mean, have to be maintained in order to keep up. I just think that it's a lot of words without any serious meaning. Do we have any estimate? Could I ask you to produce an estimate on the costs of lobbying, specifying the amounts of money spent by the City to outside lobbyists, and another column indicating how much of people's time that their salary is, and what portion of that time is devoted to lobbying activities and staff employees. Because it seems to me that that's a sure waste of time. Doesn't begin to produce the results that would be produced if the Mayor would directly involve himself in the lobbying activities. Couldn't it show that his knowledge of the City... And knowing him, I know 127 Bill 040255 - 4/13/04 that he has full knowledge, probably better knowledge than anybody, than any of the lobbyists have, as to the particular programs involved, and why he needs it. And that would save money, and an enormous amount of money, and be very effective.
I will develop a report. I think that there is a lot that the Administration has pursued over the course of the last four years. A lot of it is not the big issues that you read about in the newspaper. It is the little things, like the changes in Workers' Comp or it's the little things, like the changes in recording that the City has a real critical interest in, that... that we have the capacity to track and follow up on because we have some of these extra resources. But I will prepare a report for you that details that also; identifies the 128 Bill 040255 - 4/13/04 people in government that we currently use in support of our legislative activity and how much we pay the City people versus the consultants.
Yeah. Now, on another subject, I'm going to use the person's name, but I don't mean it personally. Joe Grace, who's been assigned to us, City Council. Has there been anything said about the purpose of that? I raise it particularly with him because in the race last year for City Council-at-Large, it was my theory -- because you have to have theories in which you run -- was that he was the only candidate who was really running against me. So I'm wondering, is he here to perform service for Council or is he here to better his program? He didn't do very well against me in the election on the votes because he talked in his campaign about energy. And is he being sent to Council to learn some substance, so that 129 Bill 040255 - 4/13/04 in the next campaign he can talk about substance. And he said about having lots of energy which I always took to mean that he didn't know me if he thought I didn't have energy. No matter how old I get to be, I think I'll always have energy.
I've felt sorry for him. Did somebody suddenly realize that he needed substance, and the best way to get substance is to be here with us in City Council, knowing what the City's problems are. One of those I'm asking, is he assigned for the purpose of finding out from me how it's best to defeat me.
Councilman, we have a point of information from Councilman Goode.
Point of information to clarify the record. I was 130 Bill 040255 - 4/13/04 actually the who one was cut for Joe Grace.
Point of information is noted. Point of information, Councilwoman Brown.
Point of information. Let the record show that in the greater northeast there were no women on the at-large ballot, and no people of color. Thank you very much.
Well, I wonder if it would be better for Joe Grace to respond.
No. The Administration recognized a need to have better communication with City Council. 131 Bill 040255 - 4/13/04 We hire Joe Grace. We think he has the understanding of some aspects of politics and appreciation for the issues confronting the Administration across the City. And he has some of the legal background, I believe. He also has history, having worked with the press. I think when you take those, you know, those combined talents, you end up with someone who I think is a valuable and has already proven himself to be a valuable member of the team. I think in any situation there are going to be some people with whom he can work better than with others. And so, I would hope to continue to have a close working relationship with you. You know, as in any situation, not everybody's going to, you know, going to have...
Let me ask you. We'll leave Joe alone for a while, until we get closer to the next election. 132 Bill 040255 - 4/13/04 But Joe, I'm not resigning. And if I clam up on you, it's because I don't want you to know certain things that I may know and I may want to use in the next campaign. So, forgive me, Joe, if I can't always answer things for fear of arming an opponent of mine. Miss Wilkerson...
...who pays -- How does a businessman recover the campaign contributions he makes to the City government or to the Mayor or candidates for City Council? When a businessman contributes money, does he -- does he then have to make up that money somehow or is that sort of he takes it out, in your view, of personal funds and just supports people because he's a public well wisher and he thinks governments ought to get support from somebody? I mean, who pays -- Who's paying for that contribution, really? Say in the 133 Bill 040255 - 4/13/04 large sums that occur in this last four years, maybe last eight years, maybe since Rendell was Mayor, since I think the contributions took a sharp upward swing during the Rendell Administration. They may have continued during the Street Administration. But what does a businessman -- How does he recover that money?
I don't have a specific answer for that. I think that people give for a whole host of reasons. I think some probably give with the expectation of recouping their -- their... See it as an investment and recoup it dollar for dollar. I think that we do have people that are generally concerned and want to participate in the democratic process. I don't know that this is a sole reason for what motivates people, and what they think they're getting in return for it.
Well, what would 134 Bill 040255 - 4/13/04 be a likely -- One may be among a number, but one of the likely reasons that a businessman makes a large contribution, because he hopes in some way or another to increase his income as a result of that. He's doing business with governments. He knows they need money. He knows individuals need money if they're running for election. Wouldn't that be one of the reasons? The reason I suggest that is, I think, a very quick way in order to cut down heavily on what the City needs in the way of meeting a deficit, would be to reduce the cost of all contracts to the City of Philadelphia, by eliminating the need for businessmen to recapture contributions they've made. Seems to me a businessman would in all phases of his life think like a businessman. If he makes an investment, he wants to get a return on it. And businessmen are not the kind of idealists that people think of. They are 135 Bill 040255 - 4/13/04 not apt to throw money out on something because of wild feeling. They expect a return. But isn't that at least a plausible argument? And wouldn't it lead to the final conclusion that the costs of government would sharply go down if businessmen did not have to make those contributions which many of them would probably feel they have to recover, and the way to recover it is buying into the cost of a contract for services.
Could you speculate as to that? I'm not asking you to give any answer.
I have no idea. That would be an interesting issue to explore. I don't -- I don't -- I don't know -- I'd like to see the empirical evidence of something like that. 136 Bill 040255 - 4/13/04
Well, you hear all the talk about pay to play, which incorporates that theory, and the fact that businessmen are businessmen. And that's why those that succeed succeed, if they're good with the numbers. They know an investment has to yield a return. They may disagree as to how much of a return. But somebody's got to pay for that, and ultimately the only way a businessman can recover is by including that as a cost of doing business. I'm not talking about morality here. I'm just talking about figures. And among the figures alone, it would seem to me that the two fastest ways for the City to reduce its financial needs quickly is by cutting down our cost of lobbying. And the City is well equipped to handle it. Between George Burrell and yourself, you'd make an excellent, quote, lobbyist, for City causes because you speak so well, and from the heart about them. 137 Bill 040255 - 4/13/04 And the Mayor does the same thing. It seems to me that's one quick way. The other way is to issue an executive order where we state the written policy that this Administration does not believe in the concept of pay to play. And in order to reduce the costs of government from every possible angle, announce a policy of refusing any contributions or setting an artificial limit of a hundred dollars or a thousand dollars as a limit of a contribution, so that it can't in any way really cost the City anything, if a businessman wants to recover his investment. It seems to me if we did that, we would save more than enough money that would be needed to balance the budget over the whole five-year plan. So I'm raising with you the questions I think you ought to be considering. Now, is there anything new? If you can answer that, I have perhaps one or two more questions. 138 Bill 040255 - 4/13/04
We will take that into consideration. We will also look at ways of trying to, you know, track the impact of the legislation that was passed by Council during the last term.
Thank you, Councilman. Can you wait until your next round?
All right. Can you wait until the next round for your last two questions, since your time is up? Is that all right, Councilman Cohen?
It really isn't all right. Council members have had indefinite time this morning to ask questions. I don't think I've had anything like the indefinite time that other Council members have had this morning.
And whoever 139 Bill 040255 - 4/13/04 occupies that Chair, whether it's the Council President or yourself as Majority Leader and Chairman, I am concerned when I hear restrictions for the first time when I talk. It may be even the nature of the questions. I don't know what it is that attracts everybody's concern to limit my questioning.
Councilman, we're happy to have you talk all day if you like. It is never our intent to have anyone not talk or express their concerns. We're only trying to spread it around a little bit; just have everybody speak. But okay, Councilman. We're going to -- Incidentally, on a side note, for anyone who heard about the shooting in the CJC, the issue is resolved. And it was a deputy sheriff who did the shooting for a defendant who jumped or lunged at a judge, because they had all kinds of rumors.
So I announced that anybody who heard that on the 11th floor.
Okay. I'll wait until the next turn to finish the questions.
Yes. I'd like to ask a question about the Mural Arts Program. This year it's going to be in the Mayor's Office at a budget of $816,015. Do you have the amount that was budgeted in the year 2004? Is that an increase or a cut?
Mr. Dubow, the Chair would also like to ask for information on all the lobbyists, all their contracts, since we know they're disbursed throughout the budget and to within various departments. So we'd like to ask the Chief 141 Bill 040255 - 4/13/04 of Staff if you would provide that information to the Chair.
Rob Dubow, Budget Director. The FY '04 number was $864,000. So it's a decrease of $48,000.
They'll actually be here. They don't think it's going to have an impact on services, but they'll be here with the Managing Director, so...
Right. I think my questions are for other departments that are to come.
All right. 142 Bill 040255 - 4/13/04 Thank you very much. Councilwoman Brown.
Thank you, Madam Chair. Two things. One, in the interest of clarity, particularly as it relates to the record, I need to offer an addendum to my earlier comment. It was specifically the northeast pines that did not support anyone of color or a female. My second -- And it's not a question, but a comment in the spirit of -- to the spirit of Councilman Clarke, but more specifically follow up to Councilman Cohen. I want to offer a thank you, actually, for Mr. Fornan's team of professionals, as my experience comparing this part of my second term to my last term, there has been a level of consistency, and the operative word is consistency, with the presence of the local lobbyists in these chambers. And that's been helpful to me when it comes to the 143 Bill 040255 - 4/13/04 flow of information in the time that I've been here. So thank you to that team of professionals for their consistency and the work they're doing. Thank you.
Thank you, Madam Chair. I also agree with Councilman Cohen that this information on what these lobbyists do, and where they're out doing the lobbying be provided to us. I have... You know, I have a very serious concern about our lobbyists, especially up in Harrisburg. And given my limited understanding of their particular work, I just assumed that they're assigned to cover specific areas, maybe even specific members of the House. But when... in the last few years we 144 Bill 040255 - 4/13/04 have seen this State of Pennsylvania take over the Philadelphia Parking Authority, take over the Convention Center, talks about taking over the Airport, I wonder if... you know, what's going on with our lobbyists. As a Mayor... And I have no 9 intention of running for Mayor. But I would have fired all my lobbyists. What are they doing? They've taken over my Convention Center. They've taken over my Parking Authority, and they're threatening to take over my Airport. What are they doing? The Gas works, too? I have... You want me to yield to you? I'd be glad to.
Miss Wilkerson, I would hope those lobbyists are working on getting us that 6 million a year from the state for the patrol of those expressways. 145 Bill 040255 - 4/13/04
On a very serious note, that I don't know what's going on. But there is... I don't know if it's a... I'm not clear of the directions that we can have these lobbyists. And some of them... You know, we have lobbyists here from a 521 management group that is going to be still under contract for workforce development. And my question would be, since my main objective around my time here in the City Council is going to be job creation and related matters to job creation, that, you know, does this group help us create jobs, and how many jobs? And we're give a group called TAC and Associates $55,000 to do investigation. Investigation... You know, investigation of what? I think that we need to take a very close look at what our lobby teams are doing. I... I don't feel as -- as bad about whatever we're doing in Washington because the Madam Chief of Staff has talked 146 Bill 040255 - 4/13/04 a little bit about some of the stuff that's brought back home. But I'm very concerned about what kind of work we're doing up there in Harrisburg with our lobbyists.
RTA Steel works with the Inspector General's Office. That's not a lobbying firm. And 521, during the first term the Administration or the City Workforce Investment Board and PWDC had substantial issues with the state. And 521 was very effective in helping us work through those issues.
Did it get us more -- Did it get us more jobs for the people of Philadelphia?
It was a question of preserving the federal resources that we have for workforce investment and training. If we need -- If we need those services moving forward, we'll use them. And if not, we don't. But we project that there will be some need for those services.
And I see that 147 Bill 040255 - 4/13/04 through fiscal year of FY 2005, under the Mayor's Office professional services that are... The budget is actually going to go up by the year 2005. And this category here of miscellaneous seems to be driving that up. And I sure would like to know what's the miscellaneous; you know, what kind of services, what kind of... you know, what kind of things do -- does this miscellaneous category do, that it brings up -- brings up your budget to a higher number than FY 2003 and '4.
I will get you a breakdown for how the miscellaneous was spent in previous years. I think, if you look at where the dollars are, we have a substantial internal auditing services figure, to the extent that we can hire staff who won't be needing all those dollars. The other lobbying contracts that we have are being reduced, some by almost half. 148 Bill 040255 - 4/13/04
You're welcome. Councilman Nutter. And we're watching your time closely so that Councilman --
It was just you and Councilman Cohen left for this round.
Yes. I knew instinctively that Councilman Cohen was talking about me. I've appreciated him not 149 Bill 040255 - 4/13/04 mentioning me by reference, but... You know, as they say, if the shoe fits, you have to wear it. Madam Chief of Staff, just quickly, first, do we know the whereabouts of our Inspector General?
I understand. Could you provide to the Chair a list of the positions that were in the Mayor's Office, the name of the individuals and the salaries or the titles -- and the titles as of November of last year, say November 1st, and could you give the same list as of today with the same information?
Thank you. And if you could have the Inspector 150 Bill 040255 - 4/13/04 General up, I'd appreciate it.
Councilman Cohen. I'd ask Councilman Cohen to finish his questioning before the Inspector General is here.
Councilman Cohen, would you like to finish? You said you had two questions.
Thank you. When you first learned in the report that came out sometime between six months, maybe a year ago, that the actual number of successes as recorded by MBEC had gone down during the current Administration, as against, say, the previous Administration, Rendell Administration? Did that come as a surprise to you?
Yes. I think... But I've also learned to have real questions about those reports. I think that there's a difference between, you know, the opportunity that appears to be there when the contract's, you know, 151 Bill 040255 - 4/13/04 awarded, you know, what actually ends up being dollars that end up in minority businesses. I think that there are problems with the quality of the reporting that goes on. Not all contracting opportunities are recorded in the City's computer system. I also think that there are any number of minority businesses that don't register in the City as minority or disadvantaged businesses, and so you don't -- You know, the reports don't tell the whole story in the City.
Well, do you think that the reports totally were wrong or...
I just think that -- I -- I think they -- that they're not as accurate as we would like for them to be. Janice Davis will talk to you tomorrow about what the City intends to do to improve the quality of reporting so that we have systems that are capturing accurate information that can produce reports that 152 Bill 040255 - 4/13/04 are helpful monitoring tools. But there are any number of changes that need to be made to improve our understanding of what we are doing, with respect to minority contracts.
Could you tell us what the Mayor himself is doing to produce a much better record of performance in that area.
Or do you think the City is already at its maximum level of performance?
No. I think the City has to do much better. We have committed resources to the Emerging Contractors Program. I believe that that's the kind of initiative the City ought to have to grow real businesses, so that... Because I think it's those kind of businesses that will grow jobs within our community. And so, the Emerging Contractors Program meets contractors where they are. 153 Bill 040255 - 4/13/04 If they have problems with their finances, it works with them to try to clean up the finances. If they need working capital loans in order to be effective, it works with them to do that. If they need expertise or if they need to develop expertise in bidding, it has training programs to assist them with that. I think it's that kind of investment that we make at this point that is going to help us increase the numbers of minority businesses participating and also increase the quality of their participation, once the --
What's the role of the Mayor in all of that? What's he going to do?
The Mayor directed us to work with the African American Chamber to develop that program. He made the decision to allocate resources there. He's had that same kind of leadership role, 154 Bill 040255 - 4/13/04 with respect to the MBEC program. We... You know, we have committed additional resources in order to put the systems in place. We have... We're identifying... We're going -- looking at various programs across the country in order to try to put the best practices in place in Philadelphia. There are other cities that do a much better job than we do. And we're taking a look at what they do. We'll be working to get away from some of the certification emphasis that this City has had, and getting more of an emphasis on monitoring or putting in place those kinds of -- those kinds of programs that minority businesses need in order to compete effectively. We have also created the Small Order Purchasing Program in the City. And with City Council's assistance, it now makes contracts up to $25,000, I believe largely available to small businesses. We've seen a huge increase. Now 47 percent of the 155 Bill 040255 - 4/13/04 small purchases in the City are done through MBEC eligible firms. And so I think there's, you know, there's been some substantial changes, some substantial investments. And we hope that when the new MBEC program is put in place, that we'll see even greater gains.
The Mayor, does he use what people call the bully pulpit? That's the role of his Office, that he gives weight to different programs. What he has done in this instance is rewarding to the highest levels people who commonly and anecdotally -- And I think that two documents are known to have read the minority discrimination permitted to continue to exist, maybe strengthened the discriminatory practices of the building trades union, say. and does the Mayor understand that when he rewards the leadership of those organizations and puts them at the highest levels of City government that, in fact, he is saying to everybody he approves their 156 Bill 040255 - 4/13/04 policies? That's the content of the message. And maybe that's why nothing has happened during the Administration of a positive nature. What does the Mayor himself do as an individual? Not putting resources. But how does he get across to people that he personally is committed to bringing about a change? Now, that's the real use of a bully pulpit, is for a Mayor to get behind the program, and let people know that either something good happens or else those people that he has power over won't be in their same positions tomorrow if they don't correct things that they're doing wrong today. And that's the question I'm raising with you. What is the Mayor's own involvement? And is he sending the wrong message?
I will raise that with him. I think... I don't know exactly 157 Bill 040255 - 4/13/04 how to respond to that. I will raise that concern with him.
You're welcome. The Chair notes that I read in some communications over the weekend that minorities are getting 2.2 percent of the contracts let in the City. When Lucien introduced the set-aside, minorities were getting less than one-tenth of one percent. So I guess we're a lot better than one-tenth of one percent. We got a little bit more. Now we're 2.2 percent, so... I really think all of this debate over inclusion is the fact that minorities aren't included, and they're still not getting the jobs. So I thank you for raising that issue, Councilman Cohen. Councilman Goode.
Thank you, Madam 158 Bill 040255 - 4/13/04 Chair. Miss Wilkerson, I was going to let you off the hook discussing MBEC, but since you responded to Councilman Cohen...
I saw that, and I'm very sorry, very truthfully. I was suckered into that.
First and foremost, does the Administration plan to do new a executive order, based upon the new leadership, a new program being developed at MBEC?
I think we need to do one, for no other reason than the time has lapsed, but --
There was a new executive order that was offered a year ago. I'm asking does the Administration need to update that executive order?
So I'm assuming that at the time it was stated that that executive order would bring us up to date, and that executive order was based upon the best practices, in terms of putting systems into place; is that correct?
And... But my better understanding is that that executive order was actually based upon legislation that was passed by this Council.
Are you familiar with the legislation that was passed by Council?
Are you familiar with what municipality it was based upon?
It was based upon the Baltimore model, which was already 160 Bill 040255 - 4/13/04 studied by many members of this Council, many people within the community that are truly concerned with minority participation. And the Baltimore model actually requires strong Mayoral involvement. So I concur with a lot of the questions that Councilman Cohen is asking. But beyond that, one of the biggest issues on the Baltimore model, and in terms of best practices, in terms of minority participation, is the actual study of capacity, in terms of where we realize -- how we realize what disparity actually exists, in other words, in the field of construction per se, what capacity exists, in terms of disadvantaged businesses, what we actually have the capacity to do, and then where we fail, in terms of actual numbers. And that same type of capacity study, data driven process, has to be done, not just for construction or demolition but for legal services, accounting services, 161 Bill 040255 - 4/13/04 all professional services. Rather than just hiring four new staff people at MBEC to do, I'm assuming what they would be doing, if you have not necessarily engaged in this type of data driven approach, that determines what is the actual capacity level, and then where we follow short, and where the disparity actually exists.
You're not talking about the disparity study from 1998, are you?
Disparity -- First of all, the disparity study from 1998 eliminates total years, and so the information is incorrect. I think it eliminates 1996, in terms of some data; eliminates other years in the late '80s, in terms of data. That disparity study was not only 162 Bill 040255 - 4/13/04 too long coming, in terms of taking four or five, six years to complete it; it is inaccurate. But what I'm talking about is a process that says on an annual basis there's some analysis of what is the capacity of disadvantaged businesses in each sector of opportunity; and then, where we are falling short. And we are not looking at the capacity that actually exists, in terms of businesses, and where we're falling short, in terms of delivering the contracts, there is no need to hire a new director or for new staff people. Is there any response to that?
I am not -- I am not familiar with that level of detail of the disparity study that the City's undertaken.
I wasn't talking about the disparity study. I was actually talking about the new strategy at MBEC and whether it is actually based upon new practices, whether the best 163 Bill 040255 - 4/13/04 practices have already been illustrated, in terms of the Baltimore model, and already incorporated in legislation passed by this Council.
Will financial records be prepared tomorrow to address that?
Thank you, Councilman. I find it said that we've been having this debate about the head of MBEC, when it comes down to people not working. And certainly, if the gentleman who came forward and testified last -- I guess it was last week -- we lose track of time -- were arguing or pleading for inclusion, saying they weren't included in job training. They didn't need to be 164 Bill 040255 - 4/13/04 trained. They're already small businessmen. But that this they still were not included. So, if we're having a 2.2 percent level of inclusion, the bottom line is that the core of it is people need jobs; and that's where we are. Councilman Cohen.
Madam Chair, would it be possible -- I'm raising this with the witness -- to have answered by the Mayor or the Mayor's Office a response to a questionnaire such as this: Who pays for the apprenticeship program? Give us the figures over the last ten years of the members of minority, including women, who were accepted into the apprenticeship program. How many had a part originally? How many were accepted? How many went successfully from the apprenticeship program into union membership? And of those that got into union 165 Bill 040255 - 4/13/04 membership, how many of them continue today to be in union membership? And what was their record of employment at that time while they had union membership? Could we get something like that. That's the scorecard. That tells us numbers of how many people, different people, not the same person getting a number of jobs. Because isn't it a fact that when they compute reports now, they list the number of hours put in, say, by minority workers? But we don't know how spread that minority group is. It could be ten workers occupying the level of jobs, instead of it being dispersed among a hundred or a thousand. Now, would it be possible, I ask of the witness, to whom I have a high regard in this area, because I know of her personal commitment --
She worked in Council on them. Because what's important is what the result is, both for the entrepreneurial end and for the worker end. How many actual additional hours of time have minorities succeeded in getting jobs for Philadelphians?
I understand what the request is. I'll have to see if we can get that for you.
Thank you, Councilman. Now we're ready for the Inspector General. We'll ask you to identify yourself for the record, and then we will ask Councilman Nutter to pose his questions, if that is okay. All right, 167 Bill 040255 - 4/13/04 Councilman?
Thank you, Madam Chair. Just for continuity purposes, Miss Wilkerson, one last question in the last area. And then I have questions for the Inspector General. Wasn't there also a survey or an analysis of current MBEC practices or activities conducted sometime of last year? Are you familiar with that outside company? I think it was done by an outside company.
Rather than speculate on whether it's a '98 study, a more recent study, I'll...
Yeah. I'm 168 Bill 040255 - 4/13/04 talking about something I believe occurred just last year.
Yeah. I thought there was something more recent, too. But I'll make sure Miss Davis is prepared to respond to that.
I don't know that that is a disparity study, as opposed to an analysis of what's going on with the program, and perspectives of people who might have some insight about the program. I don't think this is a disparity study.
Were you anticipating providing testimony today for the budget hearings?
You were not. 169 Bill 040255 - 4/13/04 Okay. But your department is anticipating or requesting additional funding for three new positions; is that correct?
Could you bring that microphone a little closer? (Complies with request.)
Yes, sir. In this fiscal year we're requesting three additional positions.
I think you're requesting for the next fiscal year, aren't you?
Well, we're in an FY '05 budget hearing at the moment. so how are you getting the funding for the current fiscal year? Is that in a transfer somewhere?
I don't know where the funding is coming from, but I'm in the process of hiring three -- for three 170 Bill 040255 - 4/13/04 positions for this fiscal year that we're in now. COUNCIMLAN NUTTER: Madam Chief of Staff, could you tell us how the Inspector General is hiring three new people in the current fiscal year?
We're identifying people -- I think it will actually start in FY '05.
What do you mean; hired in FY '05 or will they be hired in FY '04 to start in FY '05?
I thought your testimony was that we were... This... The FY '05 budget was anticipating an increase to accommodate three positions.
This will increase the total number of people in the office to six. 171 Bill 040255 - 4/13/04
No. Three current -- There are three currently employed and three new in FY '05.
All right. Well, why don't we... You know, some big numbers I don't have a problem with. It's the little numbers that really kind of trip me up. How many people do you have in your office today?
There are a total of five. There are three: Myself, the deputy, and an administrative assistant. We are supplemented by one individual who is on detail from the prison system, internal affairs; and one part-time special investigator, a contract employee.
Can I clarify something? I think I've created confusion 172 Bill 040255 - 4/13/04 about the number of slots.
Yeah. There are... The proposal is an extra $300,000, approximately, for the Office of the Inspector General. There would be three internal auditors, two...
Yeah. 21, and would be the staffing 15 for the Office of the Inspector General. 16 And that is... There are currently... 17
Well, for those 18 items we're showing a total of what appears 19 to be six new positions. 20
That's right. And 21 those are new positions that would be 22 funded in FY '05 for the first time. There 23 is currently the Inspector General, a deputy, and an executive assistant position. 173 Bill 040255 - 4/13/04
Then I believe it's one of the positions in Number 1 is...
Right, is support staff in the Office of the Inspector General.
Okay. I think the gentleman indicated that he had... Presently there are a total of six of you? Yourself and five other people?
Yourself and four others. All right. So we've accounted for you, a deputy, and one administrative assistant. Where are the other two people?
One is a full-time 174 Bill 040255 - 4/13/04 investigator who was on loan to my office from the prison system, internal affairs division. And the fifth individual is a part-time contract investigator.
That's one of the consultant contracts in the Mayor's Office.
Give me one of these jobs. And so, then you plan to hire one clerical assistant, two investigators, and three internal auditors.
Is that correct? All to start in FY '05. 175 Bill 040255 - 4/13/04
Mr. Gill, looks like you didn't maybe have much opportunity to spend some time with either the Chief of Staff or the Budget Director for budget hearings?
All right. Well, I feel confident now. So, what made you decide to ask for six new people?
It is based upon the mission of the Office of the Inspector General, as outlined in the executive order which created the office.
How long have 176 Bill 040255 - 4/13/04 you been on the job?
months, since January 4 of '03. 5 In that executive order it states 6 that the office has the responsibility to 7 conduct audits and investigations. 8 However, the office was never staffed for 9 auditing. 10
Okay. Could you 11 provide to us, through the Chair, a copy of 12 that executive order? 13
Okay. And what 15 were you doing before you came to the City as Inspector General?
For the immediately preceding three and a half years, I was the Director of Public Safety for the City of Beverly, New Jersey. And preceding that, I spent 28 years with the United States Treasury Department. The last job I held was Regional Inspector General.
Okay. And tell 177 Bill 040255 - 4/13/04 us about the... not with too much detail, but the activities of the office over the last months. 5
Well, we have conducted a 6 number of investigations. 7 Currently we have approximately 48 8 active investigations within the control of 9 my office. 10 We have conducted a number of audits 11 using outside consulting firms. The 12 sources of the audits were identified 13 through our investigations. The purpose of 14 the audits -- 15
The objective of the audits that we conducted was identified and defined by ongoing administrative and criminal investigations being conducted by my office. The purpose of those audits were both to provide economy and efficiency and introduce an internal control system within certain functions of the City government. 178 Bill 040255 - 4/13/04
What's the difference between an audit and an investigation?
An investigation usually has a specific target. It is based upon an allegation of either administrative misconduct or of a criminal. An audit is, especially an internal audit, is designed to identify the causes that allowed the criminal activity to occur, and to provide management with the necessary information to correct those causes so the activity is not a recurring event.
I will assume that your jurisdiction, with regard to criminal activity, must have certain parameters or... I mean, you could only go so far with the criminal investigation, I'm going to assume.
Yes, sir, that is correct. We have at our disposal a group of detectives called the Internal Investigations Unit of the Philadelphia 179 Bill 040255 - 4/13/04 Police Department. And they conduct criminal inquiries under my supervision, and we also have other avenues to conduct criminal investigations.
What is your level of contact with outside law enforcement agencies?
Extensive. We do a considerable amount of work and liaison with other agencies.
Okay. And when did you decide to increase your staff and why?
Well, almost from the outset I recognized the fact that we were not fulfilling the mission that was required by the creation of the office. Secondarily, after conducting several investigations, we identified numerous areas where the City needed improvement in its internal control structures, both in the handling of funds and in the processing of information.
Again, without 180 Bill 040255 - 4/13/04 getting into any of the deeper details, what exactly does that mean? What internal control functions? What are you talking about?
Well, there are... It is a system whereby management institutes certain reviews in a systematic way, to ensure that funds are not being misappropriated, embezzled, that the processing of information is done in its most efficient way.
Okay. And... So you got here in January of '03 at a time when we would have been starting to take up the FY '04 budget. Somewhere in the course of the year you decided or realized that you needed more staff?
Yes, sir. It was an ongoing process, but it was an increase in the level -- in the number of investigations that we were conducting and the number of audits that were resulting from those investigations.
Have you been 181 Bill 040255 - 4/13/04 involved in any of the... as it's been published in the paper a fair amount, any of the current probe activities?
Since Mr. Gill came to the City folk have found his advice and services very valuable. And I think that find -- you know, a number of people find themselves going to him and saying, look, we think we have, you know, a problem here. Can you help us; can you take a look at this?
And that... that there is a, you know, a real demand for his support out of his office. I think he also played a real critical role with the 21st Century Forum in helping the City take a look at developing an ethics policy. It's something we had started before the forum 182 Bill 040255 - 4/13/04 even convened, but it's a project that was initiated under Mr. Gill's leadership. You know, because he has such an extensive background out of the Federal system, it's been real helpful having his insight and expertise within the City.
All right. And I do appreciate that. Just, you know, regret that we have not had the opportunity to meet before, not that I really have much to talk to you about. But so, what are you going to do differently now than before?
Well, we've already instituted a program. As I mentioned, we have hired some outside firms to assist us in conducting ongoing audits. But on a cost benefit basis, it is much more economical to hire an internal staff to conduct these types of inquiries. And we are linking our investigative efforts towards identifying areas where the City can improve the control, as I said 183 Bill 040255 - 4/13/04 before, of its funding, the daily handling of monies, and information and equipment even.
Are you able to provide, without maybe something from the past or something that's already become public -- Are you able to provide any examples of the kind of work that you've been involved in, and I guess, what the result was?
Well, my office conducted the investigation, which was recently reported in the newspaper, involving the embezzlement of significant amounts of money from the Cashier's Office. There was an embezzlement that was ongoing for several years, and it was a total breakdown in the internal control procedures.
From the head cashier on the plaza at MSB. We investigated that individual and arrested, and she was 184 Bill 040255 - 4/13/04 recently prosecuted. It is one discrete incident to investigate an individual and have that individual prosecuted.
Far more important, in my mind, for the City and the protection of its assets, to analyze specifically how that person was allowed to continue that. And we were able to provide some feedback to the responsible managers, to put in place processes that will not -- that will hinder that from occurring again.
Right. And what responsibility -- And maybe this is laid out in the executive order -- What responsibility do you have with regard to either the Mayor, representing the Executive Branch or to the City Council or any other components of the government?
Under executive order, which was a Mayoral executive order, I work directly for the Mayor.
All right. So you report to the Mayor and you serve at the pleasure of the Mayor?
Two last questions. Tell me a little bit about any outreach efforts that you have. I mean, how would either public employees or citizens know to call you or to let you know of anything that they observe or that might be possibly violative of the law. How do people know that the office exists?
Well, we are on the City's web site clearly identified. My predecessors have conducted campaigns, brochures... poster campaigns. We have not done that while I have been here, simply because we have been overwhelmed with the amount of work that we needed to respond to. 186 Bill 040255 - 4/13/04 However, we do receive a large number of citizen complaints through e-mails, and telephone, and in person.
Is there a difference between an internal audit and a forensic audit?
Yes, sir, there is a considerable difference between those two.
Well, an internal audit may focus on policy, procedure, internal controls. A forensic audit is much more directed at following the money, if you will, insuring that appropriate accounting procedures have been followed, and certifying that those procedures have been followed correctly.
Is yours the kind of position that -- and I'm not -- hopefully, and obviously, been getting along well with the Mayor. So this has nothing to do with either yourself individually or Mayor Street in particular, but I'm now talking about the position. 187 Bill 040255 - 4/13/04 Is this the type of position -- and given some of the things that maybe that have happened over the last years or so, 5 obviously created in 1984 under then Mayor 6 Goode. Is this the kind of position that 7 should have any enhanced level of both 8 independence and protection, given the 9 nature of the work that you do? 10
The recommendation of the 11 Ethics Committee was that the position be 12 altered slightly, and that the incumbent 13 should be appointed for a five-year term, 14 to be removed only for cause. That 15 enhances greatly the public perception of 16 independence which is one of the hallmarks 17 of the position. 18
Okay. Okay. Thank you. I don't have any more questions for the Inspector General. 188 Bill 040255 - 4/13/04 I do have other questions, but I know I went way over my time. Thank you, Madam Chair.
Thank you very much. We will recess just a few moments to allow the stenographer to step out a moment. (Brief recess.)
I think, Madam Chair, I had finished for the moment with Mr. Gill. I had other questions, but I thought another member started to ask questions.
Thank you, Councilman. Councilman Goode. COUNCIMLAN GOODE: Thank you, Madam Chair.
Mr. Gill, good afternoon. I think you stated in response to questioning that you were hiring new six employees because it's the smartest thing to do to build in-house capacity than to 189 Bill 040255 - 4/13/04 use contractors; is that correct?
Well, specifically, the example you gave of the embezzlement at the Cashier's Office. How was that investigated? Was that done by an employee or by a contractor?
It was initiated by our office. And the actual criminal aspects of that investigation was conducted by the Internal Investigations Unit of the Philadelphia Police Department.
Okay. In terms of contracts that you have now, can you tell me examples of how many contracts you have, other contracts, when those contracts began and where they end? In other words, I may buy the argument that it's better to build in-house capacity to use contractors, but there may be an issue of whether we're doing one versus the other or whether we're actually doing both for some period of time. And 190 Bill 040255 - 4/13/04 over the next fiscal year are we, in fact, doing both, in terms of the terms of your contracts?
Yes, sir. I can address that. Currently I have, as I mentioned earlier, one part-time investigator as a contract employee. Regarding the auditing contracts, they were for specific events for specific periods of time. And to date, we have had one completed and two currently under way. It is not my intention to use both an internal audit staff, employees of the City, and to use outside contracting expertise at the same time, auditing expertise at the same time.
But My question is, what overlap is there? What savings are actually achieved over the next year? Because I believe Miss Wilkerson testified that the purpose of building in-house capacity would result in the reduction of, I believe, $250,000 in contracting. 191 Bill 040255 - 4/13/04 So is there actually reduction over the next year, in terms of the in-house capacity versus the contracts or is there actual overlap that shows no actual savings next year?
It is my intention, that if we are successful in our current recruiting, and we are able to attract three experienced internal auditors, that we will not use any funding in the next fiscal year to do outside -- hire outside auditing.
But you are budgeting for both contractors and new employees.
This is a transition period. I cannot guarantee that we are going to be able to attract the types of individuals. We are in the beginning stages right now of recruiting.
So our approval of your department's budget may actually not result in a savings next year but result in both contracting and the hiring 192 Bill 040255 - 4/13/04 of six additional employees.
I would say that I can't guarantee it, but it is not our intention to do both at the same time.
It's, you know, our intention not to do both at the same time. To the extent that we -- you know, we get the three auditors on and the other support people on staff, and we won't need to dip into the contracting money to the extent we get one auditor and have to contract --
Let me ask a more specific question and go back to the original question. Do you have any contracts that run into the next fiscal year?
We have one that is literally starting, as we speak, with an outside consulting firm. And the target for completion is the end of this fiscal year. We are targeting --
Do you have any contracts that will run into... definitely one and two next year? 193 Bill 040255 - 4/13/04
No. With exception of the one that I just mentioned, there may be some overage beyond June 30th.
But you're not obligated under your current contract that it goes past June 30th.
Do you have any arrangements, in terms of who handles these that go into next year?
You're welcome. Councilman Nutter -- Councilman Rizzo, and then Councilman Nutter.
Thank you. Mr. Gill, I understand that since you have arrived, that you're not just strictly investigating based on tips that you may have receive or areas that there are suggestions that there are problems. Would you explain -- I understand 194 Bill 040255 - 4/13/04 that your office is proactive also.
Yes. We have instituted extensive liaison with other offices that are engaged in similar activities. There are other Inspectors Generals in the City, including on the Federal level the Housing Inspector General. Many times their activities overlap our activities. And we are constantly exchanging information, and we are conducting joint investigations with many agencies, including some Federal Inspectors General.
So if you know of areas that have -- that are potentially loose, that there is the possibility of a problem, do Inspector Generals and the people who are in your business, do you look for areas that... With 20 years of Federal experience, local law enforcement, are there areas that you say, just to make sure we take a look at that?
Absolutely. One of the prime examples is the control of funds, 195 Bill 040255 - 4/13/04 either cash or checks, or receipts. Additionally, we have an active, a proactive program, called the Integrity Officer Program, where we have senior individuals in each of the City agencies who act as the eyes and ears of our office, who both provide us information and conduct inquiries on our behalf. It leverages the number of individuals in our office. There are approximately 30 integrity officers. They also provide us information about what is ongoing in particular functions within the City that may cause us to conduct an investigation. They have received training from us on an annual basis, and they review their programs and provide us information.
Thank you, Councilman. Councilman Nutter. 196 Bill 040255 - 4/13/04
Thank you, Madam Chair. I guess lastly for Mr. Gill, can you tell us the difference between an Office of Inspector General audit and any of the audits conducted by the City Controller? There seems like there might be some similarity or possible overlap between what the two offices do.
Yes, sir. At first blush, there would be a distinct similarity. However, what we have limited our auditing to is reaction to investigative information. We have not at this point done any proactive auditing which principally it's my understanding of what the Controller does. He has program audits, systematic audits, areas which he reviews every year. We have directed our reference towards addressing issues that have been uncovered as a result of a criminal investigation or a serious misconduct investigation. 197 Bill 040255 - 4/13/04
With the additional staff, do you anticipate doing a more proactive type investigation or... I mean, I got the impression from your statement that unless someone reports something to you, the office would not necessarily be looking for anything.
Well, I'm sorry. Maybe I wasn't clear in that. In terms of auditing, with three people on staff it would be almost impossible for us to do proactive activities. Auditing is an extremely labor intensive issue.
My long-range goal is to continue to leverage our investigations, to provide the auditors leads, and then ultimately use there reports for management purposes.
Do you produce any form of annual report? And if you do, who does it go to?
We produce a monthly 198 Bill 040255 - 4/13/04 statistical report. And at the end of the year those monthly reports are rolled into an annual report. And since I report to the Mayor, it goes to the Mayor's Office.
Does it only go to the Mayor's Office because of the dictates of the executive order or has that just been the past practice?
Well, there are a number of issues involved. First of all, most of the information that my office comes in contact with is sensitive information. There was a ruling by the Law Department that any work product from the Office of the Inspector General is non-discloseable outside the chain of management command that would use it to take action.
Well, but you've also testified here today that you have 48 ongoing investigations. I don't know how many you actually started and completed last year. I mean, I understand that certain 199 Bill 040255 - 4/13/04 information should not be out in the public. On the other hand, is there any way for us either here in Council or the general public to have some level of... I don't want to say evaluation, but certainly some sense, if you will, of just what the office is doing, how much activity there was in the past year, what have the trends been over the past couple of years. Are we having more investigations because, you know, people are doing more things? Are we having more investigations because the office is better staffed and has more opportunity to go after certain things or do you have fewer investigations which is, you know, not a bad thing because, you know, the message is getting out? I mean, how do we... I'm not questioning whether you come to work every day. I assume you do. But how do we know on a regular basis, you know, basically what's going on? 200 Bill 040255 - 4/13/04
Well, sir, my initial reaction to that is is I would be more than happy to share the statistical report.
I would like to just verify that it's acceptable through the Law Department, through the people who issued the original...
If you can get an answer to that and forward it to the Chair, I would greatly appreciate it.
Madam Chair, I don't have any more questions for the Inspector General. I do have a couple last questions for the Chief of Staff, if I have any more time.
Yes; you're fine. Please continue, unless there are other questions from other members. You may continue, Councilman. Thank you.
Madam Chief of Staff, on the... Thank you, Mr. Inspector 201 Bill 040255 - 4/13/04 General. On the first page of the Mayor's group section in the big book... What are we calling this now? Big yellow book this year.
Yes. Could you provide us -- There is an organization chart, as there is for just about every section. But could you lay out for us on the chart the exact -- And I know I asked you earlier for a listing of who individuals were and their positions and the like. Is it possible to put together an organization chart that shows actually where everyone is?
And there are three secretaries listed. External affairs; I know who that is. Education; I know who that is. Are you actually the 202 Bill 040255 - 4/13/04 third or is that the Planning Commission Director? It's Secretary of...
Right. Which I couldn't remember the other day. It's Strategic Planning and Initiative, so she's also...
Has the dual. Okay. The recent newspaper accounts... I just want to understand this from a policy standpoint. With regard to added costs or added resources being provided to the Law Department to deal with the federal investigation, is there a cap on the amount of legal services to be provided?
Not that I know of, but you would need to ask the Law 203 Bill 040255 - 4/13/04 Department. But not that I know of.
Okay. Well, I understand that. But I guess the reason I was asking you as a representative from the Mayor's Office is more really the policy question of, I mean, who decides?
And what is the policy around these particular issues?
You would have to ask the Law Department that. I don't know the answer. The City Solicitor specifically.
Okay. And the Law Department and the City Solicitor decide what the policy is, related to representation, amounts of money, all of these issues? I mean, the Mayor's Office is not involved in determining what the policy is?
Okay. All right. So anything related to that would 204 Bill 040255 - 4/13/04 have --
I would ask that you talk with the City Solicitor about that.
Okay. All right. Well, then, I guess my last question today is, if the City Solicitor made some particular decision in this area, is that a final decision or... I mean, the City Solicitor doesn't work for him or herself. I mean, they're still under the... I mean, the City Solicitor has a boss. So if the Solicitor makes a decision in this particular area about whatever that decision is, is that a final decision or can it be overruled or changed by the Mayor?
The City Solicitor is making decisions about representation. You know, in theory, could the Mayor veto funding decision, you know, the transfer ordinance that's pending? Yeah; I mean, in theory that could happen. The City Solicitor is making 205 Bill 040255 - 4/13/04 representation decisions, and... I mean, those -- that's where the decisions are being made in this matter.
Okay. Different topic, last... last area. The issue was raised earlier about... And I don't think I got my clips back but PGW. That's fine. That's fine. I'll track them down. With the decision to forego the $18 million for, I believe, not only the upcoming fiscal year, but is it the next three or next four?
Does that decision now put the FY... What impact does that decision have on the FY '04 budget? 206 Bill 040255 - 4/13/04
That's included in the FY '04 numbers that we submitted with the FY '05 budget. So it's accounted for in the numbers that you got when you got the '05 budget.
So you expect -- you anticipated in the FY '05 budget that you would not get the million in the FY 14 '04 budget. 15
Okay. But when 17 the FY '04 budget was passed, was it 18 inclusive of the $18 million payment from PGW?
Okay. So, what does that do -- What impact does that have on the FY '04 budget?
It meant that there was $18 million less in revenue than we 207 Bill 040255 - 4/13/04 anticipated when we did the budget.
Okay. So, it's been reported, at least in the press -- I don't know what you testified to last week. What's the current... Where do we expect to end FY '04 from a revenue standpoint?
From a revenue standpoint in the General Fund we expect to get $3.18 billion in revenue.
Bad question. What do you expect from a surplus or deficit position? Where were you expecting to end FY '04, including the $18 million?
You anticipated -- When we approved the FY '04 budget --
-- you 208 Bill 040255 - 4/13/04 anticipated receiving the $18 million. And you had a fund balance...
Okay. Now that you've decided to forego the and a whole 11 host of other things have happened. But if 12 the number -- if the number were 16 and 13 you've now decided to forego 18, will we 14 end the current fiscal year with a deficit? 15
No. Our current 16 estimate is actually included with the -- 17 the budget we submitted was that '04 would 18 end with a $14.6 million fund balance.
Okay. Now, the FY '05 budget anticipated receiving the $18 209 Bill 040255 - 4/13/04 million; is that correct?
And the five-year plan anticipated receiving the $18 million for the five years or the five-year plan; is that correct?
By making the decision to now forego the $18 million in FY '05, what does that do to the fund balance for FY '05 or the requirement to have a balanced budget?
Well, all things being equal, then the fund balance that we had for '05 was 13.6 million. So, if nothing else changed, you have a negative fund balance. So I would assume you have to make changes in the budget to keep it balanced.
So now you're saying it is at least a $3 million deficit.
If nothing else changed, there would be a deficit of about 4.4 million. 210 Bill 040255 - 4/13/04
Okay. And what's the impact of the... foregoing of the $18 million from PGW on the five-year plan?
It's an additional four years of not receiving the $18 million, so it's four times 18; 72 million, plus the $17 million in revenue over the life of the plan.
Are you just counting the four years? What about the first year?
The first year was '04. We already counted that. We would have to change from what we submitted to where we are now.
Right. And so the change from when we submitted the plan is that we no longer get '5, '6, '7 and '8, four years, 18 million each. 211 Bill 040255 - 4/13/04
So... This is the first day of the Operating Budget testimony. The host of the departments coming after you, what does all this do to the integrity of the budget or budgets of these various departments if now you have to make these other changes in the course of the hearings?
It means that we have to make -- to balance it, we have to make changes equal to -- in lieu of over $4 million.
When will you know what those changes are going to be?
We are going to be meeting with the Mayor, reviewing the feedback thus far on the five-year financial plan, the developments as a result of commitments made with respect to PGW, and developing a set of alternatives. 212 Bill 040255 - 4/13/04 But that's -- that's a process that will -- is going start today. We may not get to it today, but we'll be doing it in very short order.
Is it fair to say that any other department... I mean, maybe with the exception of the Mayor's Office up on the table now, but... I mean, is it fair to say that any department that comes after this testimony is not necessarily assured that the present budget they believe they are presenting may not be the final budget that gets approved?
We have not yet decided where the additional funds would come from. I think what you're going to hear when you hear the departments testify, there's a number of departments that are already down to bare bones, and... But we have not yet made the decision. And so, in theory any department that comes could be subject to additional cuts.
Right. Okay. 213 Bill 040255 - 4/13/04 Thank you. Thank you, Madam Chair.
Thank you very much. Are there any further questions for these witnesses? (No response.)
We thank you, Miss Wilkerson and Mr. Dubow. Now we're ready for the Mayor's Office of Labor Relations which is 10:15 to 10:45 a.m. (Laughter.)
Thank you for your patience. Welcome. And we ask that you identify yourself for the record and begin your testimony. Thank you.
Good afternoon, Madam Chair and members of City Council. My name is Bill Grab. I'm the Director of Labor Relations. I'm here with Delia Gorman and Joseph Tolan, the Deputy Directors, who are here to present the Office of Labor Relations' request for our 214 Bill 040255 - 4/13/04 fiscal year 2005. The Office of Labor Relations coordinates labor relations programs affecting the 22,000 unionized General Fund employees. The Office of Labor Relations works with the City managers, union representatives and other members, in collective bargaining, labor contract administration, dispute resolution, and labor-management cooperation. We are requesting $494,752 for FY '05 which represents a $22,012 decrease from our fiscal year 2004 estimated obligations. Our FY 2005 performance goals are attached for your information. In the field of collective bargaining, the current collective bargaining agreements with the Fraternal Order of Police, District Council 33, and District Council 47, will expire on June 30, 2004. The agreement with the Firefighters 215 Bill 040255 - 4/13/04 expires June 30, 2005. The City and the Fraternal Order of Police, District Council 33, and District Council 47 are bargaining according to the requirements of Act 111 and Act 195 of Pennsylvania. The Office of Labor Relations service level measures. The office processes District Council 33 and District Council 47 grievances that are not resolved in the departments. A total of 111 grievances were received in calendar year 2003, and the office disposed of 176 grievances. Through the hard work of our staff and union officials, the grievance case load has fallen from 454 at the close of calendar year 1996, to approximately 60 at the close of calendar year 2003. Another office of Labor Relations service level measure is training of City employees. We train managers and supervisors to function effectively in a unionized environment. 216 Bill 040255 - 4/13/04 The labor-management cooperation function is what we call Redesigning Government Initiative. The collective bargaining agreements between the City and AFSCME unions describe the Redesigning Government Initiative or RGI, which is a labor-management cooperative program designed to improve services to the citizens and reduce the cost of City government. RGI committees have worked successfully in Recreation, Revenue, L & I, Health, the Police Department, and the Department of Human Services. The newest committee involves the Board of Revision of Taxes. The Board is in the process of reviewing its technological systems. This include redesigning how the work gets done. The Board of Revision of Taxes and the unions are parties... have agreed as parties to involve employees in its redesign of the work. Thank you for this opportunity to 217 Bill 040255 - 4/13/04 present our budget request, and we are available to answer questions.
Thank you very much. In your testimony you mentioned that you coordinate Labor Relations programs affecting unionized employees. What are these programs? MR GRAB: The programs are the grievance procedure -- Well, collective bargaining, the grievance procedure, the unfair labor practice charges filed against the City, and training and advising managers and supervisors.
What role, if any, will your office play in the Administration's desire to become self-insured for health benefits?
If the City becomes self-insured for its unionized employees, it will have to be included in our collective bargaining agreements.
Okay. Have the unions been notified of this 218 Bill 040255 - 4/13/04 initiative? And if so, what was their reaction? And what consultants have been retained for this purpose, if so? And is that somewhere in this budget? Do you want me to slow down and go back?
No. Number one, the City's proposals to the Fraternal Order of Police include cost containment issues, including self-insurance. We are engaging the Hay Associates, as I think the Personnel Department, as our consultants. And there was a third question.
You mention in your testimony that you conduct training courses during the year. What are these courses? And can we get copies of your 219 Bill 040255 - 4/13/04 course material?
Good afternoon, Madam Chair. The training courses we conduct for City managers and supervisors... Basically, it's a day-long course that covers what they are legally obligated to do under state law, what the contracts contain. That includes master agreements with District Council 47, and the last three agreements with District Council 33. We also talk about what determines whether disciplinary action is for just cause, what is the disciplinary process, how to do progressive discipline appropriately. We talk about what the role of the union representative is, and what are the steps in the grievance procedure. And those are -- That's the bare -- basic outline of our training course. We give it once or twice a month nine months out of the year. And we have 220 Bill 040255 - 4/13/04 also gone out to departments to do customized classes for larger departments.
The Mayor has indicated that -- And obviously, we're facing some very serious budgetary decisions. What value and contribution is your office adding to this whole process?
Well, I think it's two pronged. One is the collective bargaining process where we'll be working with the unions trying to address issues. There's the cost of benefits and wages to the City. The other way we do it is through labor-management cooperation and redesigning government initiative.
Thank you. We'll open it up for questions. Questions from my colleagues? Councilman Nutter.
Yes, Madam Chair. I'll be quick. 221 Bill 040255 - 4/13/04 Mr. Grab, just kind of two questions: One, what, if any, involvement does the Office of Labor Relations have with regard to employee -- Let me rephrase that. What, if any, involvement does your office have with regard to labor disputes that do not involve City of Philadelphia public employees but are labor disputes nonetheless, which may occur in the... in Philadelphia? Do you get involved in any other non-City labor issues?
The executive order that establishes our authority and responsibilities are with the City employee unions.
And could you forward to the Chair a copy of the executive order.
Do you have any sense of how your office compares to similarly situated or similarly tasked offices in any of the other major cities in the United States?
Only New York City which is a much larger office and their workforce is much, much larger also.
Yeah, just a little. Do you have any information? What's the size of the New York City office? 223 Bill 040255 - 4/13/04
I -- I... I can get you that information. I have talked very often with the Director of Labor Relations up there, and we talk about sizes; but the numbers are not coming.
Do you ever have any contact with the Director of the Office of Labor Relations in Chicago?
You know, we have once in a while, but not often. They'll call for information.
The reason I asked is, many of us have had situations where we've gotten involved or received calls about various labor-related issues, often involving construction related projects in the... in our building trades. And I guess over time, and certainly some more recent situations, I've come to wonder whether or not in a more strategic fashion and a more proactive fashion, whether it would be helpful to have -- through our Office of Labor Relations seems 224 Bill 040255 - 4/13/04 to be the appropriate place -- that in a... maybe in a more targeted, a more methodical, a slightly quieter way we might be able to get resolution to some of the many issues and challenges that come up, as opposed to the more ad hoc, pulled-together method of responding to a particular situation or crisis at the point that it's a crisis and becomes a rather public issue. And I guess I'd be interested in your views on that.
First, we have the Office of Labor Standards in the Managing Directors Office.
Which deals with some of those issues. And many times it's -- Many times it is the point office or situation for questions and problems that evolve in the outside labor relations world.
Okay. And I'm sure my colleague, Councilman Ramos, can tell us a fair amount about that particular 225 Bill 040255 - 4/13/04 office, I guess. And I do not --
We used to transfer calls back and forth an awful lot to the offices --
Well, he tells us that it mostly was your office transferring calls to his office. He has no recollection of sending calls back the other way. But... And again, not being an expert about that office, I guess I would ask, you know, just how far that office can go, in terms -- in its authority, in terms of trying to either get things quieted down or quote unquote put the deal together that needs to be done. And what I'm suggesting to you is, if someone came to town and wanted to do whatever it is they wanted to do... You know, let's -- I mean, the big projects, you know, usually have a way of working themselves out. But in many instances the smaller ones. And whether it's a local person or a 226 Bill 040255 - 4/13/04 non-local person, it seems that it might be helpful in a more of an up-front fashion, that, you know, 99 times out of a hundred person's probably got to pull a building permit or get some permit to do something and the City may -- that may be our only connection to it. But if there were outreach to that entity to say, you know, what is it that you're trying to get done? We can help work you through the process, the system, the rules, the standards that go on here in Philadelphia, and to some extent, I guess, be that middle entity between the people trying to get something done and many of our friends in the trades that, you know, it would kind of all get put together before it exploded.
And I think also provide a service to the entity because, you know, the office knows all of the various players, and that one entity wouldn't then have to try to then negotiate 227 Bill 040255 - 4/13/04 in a rather ad hoc fashion with, you know, three entities or four or five or eight, however many, you know, would want to be involved. Is this something that... I mean, is there any value in something like this?
I can say this from my experience. First of all, I'm trying to figure out how to get the Office of Labor Relations alphabetically after the Office of Labor Standards because when a phone call goes into the central phone system and they say labor in it, the phone call comes to my office. I have many times... And I have referred things to the Office of Labor Standards about that or I have referred things to MBEC in Congress. And the... It's not often that I get a return call. Or I've gotten a few return calls, and they have been very satisfied with the... by me routing them to the right place; let's put it that way.
Could there be more coordination? I guess there could be more. I will bring that up with the Chief of Staff.
Okay. All right. Maybe we'll talk about that a little later. Secondly, is -- how actively involved is your office in the contract negotiations with our municipal unions? And secondly, I'm always left with the impression that -- I mean, the office has a role, but ultimately the City seems to hire a fair number of outside people, I think usually attorneys, at probably some fairly decent rates, to negotiate our contracts. And I guess similar to some of the questioning that was being based earlier, actually related to the Office of Inspector General. Why wouldn't we seek to increasingly try to develop in-house capacity to negotiate contracts, as opposed to what seems to be at times a rather 229 Bill 040255 - 4/13/04 expensive outside procurement?
We... There's two types of negotiating contracts. There is the Fraternal Order of Police and the Firefighter's Interest Arbitration, which is arbitration that gives you a contract.
And then there's collective bargaining with District Council 33 and 47.
The function of iterative issues with District Council 33 and 47, this office alone usually has an attorney who will have the chief spokesperson at the negotiating table and put together the package, with consultation with the Mayor's Office. In the District council 33 -- I mean, District Council -- Excuse me. In the Fraternal Order of Police and Firefighter negotiations, the City's presentation is before a panel of arbitrators, and becomes more of a 230 Bill 040255 - 4/13/04 courtroom or legal type presentation. And that's where we use a lot of the outside counsel and we use the inside counsel in the Law Department.
What would you anticipate the makeup of the team to be for the upcoming contract negotiations? I know you only have one interest arbitration and two non-uniformed. And then... Is your office involved in teacher negotiations at all?
My office would be at the negotiation sessions while representatives from Finance, representatives from the Managing Director's Office, representatives from the Law Department, and some outside counsel.
What would you anticipate the cost to be of the outside counsel in negotiating contracts?
That... That you'll find 231 Bill 040255 - 4/13/04 in the Law Department budget. We -- We do not -- We are -- do not budget that.
I notice everyone wants to leave a lot over to the Law Department. The Law Department would do well to be represented, I think, every day at the budget hearings, to make sure that people aren't shoving themselves off on them. It's those other people; right. Okay. I'll ask the Law Department about that.
Thank you, Councilman. Councilwoman Tasco and then Councilman Ramos.
I just have a couple questions. Is there a coordination between your office and the City Representative's Office and, say, the film department who interact with these various entities that come into the City to do 232 Bill 040255 - 4/13/04 work, so that there's an understanding of what the process for working in the City would be?
No. And if I got calls, I would refer them to either Labor Standards or MBEC about that.
Well, do you see a role -- your role -- a role for your organization, since you are Labor Relations? And what is the process?
As I stated to Councilman Nutter, I will discuss that and see if there is a role for us to expand with the Chief of Staff. I've used this phrase before here where I guess we're Mr. Inside and Mr. --
And the Labor Standards being Mr. Outside, dealing with the outside.
I see. All 233 Bill 040255 - 4/13/04 right. I think that Councilman Nutter may have asked this, and maybe I didn't understand the question, about the role in the City labor contracts. You said that their contracts would be identified in the Law Department for the upcoming City negotiations.
So you basically work with the various departments on issues. I notice you do grievances.
Who handled grievances before your office was put into place?
We... My... I was 234 Bill 040255 - 4/13/04 situated, and my staff and I were situated in the Personnel Department. And we basically handled the grievances at that time out of the Personnel Department.
So the Personnel Department doesn't handle grievances any more?
Personnel Department... Grievances that deal with the Personnel Department, yes. Other grievances come outside the department. The fourth step in the grievance procedure is the Office of Labor Relations.
So if an employee of the City has a grievance, they come to your department, rather than go through the Personnel Department.
Thank you, Councilwoman. Councilman Ramos. 235 Bill 040255 - 4/13/04
Thank you, Madam Chair. What's the status, as we speak this afternoon, on the negotiations with District Council 47 and 33?
District Council 33, we have received their proposals, and we have a negotiation session scheduled for a week from today. District Council 47, we have not received their proposals as of yet.
Is this normal procedure? We're running out of time. Contract will expire soon, and you have two major issues concerning pension and health benefits. And as you've stated, they are being very protective, as unions usually are, of those two parts of collective bargaining agreements.
This is not unusual. It's not... It's within the limit of what we -- It's in the latter part of the window, yes, but it's usually within the window that we usually negotiate, the timetable. 236 Bill 040255 - 4/13/04
Where do you see... Have you seen any... Is there any movement as to how you're going to get past the Administration proposal of self-insurance and pension contributions?
I think there will be a lot of discussion as the City's financial situation, fiscal situation. And we're going to have to impress upon the unions that we need their help, and that there are better ways to spend the money that we do spend so that we can spread the money around better -- let's put it that way -- in a better, a more proportionate way.
Is your position going into union negotiations to avoid a strike at all costs, within the framework of fiscal constraint?
Well, we do not -- We do not want a strike. We're not looking for a strike. I don't know whether I can say within all costs, but within reasonable costs, yes.
So there's 237 Bill 040255 - 4/13/04 nothing -- So are you saying that in certain circumstances a strike could happen -- I mean, will be welcomed?
If these two issues are not handled before the end of June, is there a chance there's going to be a strike?
There's always a chance that there's going to be a strike, if... if the parties do not reach agreement by June 30th or any time after that.
It's not unusual for the parties to extend. I mean, if you remember back in 2000, we extended into mid August before we got agreements.
I think the public -- public needs to know that there's movement, and we definitely need to know here in City Council that there's some significant movement going on towards avoiding a strike by two of our municipal 238 Bill 040255 - 4/13/04 unions, and that we're doing everything possible to avoid such, you know, a job action. We've had these job actions in the past, a few of them, in the last years, 7 maybe two or three of them, two -- two or 8 three of them that we don't want to 9 remember because of the impact on the 10 everyday lives of people in Philadelphia. 11 And given that to the major issues, 12 without even talking about raises and the 13 fiscal situation of the City of 14 Philadelphia, that I'm very concerned that 15 there's not a whole lot -- there's not 16 enough -- there's not enough movement going 17 on. 18 Are you in a position to request of 19 District Council 47? You said you have not 20 gotten their proposals.
What happens if they don't submit proposals until mid June? Are you going to wait until then to tell them that the contract is up? 239 Bill 040255 - 4/13/04 Or maybe do you take a proactive approach and say: Look, we have many major -- we have two major issues that we have -- that we're proposing some more fundamental changes here? We need your proposals.
We would call them before. We would talk to them to get their proposals, and get the issues before us before then.
Okay. And I agree with Councilman Nutter -- and you'll probably agree with this because this is probably a labor issue -- that stated that we probably need better coordination with our different respective labor-related shops within the government. As former Director of Labor Standards, I handled probably on a daily basis issues of labor management that you were sent to my office.
And those, you know, never got into the media. It never, 240 Bill 040255 - 4/13/04 you know, came to, you know, to the attention of the... even the members of this Council or other people in government. But it's always very satisfying for me and very important for our daily relationship between management and the labor. But I do agree that there should be a more... a more coordinated effort because there is another labor-related shop within the government -- and this slips me now -- that handles, you know, some of these type of issues. But I think that we will probably come a long way if we... if we can better coordinate, you know, the labor management issues within the government.
Coordination and cooperation always helps -- usually helps or most times helps.
Thank you, Councilman. 241 Bill 040255 - 4/13/04 Are there any more questions for these witnesses? (No response.)
We thank you. Now Mayor's Office for Information Services. We thank you for your patience. We ask that you come forward, identify yourself for the record, and begin your testimony. And certainly we thank you, because your time is 10:45, so we're just a little bit past that. But at any rate, we're glad to have you, and thank you for your patience. Good afternoon.
Good afternoon. I was going to say good morning, but it's good afternoon. Madam Chairman and members of City Council, I'm Diana Neff, the Chief Information Officer for the Mayor's Office of Information Services. I am pleased to present, on behalf 242 Bill 040255 - 4/13/04 of the entire staff, the testimony for the fiscal year 2005. With me this afternoon is Michael Dean, my First Deputy CIO; and Debbie Beatrice, the Director of the Administrative Services Center. The Mayor's Office of Information Services works in partnership with City agencies to implement and manage information systems that support and enhance City government operations. MOIS coordinates the City's information technology activities by providing centralized planning, enterprise IT standards, IT project management, computer training, enterprise GIS, and desktop support. MOIS also operates the City's central data center, the metropolitan-wide area network known as CityNet, and the operations support center. MOIS is requesting a total of $11,179,254 from the General Fund for the fiscal year 2005, $6,265,767 in Class 100 243 Bill 040255 - 4/13/04 for 101 full-time positions; $4,750,853 in Class 200 for computer hardware maintenance, software licenses, training, and project management support; and $162,634 in Class 300 and 400 for materials, supplies, and equipment. This General Fund request represents a $1,493,226 decrease from the fiscal year 2004 estimated obligations. This decrease represents a reduction of in budgeted 12 full-time staff positions from last year. 13 Eight of those positions were 14 eliminated from the MOIS budget as a result 15 of the transfer and reorganization of 16 personnel from MOIS to the new 17 administrative service center. 18 At this time... Oh, excuse me. In 19 the Water fund we are requesting a total of $1,037,129: $708,779 in Class 100 for 12 full-time positions; and 292,000 in Class 200 for hardware, software maintenance; $36,350 in Class 300 and 400 for the materials, supplies and equipment. The Water fund request represents an increase 244 Bill 040255 - 4/13/04 of $22,663 from fiscal year 2004 submitted obligations. This increase reflects additional personnel costs associated with the existing Water Fund staff. The grants funds we are requesting is a total of $3,938,500 which is a net increase of $769,450. In support of the technology projects for the Neighborhood Transformation Initiative, we are requesting $3,800,000. This represents an increase of $900,000 from FY '04 for the Records Department GIS project. These other funds will be used to complete the Unified Land Records System, the Vacant Property Management Information System, and develop needed interface programs to support the sharing of property information among the departments and City's NTI business partners. A hundred thousand dollar Federal Homeland Security grant will be used to acquire additional aerial photography and planimetric mapping in the support of homeland security. 245 Bill 040255 - 4/13/04 In FY '05 MOIS will use 25,000 from a Productivity Bank Loan to continue implementation of electronic bail presentment and payment system. The Productivity Bank is funding this initiative for a total cost of $175,550. MOIS has received 125,550 in FY '04 to put this capacity in place. The additional funds for MOIS in FY '05, along with 25,000 for the Records Department, will be used to embed this credit card payment capability into existing web based applications at the Records Department and elsewhere in the City. A grant from Drexel University of 13,500 is to document a governance model process for the content management of the City's web site. Madam Chair, if you would like, I could end my testimony at that time, due to the lateness of the hour, and open it to questions.
You are kind. Thank you. 246 Bill 040255 - 4/13/04 Any questions. Thank you very much. Councilwoman Tasco.
What is the percentage of your professional service contracts held by MWBEs?
I have it. For the fiscal FY '04 and through the balance of this year, we are estimating on a base contract of $2,511,985 that $628,603 or 25.02 percent will be placed with minority, women-owned businesses.
Our level range is anywhere from 10 to 27 percent, depending on the type of contract and the services being provided.
Some of them are a 25 hundred percent to minority- and 247 Bill 040255 - 4/13/04 women-owned businesses. Others we require on our RFP process that the primes come in with minority- and women-owned business sub-partners.
Do you find that there are many companies that will do business with you who are minority and women? Who made this -- the standards able to do the hundred percent? And if so, how many of them get the hundred percent? Some of the primes. Are some of the subs have the capability to be primes?
Right. We have... Let's see. One two, three, four, five, six, seven, eight, nine, ten of the contracts, of which one, two, three, four, five, six are primes and are minority- or women-owned businesses.
And the others are large corporations like IBM, are online training, and... Some -- Our training either has minority participation or direct minority firms. 248 Bill 040255 - 4/13/04
Thank you very much. Are there further questions? (No response.)
All right. Then we will go to the Mayor's Office of Community Services. And we thank you for your patience. Welcome those forward. We are going to testify in the area of Community Services. (No response.)
We note that written testimony indicates that the Empowerment Zone and we know Community folks are testifying. And the Mayor's Office of Community Services, we would welcome you to come forward. Thank you.
Good morning, Madam President. Mr. Ralph P. Blakney, who's the Executive Director of the Mayor's Office of 249 Bill 040255 - 4/13/04 Community Services is on his way. Shall I proceed in reading the testimony that is prepared for you or shall I let Miss Gladstein go first?
Thank you. My name is Eva Gladstein. I'm Executive Director of the Empowerment Zone and Renewal Community Office. Thank you for the opportunity to provide testimony today. Given the hour, what I will do is just briefly summarize our testimony, as I know you have it in written form in front of you. The budget for the Empowerment Zone is $17,758,798, of which $711,753 is in the General Fund and $17,047,045 is from the Grants Fund. This represents a decrease of 250 Bill 040255 - 4/13/04 $58,299 from estimated obligations in General Funds from fiscal year '04, and an increase of $695 over estimated obligations in Grant Funds from fiscal year '04. The General Fund covers our personnel and associated costs of administering the two programs. The Grant Funds are used to fund three staff positions, and they make adequate funding available for all of the programs that flow from the Empowerment Zone program. As you may know, the Empowerment Zone is a Federal grant program. It began in December 1994. Renewal Community program began more recently, with an award in January 2002. In both cases there are Federal tax incentives that are available in specific neighborhoods of the City through December 2009. I guess just to summarize the substance of our testimony, we wanted to share with you that... several of our 251 Bill 040255 - 4/13/04 significant achievements. One is in creating national models to sustain the impact of our work. Another is in lending of $35 million and leveraging another $83 million through 187 loans made by community lending institutions, to promote economic growth in these neighborhoods. Thirdly, we have funded the cleaning and greening of more than acres of 12 vacant lots in Empowerment Zone 13 neighborhoods. 14 We've also helped spur the 15 revitalization of the Girard Avenue 16 corridor to bringing together 44 17 organizations in the Girard Coalition, 18 Incorporated. And finally, we've created strong collaborations in the Empowerment Zone and Renewal Community neighborhoods of residents, community-based organizations, businesses and city partners. And the rest of my testimony goes in to more example, but I will close with that 252 Bill 040255 - 4/13/04 and see if there are any questions.
Thank you very much. We will ask you to begin, in the absence of Mr. Blakney. Please identify yourself.
He is already in the building. He asked for two minutes. Shall I proceed?
Any questions with regard to the Empowerment Zone? (No response.)
Why don't you begin reading, and then he can ... Councilwoman Tasco.
You know, you all are designating the areas for the renewal community. What was the criteria for selecting a community to be a renewal community?
Good afternoon, Councilwoman. There were H.U.D. requirements that capped the total population by the 1990 census, also 253 Bill 040255 - 4/13/04 required at least a percent poverty level in each census tract, and a certain percentage of unemployment. And then again, the total of all the census tracts could not equal more than 200,000 in population as of the 1990 census. When we ended up designating 43 census tracts, they were -- that were eligible but -- Oh, and what follows is that all of it had to be contiguous. We could not have disparate areas of the City of Philadelphia. So all of the census tracts had to touch each other. So there were more areas that were eligible that we were not able to include within the population, and also because of the non-contiguous nature of some of the census tracts.
So, part of your North Philadelphia program touched a little bit on the Logan area and was contiguous. Could you tell me why part of that Logan area was not included in the 254 Bill 040255 - 4/13/04 plan?
I believe that a small part of the Logan area is included in the plan, but not the major triangle.
I'm not talking about the triangle. Triangle wouldn't qualify. That was not an issue. The issue was going up Broad Street, Overbrook Road, where there's a large commercial strip and could have benefited from the use of these funds.
In fact, up North Broad and part of Old York Road is included in the community. I don't have the map with me here right now. Is there a specific census tract that you'd like to ask about? Because I'd be happy to get the information.
We had this discussion... I just wanted it for the record, because we had this discussion when they were deciding what part of the area would be included in the renewal community. 255 Bill 040255 - 4/13/04 And we put forth an argument that it was contiguous to a portion of the renewal community. It should be extended a little bit, which could have been very helpful to a business strip that needs some help, and would cut down on... to kind of help us access dollars to revitalize that community and not have to count on General Fund dollars or dollars from other City departments. It would go, like, from maybe Wingohocking up, and it does not make -- does not -- and it is contiguous to the lower end.
Okay. I appreciate your concern, and I know we had that discussion.
Well, thank you. And I won't be mad at you. It's a political decision. Thank you.
Not to include anything in the Ninth District, because people are getting their digs in. I want 256 Bill 040255 - 4/13/04 mine in, too.
That is certainly your right. And each of us are elected, and each of us must protect the people who put us here. We'll ask you to begin testimony, please, for Mr. Blakney.
Councilwoman Blackwell and members of City Council, I am reading the testimony of Mr. Ralph B. Blakney. I am Miss Dell Jones, the Director of Planning for the Mayor's Office of Community Services. I am here to provide a brief description of the work of the agency and present its proposed operating budget for fiscal year 2005. The Mayor's Office of Community Services, hereinafter referred to as MOCS, requests a fiscal year 2005 appropriation of $28,296,139 and $27,584,387 from the Grants Revenue Fund, and $711,753 from the General Fund. Miss Gladstein has already provided 257 Bill 040255 - 4/13/04 her testimony for the Empowerment Zone. The budget of approximately $10.5 million for MOCS programs includes an increase of $963,361 from the fiscal year '04 estimated obligations. The increase in this appropriation will cover projected increases in various grant awards. The largest funding source is the Community Services Block Grant, which is known as the CSBG grant, a triennial grant awarded by the Commonwealth of Pennsylvania. The proposed CSBG operating budget for fiscal year '05 is $7,100,542. The amount of the grant is formula generated based on the percentage of the population identified as being at or below 125 percent of the Federal poverty guidelines. Subject to a plan that must be approved by the Commonwealth, the block grant allows flexibility in addressing the needs of low income communities. Madam... Councilwoman Blackwell, 258 Bill 040255 - 4/13/04 I'd like to give deference to our Executive Director, Ralph Blakney, who is here to finish reading his testimony.
Okay. MOCS is the locally designated community action agency. Its mission is to coordinate resources, leverage funding, and provide services to move low-income persons towards self-sufficiency and out of poverty. There are 336,000 Philadelphia residents below the poverty level, according to the U.S. Census Bureau. There are also another 414,000 Philadelphia residents below 125 percent of the poverty level and eligible for services through MOCS via the CSBG Block Grant. In fiscal year '04, MOCS was effective in a number of areas, including outreach to low income people and collaborations with organizations concerned 259 Bill 040255 - 4/13/04 about poverty. In addition, the agency produced a new bilingual brochure to inform English and Spanish speaking communities of several programs and services. The agency also is partnered with the United States Postal Service and the Salvation Army to conduct a clothing drive. In fiscal year '05, and at the direction -- with the direction of the Mayor and the Managing Director, MOCS will implement a strategic realignment of its programs, following these guiding principles, one being to implement opportunities to work smarter and more efficiently, to eliminate duplicative and/or under-performing programs, to leverage partnerships to deliver services more effectively and efficiently, to leverage outside funding to support programs incubated by MOCS, and to continue to use the CSBG Block Grant funding to strategically leverage other grants. The realignment enhances MOCS' 260 Bill 040255 - 4/13/04 ability to fulfill its mission to reduce and eradicate poverty. For example, by redirecting resources from programs that duplicate services already available throughout the City to programs for which there is a strong but unmet need, we are strategically filling a service niche, and we are making the most of our limited CSBG dollars. Another example is our partnership with DHS to fund the Fatherhood Initiative Program, a nationally recognized program that strives to improve the relationship between children and their non-custodial fathers. In recognition of the program's strong track record and its strategic relationship with the DHS mission, DHS will invest additional resources in the program during the fiscal year '05, and will thereby free up CSBG funds to be invested in other promising models. In addition, MOCS will invest some of its resources into eligible programs in 261 Bill 040255 - 4/13/04 other departments. The Office of Adult Services will utilize $500,000 in CSBG funding in order to ensure that all shelter residents have case management services. This is consistent with MOCS' charge to move individuals to self-sufficiency and reduce dependence on entitlements. The Recreation Department will use $500,000 of CSBG funds to support its Older Adults Program. We are also looking for other opportunities to move more closely to connect MOCS' Older Adults Program with five older adult programs run by the Recreation Department. Finally, we are investing $250,000 to address recidivism. The prisons will utilize these new funds to expand their efforts to successfully reintegrate inmates who are returning to their communities. During fiscal year '05 we will also join with other organizations from across America and wholeheartedly support the 2004 262 Bill 040255 - 4/13/04 No Room For Poverty Rally on September the 4, 2004. It has been 40 years since President B. Johnson began the War on Poverty, and the problems still persist. Therefore, in conclusion, I ask that this City Council support this rally with a resolution and other actions deemed appropriate by this body. At this time I will give deference to Mr. Blakney.
Thank you, Miss Jones. Fine job. Mr. Blakney, welcome. Is it true that your grants don't pay for the full costs of your employee fringe benefits? Can you clarify that?
Yes. In terms of the question about the fringes, I'd like to call on the fiscal director to answer that question, please. 263 Bill 040255 - 4/13/04
And as she's coming up, Majority Leader Blackwell, I sincerely apologize for not being here at the time that you called on our agency, but I was given information that we would be called a little later in the day. So, I thank you.
That will be fine. Of course, it is a little later. So we're glad you're here.
Oh, I'm sure. I'm sure. We have a great relationship with this department, and work with them on a daily basis, so -- so we know his commitment is real. Yes, ma'am.
Good afternoon. My name is Kirstin Ritter. I am from the Office of Community Services. Can you repeat the question, please?
I'm asking about employee fringe benefits. We 264 Bill 040255 - 4/13/04 understand your grants don't cover that costs. Can you clarify?
That's correct. And we are rolling in those costs over the next several years. In the past, the City of Philadelphia has kicked in 100 percent of our fringe benefits. However, because it is a large amount, it's hard to... We feel like that might take away... That was at one point taken away from the services being provided to poor people. However, in the next several years we have and will be rolling in more money towards fringe benefits.
For 2004 Workwise Program, they received a $1.5 million increase in appropriations but spent about $180,000, we're told. Is the rest of the money being spent or why was it not spent?
Well, when we go... It's -- It's a tricky situation when we are dealing with the City of Philadelphia when 265 Bill 040255 - 4/13/04 we're speaking about appropriations. And it's just that for the most part we are not aware of our appropriations amount at the time when we're preparing the operating budget. So most of the time it is a little bit less but we're not aware of... It's based on state, Federal Government regulations. So, that's basically what our actual grant award consists of. So, it can be a lot less, you know, as far as then the appropriations, so we don't usually truly use all the appropriations that we allocate. But in the case of we might have a large sum given, we want to make sure that there's enough appropriation power to cover any -- any grants that we might be awarded.
This is a question from Councilman Ramos who had to leave. Section 6, , Volume I of the CAFR lists a grant for program referred to as Latino Rights of Passage.
Okay. We actually have that program in coordination... Do you want to answer that? (No response.)
We actually have that grant in coordination with our Department of Human Services. And it is a spinoff, and I will probably ask Jizel Jones if... Do you want to...
The Latino program is administered by MOCS. There's a stat person in the agency who actually operates that program.
Yes. His question was... He wants to know what the program does and who is administering it. Do you know who administers it?
Yes. Her name is Ellen Ruiz, who actually directs the program. And she's not with us today. 267 Bill 040255 - 4/13/04
And it's a rights of passage program where they actually, you know, develop skills toward from childhood to womanhood.
This program has been in existence for just a couple of years.
Okay. Basically, the program is to make young people more culturally aware of their particular heredity. It's an after-school program, and it focuses on children ages 10 to 13.
Great. One last question from me. On you request $17 million in Class 200. How will you use these funds?
If I may answer that 268 Bill 040255 - 4/13/04 question, the majority of those funds on behalf of the Philadelphia Empowerment Zone -- And that is subcontracted with primarily non-profit providers, who operate a variety of economic and community development programs.
Thank you very much. Councilman Goode, questions?
Thank you, Madam Chair. My question for Ms. Gladstein. I notice in your testimony you talk about the performance of the lending institutions in the Empowerment Zone which have made $35 million in loans and leveraged $83 million. I'm hoping to just get a little bit more information about the $83 million that was leveraged. One, is that all private dollars that were leveraged? If not, the breakdown of public and private. Also, within the private, a breakdown of how much the private financing was from banks. 269 Bill 040255 - 4/13/04 And then a further breakdown, in terms of banks, which of the depository banks participated in those loans. If you could just forward that information through the Chair. The second question, you may have information available about for us now. You say that the lending that has occurred in the zone has maintained and created 1,197 jobs. How many of those jobs were new jobs that were created versus retained?
I can't give you that number today. I can go back and try to get you that breakdown.
Do you have any idea where whether the majority of those jobs were new jobs or whether the majority of them were retained?
There was one large loan which was in the North Philadelphia Health Systems that accounts for quite a large number of jobs, of Empowerment Zone jobs, and those are jobs maintained. My memory is that was in the area of 200 or 270 Bill 040255 - 4/13/04 300 of those jobs. And I think the rest, if you take that away, there would probably be about another 800 jobs which are probably fairly evenly split between new jobs and jobs maintained. But again, that's a guesstimate. As you know, this is a number that fluctuates. And we ask our lending institutions to get it every six -- to retrieve this information every six months from their borrowers.
So, do you have any idea how much it costs to create jobs within the Empowerment Zone program, create new jobs?
The rule of thumb that our lending institutions use is that one new job be created for every $35,000 loaned.
I would -- I would say in large part, but not in every 271 Bill 040255 - 4/13/04 instance. Business -- You know, the business cycle goes up and down. And some businesses, in fact, that have been very successful for a few years have hit upon harder times in the last year. So, again, it's... Sometimes we see immediate success. Sometimes -- Usually there's a three-year window, during which the businesses ask to create the job. Very often they are successful. But if you look five years out, the numbers might vary.
Once again, through the Chair, could you forward information regarding the dollars leveraged, $83 million, how much is public, how much is private; of the private dollars, how much came from banks; and of the bank dollars, how much came from our City depositories. And then secondly, a breakdown of how many jobs were created that were new jobs versus retained, and what that cost per job is for the $35 million in lending.
Is there anyone here from the Mural Arts Program?
I've been informed that the Mural Arts Program will be available to testify along with the Managing Director's Office.
Sure. Thank you. I want to continue along the line of questioning that my colleague Councilman Goode raised, for clarity purposes. Of the new jobs, were those renewal 273 Bill 040255 - 4/13/04 jobs, KOZ jobs, or both?
We have another... We're also tracking Renewal Community job creations, but that's a newer program. We've had two rounds where the City has been able to allocate tax deductions to... I believe it's differences now. 12 And we're able to, you know, just starting 13 to track those job creation numbers in the 14 renewal community. 15 That's a little bit harder to do 16 because we're not actually making direct 17 loans. So, through that one tax incentive 18 we can track those businesses.
I believe that we're asking them for a three- and/or a five-year projection. I will get back to you on that, if you'd like to.
Okay. 274 Bill 040255 - 4/13/04 Could you please provide to the Chair a list of businesses and jobs created in the Empowerment Zone since 1994, to get a big picture and look at Empowerment Zone activity? Speak to any linkages or the linkages with the City's Commerce Department and/or PIDC.
Sure. Actually, we have a five-member economic development unit of Empowerment Zone staff members, and they are physically located within the City Commerce Department so that we can coordinate with them on a day-to-day basis and on a programmatic basis. It's a very strong communication and collaboration with the Commerce Department; and, frankly, with PIDC through that mechanism. As an example, we participate in meetings at PIDC regarding land assembly in the Empowerment Zone neighborhoods is another just another example of the ways that we collaborate. 275 Bill 040255 - 4/13/04 And from time to time we jointly fund projects with the Commerce Department. In those cases we make sure, again, that we're collaborating so that we're not duplicating funding and that we're being consistent, in terms of the goals of the projects.
I'm curious, then, to know, given the relationship with the Commerce Department and the magnitude and the depth of that relationship, is there any explanation for why you're under MOCS and not the Commerce Department, given what you've just shared?
Well, historically, the Empowerment Zone since 1995 has been the unit within the Mayor's Office of Community Services. And I wasn't here, but I understand the rationale, because MOCS is the City's antipoverty program.
And the overarching goal of the Empowerment Zone is an antipoverty -- is to combat poverty through 276 Bill 040255 - 4/13/04 economic and community development. In fact, we collaborate very strongly with a number of City agencies because our goals are so broad. So, we also work with the City's community development entities as well.
Okay. That's certainly acceptable to me. I'm just curious to know what the strategy may have been. Back to the youth programmatic activity at MOCS. The Latino Rights of Passage; is that project funded over the course of the five-year plan? And the reason why I raise that is because it's cited and listed in fiscal 2004, but there's no -- there does not appear to be any subsequent budget activity beyond fiscal 2004. Miss Gladstein, factual information from the operating budget.
Basically the funds... We took away, as a matter of fact, all of the funds that were given to 277 Bill 040255 - 4/13/04 us by DHS because of the way that we do -- the transaction. Actually, we have another City department. In most cases we do finish transfers, and we --
Repeat that last statement, and speak clearly into the mike. I missed it.
The reason why we've taken it out in the future years per the operating budget, all of the funds that we transfer between departments or the DHS, we've taken out of the budget for this year because we -- they reimburse us for those costs. So, actually use our grant dollars and transfer those costs back into DHS. So, it's not shown... So, it's more so an internal issue. We don't -- In other words, we don't have an outside -- most -- These funds are more so for those grants that -- for Federal, state and other grants, not for internal, other City departments, so...
-- we were actually 278 Bill 040255 - 4/13/04 getting those funds in previous years from DHS. And we thought we would be able to get counseling in that way, but that's not the case. We're not able to... (Alarm clock sounds.)
Now, I didn't follow that completely because I'm not an accountant.
If that continues, yes. And it's an internal function.
Yes, it's an internal function, exactly. It's more so internally.
Okay. I have to reassess my questions? What does that tell me? Maybe I'll be like my colleague, Councilman Nutter, and just filibuster. Just kidding.
The Fatherhood Initiative Program. I followed that my few years here in City Council. What's the status of that program? What's the impact? Is there multi-year funding? What does it hold for the future?
The Fatherhood Initiative Program to date has been funded primarily out of the Community Services Block Grant. There is the intention to move forward with that program. For fiscal year FY '05 we plan to strengthen our relationship with DHS around that program, and that DHS will be supplying more funding for that program. 280 Bill 040255 - 4/13/04
Speaking from my experience as a former program officer years ago, what does that mean that you're going to strengthen your relationship with DHS? I'm curious about impact. How many family -- How many fathers are involved? How many young people will ultimately being impacted by the program?
I'll have to get back to you with specific service provision numbers, but I can say at this time that we are moving forward with the expansion of that program, which means that we plan to add staff to the program and provide even greater services. So, if you will permit, we will get back to you with the exact numbers for this fiscal year to date or for last fiscal year.
I would like to have that. Expanding staff on one side is important and useful. What impact does that have on the service delivery side? 281 Bill 040255 - 4/13/04 I'd be curious to know how many young people are being served in various Councilmanic Districts across the City that ties into the mapping that Safe and Sound has done, that speaks to their risk factors are with young people, and how the Father's Initiative ties into that from a logical problematic planning standpoint. So, the impact part of that I need a lot of help with. So, if you'll provide that information to the Chair, that will be very, very much appreciated. Speak to your partnership with the Recreation Department.
Okay. I did want to clarify one point. Our Fatherhood Initiative Program primarily is a program which is geared toward services to non-custodial fathers, not to children directly.
Now, there is an ancillary benefit by moving fathers to stronger relationships with their children. 282 Bill 040255 - 4/13/04 So, the numbers that we would be providing primarily would be the numbers regarding the fathers who participate in the program.
Okay. I thank you for that clarity. So, I'd be curious to know how are those fathers identified. Do they come through Family Court? Do they come through DHS? Do they come through the schools? Help me with that information as well.
Okay. Regarding our partnership with the Recreation Department, this has involved a number of services during the years. I believe had the Safe Schools and the Safe Streets -- Safe School, Safer Communities Program has benefited as a result of that relationship. I know Mr. Malik Aziz has done some work with Recreation around addressing the needs, trying to -- of young people, trying to keep them from moving from being dependent children to delinquent children; also trying to keep those children who are 283 Bill 040255 - 4/13/04 not in the system at all from becoming delinquent.
Sure. That paragraph for me is an opener. So, again, I would like some details. What schools are involved? When you say it's a Safe School, Safe Communities Initiative, I'd be curious to know what schools do we have existing partnerships would be helpful. And then you speak about older -- five older adult programs. Where are they? What communities are they serving, again, and the impact with the delivery of that service. So, if you could provide that to the Chair.
I don't know if someone -- I don't know if someone from Recreation is here. If they are, we could bring them up to speak about the five other adult centers.
That's referring to five other adult centers that are currently 284 Bill 040255 - 4/13/04 under the auspices of the Philadelphia Recreation Department. There is also Community Services does operate one older adult center at this time which is the West Oak Lane Senior Center.
So... And collaborating with the Recreation Department, we will move towards strengthening not only the MOCS program, but the relationship with what Recreation has been doing.
Good afternoon. My name is Lynn Spiro, and I'm the Director of Older Adult Services for Recreation. We operate five senior centers. One is located in the northeast, 7500 Castor Avenue. One is located in South Philadelphia. We operate one in the lower northeast. That's Juniata Park Older Adult Center, and two in North Philadelphia, one at 22nd and Cecil B. Moore, and one at 5th and Allegheny. 285 Bill 040255 - 4/13/04 We serve -- A number that we serve are duplicated count.
The impact that we have and the numbers that we serve, we know it as a duplicated count. For example, we serve 126,000 hot lunches during the year. We have approximately 170,000 people that cross through our door during that year and receive service. But again, that's a -- that is a duplicate count. Someone may come three times a week; they may come two times a week.
Okay. So, this relationship suggests that there's been an increase in the number of older adults that you're serving? How new is this relationship?
Between DHS 286 Bill 040255 - 4/13/04 and -- and forgive me. Between MOCS and the Rec Department.
This is... This is very new. This piece of it is very new. And so, it being a new relationship, service delivery is reaching more older adults. This relationship will begin, my understanding is, July 1st.
Okay. All right. Do $500,000 of that goes to -- Does that go toward operating costs, salaries, service staff? Help me out. What does that pay for?
That will... That will go to the cost that had come from the General Fund prior, and it would be staff salaries primarily.
Okay. Thank you for your testimony on that. Finally, the final sentence, we are investing $250,000 to address recidivism. Speak to that, what that means. Details is what I'm interested in. 287 Bill 040255 - 4/13/04
Councilwoman Blondell, at this time if someone is here from the Prisons I'd like to call them up. MOCS is actually collaborating with the Prisons. We will be furnishing the funds, although I have no details at this time regarding what they plan to do with those funds.
I am Allen Appel, and I'm the Prisons Deputy Commissioner for Treatment. The Prisons Commissioner would like to have been here, but he had an unavoidable scheduling conflict.
That's not a problem. It's certainly understandable. Would you be more comfortable with me saving these questions for the Prison Commissioner when he comes?
Okay, then. Given the increasing number of women who are being committed to prisons, how and -- how does the Prison Commissioner and his team of professionals address that 288 Bill 040255 - 4/13/04 issue?
Well, the grant from MOCS will fund two reentry programs that are specifically for women inmates.
They are going to provide job training, job placement, housing help, case management, family reunification for the women that graduate from the Behind The Walls Jobs Project.
In which they will be learning job training and life skills programming.
Okay. I've raised that issue because I've been in discussions with members of the Black Clergy.
And learned of the horror stories that all prisoners face, but most particularly women who are mothers...
...who are returning to their homes, and the disconnect that exists between when they leave the prison walls and they stay on State Road, with no money in their pocket to get home to their families. And so, that's why I raise those questions around, you know, the challenges facing female prisoners. So, you mentioned job training and job placement?
What connect, if any, exists with the number one agency in the City in the business of that, which is Workforce Development Corporation?
It is not in the grant that we will be getting. But the two agencies that we will be funding, one is the People's Emergency Center.
Both of those get 290 Bill 040255 - 4/13/04 funding from PWDC for those women who would meet the requirements while they are in training.
Okay. I want you to hold that thought. We have a point of information from my colleague. And then I have a follow-up question.
Thank you, Madam Chair. What portion of the $250,000 is going to be used specifically for job training and placement?
The whole amount goes for job training, job placement, case management, to help that work.
I understand you roll it together, but I need to know specifically what portion of the money is going toward job training and placement. I believe the source of these 291 Bill 040255 - 4/13/04 dollars is General Fund dollars, as announced in the Mayor's budget, unless I'm wrong. And if PWDC has a budget of over a hundred million dollars for job training and placement, why would we be using General Fund dollars for job training and placement?
The money that will be going from MOCS to the Prisons for this purpose are grant funds, and primarily Community Service and Block Grant Funds.
So -- So the money that the Mayor announced in his budget speech is the same $250,000?
I can't speak to the Mayor's address. I'm being informed that it is the same $250,000.
So he was referring to Community Service Block Grant dollars, rather than General Fund dollars? 292 Bill 040255 - 4/13/04
Surely. Surely. Surely. Thank you. Good point of information. Councilwoman Brown. (No response.)
Actually, that's still not a good thing because essentially we stopped using Community Development Block Grant dollars a year or two ago because there was these sources there at PWDC because PWDC was the major coordinator of Workforce Development Resources and Initiatives. Shouldn't all Workforce Development dollars for job training and placement flow through PWDC? And shouldn't we be using those dollars, rather than using Community Development Block Grant dollars or Community Service Block Grant dollars and 293 Bill 040255 - 4/13/04 surely not General Fund dollars?
Councilman Goode, I'm really not in a position to say whether using the money as planned is the better way to go on that.
Do you operate any other job training and placement programs, other than this one?
We have a program called Workwise, a supported work program.
Do you use -- Do you operate any other job training and placement programs where you use Community Service Block Grant dollars?
We have no other programs per se. However, we do have case managers who work within those programs who in part their responsibilities does include helping people to move toward work. As you know, the mission of the agency is to move people toward self-sufficiency. 294 Bill 040255 - 4/13/04
Your budget is roughly $28 million? Including -- Actually, Your budget is roughly $10 million; is that correct.
PWC's budget, I believe, is roughly $130 million? I mean, I don't see any reason why we should be using Community Service Block Grant dollars for job training and placement. And I know that's not your decision, but that's an issue that we have to consider. Thank you, Madam Chair.
My only follow-up comment would be, so often government is guilty of not talking across the invisible lines that exist among agencies. And to Councilman Goode's point, it may not be a decision, but it's worth certainly exploring at a level that's appropriate for you to have a Workforce Development Corporation do what they do 295 Bill 040255 - 4/13/04 well already. That's what they're in the business of doing. Comment, Mr. Blakney?
I will bring that question up with my superiors and supply you with some response to that question.
Okay. And then finally, purely as a suggestion, there are a lot of gaps and loopholes that exist with regards to leaving -- women in particular -- leaving prisons, back to being responsible mothers and contributing citizens. So conversations with others who care about that issue make sense. And I would ask that you look to speak with, have a sit-down with the Black Clergy because they're looking to make a dent and a difference in this area. And you're already -- You're doing it already. And the two worlds talking together can at least raise the number of women that you touch, in a way that moves them back towards self-sufficiency.
The Black Clergy are 296 Bill 040255 - 4/13/04 part of the reentry process that we have up and running.
Thank you very much. Further questions? Councilman Ramos.
Can we have the Budget Director approach the witness table?
Yes, sir. Mr. Dubow. And thank you very much, sir.
Good afternoon, Mr. Dubow. Why are you using Community Service Block Grant dollars for job training and 297 Bill 040255 - 4/13/04 placement, rather than PWDC dollars?
I heard the line of questioning. It is an interesting question. I'll have to look into it. It's a good point.
Well, I don't know whether it's not something that we just decided to do within the last couple of years. So, I need to look into to see why we do that, and then... I think your point's a valid one.
Thank you. Sir, is there further discussion about this issue? Councilman Ramos.
Yes. Thank you, Madam Chair. I have a few questions. You mentioned that you're producing or you have producing a bilingual brochure to inform English- and Spanish-speaking 298 Bill 040255 - 4/13/04 communities of programs and services. Can you talk to me a little about that. Where is it? How and where are they being distributed?
Yeah. MOCS up to the last few months was actually housed in approximately or different 9 facilities. And we had those brochures 10 available at all of those cites for people 11 who would come in for services. 12 MOCS has also distributed brochures 13 through our community engagement unit, which has a lot of contact with the public through their services. Many of them more recently had been working with the NTI program. And that's just some of the information that's available through the Community Engagement Unit, those brochures.
But how and where are we distributing these? I mean, for you to give out Spanish-speaking literature, I don't suspect you'll do it at 22nd & Cecil B. Moore, although we have a few Hispanic 299 Bill 040255 - 4/13/04 people who live in that area. What parts of town have you distributed this literature to Spanish from English?
We do have at least three Spanish-speaking staff people in the CDU unit. And I would have to get you a listing of all of the places where brochures may have been delivered, as well as the general vicinity or communities in which brochures were distributed.
You have, like, three people that speak Spanish in MOCS?
We have three Spanish-speaking people in the Community Engagement Unit.
Okay. How about throughout the MOCS system, outside of your -- not including the Empowerment Zone.
I don't know what the 300 Bill 040255 - 4/13/04 exact number is. I have to get back to you with that number.
Mr. Blakney, will you submit all this information to the Chair and we'll distribute it.
Well, I have just been given information, a breakdown of the current staff. Currently we have 16 Spanish-speaking people on staff at MOCS. 17
Are any of these bilingual people in areas where we have a high concentration of Spanish-speaking people?
I'd have to give you the other locations. That's one of other traditional satellite sites.
There's one person who routinely works there, but she's often partnered with another Spanish-speaking people.
A MOCS 302 Bill 040255 - 4/13/04 representative that handles...
And what do you have at 6th and Diamond? Is there a MOCS office at 6th and Diamond that you're using?
There's not an actual MOCS office there. It's a makeshift office, if you will.
Okay. Do you have any idea how many Hispanic people you're servicing?
Can you get that for me, please? Make it available to the Chair. This is why I -- The reason why I've asked these questions is, first of all, 303 Bill 040255 - 4/13/04 they're appropriate. But I find it a bit worrisome that an agency... And I know about this agency. I once served under the Administration of Wilson Goode, Sr. I was proud to serve for a year in this capacity. I left my construction work to help the Administration. And I was Director of a MOCS office in the Hispanic community, which now that office does not exist. It is worrisome that an office that is charged with... that is charged to move low income people to a self-sufficiency and out of poverty, that there is not anything here that says are we going towards new immigrants coming into the City of Philadelphia. Given that my experience, outside of friends that I have in academia, that come from foreign countries, my experience is that the immigrants that come into contact the most in this City are poor people. And I don't see anything within MOCS that addresses what are we doing as a government. And I think that MOCS is one 304 Bill 040255 - 4/13/04 of the appropriate places to address this with a new immigrant population. And although that immigrant -- the immigrant population speaks different languages, that the group of people that are -- the biggest group in the immigrant community in Philadelphia are people that speak Spanish that come from Central America, Mexico, mainly, but all over Central America. Then we have a migrant population that has lived here. My parents and I are an example of that. And those are of migrant population from Puerto Rico, of the American citizens. And I don't see where there's anything here that addresses that very poor community. This past weekend there was an article that 38,000 people left Philadelphia in the last three years. It is very disturbing. I think that we need to do more, especially with our immigrant community, given that that immigrant community that I 305 Bill 040255 - 4/13/04 have firsthand knowledge with is a very poor community. And if we can be of assistance to the poor immigrant community, there's a very good chance that they can -- that they'd be -- they'd be inclined to want to stay and live in a great City called Philadelphia. But if we don't reach out to them or we don't provide them services that by law we can provide them, then we can't see this City expand. So, I would like you to please take under consideration, as you go about... as you go about implementing the strategic realignment of your programs, that you include something here on how you're going to reach out to a poor immigrant community that has now found Philadelphia. In the case of people from Puerto Rico, we found Philadelphia many, many years ago. But it should still be a place where people can get services, find a job, raise a family, and continue to make 306 Bill 040255 - 4/13/04 Philadelphia their home, instead of what the statistics are showing us, that people are getting up and leaving this great City.
Well, Councilman, I sincerely embrace your concerns and can assure you that we will look at how we can provide more services to the immigrants. I would like to say that up to this time we do have an adult literacy program which we will be changing in FY '05, and that we realize that there are a number of adult literacy programs in this City. But I would point out that the English as a second language component of that program has reached out and provided services to immigrants during its time of operation. The Workwatch Program, which was mentioned earlier, which is a welfare to work program, also does have in its numbers of people who are being serviced immigrants. And as we also mentioned, the CEU unit of the agency also does provide some 307 Bill 040255 - 4/13/04 information and referral services to the immigrant population.
Can you give me whatever information and data you might have of how many bilingual people, particularly people that speak Spanish, are being serviced by MOCS? I know you have an office at South Broad Street. And just two Sundays ago, I held a meeting of the Spanish-speaking -- I called for a meeting of the Spanish-speaking immigrant community of South Philadelphia. And I had a meeting at 17th & Moore?
And I had folks come from the west side of Broad Street. The Hispanic population demographics historically in this City has been concentrated on the east side of Broad Street. Yet now this is a growing community on the west side of Broad Street. And I would -- At that meeting a couple of 308 Bill 040255 - 4/13/04 Sundays ago, I had a few hundred people come. And they knew absolutely nothing about MOCS. And in all fairness to you as well, to many City programs and agencies. And sometimes it really takes for government and schools to take a look at what's happening around them and start looking ahead, of what the City's going to look like in the next 10 to 20 years. And I would like to see this government be more visionary of where this City is going, who are the people who are going to inhabit this great land called Philadelphia in the upcoming years. And I'll be more than glad to work with you in helping you better define your strategic alignment of your programs, as it pertains to a population -- immigrant population that is growing by leaps and bounds. But if we don't try to keep them inside the City of Philadelphia through services and jobs and job training, they're going to move on to another town. 309 Bill 040255 - 4/13/04
We truly welcome your assistance. And I will say that we are aware of the migration of Latinos from the east side of Broad Street to the west side. And I'm sure that this Administration, not only within MOCS, but as MOCS continues to collaborate with other departments, that we will do a better job of addressing the needs of the immigrant population.
Here is another Philadelphia Initiative of the Street Administration that's being managed through the Managing Director of the City of Philadelphia. And I think that the different City agencies and departments need to -- maybe been instructed to go ahead and formulate plans. And I don't see it in your plan. But I'll be more than glad to help you. If you have not reached out to Phil Goldsmith, you should, so that we can implement this global Philadelphia plan into all City 310 Bill 040255 - 4/13/04 departments and services.
I certainly agree with my colleague, Councilman Ramos. The City is becoming much more diverse. And in years past we've always raised the issue of how is government going to address the issue of the diversity in the City, in terms of government access, the ability of our government to service people from many various backgrounds and cultures. And I will say to you that part of my District does. We have a very diverse District, in terms of the number of Latinos, but also other ethnic groups who need to have some connection with the resources that the City has to offer. And I'm not sure that MOCS even services the northern portion of the 9th 311 Bill 040255 - 4/13/04 District above the Boulevard. Do you have a program, an office in that part of the City? And if so, who runs that office?
The programs that would be considered in the northwest -- and I'm not exactly sure what boundaries you're using -- but we have the Youthwear Program currently, which is located at the 5700 Block of North Broad Street; the Russell Glane Older Adult Center, which is on Ogontz Avenue. I believe that's Ogontz and Washington Lane.
And the -- And the, you know, currently the -- Currently the Adult Literacy Program which is 138 West Chelten Avenue.
Well, I think it would be in your planning as you move forward. I agree with Councilman Ramos that we look at the whole global project that they've started in the Managing Director's 312 Bill 040255 - 4/13/04 Office, find some way to coordinate, and look at the City in its totality, and the number of new residents who are moving in the City. I have an Asian population, as well as Councilwoman Blackwell has a large Asian population in her community. And I'm often concerned about the ability to communicate. And have met with the Commission on Human Relations to talk about ways of communicating with these new residents, just to allow -- so that they can be informed of what services we provide them in the City of Philadelphia. And I think a more global approach by your office would be very helpful.
Yes, Councilwoman Tasco. We will once again be talking with the Managing Director about not only the immigrant population, but the current diversity of the City, and, you know, getting back to you with some response around what part MOCS will play in helping to address the needs of such a diverse 313 Bill 040255 - 4/13/04 population.
Thank you, Councilwoman. Councilman Nutter, you're next.
Thank you, Madam Chair. Mr. Blakney, if you've already responded to this, just tell me, and I'll move on to something else. But I noticed in your testimony the... On the second page toward the bottom, the $250,000 to address recidivism. Have there been any questions about that?
Okay. I'll read the transcript. How does -- How does MOCS determine, either from a goals or standards or benchmarking standpoint -- I mean, how do you know or determine how well the program is working? Are there particular goals, measurement standards, that you seek to achieve on a yearly basis? 314 Bill 040255 - 4/13/04
We... In order to receive the Community Service Block Grant funds, as well as the other grant funds that the agency receives, we submit proposals. And those proposals do include objectives, performance outcomes, and goals.
And so, we basically determine how well we're doing by whether or not we reach those goals.
Are these... Are they written somewhere? Is it something that you can --
-- share with us? Do you have trends over time to show what's going on? I mean, what is -- What's -- What is the fundamental goal of MOCS? What's the purpose?
It depends upon which fund or which grant you're speaking of. The six national goals for the 315 Bill 040255 - 4/13/04 Community Service Block Grant are, number one, low income people become more self-sufficient; number two, the conditions in which low income people live are improved; three, low income people own a stake in their community; four, partnerships among supporters and providers of services to low income people are achieved; five, agencies increase their capacity to achieve results; and, six, low income people, especially vulnerable populations, achieve their potential by strengthening family and other supportive systems.
I'm reading from a sheet which lists the six national goals for recipients of Community Service Block Grant funds.
No. But I will be more than happy to furnish you with it, 316 Bill 040255 - 4/13/04 Councilman.
Okay. And you read the goals. And how do you determine that... How did you determine that you're meeting it?
We determined it because our proposal to the state includes service numbers for the various goals. So, based on how well we provide services in each area, that's how we're able to determine our level of success.
So if the state takes your application or funds you again, I mean, does that -- is that the determination of whether you met the goals or not?
No. The Community Service Block Grant is formula based. It is based on the number of low income people in Philadelphia, as well as the number of people who are unemployed in the City. And so, there will continue to be some level of Community Services Block Grant funding from the Federal Government 317 Bill 040255 - 4/13/04 to Philadelphia through the state, as long as there are low income people and unemployed people in the City.
Yeah. I understand that. You tell me that there were six goals.
What I'm asking is who determines, or how is it determined, or what evaluation is made, and by whom, of whether or not you met those goals.
There is -- The Federal Government has a system called ROMA, which is stands for Result Oriented Management Accountability. And that is basically a method for looking at how well you did, whether people have moved towards self-sufficiency, whether they obtained jobs. And we'd be happy to furnish you with copies of those reports, if you would like.
Okay. And so 318 Bill 040255 - 4/13/04 actually what's the goal for FY '05, as compared to FY '04? I mean, in those six items, where are they today, and where do you expect them to be as a result of your FY '05 activities?
We are in the process now of putting together our proposal for FY '05. We received the RFP, if you will, and we will be submitting it shortly, so that's not conclusive as of yet.
All right. How many people are unemployed in Philadelphia?
I don't have necessarily numbers on unemployment. I can give you numbers around the number of people who are in poverty.
There's 336,000 below the poverty level, 414,000 below 125 319 Bill 040255 - 4/13/04 percent of poverty. So... And they're eligible for services through MOCS through the block grant; is that correct?
Okay. All right. But I thought one of the six national goals was... Did you say something relating to reducing the poverty level or reducing unemployment? I'm sorry.
Yes. The... The... None of the goals actually address unemployment per se. It basically says that low income people become more self-sufficient, which can be interpreted to include employment.
How many people became self-sufficient or will become self-sufficient in FY '04? And what's the definition of self-sufficiency?
That information we will have to provide you with. I don't have that information at this time.
Which? I asked 320 Bill 040255 - 4/13/04 two different things. I asked two different questions.
The information around how many people will become -- Because I don't believe we can say what that number will be at this time. We probably could give a projection, but I'm not even prepared to do that now. We have to furnish you with that.
I don't have that in front of me. The Federal Government's definition, the definition which I loosely use, is a person who has moved to a point where they're able to provide for themselves and their family without assistance.
Okay. But you said you would have to get back to us, in terms of either an actual number or a projected number of people comparing FY '04 to FY '03, in terms of how many people became self-sufficient and... Is that 321 Bill 040255 - 4/13/04 right?
Okay. And because you're working on your plan presently, are you even in a position to try to project FY '05, compared to FY '04?
No, I'm not. And one of the reasons why I'm not able to do that is because as we move forward, the Administration's intention is to place a lot more emphasis on partnering, partnerships between City agencies. As you've already heard, MOCS will be giving $250,000, in a sense, to the Prisons. And I could not speak to what the impact of that will be in the lives of the recipients of those services as a result of those funds.
Okay. I understand. Okay. Anything that you can get in response to the questions to the Chair, I would greatly appreciate it. Thank you. 322 Bill 040255 - 4/13/04
Thank you, Madam Chair. This question is for the Empowerment Zone. In... It's listed in the CAFR -- in the CAFR book that the Empowerment Zone is listed as spending $17 million in fiscal 2004, with another $17 million scheduled in fiscal 2005 for purchases of services. What was the this money spent on? And can we get a breakdown on what the $17 million for 2005 would be spent on?
It's spent through contracts with various, primarily non-profit, providers delivering a variety of programs, ranging from after-school programs, to our lending institutions, housing programs. I would be happy to provide a list of anticipated contracts for fiscal year '05.
So you're going to spend $17 million for fiscal -- or FY 323 Bill 040255 - 4/13/04 2004, the same manner for 2005.
that was our grant appropriation for fiscal year '04. Obviously they're still in that fiscal year, so I don't know if we will spend the full amount of the grant appropriation for '04. And so, I can provide you with a list of the contracts we have for '04, if that would be helpful, and our planning contract for '05.
So, your purchase of services is services that you have contracted out. Is that what that means?
Exactly. At any one point in time we may have up to 30 contracts for various services in three Empowerment Zone neighborhoods.
Okay. Thank you. One final question. Why... I believe this goes to the gentleman from MOCS. Why was the 2004 original appropriation almost $2 million underspent? 324 Bill 040255 - 4/13/04 MOCS -- and MOCS was expected to add close to 40 positions for fiscal 2004.
I know, as we said before, one thing about appropriation dollars, we never -- we never know the exact amount of how we're going to get from our grants. All of our funds are primarily awarded by grant. So, we try to put, like, a percentage increase based on our previous year, like... I guess our estimated obligations. And that's how we determine our appropriations. But in actuality, once we actually get our grants in, that's our true figure, as far as that's concerned.
Do you have to return that money to the fund, you know, to the -- where the money came from?
No, not the appropriation, because we don't have that 325 Bill 040255 - 4/13/04 many actually released to us until we get our actual grant allocation letter. So, for example, say we have an appropriation level of $1 million but our grant comes in at $500,000. We only get released to us the $500,000, based on our actual grants. So this money is not really used. It's more so like, I guess, an account, just in case we have to make sure that we have enough appropriations available to us in case we have a large increase in our grant dollars.
Maybe the follow-up question... Let me just have a follow-up question, why you didn't spend all of the appropriation. MOCS was expected to add close to 40 positions for fiscal 2004. What happened to these positions and why were they not developed?
Yeah. That might be. Let me see. Yeah. We can look into that and get back with you. 326 Bill 040255 - 4/13/04
You have laid out -- You were going to fill 40 more positions, but they were not -- these positions were not developed. It's in the... It's in your report. I just want to know, you know, why; maybe because you -- You didn't spend $2 million of your appropriation.
So I'm thinking maybe that's why you didn't fill your 40 positions. I'm just assuming that you didn't fill your 40 positions, so you had close to $2 million that you wanted to spend.
I'm only assuming. It's probably a bad assumption. I shouldn't be assuming. WOMAN WOMAN: Because actually, along with everything else, our positions 327 Bill 040255 - 4/13/04 are actually based on -- Well, we'll get back with you on that one.
Yes, you're absolutely next because there's no one else on the board who wants to speak. And then after this, before Mr. Hanna comes for... Debra Kahn is here to answer a previous question. And then we'll have housing and community development, which will be our last group for the day. Yes, Councilwoman Brown.
As a follow-up to Councilman Ramos' questions, what happens with those dollars? Do they roll over? Do you have to return them? Answer that question. Two, when you provide the detail, 328 Bill 040255 - 4/13/04 what are -- what were those 40 positions budgeted for? Specific programs that are existing, but they had been new programs. The details. MS GLADSTEIN: Okay. Sure.
So, the initial question: Are those dollars, did those dollars roll over or do you have to return them?
No, they don't roll over. But we don't actually have those dollars.
Until... We don't actually receive these dollars until we actually receive our grant amount. So, if we don't get a grant amount in that full amount, the City never releases those dollars to us.
So, everything combines with -- you know, is as a result of how many -- how many -- Once we get an award letter, we have to submit that to the 329 Bill 040255 - 4/13/04 Budget Director -- you know, the department -- the budget department.
And they'll determine, you know, how much they're going to release of those funds that we've been allocated, actually allocated by our grant.
You're welcome. Councilman Ramos, have all your questions been dealt with?
All right. If there are no more questions, we will ask Secretary of Education Debra Kahn to come forward. And as soon as those questions are answered, Mr. Hanna, we thank you for your 330 Bill 040255 - 4/13/04 patience. Then we'll ask Housing and Community Development to come forward. Thank you. Thank you. Well, as you've already spoken earlier, we will go right to questions. And one of our colleagues has to leave and wants to ask questions of our next witness. So we will go right into it, if that is acceptable. Councilman Nutter, Councilman O'Neill, in either order.
I just saw Miss Kahn here, and I asked if you could put her on. I know one thing she was coming back with was a definitive answer on whether the April 15th deadline was still the deadline or whether it's been continued or pushed back. So that's the particular question. I wanted to know -- There was some other information. I'm not sure if she was supposed to have it today, though.
I'm waiting to 331 Bill 040255 - 4/13/04 hear the answer.
The April 15th deadline for the public school students is still in effect.
So, let me repeat. You said the April 5th deadline for public school students is still in effect.
So, the issue with Catholic students has not been resolved?
Thank you, Madam Chair. So, Miss Kahn, what -- what exactly does that mean, in the whole scheme of things?
I think it means what I 332 Bill 040255 - 4/13/04 said earlier, that that deadline was set of course with the program that we had announced with the features that we had announced which applied to public school students. Students were supposed to get their applications in by that day, fill out all the appropriate forms so that the School District can review those files, make sure -- you know, review them for completeness, get any additional information that's required so that it would be sufficient time to process. As I said earlier, if in fact there is an arrangement that we work out that comes to expand the eligibility for the program to include non-public students, then certainly there would be a different timetable that would need to be set, in order to accommodate those students
It would seem to me, Miss Kahn, that if there was even a 333 Bill 040255 - 4/13/04 contemplation that that might happen, that the deadline would be pushed back -- Because it throws the whole program into a real messy situation. If you've got public school students told April 15th, then it reopens because you've allowed Catholic and other school -- private school students in from Philadelphia -- It seems to me that the decision's been made at -- I won't call it your end, but at the end of where the scholarship program is. I know there's different entities involved. Council's not involved in that directly. We're just involved with trying to see if we can approve the City funding of this. And I'm very disappointed to hear this.
Councilman, I would just have to say that I honestly don't see how that's the case because obviously students who don't attend public schools, those applications would be coming from the schools that they attend. 334 Bill 040255 - 4/13/04 And it would be a different process with different people involved. So that I actually don't see anything inherently problematic in having to have the kind of timetable that we established for the public school kids; and then, say, if in fact there are other students that come in, to set up a different timetable involving those schools, and those people who would be --
Well, then you have two programs. Then you've got a program for public school kids where the applications ended April 15th, and then you've got another program sometime later for non-public school children in Philadelphia. And if you are going to make it fair, you make it for everyone. And that means the public school students that missed the April 15th would then get another shot at the apple. And you create more problems for yourself. It would seem to me that if you 335 Bill 040255 - 4/13/04 had a contemplation that this might not be discriminatory, that you would move the time back at least to the time the budget passes, when you'll know whether you'll have money for the program. That's just my viewpoint. You may differ on it.
Seems to me that you don't know when the awards will come. So, if you don't have an equal opportunity, in terms of time, you don't know what funds could be left on the back end either. Councilman Rizzo.
Secretary Kahn, could you just briefly describe the communication that went into notifying parents of this scholarship program? Not everybody is... Not everybody reads the paper every day, and not 336 Bill 040255 - 4/13/04 everybody watches the evening -- or listens to the news. Did we mail something home? Did the student take something home with them? How do we know -- Are you fairly confident that all of our school -- high school children or parents of the children that are eligible for this program have been adequately notified?
Well, there was, first of all, the public announcement that was made on I believe it was September 30th, which did receive pretty extensive media coverage. But you're right, of course. That's never sufficient and you can never rely on that. So in the schools themselves, there was communication that went out on a, you know, repeated basis in terms of flyers, brochures. I don't believe that there was actually a whole mailing, but there were lots -- you know, materials distributed. 337 Bill 040255 - 4/13/04 There was also notification about -- you know, through counselors and principals and teachers, you know, trying to really touch students so that -- and families, in various venues, in different kinds of that event the School District had. And there were certain workshops held to notify students and families.
Don't you think something -- Don't you think something so very important... There's some kids out there that probably would like to go to college that maybe would hope that... Some of them just don't want to go to college even though they're smart, and they probably could achieve. Don't you think something so very important that the School District or the Administration should have communicated to these parents directly by a letter?
Well, I think that, yeah, you can never do too much communication, but it all -- But my experience is that all of the activities in which I've been 338 Bill 040255 - 4/13/04 involved, you can never do enough. But I do think that it really is important for all of us to understand, when it comes to this program, that the idea is that we would hope that one year, two years, four years from where we are today, in terms of the people who take advantage of this program, that it grows. The whole point here is that it does grow.
Well, I'm concerned about this senior class of kids that won't have another whack at the apple. I'm talking about something so very important that parents are aware that there's an opportunity for them to get some help, because I've heard -- I've heard on radio, talk radio, parents basically telling their kids that want to go to college that we can't afford and you cannot go.
And that's the perception that we in this scholarship program, and others, that we have to continually battle against. 339 Bill 040255 - 4/13/04 And again, there's been extensive media. There have been talk radio appearances. There have been forums. There have been workshops, a whole variety of ways. But again, I can't sit here and tell you that I know that we've reached every single family --
I would hope if there is any consideration -- And like many things that happen in this government -- that that 15th date may not be the dead date -- the deadline, that some last ditch effort be made to make sure that this really has been communicated, as well as possible. I know sending out whatever the number... Have you figured out how many seniors we have yet?
So it can't be 340 Bill 040255 - 4/13/04 that significant a mailing to make sure that each household gets a copy of a letter. How many were there?
Oh, you didn't. I'm sorry. That's Councilman Nutter's question. I've had this opportunity, and I appreciate it. I'll stand by and listen. But I would encourage you if the date does get extended, that we do something above and beyond what we've done already. Thank you. Thank you for your courtesy, Councilman Nutter.
Thank you very much. And we would say to the Secretary that all the... pretty much all the Councilpersons who are here today have expressed concern about opening up the 341 Bill 040255 - 4/13/04 process. And I'm not at all pleased about this aspect of the budget. So, having said that, Councilman Nutter.
Thank you, Madam Chair. Miss Kahn, let me try to understand something. You were here earlier. And you were very generous with your time. And you tried to answer the questions posed by either myself or others to the extent that you can. I know you've gone out and tried to get additional data, and I'll ask you about that in a second. I need, though, to better understand. What is the significance of the April 15th date in the whole scheme of things? You've responded to a number of members that, you know, there could be a subsequent decision to more fully open the scholarship program to all graduating seniors, as long as they meet the other 342 Bill 040255 - 4/13/04 eligibility requirements, in terms of what school they're looking to go to. I thought you also indicated that, whether because of availability of resources, certainly on the City's side -- And I don't know when the funds would get transferred on the School District side -- but that didn't you say that you were anticipating awards, either in the summer or possibly in the fall? Wasn't that your testimony earlier today?
Okay. So, why is there at the moment an immovable adherence to the April 15th date, just to get an application in? What is that about?
Well, first of all, we moved it back to April 15th from the earlier time. And we did that really to coincide with tax day, because in many cases families will need the kind of data that's provided on their tax forms in order to be 343 Bill 040255 - 4/13/04 able to completely complete -- fill out the different financial aid forms. The thinking was on the part of the School District, and they are really --
All right. They'll have it. And then they'll have it for the rest of the year.
No; I understand. But I'm explaining why we even moved it back to April 15th. I mean, and again, you know, the front line on this is really at the School District, where they have to be encouraging and supporting the counselors and the teachers and the students in soliciting these applications and in making sure that all the information gets where it needs to go. And the thinking was at the time that it will, once all of this information comes in and gets compiled and reviewed for completeness and thoroughness, because for students this will be the first time they've ever been through this and sometimes for families. 344 Bill 040255 - 4/13/04
To give enough time in order to get the information, to have it complete, and to be sent for processing.
I understand that. But in many of your responses, and certainly to Councilman O'Neill, and some of the responses earlier, you heavily emphasized or made repeated reference to the School District.
And I understand that they are a significant partner in this. And actually, they are the majority partner, if you will, in terms of who has what dollars in. But what I still don't really understand is, the School District has no 22 ability whatsoever to influence what the City does with City dollars that are in a budget under review by the City Council. And so, if we for the moment take 345 Bill 040255 - 4/13/04 the School District out of the discussion -- And one of the points I was trying to get to earlier was that, in terms of City dollars, I mean, there really is nothing to work out with anyone. The City can decide what it wants to do, and how it wants to do it, and what kind of program it wants to support with its own dollars because of the nature of the relationship between the taxpayers and their City government, regardless of where their kids go to school. So, when you were with us earlier and we asked about the date... I mean, who did you talk to, and what were the nature of the discussions about either moving the date or changing the one key parameter, which is... I know you've picked up is a particular sticking point with a number of Council members. I mean, what happened to that issue from earlier today?
Both the 346 Bill 040255 - 4/13/04 application deadline and the eligibility issue, since you're opening the program. Who have you discussed this with, since you were with us around noon?
As far as the application deadline goes, all I was asked to do was to confirm, because there was some discussion from members indicating that they thought that it had been moved back. And I simply confirmed, in terms of any of the information that the School District was putting out to its counselors, to students, whether or not that date was still in effect. And yes, I was told that that date was in effect. Doesn't mean it couldn't still be changed, but I am saying that as of today --
And since one of the people who was asking that question was Councilman Ramos, who I know cares about public school students, but also was asking the question from a perspective of opening 347 Bill 040255 - 4/13/04 the process. You know, I don't necessarily know that the sum and substance of the questioning was just to confirm whether or not the date had been pushed back. I think you heard or not. And I certainly appreciate that you have confirmed, and, you know, you can answer to Councilman Ramos about what he heard or what he had been told or what thought he had been told. But I don't think that any of us who asked questions about this were solely interested in the answer to, you know, this mysterious question of has the date been changed. I think there was another part to that question which is, will the date be changed, which is really, I think, the more important question.
Let me also note that with an award date being in August, it's... I don't know, obviously, there's a whole lot of time because if a 348 Bill 040255 - 4/13/04 lot of students really need money in August, they go away. And so, that's a very, very late date to even get the award. So, I don't understand. Or I guess we haven't been privy to all those discussions. But I don't even know why they would wait until August when kids get -- freshmen go away for their first several weeks either, but there are definitely some questions about that. I mean, students at graduation generally announce they know where they're going. And monetary awards are announced and grants are announced.
I understand that. But that is a timetable that actually works very well with colleges because they often don't even get their final financial aid packages to students until sometime over the summer. And often there's back and forth even after that, upon enrollment. And again, we're basing that timetable in part on the experience and the 349 Bill 040255 - 4/13/04 practices that have been followed by the City's current much smaller Last Dollar Scholarship Program.
Well, let me ask a more direct question. Given all the conversation that's happened today, the concerns that have been expressed, I mean, they say it every time we go into this area. I mean, I support this idea. It is a great idea. It is a great concept. And, I mean, I said to Councilman O'Neill and I've said to a couple other members, I mean, this is one of these situations where... I mean, you've got one of the best of ideas. But now in the course of the implementation, it creates all kinds of disruption and anxiety and consternation which then unnecessarily, I think, clouds the issue and the proposal and the idea. I mean, do you think that based on what you heard here today, that the application date should be extended?
I think that there is 350 Bill 040255 - 4/13/04 probably some confusion, in terms of what happens as a result of that application date. Again, the reason that the School District felt for its practices that we needed to have an application date which would, again, give their counselors and their staff people time to review everything before all of these applications needed to, in turn, go over to the Education Fund, it is simply that they would need some time to do that. But because of the date at which, in their experience, they anticipate getting the awards and the final awards from the various colleges, and because checks would not be issued until August and September, in my view that if, in fact, the eligibility is extended, there would be sufficient time before any of the awards are dispensed to have other students come into the program to complete their applications and to be able to be processed, along with the applications from 351 Bill 040255 - 4/13/04 the public school students.
I appreciate that explanation. But now to get to the narrower question. I asked you -- And I'd like to keep it in the realm of a yes or no -- do you believe that the deadline for applications should be extended? Yes or no. 10
From what I know now, I don't believe that it's necessary. However, what I want to do is --
Your previous answer was that you expect that it would be extended if other developments happen. I mean --
What I'm discussing right now is the application for public school students, which is the program that I know 352 Bill 040255 - 4/13/04 of that we have geared up to operate. What I will do is --
Secretary Kahn, we're not talking about a program just for public school students. And now I'm going to ask: In terms of the City support for this, the money that is in the budget in front of us, do you believe that the City of Philadelphia should support a program that is more inclusive and open to all graduated seniors in the City of Philadelphia, as it relates to the taxpayer dollars that come into the City and is now being supported by the City in this budget?
If you're asking me whether I personally believe so, my answer would be that I would like to see if we can work out an accommodation, that we can afford, that would expand the eligibility, yes.
You asked if an 353 Bill 040255 - 4/13/04 accommodation of some type of inclusion in the program, whether it is exactly the same terms and conditions... Because I go back to the fact that the structure of this program is a cost-sharing program now between the City of Philadelphia and the School District of Philadelphia on behalf of its students. If, in fact -- And I understand and I am well aware of what Councilman Ramos has put on record, in terms of the Archdiocese's current position. But if, in fact, they were able to come with the same type of cost-sharing arrangement that the City has with the School District of Philadelphia to do so on behalf of their students --
I understand that. I'm not talking about the City or the School District or with any other party. I'm talking about the City of Philadelphia's $4 million that came from all of the taxpayers, that no one asked 354 Bill 040255 - 4/13/04 them, you know, what's your race, religion, color, what neighborhood you live in, whether you like everybody or don't like everybody. Citizens get a tax bill for their real estate taxes, 58 percent of which go to the School District. Those people get a tax bill, some percentage of which goes to the School District of the City of Philadelphia, and the rest comes to the City of Philadelphia. No one asked you to make all these distinctions when you pay your taxes. There are no criteria. There are no... Again, other than usually income based, either created by the City, the state or the Federal Government. So, I don't want to create any confusion between the City portion and some other party.
I'm certainly not looking to create confusion, but I think it is important to recognize the structure of the program. 355 Bill 040255 - 4/13/04 And the structure being, as I believe you said earlier, the School District in the current arrangement we had now was the lead --
Secretary Kahn, it's a brand new program. It's not going by any particular statute, that I can determine. The City of Philadelphia will decide ultimately for itself how it wants to spend its money in participating in a program. If there were a program and the other parties said to the City, the only way you can participate is by excluding certain other citizens, I mean, the City has to decide for itself as a governing body whether it wants to participate in that. I mean, the tail's not wagging the dog here.
The issue is only what we have said so far publicly would be the structure of the program.
And what the benefit 356 Bill 040255 - 4/13/04 would be or what the maximum benefit, and what the cost sharing would be.
So, that's what I'm saying. What we could do, we have to look at what we can do within the current financial allotment.
Okay. Gotcha. I'm sure we'll have some more discussion about this. You have some of the statistical... numerical data that we discussed earlier?
I honestly believe -- And I hope we all realize that this isn't going to change, as long as there's an expectation of $4.2 million. The only thing that will change this is a City Council decision not to put forward the money in its current form 357 Bill 040255 - 4/13/04 because that would be an ultimate City decision. The Mayor can only make the proposal. Council has to ratify it or cause it to be changed.
Around May 20th, when this budget will be reported out, I'm sure less than a month for the application period, if it were to be a change. So, we're dealing with something that already has serious problems, just in terms of the substance. And then we'll get shifted, to terms in -- to a problem, in terms of process.
Because of the school year and the realities there they're in. So, we may have to -- this may be where we have to do something a little sooner than reporting out of the budget. That's all I wanted to say. Because I 358 Bill 040255 - 4/13/04 think a decision been made not to change this program unless absolutely forced to. Thank you.
Right. Okay. How many school children are in the School District of Philadelphia?
Well, I did ask about the total population. How many high school students are there?
Okay. And this is -- And I just want to confirm the source. This is data that's been compiled and reported by the Pennsylvania Department of Education, and these are '03, for 2003 numbers. The total public high school enrollment was 62,957.
Includes charter schools of 4,000. All right. So, 62,957 is the total high school population last 359 Bill 040255 - 4/13/04 year. How many graduated?
And the number of graduates that was reported, again for '03, was 9,507.
Well, the college-going information, as I believe I said earlier, is less than what we would want it to be. And this data has not been collected well on a regular basis. The last numbers that I have that were compiled were, I believe, for the 2000 360 Bill 040255 - 4/13/04 school year. And at that time they had a record of 2,579 students being enrolled in college, which puts us at less than... you know, just about percent of the 6 graduates going on to college, of whom 77 7 percent went to the schools that are 8 eligible, because we talked about that 9 earlier, too, for the core scholarship 10 program. 11
Correct. And the goal 17 again, very much -- And I think this points 18 to -- And these numbers have been reported 19 many times that the School District 20 estimates its college-going population is 21 in the neighborhood of 30 percent, and 22 again points to the really compelling 23 reason why we need to do a number of 24 things, scholarships included, to try to 25 grow that number. 361 Bill 040255 - 4/13/04
I hear what you're saying. I guess... Why do we only know from the year 2000 how many students went to college?
Because unfortunately it's just not information that has been compiled and collected and looked at on a regular basis.
The first set 362 Bill 040255 - 4/13/04 were for '03. The 62,000, the 10,000, the 9,000 were all '03 numbers. We do not know today how many students are in school. We can tell you for last school year. But the attended college number is from 2000.
I would just say the changes that are being made at the School District, particularly the emphasis on the secondary level, the need to improve... As I know Paul Vallas has talked about a number of occasions, the academic preparation for students, particularly those on the college track, to look at advanced placement courses, all of those things to really take very seriously, that there are programs. All of this... All of this points to what we readily acknowledge, is a need to change the culture in high schools. And part of that means, yes, counting and keeping track of that kind of information. So, the fact that it hasn't been done on a complete regular way, again, 363 Bill 040255 - 4/13/04 speaks to the exact need that we're acknowledging and looking to address in a variety of ways.
Miss Kahn, whether you know how many students went to college or not, from my perspective, has nothing to do with whether people got a scholarship or not. I mean, that's an internal accounting or accountability issue over at the School District. It has nothing to do with whether there are scholarship's program or not. The two have nothing to do with each other. That's a focus issue. That's an accountability issue. If you had $8 billion worth of scholarships available, that's not going to change the numbers that you just gave us here today. Because we don't know.
Well, it could change the numbers, but it wouldn't change necessarily whether or not you counted those numbers, unless you made a commitment to do that. 364 Bill 040255 - 4/13/04
And what I'm saying is -- Yes, that's part of this effort in not just the scholarship, but in upgrading the high schools in keeping track and saying, it is important to us, and --
Tell me what's happened since 2000 to now April of 2004. Tell me the system changes that have taken place over at the School District to better account for the whereabouts of graduates.
The School District has had a whole lot of change in that time period, which I know that everyone here is well aware of. And frankly, there were a whole lot of, you know, changes and difficulties, and problems going on --
Well, Ms. Kahn, with every respect, if I was aware of this particular issue, I wouldn't ask you about it. But I don't know what they've done to better track the students because I'm stunned at the information that you gave me 365 Bill 040255 - 4/13/04 here this afternoon.
This Administration now has made a commitment that it will better track its graduates. And that's something -- And I'm not proud of it, and I'm not happy about it, and I'm as displeased as you are, but the fact is --
Well, then why can't they tell me how many -- how many students are in school today or yesterday or in September, and how many students graduated last May, last June and went to college? 366 Bill 040255 - 4/13/04
I don't believe... I don't believe that... When I go to high school commencements, there's always a bragging part of that commencement...
...that tells the parents and everyone there that we got 150 of the graduating class of 2003 that are going to college. I can't believe that that number is not taken back to the principal's office or the counselor's office and is recorded that the Class of 2003 from Ben Franklin High School had 200 kids that went on to college. I cannot believe that is so. I would ask Debra Kahn to double check that because -- I mean, if you're taking away the biggest -- the most -- the thing that 367 Bill 040255 - 4/13/04 you're the most proud of in a high school to -- and that is, how many of your -- how many of your kids are going off to college. I mean, it has to be somewhere.
If I can just respond, I would say I have had and said almost exactly that same thing and had that same experience. And what they keep telling me is, number one, it hasn't been compiled centrally; and number two -- and this I can absolutely attest to -- that from the time graduation comes in June until enrollment occurs in August or September, there is traditionally a substantial dropoff in the students who actually end up going to enroll in college.
But to say that our high schools are not keeping an account of one of the most important things today that they do, and that is to announce how 368 Bill 040255 - 4/13/04 many of the kids are going on to college, I find very hard to believe that they're not doing that.
It is part of the improved tracking and record keeping and outcome data that we absolutely need to put in place to track better outcomes for our students.
I cannot perceive of taking this program forward and putting $4.2 million of City taxpayer money behind it when you don't know this information. To me this is worse than your earlier discussions about the discrimination part of it because even as Councilman Nutter has said, in concept this is a terrific program. We just have to make sure it doesn't discriminate. But how can you even go forward with applications, with time deadlines, with getting information out, and you don't know the very information that you're using to buttress the justification for the program 369 Bill 040255 - 4/13/04 to begin with.
2000. Those kids have graduated from college, whoever they are, in about another two weeks. This is -- That's ancient history for statistics like this. I'm concerned. Look, the School District I understand. They're responsible for the schools, for the students. Anything they can get money for for those students, any information they don't have to supply to this Administration, City Administration, and still get money, more power to them. I think it's a disgrace that the City Administration, first of all, is willing to even get into a program like this, with specific deadlines ready to kick off for this coming school year in September, without the kind of foundation of information that you need to get this far. And then on top of that, the City Administration is willing to put its name 370 Bill 040255 - 4/13/04 on a discriminatory practice. I can't understand it because I can understand the School Reform Commission. They have a different mission than we have. They only have the smaller focus of their mission at the public school system. We have the taxpayers of Philadelphia. But we assumed you, the Administration, putting this together have up-to-date information, even if we disagree with the results of your discussions, that your discussions were based on some information, now ancient. And in this world 2000 is ancient. With the technology we have, if there's a dropoff number, it's the same for the parochial schools and other schools as it is for the public schools. It's not going to change. If they announce at graduation at such and such a high school that's not public that they have X number of students going, whatever that dropoff is, it's not going to be any different in the public 371 Bill 040255 - 4/13/04 schools. That's just a dropoff where kids say they're going, and then they don't go. But not knowing how many said they were going, and the official count as of the May or June graduation, to me how can we be talking about something that has two days left for the deadline for the application, without that kind of information? I feel even stronger on that than I did before.
Madam Chair, if my colleagues would indulge me, I needed to be out of here probably 10 or 15 minutes ago. If I could ask two or three minutes' worth of questioning of the Secretary of Housing and Neighborhood Transformation before we return to this.
That will 372 Bill 040255 - 4/13/04 be fine, then. Mr. Hanna.
Miss Kahn, would you wait in case they have further questions.
Thank you for your patience. We say welcome. It must be noon, since that is your allotted time.
Thank you, Madam Chair. Mr. Hanna, Mr. Dubow, I actually could not wait for the final questioning, 'till the callbacks. I'm assuming you may be called back for further responses to questions. But in line with a number of things I heard today, 373 Bill 040255 - 4/13/04 some specific things have come up over the last week. First I ask Mr. Dubow, is there or is there not a hiring freeze in effect?
But in previous testimony today, we've seen a number of different -- and in testimony that will occur tomorrow, we've seen a number of different offices, including the Mayor's Office, that will be doing new hiring in the -- under the Secretary of External Affairs for the Mayor's Office, the Inspector General's Office, at the Minority Business Enterprise Council. So, in effect, there is a hiring freeze for some agencies and not a hiring freeze for others. Would that be a correct statement?
Well, the way the hiring freeze works is that before any hiring can happen, it has to be reviewed by Finance to make sure that there's money in the budget, 374 Bill 040255 - 4/13/04 and then the appropriate cabinet member, to make sure that programmatically it's something we want to do. So I guess it's not -- It's a...
It wasn't a general question. I want to get very specific. In a context of what you're proposing, in terms of charging a $35 application fee, are you sure where there's going to be a hiring freeze and where there is not?
In a context of what you're going to be doing, in terms of proposing a $35 application fee...
Are you yet sure where there are going to be hiring freezes or not?
Yes. In places where they will be hiring are sort of places where it shows in the budget.
I guess the next question is for Secretary Hanna, then. 375 Bill 040255 - 4/13/04 The proposed reorganization of the housing agencies, is that automatically expected to result in a decline in the number of people working in housing agencies?
I'm sorry. I didn't quite hear your question. Can you repeat it for me, please?
In terms of your organization of housing agencies, is that expected to automatically result in the decline of employees within those housing agencies?
It will probably result in a net decrease overall in the number of employees, yes.
All right. Do you know yet which positions you want to keep and which you want to get rid of?
That we don't know, but we will know by the time we come back to Finance for next month for the CDBG.
Now you're a little bit more specific, was the reason I 376 Bill 040255 - 4/13/04 had asked the question today. You recently posted an interview for a position of Neighborhood Program Coordinator.
Yes, sir. That particular position, though, was to replace a person who had left. That wasn't a -- didn't represent a net new hire. We lost an individual. We needed to replace that individual.
Okay. I believe it may have been an informal offer made. I believe afterwards the decision was made to then not fill that position. And the reason I asked the question of whether there is a hiring freeze or whether there's not, is: Are there 377 Bill 040255 - 4/13/04 processes happening? This is a question for your agency, as it goes through reorganization and the City. Are there hiring processes going on out there, where people are interviewing for jobs, possibly believing they are going to attain those jobs, and the City doesn't know yet whether it's going to actually have those jobs available?
Well, just to speak for my department, in the situation like the one you just described, where we lose an individual, and we, as in myself and my senior staff, deem it appropriate to replace that individual -- And that's not always the case. But in the situation that you just described, it was deemed appropriate that we needed to replace an individual. And yes, we will rehire that individual or an individual to replace that or fill that particular slot.
My understanding is that an offer was made to someone. They 378 Bill 040255 - 4/13/04 were supposed to start, actually, tomorrow, and they were told that the position is going to remain vacant, which I find very strange, just in terms of hiring practices, period. But I'm also asking that in the broader context of what's happening, in terms of agency reorganization, one; and two, in the whole context of the budget hearings, as we also are considering whether we're going to charge people $35 for a job application. I mean, the larger questions is -- And maybe it's more appropriate; I don't know; for Mr. Dubow or who. Can you actually interview someone, have them compete for a job, offer them a job, and then change your mind and decide it's going to be vacant? And in the context of that, if you do plan on doing that, which is a bad, I think, employment system in general, would you give them their $35 back?
Could I speak again to 379 Bill 040255 - 4/13/04 that specific situation? Again, to repeat myself, to my knowledge we have not verbally or in writing offered that particular position out. That's not to say that... In fact, I'll go as for as to say that I instructed our staff not to hire anybody just yet or not to extend any offers. That was my specific instruction. Now, as to whether or not an individual a couple layers below me communicated verbally or otherwise that the position was going to be for them, I can't speak to that. But I know what my instructions were.
I need two things from Mr. Hanna, Mr. Dubow, which you could forward through the Chair. Mr. Hanna, I need to know whether that position is still vacant, and when the decision was made that a position will or will not remain vacant. I need to have it in writing, in terms of when that process happened, and 380 Bill 040255 - 4/13/04 when a decision was made. And Mr. Dubow, I need to know more specifically from Administration, without going back, where in fact there are hiring freezes or not, because essentially we're talking about a position that people were interviewing for. There were candidates for a position. There was an offer made. And then at the same time that someone actually thought they were going to be in work this week, they find out that, no, the position is going to become vacant. And I can't believe that the hiring freezes are that flexible or fluid. But if you could forward that information through the Chair, I'd appreciate it.
Secretary Kahn, I'm sitting here very troubled by your 381 Bill 040255 - 4/13/04 testimony. And something tells me that there may be a communication problem here. I'd be real curious, and knowing Paul Vallas... Knowing Paul Vallas, I think if you asked him that question, how many kids would graduate from our schools and go to college, it sounds like that's the kind of thing that he could spit out just like that. Are you sure you're talking to the right people over there, that can't tell you that information? Like Councilman O'Neill said, and Councilman Nutter, it's mind boggling to think that one of the most basic questions that you would have where you'd want to brag about is how many kids that you send off to college. Who are you talking to? Because I would bet Paul Vallas would go through the roof if he heard your testimony.
Paul and I have had these discussions, been talking one on one and talking to others as well. 382 Bill 040255 - 4/13/04
Now, I did not speak with him directly today. But we have always used this same phrase of, we believe the estimate is about 30 percent. And as far as I know, it's based on the same survey that I've referenced. However, what I really would like to point out is that that 2500 of just a few years ago, there's really not much reason to believe that it would have changed very much in the past few years. And in fact... And I would further say I think that the fact of what that number was from that last survey points to the real significant problem that we have, and that we all need to do everything we can to try to improve those statistics. And in fact, looking at the applications right now, I mean, we have further confirmation that that number might in fact still be... I'm not saying that we -- 383 Bill 040255 - 4/13/04
I'm not talking about... I'm not talking about how many. At this point I don't really think it's relevant. I think the problem is, who was the school superintendent in the year 2000 when the statistics -- when the information was gathered?
Do you think there's some significance to him leaving and that information's available up to when David Hornbeck left? Then you've got the new superintendent that came aboard, and you don't have it? I mean, I just can't -- It's just hard for me to believe... It's just hard for me to believe that we could be operating a school system and an Administration... If I were the Mayor of this City or a top executive in the 384 Bill 040255 - 4/13/04 Administration, I'd be proud to know how many kids went off to college.
And I agree with you. And we all want to have that data. And I think your characterization of Paul Vallas is right on. And he absolutely wants to get this data. And from everything I understand, they're committed to doing the kind of surveys this year that would enable us to get it, for a lot of priorities --
For 2001, 2002, and 2003 somebody obviously dropped the ball.
I guess my characterization of Mr. Vallas -- And I don't mean to be disrespectful -- was obviously not correct.
That's what you're telling me. If you're telling me 385 Bill 040255 - 4/13/04 that the man does not know, after he's been the school superintendent for -- since David Hornbeck left, that my characterization of him is wrong. I was misled, and I'm absolutely amazed that he doesn't know that information.
I don't want to beat this to death, but I'm just telling you. Now I see why we're in the -- I can't say the word here -- why we're in the situation we're in in our school system, if we don't even know the most basic information that an amateur would want to know. Thank you.
I will always let Paul Vallas speak for himself because he will do that. But again, my best understanding is that we are absolutely committed to get that information.
Sure. After this -- After today, I don't see any... I 386 Bill 040255 - 4/13/04 don't... It took this hearing today to get that information, to start gathering the information. Because you probably would have had another year that you wouldn't have had it, unless the scholarship program is driving it. But my point being is, until the scholarship program -- And how you even have a scholarship program without knowing the information, at least some basic numbers, it's -- again, it's mind boggling to me. Thank you. Thank you, Madam Chair.
You're welcome. Thank you. Are there any further questions for Secretary Kahn today? Councilman Nutter.
Thank you, Madam Chair. Just very quickly. Secretary Kahn, if you could get a more detailed response to the data request. I thought that your response when you started was that the information you shared 387 Bill 040255 - 4/13/04 with us came from the Pennsylvania Department of Education; is that correct?
Yes. As stated, it's compiled by them, which is of course submitted by School Districts.
I understand that. But you said it was for 2003. I think, given the nature of the conversation, it would be helpful if we had 2004, at least end of the... the midway mark for the school year December 31, 2003, data directly from the School District for the items in question: Total school population, total number of high school students, total number of seniors, any information they have projecting graduation. And the one thing I would mention to you is if the numbers are consistent, although I am -- I don't mean to doubt you at all, but I mean, I would really be surprised... I'm really surprised that this year 2000 figure that you gave us of 2,579 young people going on to college. 388 Bill 040255 - 4/13/04 You mentioned, though, that 77 percent of those going on to college, seniors, had attended the schools in 5 question. 6 Given that number, which I think 7 gets you to about 1900 or so students, it 8 would still seem to indicate, based on 9 these figures at least, that there is room 10 for other young people to participate, 11 possibly of a non-public school nature. 12 Do you have any information, for 13 instance, that would indicate for those 19 14 schools, how many last year, year 2000, if 15 we're going to compare apples to apples, do 16 you know for the year 2000, how many 17 non-public school students attended the 19 18 schools? 19
I think it might -- I mean, part of what all of us, I think, are trying to get to is a better understanding of the universe of potential students who could participate in this. 389 Bill 040255 - 4/13/04 Because quite honestly, we might find that based on not only number of students who graduate, but also what their preferences are, in terms of where they go. You know, the magnitude of the, quote unquote, financial problem, in terms of the overall program, may not be as great as you're concerned. And I understand the rightful concern about it. That puts aside our dispute about whether or not the City should participate in a discriminatory program. But, I mean, you might have space to do some other things, just based on the pure numbers.
I would say two things in response to that. One, I think that points to what one of the benefits of waiting is, so that we could, in fact, get some idea of what the experience might be. And even in terms of applicants -- public school applicants for this year. And I think we now have a better handle on that. 390 Bill 040255 - 4/13/04
We tried to point out many of the benefits of waiting. But, you know, from today we've heard that there would be no waiting.
Well, I mean, even waiting until this point, when we do have -- you know, which was a different experience than back in October, when we had not kicked anything off, and didn't know what the response would be.
Well, I understand that. But I'm sure if you had your druthers, as -- And I appreciate your trying to put the best... you know, the best possible perspective on all this. But there's no way in the world that you were waiting for today. Given all that happened in the course of this day, I would tend to think that over the course of the weekend you were not eagerly anticipating coming into this kind of environment just for the opportunity to point out that by waiting we'd make the program better. I mean, come on. 391 Bill 040255 - 4/13/04
I didn't say that that's how I spent my weekend. But I do mean, and very seriously, that I thought that if we had some experience and had some idea of what the demand would be, that we would be able to make a better decision. And, secondly, I do want to point out that since the stated public -- the intent for public funding is over a four-year period, again to emphasize that the idea is that this volume would grow, that it would grow on the part of public school students and anybody else who gets in. So, I think the budget needs to be looked at in that context, in a multi-year context.
Thank you very much. If it is acceptable, we would like to finish with Housing and Community Development now. Thank you Secretary Kahn, Mr. Wilds, Mr. Hanna. 392 Bill 040255 - 4/13/04 Thank you for your patience. And then we can formally invite you to deal with your testimony as you couldn't before, and say thank you for your patience.
If Secretary Kahn can just bear with us for a few minutes, I think we have to have the Secretary come back because I just received some information that there are some statistics available on how many seniors graduated from last year's class. There were 12,000 seniors. 9,000 graduated. And between 4,000 to 5,000 went on to college. So, I think it's very important that we find out if, in fact... This is the information I had got from the School District a few minutes ago. I think we need to verify this information because we just heard from the Secretary that it was not available. 393 Bill 040255 - 4/13/04 And now just a phone call has provided me with some information about how many seniors were in the last graduating class. There were 12,000. 9,000 graduated. Between 4,000 to 5,000 went on to college.
Do you have any information on whether there's tracking of those who announce at graduation they're going to college or whether that's impossible or...
I think that's... I just wanted to see if there was any information out there. And this is the preliminary information. I believe that that question, you know, should be answered -- could probably be answered as well.
Well, for starters, that means the number of graduates doubled in the last three years, who are going to college, even though it 394 Bill 040255 - 4/13/04 would only make sense that they would be the same three years later, so you didn't have to look at the information. And I'm paraphrasing, not quoting the Secretary. This raises... More questions are being raised than being answered, and they're kind of scary. We need a lot of work on this in a very short period of time. Thank you.
Well, we would like to suggest to the body that Secretary Kahn return at 9:30 tomorrow morning, when we are due to resume these discussions. And perhaps between now and then she can clarify some of the facts and reconcile the information that our colleague Councilman Ramos rose with the facts that she gave earlier today. So, that is acceptable. We can... Since we'll be recessing until tomorrow at 9:30, we can bring the Secretary back on before we hear the rest of the Finance 395 Bill 040255 - 4/13/04 Department and deal with tomorrow's agenda, if that is acceptable. That seems acceptable. Secretary Kahn, is that acceptable to you, 9:30 tomorrow a.m.?
Thank you. Thank you. We're trying to get you on. Please identify yourself again. Thank you.
Good afternoon -- Good evening. My name is Kevin Hanna. I serve as Secretary of Housing and Neighborhood Preservation with the City of Philadelphia. With me to my right and your left is Scott Wilds. Scott serves as Deputy Director of Housing, and Rod Lyles, who serves as our Fiscal Manager. In the interest of time and in respect to your time -- In the interest of the hour and with respect to your time, I am not going to read the entire testimony. Hopefully everyone has had a copy provided 396 Bill 040255 - 4/13/04 to you. But I would like to highlight just a couple of paragraphs, and then after that, leave as much time as you all have. We have the rest of the evening, but as much as you all have for questions. The proposed operating budget for OHCD is $230.2 million in fiscal 2005, of which $146.4 million will be in the grants revenue fund, $83.4 million in the community development fund, and $400,000 in the General Fund -- or from the General Fund. This operating budget represents costs of all housing programs, as well as salaries for all OHCD Philadelphia Housing Development Corporation, as well as Redevelopment Authority, also know as RDA, staffs, rents, materials and supplies. Our Class 100 which represents OHCD salaries only... Our Class 100 expenses requests of $4.3 million reflects a decrease of $91,546 compared to fiscal '04 estimated obligations. 397 Bill 040255 - 4/13/04 This net decrease is due to a reduction of two budgeted staff positions, and does not include an allowance for any negotiated wage increase and/or support the funding of 77 requested positions. In Class 200, our fiscal year 2005 request is $225.6 million. Our Class 200 expenditures represent RDA-PHDC salaries as well as all programmatic expenses incurred by those agencies. Our Class 200 request does include the following award changes: A decrease in federal CDBG funding of $695,000, an increase in Federal housing opportunities for persons with A.I.D.S., also known as HOPWA funding, of $90,000. In addition, $1.3 million... I'm sorry. The HOPWA funding was $2 million. And an increase in Federal Home Investment Partnerships Funding of $90,000. In addition, $1.3 million was received for the American Dream Downpayment Initiative. In Class 300 our fiscal 2005 proposal obligations increased by a mere 398 Bill 040255 - 4/13/04 $12,000, as compared to fiscal '04 estimated obligations. The proposed operating budget under the Community Development Fund, grants revenue fund and General Fund also will be presented in the spring to the Finance Committee in its hearing on a Council Bill 9 on the Consolidated Plan, authorizing the Community Development Block Grant and other housing programs for fiscal year 2005, CDBG year 30. And with that, Madam Chairman, as a broad overview, I'd like to ask that the entire testimony be introduced into the record, but would open ourselves up now for any questions that Council members might have.
Excuse me. I'm trying to get ahold of CEO Vallas for the group for tomorrow. Let me ask one question. As you know, we've been dealing with issues that deal with appraisals. Do various housing departments have appraisals or just... You 399 Bill 040255 - 4/13/04 know, Redevelopment Authority?
I can't speak for all the departments, but certainly RDA has a couple of appraisers on staff which primarily or who primarily review appraisals provided to us by outside appraisers.
I mean, since part of the issue with us trying to move housing deals with the appraisal rate, I mean, do we have to have two appraisals for every property? And is that law or just policy, number one; and number two, can we consolidate or borrow appraisals from different departments to get our stuff done?
As to the question of whether it's law or policy, I'd have to get back to you on that.
I do know THAT it is policy that our in-house appraisers review the appraisals that come from contracted 400 Bill 040255 - 4/13/04 appraisers. And that's a policy that I'd agree with very strongly, because like with doctors or lawyers or even politicians, you have good ones and you have bad ones. And it's important to... from our standpoint, to make sure that the appraisal that we get is relatively acceptable.
Exactly. I understand that. As you know, we've been trying to work on some way to get private developers who want to -- to increase the acquisition pot, to get them to give 50 to 75 percent of the fair market value of the property to the City in some kind of escrow fund. And so that you still have to get -- have these properties to be able to appraise, and all that. So I'm trying to impact on a process so that by the time you come back to -- for the -- your formal OHCD NTI hearings, we have some process in place. So I know that it includes that. It includes like 200 percent. It includes the 401 Bill 040255 - 4/13/04 appraisers, as well as the 200 percent issue.
Let me do this: I will discuss that issue with the Chairman of the RDA Board and the Executive Director. Let me have that discussion with him, and I'll get back to you in writing, Madam Chairman -- Chairwoman.
Thank you. That's my issue they're working on. Do any of my colleagues have questions for you? Councilman Ramos.
Yes. Thank you, Mr. Secretary, for coming here this afternoon, and for being so patient. I just have a general question. We're glad that you're in Philadelphia. And now you have been given the position to consolidate and group all of our housing initiatives in this government. Do you see this as part of an economic development strategy of this Administration or is this still housing by 402 Bill 040255 - 4/13/04 itself, although you brought in RDA and other components of our -- of our housing efforts in this City or do you actually believe that this is, you know, part of an economic development strategy? And if so, talk to me a little bit about it and how you see it.
I absolutely, Councilman, look at this as consistent with the Administration's overall economic development policy. One of the goals of reorganizing the housing department is to be in a position... Well, two goals, I should say, of the reorganization. One would be to more efficiently and effectively deliver housing services. A third goal -- Our second goal, rather, would be to do that in such a way that it's more consistent, and then we use the economic development dollars that are available in a much more effective kind of a way. That's not to say that that kind of thing is not going on already. 403 Bill 040255 - 4/13/04 For instance, a part of the CDBG award that comes through the office, my office, ends up in the Commerce Department, ends up at PIDC, ends up at PAID to fund, for instance, a couple of small business lending programs administered by one or some combination of those three, Commerce, PAID or PIDC. So that there's some available already going on. But certainly once we are better organized, that would put us in a position to better coordinate our efforts with the efforts of the other economic development agencies throughout the City government.
Because as the economic development of Philadelphia goes, an indicator or... Housing has always been an economic indicator in our country, to see if in fact the region is being uplifted. And, you know, I would sure hope that with consolidation of the different housing and housing-related programs of the City, that we can -- that we have a vision 404 Bill 040255 - 4/13/04 of how this consolidation actually moves us in the area of a better economic development forecast.
And if you think about it, our office is the Office of Housing. And as I've stated, one of our responsibilities is the provision of housing services to the City. People can't buy houses if they don't have a job. So to the extent that what we do, what the other economic development agencies do, promotes the creations of jobs, promotes the maintenance of jobs, that only inures to our favor, from a housing standpoint. So, yeah, the two are inextricably linked, in the sense that as jobs are created, people are better able, again, not just to buy new houses, but are in a position to maintain their houses and avoid things like foreclosure. So, yeah, they're linked in a real big way.
Thank you very much. Councilwoman Tasco is on her way down to ask a question or two. Are there any other questions from members of this Committee? Councilman Rizzo.
Madam Chair, I believe I heard you say you're working on getting Mr. Vallas for us here tomorrow sometime?
Oh, yes. They have the SRC meeting tomorrow. He wasn't in just when I called. But we did talk to Mr. Spitzer. And if not, the head of the scholarship committee will be in. We'll get one or the other, but we will get some response tomorrow.
I would love to see Mr. Vallas because I have a feeling he will just -- those numbers will just flow 406 Bill 040255 - 4/13/04 from his tongue.
Oh, absolutely. He's always prepared. I told him it was about scholarship and inclusion and all of that. But I'm sure that he will... I'm sure that before our meeting he will hear about all the issues that are involved and be prepared to respond; absolutely.
Thank you. After he hears about today, I think you couldn't keep him out of this place. Thank you.
Thank you, Councilman. Are any other questions? Councilman Clarke.
Thank you, Madam Chair. Actually, I have some questions that probably would be better answered going to Community Block Grant hearings, some of the operational questions with respects to the office and consolidation claim. 407 Bill 040255 - 4/13/04 I heard some of that asked by Councilman Ramos, and I assume he dealt with that in depth. So I don't want to... Excuse me for my absence. I was meeting with other members of the Administration to discuss the closure of facilities, so I probably shouldn't be in the best of mood, but I won't take that out on you, sir.
One of the issues that we talked about earlier was the concern about the... I guess the continued depletion of the block grant from the Federal government, and I understand this year that it actually... the operational capacity of the agencies. Have you talked about that?
No, I haven't. It is contained in a paragraph in my testimony, but in the interest of time I didn't read the entire thing into the record. But that is a very important and a very realtime kind of an issue. 408 Bill 040255 - 4/13/04 What I did not say, Councilman, was that this year, this current fiscal and CDBG year, we were cut by $5.3 million in our CDBG aware, the City of Philadelphia was. That's no fault of anybody's. It had a lot to do with the formula that HUD uses to award different cities their block grants. And for the first time year 2000 census numbers were used, as opposed to 1990 census numbers. And because the City of Philadelphia lost population between '90 and 2000, our block grant got cut by a commensurate amount. That was Year 29, this current fiscal year which ends in a couple months. We've been notified -- In fact, we were notified after this information was submitted to Council that we were due to be can you tell by another $695,000 in our block grant. What needs to be taken in consideration is the fact that the Office 409 Bill 040255 - 4/13/04 of Housing made ends meet this year or is making ends meet this year by virtue of the fact that we are selling off or RDA is selling off certain assets, a couple of parking lots, in particular. Had it not been for the availability of those assets and the sale of those assets, it would have been very difficult for us to meet or to provide ourselves a balanced budget this year. That's the good news. The bad news is that the revenue that had been provided by those assets are gone away because we no 15 longer own those assets. The worst news is the assets have gone, and we don't have another opportunity in Year 30, upcoming fiscal year '05, to take those same kind of steps. That having been said, we are looking at a pretty substantial operating budget deficit. This is outside of the General Fund because our offices for the most part are funded by CDBG. We're looking at a pretty large 410 Bill 040255 - 4/13/04 budget -- operating budget deficit for '05 which is going to require us to make some pretty difficult, and will probably end up being pretty painful decisions, relative to how we do what we do.
Well, shouldn't that enhance your need to complete the consolidation plan?
Let me say a couple of things about consolidation while we have a couple of minutes here. I sat -- not here -- but sat downstairs at last year's Finance Committee meeting and said to, I remember specifically, Councilman Nutter that I thought the consolidation process would take about 12 to 18 months. I stand by that statement. However, after having made that statement and after having gone back and looked at some things, not the least of which was the content of 411 Bill 040255 - 4/13/04 the union contracts that we operate under -- And remember, one union represents -- or each -- One union represents each of the three organizations. Each of those three organizations have a separate distinctive contract. So we have three different contracts, one for RDA, one for PHCD and one for OHCD. After having gone back and reviewed those contracts, it became apparent to me that there was no way we could effectively substantively consolidate and reorganize the three departments under those contracts. To give you -- And I don't want to -- certainly don't want to negotiate --
That is why I decided last fall to wait until this spring, 412 Bill 040255 - 4/13/04 basically now, to really jump in with both feet into the exercise of reorganization. The thought was it would make a whole lot more sense to go ahead and renegotiate the contract, and as a part of the renegotiating of the contract put together a reorganization. Otherwise, as I said, I'll give you just a quick example. Under the current contracts, if there was a need in RDA, for instance, for a Clerk Typist II because the work there is just busting at the seams and there's more work than all the Clerk Typists could do, if there's a need for a Clerk Typist II in RDA and a Clerk Typist II who's perfectly qualified to do the work existed at PHDC, and let's say her department or his department wasn't doing very much, the contract -- the provision of the contracts forbid me from moving someone from PHDC to RDA because in the eyes of the RDA contract, that would be tantamount to subcontracting that work out to some outside agency. 413 Bill 040255 - 4/13/04 That's why I say it's impossible under the current contracts to consolidate. We need to change that, among a number of other provisions, and build into the new contract some flexibility that would allow us to reorganize as we come up with a better way of doing what we're looking to do.
Under the formula that HUD uses to determine the words per county, right not per municipality...
... don't they also take into account the income of a particular county? And I asked that question because while the population has dropped considerably in the City of Philadelphia, the per capita income has also dropped. And I'm wondering, do they also take that into account? Because a substantial amount of this money is for people who are under -- utilized for people with income 414 Bill 040255 - 4/13/04 eligible guidelines. So while we're reducing our population, we're also reducing --
-- our per capita income. And I would think that to some degree --
That was the exact same point that I had made to the regional HUD director. And his response was, well, Kevin, yeah, that makes logical sense. But that's not the way it works. I'll let Scott, Mr. Wilds, speak more specifically to the former. But that's a point that I brought up to HUD, and was basically told, Kevin, if you want them to get that kind of change, you're going to have to... Well, it would take a literal act of Congress.
Right. In the discussion -- Not to cut you off. I know Scott will respond to that specific question. 415 Bill 040255 - 4/13/04 But in your earlier conversations during the course of the last of couple years, in talking about the distribution of resources, particularly from PHFA, talking about other counties, rural, suburban counties that are now receiving tax credits and other resources from some of these agencies, I was told that that's happening because there is more low income and moderate income individuals in those particular counties. While the per capita income was dropping for the City, it was also dropping statewide. So now there had to be a more equitable distribution of resources across the state. So that suggests to me that that in fact should have some bearing on the allocation from the Federal Government
The formula for the Block Grant is based on several factors, one of which is overcrowding, one of which is incomes, one of which is population, and the last is age of housing stock. This is weighed nationally, so that we compete, in 416 Bill 040255 - 4/13/04 effect, with Detroit and Houston and San Diego, and large places like those. The impact of the age of housing stock question has been very, very intense because of the shift from '90 to 2000 housing numbers. The age of housing stock question relates to houses over 40 years old. The building boom after World War II has suddenly come to mean that lots of suburban places now have older housing stock. Of course, so do we. But you have the whole ways of the inter parts of the suburbs that are now counted as older housing stock. And that factor alone, HUD states, has resulted in eight percent cut to our grant, simply by changing to this latest census data.
Does older housing stock, is that determined by vacant 417 Bill 040255 - 4/13/04 housing stock?
So the houses that have been rehabbed factor into that...
So my question is, by the policy shift towards reconstruction, by -- particularly by subsidized housing, does that then diminish our ability to say that we continue to have older housing stock, although the --
In the long term, as we change the ratio between older houses and new construction ones, it's going to affect that. Now, it's affecting every place as well. But the impact has really been at a place like Atlanta in its suburban area which boomed after World War II, those first set of suburban houses are counted 418 Bill 040255 - 4/13/04 now as older houses. And so, Atlanta got a boost up. And the pie is the same size, so we get hurt
It's a minor part of the... It's the number of people who live in the City.
Right. So we've had a reduction -- a small reduction but an absolute reduction -- in the number of people who live in the City from 1.5 to 1.4 million people, and that's made a difference, too.
Yeah, but... I find it hard to believe that money that traditionally comes to counties, that in most instances to provide subsidy for mortgage write-downs or whatever, whatever type of program, puts so little emphasis on... in terms of the allocation, so little emphasis on the income, per capita income 419 Bill 040255 - 4/13/04 of the individuals living in the City. That makes like no sense to me. If you look purely at population, as opposed to the income levels of the residents in that City, that makes like no sense.
I'm happy to share with you a report about this thick (Indicating) that HUD did a year ago, that looked at this, the impact census on the distribution of block grant. And it goes into depth into this. And it sites us as an example of an urban poor place that has been hurt by the application of this unchanging formula.
All right. Getting back to earlier conversations, I don't think you gentlemen were here. We talked about a lobbyist from the Mayor's Office and their ability to lobby Federal Government. Do they have any interaction with your agency, as it relates to changing policy? Because that policy to me makes no 25 sense whatsoever, that, you know, 420 Bill 040255 - 4/13/04 population to the largest degree drives the allocation strategy, as opposed to cities of most need, i.e., income. That just makes no sense to me. And I don't understand why we --
Councilman, it makes no 8 sense to us. In fact, if you think about it intuitively, it's illogical to penalize, especially a large urban city when it loses population. It would seem that that's where you need to put more federal resources, to kind of arrest that... those decreases in population. Scott works with a group that sits with our lobbyist and others on a periodic basis. I guess you can speak to what we've done. I don't know that that particular issue has ever been brought up to them
Well, we meet regularly with the Washington, D.C. firm Paten & Boggs. And they represent the City. And they have a special expertise in housing. We have raised with them this 421 Bill 040255 - 4/13/04 question. And it's very tough to change because it has to be done at the point that program as a whole comes up again for reauthorization. The current block grant program has some time still to run. And of course, once you start to change the formula, you could get hurt as well. So we have to be careful in making sure that we've got our ducks in a row, in the current environment in D.c., to be able to get to the place that we would like to go.
Well, I understand, you know, once you open up the can of worms. But the reality is we've been receiving I think like a $5 million reduction in subsidy on a yearly basis for the last several years. I would think that, you know, given the fact that we have a strong Congressperson who happens to sit on the Appropriations Committee, at a minimum we should focus our efforts on utilizing, you 422 Bill 040255 - 4/13/04 know, the tools that we have, Congressman Fattah, the work towards, you know, shifting that policy. To be concerned about it, frankly speaking, becoming worse, if we decided to entertain the issue -- I don't know how it could get any worse. Every year you can count on a reduction in contributions from the Federal Government; no understanding that your population, as the trends have shown, will continue to decrease the per capita income. I mean, you know, I don't even know why we're even concerned about that. I mean, personally I would be very aggressive to change that policy because it apparently is somewhat detrimental to us. Okay. Thank you. Thank you, Madam Chair.
Councilman, I'm sorry I've been distracted. I was focusing again, too, on this $5.3 million cut, and agree it's been very trying that we've been cut every year. 423 Bill 040255 - 4/13/04 In addition to that, we got a $695,000 cut, even after $5.3 million for our CDBG application coming in; am I correct?
That's... Well, for the current fiscal year for the current CDBG year we were cut by $5.3 million. In fact, what was the hard number in Year 28? Was it 58?
So that... For '04, that's where we're starting. Fiscal '04 we're starting at $63 million. On top of that there was another $695,000. And the Councilman's point is very well taken, in the sense that unless this formula is changed, then that number isn't going to change for another eight, nine, ten years or so, until there's a new census and a new way or new opportunity for the Feds to take a look at that formula. But my point is, we don't keep getting cut by $5.3 million. We will never 424 Bill 040255 - 4/13/04 see that $5.3 or this $695,000 again, unless some change is made on a federal level.
Thank you. I know that you mentioned work rules. And I think that's an idea whose time came some years ago, about flexibility and people doing assignments. I think that's... Given our whole work environment, that people do a lot of different things now than they did before. Listen, I don't think people will complain so much about it if they could keep their benefits and their health package. Am I right, Councilman Ramos. But let me ask you another question. We've been talking about demolition. And in fact, I talked to Councilman Clarke about this the other day. The legislation that we were dealing with in the past for Committee of the Whole and the Housing Committee on demo, did that not include residential and commercial properties? 425 Bill 040255 - 4/13/04
Because I had this discussion with Councilman Clarke where he questioned whether or not some commercial areas were considered -- Neighborhood commercial districts, I'm talking, not just... I'm not talking major.
Councilwoman, I believe it did. I was not at that hearing, but that's my -- my understanding, that it was both.
Councilman Clarke asked me about that issue the other day.
It had to have included residential and commercial because part of the money was going to go towards the demolition of the Westrum property. And all of that stuff there was commercial stuff; so, yeah, it did.
And I think that's all of my questions at the moment. I'm really concerned about how we go from here. As I said, I'll be focusing on 426 Bill 040255 - 4/13/04 acquisition dollars, if we got that in place. And then, I really understand NTI, the heart of it and how it's a leveraged program. And I think as long as we keep our minds open so that we can do that... We only get frustrated when we understand there's some leverage, and then when you come up with something... So I'm thinking out of the box. Then, you know, you kind of get stopped and you're saying, well, we don't -- can we do it that way. But that's what NTI is. That's what makes it an exciting and creative program.
Councilwoman, speaking on behalf of NTI and our department, we appreciate yours specifically, your willingness and ability to come to us with innovative, out-of-the-box type ideas. And as is typically the case, when those kinds of ideas are presented to an entity or an individual, the natural 427 Bill 040255 - 4/13/04 inclination, reaction is to say, well, wait a minute. Hopefully we've gotten past that, and are more willing to consider and try to figure out ways to implement it, as opposed to figure out ways not to do those kinds of things. So thank you again on behalf of NTI, for your willingness to come to us. And we encourage you -- not that you'd stop if we didn't, but we encourage you to continue to come up with those types of ideas.
Thank you. Did you have questions, Councilman Ramos?
Yes. Thank you, Madam Chair. Secretary Hanna, you mentioned how you wanted to consolidate, and I asked a couple questions about your consolidation approach and its ties to economic development with this City. And you brought up a very interesting and very serious concern of how 428 Bill 040255 - 4/13/04 you would like to get -- correct me if I'm wrong -- that you would like to get... you would like to get your shop, all the different parts of it, under one union. Is that a fair assessment of what I heard?
That's a fair assessment. Let me offer one caveat. And I don't know what's coming next from you, but let me offer one --
Yes, my goal is to have all three under one contract. What I don't want to do, however, here in this forum is talk in any -- at any level of specificity about those negotiations with the unions. I mean, I'd certainly hate for them to negotiate their contract in the press, and I'm sure they'd hate for us to negotiate ours in this particular forum.
Doing a fairly good job of reading minds there for a 429 Bill 040255 - 4/13/04 minute. Are you directly involved in bringing up this issue? I'm a former Labor Standards Director for the City of Philadelphia, and so I know a little bit of this business.
Are you directly addressing this concern of yours for these negotiations and this contract that's up at the end of June or are you doing it through the Office of Labor Relations, which I probably assume that -- I can assume that's how you're going about it. They were here with us this morning. We're coming towards that day at the end of June where we have to, unless we get an extension, have to come to some agreement with our municipal unions. So are you directly involved or are you leaving this up to the Office of Labor Relations?
The answer to your question is all of the above, plus some. 430 Bill 040255 - 4/13/04 We are, in fact, working with the Office of Labor Relations. I am directly involved. In addition, we're working with the City's outside labor counsel, the counsel that is helping Labor Relations to negotiate the overall City contract. More specifically, I've had meetings with our local union leadership. We plan, in fact, to have a follow-up meeting next week, because at our last meeting I basically told them what I just told you, that we're looking at a pretty substantial deficit. And we asked them to come back to us with their recommendations as to how we might plug that deficit. That's what next week's meeting is going to be about. But yeah, we had engaged our unions locally. And we've also asked for and have been provided help from our side by the Office of Labor Relations, as well as the City's outside counsel.
Well, I am very glad you're doing that, because I had a 431 Bill 040255 - 4/13/04 particular question this morning, because an answer I got about how the negotiations were going was that one of the unions had not presented a proposal to the City. And my response was, well, how about if they decide not to give you a proposal until mid June? What's going to happen then? And you're right around the corner from a contract expiration date. You should definitely consider going to them and asking them for that proposal or getting things moving. So I commend you for being proactive on this because that's what it's going to take, because as you probably know, these -- there are certain things within union structures that are very -- you know, very dear to leadership and to its members. And that's probably one of then, probably not as high up as self-insurance, health and welfare, and pension matters. But I'm quite sure restructuring is up there, as well. And I'm glad you're 432 Bill 040255 - 4/13/04 tackling it with your personal involvement, and make sure you let your -- our negotiators over there at the Office of Labor Relations know where you stand, and utilize your authority as a Secretary in this government to push that, because I agree with you that if you're going to be able to be successful in restructuring and consolidating all the housing departments of this City, that you're probably going to have -- you're going to probably need, you know, the flexibility to do so with a work force that's under, you know, one union or one labor umbrella.
And flexibility there is a key word, because one of the other things I'd like to try to accomplish in this union negotiation is the ability to work... the ability to position the Department of Housing to more quickly, more adroitly adjust to the market. I mean, it's been at least 15 years since the last reorganization, and things have changed an awful lot over the past 12 433 Bill 040255 - 4/13/04 to 15 years. I mean, these things (Indicating) weren't available 12 to 15 years ago. People were basically just discovering fax machines. Lots have changed since then. And for us to just now reorganize or do things to adjust to certain changes, I think it's good. But it's also late. So one of the things I'd like to negotiate in the contract is to somehow position the Department of Housing to be in a position to, as I say, more adroitly, on a more timely basis, change as the market changes. Thank you for your encouragement
Thank you. Thank you for your response. Thank you, Madam Chair.
Thank you very much. Are there other questions? (No response.)
Then let me 434 Bill 040255 - 4/13/04 say thank you very much. We thank you for your patience. We'll see you next month sometime.
And thank you. And this hearing will be recessed until tomorrow morning at 9:30. (Council concluded at 5:37 p.m.) 435 Bill 040255 - 4/13/04 CERTIFICATE I HEREBY CERTIFY that the proceedings and evidence are contained fully and accurately in the stenographic notes taken by me upon the public hearing of The Philadelphia City Council, taken on April 13, 2004, and that this is a true and correct transcript of same. _____________________________ DAVID A. DEIK, RPR and Commissioner of Deeds (The foregoing certification of this transcript does not apply to any reproduction of the same by any means, unless under the direct control and/or supervision of the certifying reporter.)