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.