COUNCIL OF THE CITY OF PHILADELPHIA2 COMMITTEE ON APPROPRIATIONS3 Room 400, City Hall6 Philadelphia, Pennsylvania Thursday, November 17, 20117 9:20 a.m. PRESENT: COUNCILWOMAN JOAN L. KRAJEWSKI, CHAIR10 COUNCILMAN DARRELL CLARKE COUNCILMAN W. WILSON GOODE, JR.11 COUNCILWOMAN DONNA REED MILLER COUNCILMAN BRIAN J. O'NEILL12 COUNCILMAN FRANK RIZZO, JR. BILL 110782 - An ordinance authorizing14 transfers in appropriations for Fiscal Year 2011 within the General Fund from certain or15 all City offices, departments, boards and commissions...16 BILL 110783 - An ordinance authorizing17 transfers in appropriations for Fiscal year 2011 within the Water Fund from certain or all18 City offices, departments, boards and commissions...19 - - -21 2
Good2 morning. The Committee on Appropriations3 is now in session.4 Do we have someone from the5 Administration?6 (Witness approached witness7 table.)8
I'm9 sorry. I'm way ahead of myself. The10 Clerk will please read the bills.11
Bill No. 110782, an12 ordinance authorizing transfers in13 appropriations for Fiscal Year 201114 within the General Fund from certain or15 all City offices, departments, boards and16 commissions to certain or all City17 offices, departments, boards and18 commissions; and19 Bill No. 110783, an ordinance20 authorizing transfers in appropriations21 for Fiscal Year 2011 within the Water22 Fund from certain or all City offices,23 departments, boards and commissions to24 certain or all City offices, departments,25 11/17/11-APPROPRIATIONS-BILLS 110782 & 1107831 boards and commissions.2
Good morning,5 Councilwoman Krajewski and members of the6 Committee on Appropriations. My name is7 Rebecca Rhynhart and I'm the Budget8 Director for the City of Philadelphia. I9 appear before you today to offer10 testimony on Bill Nos. 110782 and 110783.11 These ordinances are needed to12 transfer appropriations to those agencies13 and expenditure classes where shortages14 have occurred and will allow the proper15 recording of final Fiscal Year 201116 obligations. This is required for the17 year-end closing of the financial records18 of the City.19 Bill No. 110782 transfers 10.720 million of '11 appropriations within the21 General Fund from certain City22 departments to other City departments.23 As discussed further in this testimony24 and testimony submitted by each of the25 11/17/11-APPROPRIATIONS-BILLS 110782 & 1107831 departments, there are seven transfers2 requested in this bill, including five3 involving a net change in departmental4 appropriations and two transfers between5 classes within budgets that do not result6 in any net change in appropriations.7 Among the larger transfers, 5.78 million is being requested by the First9 Judicial District to cover additional10 costs within the department. This11 transfer is in agreement with the Zero12 Growth agreement between the FJD and the13 City which requires the City to14 appropriate any surplus in their General15 Fund budget and a share of the revenue16 they generate. This amount is partially17 offset by an internal transfer of18 $763,291.19 The Department of Public20 Property requests 1.8 million to cover21 interfund services, primarily water22 usage, provided to the General Fund by23 the Water and Aviation Funds. This24 amount is partially offset by an internal25 11/17/11-APPROPRIATIONS-BILLS 110782 & 1107831 departmental transfer of 746,000.2 In addition, the Fire3 Department requests a total of 1.44 million to fully fund payroll charges and5 the cost of water usage. This amount is6 partially offset by an internal7 departmental transfer of $237,000.8 Among the smaller transfers,9 the Procurement Department has requested10 $500,000 for increased advertising costs.11 This is partially offset by an internal12 transfer of 358,000.13 Forty-four thousand is14 requested by the DA to fully fund payroll15 charges for the fiscal year. This amount16 is partially offset by an internal17 transfer of $11,673.18 Internal transfers with no net19 change in appropriation levels include20 715,000 -- and I'm approximating -- Class21 100 funds for the Philadelphia Prisons to22 Class 300 and 400 funds for the purchase23 of the radios and related equipment, and24 approximately 471,000 in Class 200 from25 11/17/11-APPROPRIATIONS-BILLS 110782 & 1107831 the Mayor's Office of Housing and2 Community Development to Class 800 to3 allow payment of acquisition recycling4 funds to the RDA.5 Bill No. 110783 transfers 6.66 million of '11 appropriations within the7 Water Fund. The Water Department has8 requested a transfer of 2.9 million from9 Class 100 to Class 800 for a payment to10 the Rate Stabilization Fund. This bill11 also requests a transfer of 3.7 million12 from Class 300 and 400 to Class 100 for13 the additional amount the Water Fund owes14 towards the City's contribution to the15 Pension Fund based on the year-end16 allocation between funds.17 I respectfully request that you18 report these bills out of Committee with19 a favorable recommendation, and I further20 request that the rules of Council be21 suspended so as to permit first reading22 at the next session of Council.23 I appreciate the opportunity to24 testify and would be happy to answer any25 11/17/11-APPROPRIATIONS-BILLS 110782 & 1107831 questions you may have.2
Thank3 you.4 Are there any questions from5 members of the Committee?6 Councilman Clarke.7
Could you12 just briefly explain the Zero Growth13 agreement with the First Judicial14 District.15
Sure. There's16 an agreement -- or there's actually17 multiple agreements with the courts where18 we share revenue that they generate for19 the City above a certain base amount.20 So, for example, if bail fees come in21 higher than the base amount in the22 agreement, there is agreements that we've23 signed, most of which give two-thirds of24 the revenue to the City and one-third to25 11/17/11-APPROPRIATIONS-BILLS 110782 & 1107831 the courts, but they have varying2 different splits between the courts and3 the City. So each year we go through a4 calculation whereby that amount is5 calculated and then we give over to the6 courts the amount subject to those7 agreements.8 I think the courts might be9 able to speak more, but I think the idea10 of the Zero Growth agreement, if they11 want to, is that any additional revenue12 for courts would come from them13 generating more revenue for us. So14 that's the idea. Zero Growth meaning15 that their budget won't grow unless they16 generate more revenue.17
Good morning.25 11/17/11-APPROPRIATIONS-BILLS 110782 & 1107831
I just8 wanted you to briefly go through it, make9 sure that we're in line with each other.10
Sure. It's the11 basis of what the Budget Director said.12 In order to give us an incentive to13 increase revenue, we've done many things14 to try to increase collections on the15 criminal side with bail judgments, the16 billion dollars that has been talked17 about many times. To give the courts an18 incentive to do that, we have an19 agreement if we bring in more over a20 certain baseline, the courts get21 one-third added back into their budget,22 which we reinvest into trying to collect23 more money for the outstanding24 obligations, and which the City gets25 11/17/11-APPROPRIATIONS-BILLS 110782 & 1107831 two-thirds of it. That is the average2 amount of the agreements.3
So in terms4 of increased revenue in the court system,5 it traditionally means something that6 will be put upon the citizens, be they7 guilty, not guilty or whatever the8 process is in civil or -- exactly how do9 you do that? Is it primary collections10 or is it --11
How do they12 increase revenue; is that what -- you're13 asking how do they increase the amount?14
I just wanted to17 clarify your question, Councilman Clarke.18 Is your question how do they increase the19 revenue?20
Yeah.21 Basically I'm saying -- you're saying22 that this agreement -- I understand the23 part about the fact that the revenues are24 increased based on the operations of the25 11/17/11-APPROPRIATIONS-BILLS 110782 & 1107831 courts and there's a shared agreement in2 terms of revenues above that baseline,3 but my question is, how do you increase4 revenues with the courts?5
It's the6 revenues that the courts collect, and7 maybe you want to speak to some of your8 initiatives of how you -- the courts have9 gone through certain initiatives to10 increase revenues coming in.11
We and the12 City, we've been looking for ways of13 increasing revenue on our side, and you14 guys have some magic bullet. We'd like15 to share --16
Right. And what17 they collect comes to the City's General18 Fund.19 But you can talk about what20 you've been doing.21
Bullet is24 probably not the appropriate term. I25 11/17/11-APPROPRIATIONS-BILLS 110782 & 1107831 apologize.2
We have a3 three-step process that -- we've just4 really stepped up collection efforts in5 the outstanding amounts on the criminal6 side generally. It's a three-step7 process. We have internal dunning, which8 includes bringing people in for payment9 plan conferences, getting more people on10 payment plans, that if they can't pay the11 whole thing, they'll pay us a little bit12 regularly so we get more money regularly13 coming in. But if that doesn't work out,14 then we turn them over to a third-party15 collection agency, which we started three16 years ago, and that's a classic17 collection agency where they'll just keep18 calling somebody and trying to get them19 to get back in compliance. And then if20 that fails after six months, then it's21 turned over to attorney collection firms,22 where they seek to see if there's any23 assets perhaps from an estate or bank24 account or anything that they may be able25 11/17/11-APPROPRIATIONS-BILLS 110782 & 1107831 to find. And although we have a huge2 amount of receivables, we have been able3 to increase the percentage of money4 coming in through these efforts.5 So I guess it's not really6 magic. It's just a lot of hard work and7 collaboration.8
Okay. All9 right. Thank you.10 Thank you, Madam Chair.11
That19 ends our public hearing on20 Appropriations. Now we'll go into our21 public meeting.22 The Chair recognizes Councilman23 Clarke for Bill 110782.24
Thank you,25 11/17/11-APPROPRIATIONS-BILLS 110782 & 1107831 Madam Chair. I move that Bill No. 1107822 be reported out of the Committee with a3 favorable recommendation, with rules4 suspension as to allow reading at the5 next session of Council.6 (Duly seconded.)7
All8 those in favor?9 (Aye.)10 COUNCILWOMAN KRAJEWSKI:11 Opposed?12 (No response.)13
Thank you,17 Madam Chair. I move that Bill No. 11078318 be reported out of the Committee with a19 favorable recommendation, with rules20 suspension to allow reading at the next21 session of Council.22 (Duly seconded.)23
All24 those in favor?25 11/17/11-APPROPRIATIONS-BILLS 110782 & 1107831 (Aye.)2 COUNCILWOMAN KRAJEWSKI:3 Opposed?4 (No response.)5 COUNCILWOMAN KRAJEWSKI:6 Therefore, Bill 110782 will be reported7 out of this Committee with a favorable8 recommendation with a suspension of rules9 so as to permit first reading at our next10 session of Council.11 Bill No. 110783 will be12 reported out of this Committee with a13 favorable recommendation with a14 suspension of rules so as to permit first15 reading at our next session of Council.16 Thank you all very much.17 (Committee on Appropriations18 concluded at 9:35 a.m.)19 - - -20 16 CERTIFICATE2 I HEREBY CERTIFY that the3 proceedings, evidence and objections are4 contained fully and accurately in the5 stenographic notes taken by me upon the6 foregoing matter on November 17, 2011, and7 that this is a true and correct transcript of8 same.9 10 11 12 13 --------------------14 MICHELE L. MURPHY15 RPR-Notary Public16 17 18 19 (The foregoing certification of this20 transcript does not apply to any reproduction21 of the same by any means, unless under the22 direct control and/or supervision of the23 certifying reporter.)24 25