COUNCIL OF THE CITY OF PHILADELPHIA2 COMMITTEE OF THE WHOLE3 Room 400, City Hall6 Philadelphia, Pennsylvania Thursday, May 19, 20117 10:35 a.m. PRESENT: COUNCIL PRESIDENT ANNA C. VERNA10 COUNCILWOMAN JANNIE BLACKWELL COUNCILMAN W. WILSON GOODE, JR.11 COUNCILMAN BILL GREEN COUNCILMAN WILLIAM K. GREENLEE12 COUNCILMAN CURTIS JONES, JR. COUNCILMAN JAMES KENNEY13 BILLS 110135, 110136, 110137 and 11013815 RESOLUTION 110161 - - -17 2
Good2 morning, everyone. This is a continued3 public hearing of the Committee of the4 Whole.5 The Chair recognizes6 Mr. McPherson.7 MR. McPHERSON: This is a8 continuation hearing on Resolution9 110161, the City's Five Year Plan; Bill10 No. 110135, the Capital Program11 2012-2017; Bill No. 110136, the Capital12 Budget for 2012; Bill No. 110137, the13 Operating Budget for 2012; Bill No.14 110138, wage tax. And could the City15 Controller please come to the table.16 (Witnesses approached witness17 table.)18
Good morning.21 COUNCIL PRESIDENT VERNA:22 Councilman Green?23
Yes, Madam24 President.25 5/19/11 - WHOLE - BILL 110135, ETC.1
I2 believe that you had requested a callback3 for the City Controller.4
Thank you,9 Mr. Controller. I appreciate you coming10 over here again. I apologize that I was11 not able to make your first testimony. I12 had a few things going on the last few13 months. So I very much appreciate it.14 I wanted to really talk to you15 about the School District. You did, I16 thought, some great work in reviewing17 charter schools and taking a specific18 look at auditing charter schools, and we19 have next week the School District coming20 before us. We don't know exactly what21 they're going to say yet, but we imagine22 a lot of it will be, It's not our fault.23 And so I am wondering if -- we have24 limited authority in City Council. Act25 5/19/11 - WHOLE - BILL 110135, ETC.1 46 requires that we appropriate the same2 we appropriated last year. There is no3 overview under the state law that created4 the SRC. Essentially we give them money5 and they do whatever they want with it,6 and I just wanted to talk to you about7 your office probably being the only one8 with the authority to go in and see9 what's happening, take a look at the10 Class 200 contracts, take a look at where11 the money has been going, et cetera, in12 some detail.13 As you know, we get a very14 short, short, small, teeny budget request15 from them, and I just wondered if you16 were open to using some resources to try17 to take a look at that so that we can18 have a much clearer understanding in the19 City government about what's happening in20 the School District.21
Well, it's a22 good idea. 1 with the City. I've been arm wrestling2 with the School District since my first3 day in office. First of all, the state4 takeover legislation created some5 ambiguity as to who is the auditor over6 the School District. Now, we7 successfully kind of fought that battle,8 but essentially we're limited to the9 following year review, the post audit10 review of the financial statements of the11 previous year. 14 So it would be useful, for15 example, when Jonathan Saidel was the16 Controller, he had legislation in17 Harrisburg to try to get the Controller18 pre-audit authority, as they do with the19 City. 1 audits of the schools. And our top2 technical people in the office came up3 with the brilliant conclusion that since4 we have to certify the assets of the5 School District and since they claim they6 have boilers and all sorts of equipment7 in the building, how the heck did we know8 if they really did if they didn't let us9 into the building? So they had to admit10 us to the building. We found all sorts11 of fire code violations and electrical12 hazards and so on in the course of doing13 that. 15 I mean, there's clearly a16 governance issue in that Philadelphia and17 Pittsburgh are the only districts in the18 state, they don't have elected school19 boards, they have theoretically a state20 board that is looking over the shoulder21 of the governance of the School District,22 but was in fact managing it. They don't23 get elected, and they don't have taxing24 power. 1 a relatively small percentage of their2 supplemental appropriation, although with3 a substantial infusion of cash from the4 real estate tax, and basically they're5 still doing what they did when Hornbeck6 was in, which is throwing their hat over7 the fence and saying, We've made a down8 payment on something and now you have to9 back us up. 18 There's also a problem with the19 way they maintain their records. 1 the name of the contractor, the amount of2 the contract, a one-sentence explanation3 of what it's for, and that's it. And4 it's a sheet of paper like this. 6 Because that same state takeover7 legislation, which was passed with the8 idea that business would be superior to9 the political and the governmental10 process in getting the schools out of11 trouble, exempts them from competitive12 bidding requirements. It provides all13 sorts of opportunity for old-fashioned14 patronage and favoritism. 22 So, first of all, the23 Legislature could make that clearer. 7 I guess we could get the8 consent of the School District. Since9 they're going to come in here and ask for10 things, you could try to get them to11 consent to an audit of certain types of12 expenditures. 18
Thank you.19 I certainly will suggest that to them and20 certainly would be happy to work with you21 at the state level. I don't see why22 there would be an objection by the23 Legislature or the Governor to having24 oversight of the School District at the25 10 5/19/11 - WHOLE - BILL 110135, ETC.1 local level in terms of auditing2 authority, and would be happy to work3 with you on that if that's something you4 want to try to achieve. Ultimately, I5 think given the cutbacks, we ought to be6 going to Harrisburg to fight to get back7 control of our School District, and then8 we can amend the portion of the Charter9 dealing with the School District to give10 everybody appropriate oversight authority11 of what's happening there. And so I'd be12 happy to work with you on that.13 I did want to mention one thing14 that I would ask that you look at, and,15 that is, I have been told by people16 representing the people in the Office of17 Property Assessment that they are18 literally, literally sitting on years of19 assessment data that they are not allowed20 to enter into the computer system. And21 there is a part of this deficit that is a22 loss of state funding. There is a part23 that we knew and identified last year at24 budget hearings would be a problem, which25 11 5/19/11 - WHOLE - BILL 110135, ETC.1 is a loss of stimulus funds, but2 everybody saw that coming. So the fact3 that there's a deficit related to the4 loss of funding that we knew was5 happening is poor planning.6
And then,9 finally, a portion of it is because they10 anticipated revenues from an increased11 real estate base which didn't appear12 because of a -- I guess it's one of the13 unintended consequences of the decision14 to freeze assessments.15
And I don't17 know if you have authority to look into18 the OPA or why they have been instructed19 not to enter new assessment data that20 they've been holding on to for three or21 four years, but I would suggest you look22 at that, and that may help the School23 District financial problems somewhat.24
Well, I think25 12 5/19/11 - WHOLE - BILL 110135, ETC.1 we could do a performance audit of the2 Office of Property Assessment.3 Do we have money that is4 available for that?5 We do. Okay. Well, we could6 do that. And Senator Piccola also had a7 draft legislation on the charter schools8 last year in which he was going to give9 our office authority to review charter10 schools. Now, that's been held up for11 over a year. So while you're out there12 battling with Harrisburg, you might put13 that on the list.14
Well,15 hopefully it's something we can do16 together. You have far more experience17 than I do there.18
Are21 there any other questions of the22 Controller?23 (No response.)24 COUNCIL PRESIDENT VERNA:25 13 5/19/11 - WHOLE - BILL 110135, ETC.1 Seeing no one, thank you very much.2
Last4 week we had asked for callbacks for5 Police, Fire and Fleet Management, also6 Procurement. Does anyone have any7 questions regarding Police, Fire or8 Procurement?9
Was there13 specific requests for these departments14 to come back?15
Yes.19 And I understand that at the last minute20 we got a call that it wasn't necessary21 for Police, Fire and Procurement.22 However, there may have been other23 members who may have had questions.24
Over the25 14 5/19/11 - WHOLE - BILL 110135, ETC.1 years, I just feel sorry for these folks2 that during the budget process sit here3 when they actually could be working.4
The5 Chair agrees, and that's why we made a6 call and said it was not necessary for7 the Commissioners themselves to come in,8 because I didn't know what the9 Councilmembers may have wanted to ask.10
Thank you,15 Madam President. Not that there was any16 of these specific departments, but at a17 point, I had called back two, and I had18 worked out with the Administration to get19 my questions answered and conveyed that20 both to the Administration. And so we're21 always glad to see them, but I don't have22 any specific questions of them.23 Thank you, Madam President.24
So I25 15 5/19/11 - WHOLE - BILL 110135, ETC.1 don't see any need for the Police, Fire2 or Procurement to wait. Thank you for3 coming in.4 Councilwoman Blackwell had made5 a request for Fleet Management to be6 here. So while we're waiting for her, I7 would like Fleet Management to come up to8 the witness table. I see you have9 written testimony.10 (Witnesses approached witness11 table.)12 MR. McPHERSON: No; that's not13 him. It's Local 1927, Vincent Fragale.14
I'm15 sorry. Is Vincent Fragale here?16 (No response.)17 COUNCIL PRESIDENT VERNA:18 Vincent Fragale?19 UNIDENTIFIED WITNESS: He20 stepped out.21
Is he22 coming back?23 UNIDENTIFIED WITNESS: He's in24 the hall.25 16 5/19/11 - WHOLE - BILL 110135, ETC.1
Thank6 you.7 (Pause.)8 (Witness approached witness9 table.)10
Good morning,11 President.12 COUNCIL PRESIDENT VERNA:13 Please identify yourself for the record14 and proceed with your testimony.15
I didn't hear16 you.17 COUNCIL PRESIDENT VERNA:18 Identify yourself for the record.19
My name is Vince20 Fragale, Business Agent of Local 1927.21 COUNCIL PRESIDENT VERNA:22 Proceed with your testimony, please.23
13 We are here today to offer14 testimony of how the increasing amount of15 contracting out in this city has16 negatively affected the productivity of17 our department. We will show how the18 department, when adequately staffed with19 a workforce of dedicated and qualified20 technicians, has benefited our department21 and the City as well. It is our goal22 today to ask the members of this Council23 to remove the funding from the 200 class24 and return it to the General Fund. 5 The Union contends that there's6 too much wasteful spending on outside7 contractors. 10 This is a serious problem. Over the past11 12 years, our department has seen an12 almost 45 percent reduction in its13 workforce, while at the same time the14 amount of work that is contracted out has15 grown each year. As citizens, we are16 told that this is done in order to17 increase efficiency and productivity, but18 after years of this practice, the results19 have produced the opposite. Our members20 have seen their jobs given to private21 contractors, because contracting out22 reduces the amount of oversight and23 control over the workforce. 4 Every year we see more and more5 of our tax dollars spent on private6 contractors. Work that was previously7 done by City workers is now being done by8 people that don't live in this city and9 that don't have no vested interest in10 seeing the City succeed. Their bottom11 line is the bottom line. These12 contractors in many cases do not hire13 people from this city and their workforce14 does not increase our tax revenue. How15 can we bring jobs to this city by laying16 off people? When the work is done, it's17 shoddy. To whom do we complain? When18 the work being done costs the taxpayers19 more, why do these contracts continue to20 be renewed? 21 The reason we bring this to22 your attention is that a lot of the work23 that our members can do is now being24 contracted out. 1 equipment are returned, very often our2 members have to correct the mistakes made3 by outside contractors, when we could4 have done the job right in the first5 place. 10 In addition, when Fleet11 Management contracts out this kind of12 work to companies based outside the City13 and in some cases outside the state,14 contract employees and the communities15 that they live in reap the benefits of16 our tax dollars. When Local 1927 members17 perform work, you can be certain the18 majority of their wages and taxes stay19 here in this city. 14 Janitorial services: General Fund15 96,000, Water 26,000, Aviation 10,000,16 for a total of 132,000 in janitorial17 services. Heavy equipment repair:18 300,000, in Water 298,000, in Aviation19 80,000, 678,000 total. Auto collision20 and light truck repairs: 496,000 in21 General Fund, 248,000 in Water, 42,000 in22 Aviation. 1 minute there. We had a body shop at 11th2 and Reed that had two shifts of people3 working, with 34 people working in that4 shop. We're now down to one shift with5 11 people. I mean, there's no reason why6 we can't bring all this work back to 11th7 and Reed. 12 Engine and transmission repair: 272 in13 General, 129 in Water, 20,000 in14 Aviation, for a total of 421,000. 20 Towing: 66,500 in General, 10,000 in21 Water, 5,000 in Aviation. 22 We used to do all our own towing. 1 private vendor from outside the City2 towing our vehicles. We always had our3 own tow truck drivers. 11 It's a grand total of 2,659,50012 worth of our work, and this is just a13 small amount. I think the grand total of14 what they contract out in the 200 class15 is way more than that. We just touched16 upon a few things. 1 We ask City Council to take a2 long look at the information that we have3 provided. We are confident that once all4 of the factors have been weighed, you5 will see that there is no better way to6 ensure the taxpayers of this city are7 getting the most out of their tax8 dollars.
Ending the practice of9 privatizing City services and hiring City10 workers would improve the levels of11 efficiency and quality through increasing12 oversight, enhancing quality assurance13 and proper training. 18 For years, contracting19 out/privatization was considered the only20 way to improve efficiency and to increase21 productivity. However, after years and22 years of this practice, what we know is23 that there are no shortcuts to increase24 success. 1 There is no easy way to produce the kind2 of results that our members have been3 producing for years. It takes good, hard4 work, well-trained and dedicated men and5 women that take pride in the work that6 they do. 8 We can continue down this path9 and allow City service to be contracted10 out and hope for a better result or we11 can return to what works and hire more12 City employees. 16 Our Local 1927 members deliver17 the highest quality work and with the18 best value for our tax dollar. 2 The quality of work that our3 members deliver can be illustrated by a4 recent example when one of our members5 identified both the cause and the6 solution for a design flaw on the Police7 Department's fleet patrol car. Our8 member pays attention to these kind of9 situations. They realize that by doing10 their job, they are helping others do11 theirs. When a call goes out for a12 police officer and they have to respond,13 our members work hard to make sure that14 they can do so in a safe, reliable15 vehicle. 18 To the members of City Council,19 you can help us by addressing these20 serious issues by moving funding for21 contracted-out services from the 20022 class fund into the General Fund. 1 Fund, would allow the Office of Fleet2 Management to hire upwards of 40 AMTs,3 auto body techs and various support4 staff. 9 Thank you for your time and10 consideration of this matter. 15
Thank16 you.17 Councilwoman Blackwell, you18 would like to be recognized.19
Thank20 you very much.21 I would like to hear a response22 from the Administration about this whole23 issue of privatization. We all know --24 we've been around here too long not to --25 28 5/19/11 - WHOLE - BILL 110135, ETC.1 that when privatization occurs, there is2 always the initial savings and then it3 always costs more. That's the way it is.4 We would like to know -- one of5 the folks told me that they had to --6 when they reviewed -- when men from Fleet7 Management reviewed a job that had been8 privatized out and they were criticized9 by poor work that was painted over, they10 knew nothing about it, because it had11 been privatized.12 So for many reasons,13 privatization, not only does it hurt us14 income-wise but it hurts us15 accountability-wise. And we who are16 driving these cars from 1910 who need new17 vehicles certainly would like to know.18 We know that when we call Fleet19 Management, they're available, but when20 privatization occurs, all of us are put21 in jeopardy, and we would like the22 Administration to respond to this. We23 want to hear them respond to the list of24 savings that are listed, and certainly we25 29 5/19/11 - WHOLE - BILL 110135, ETC.1 want to say that we're in total agreement2 with this testimony and thank them for3 coming. Thank you. Thank you all,4 Mr. Fragale and team.5
May7 we have someone from the Administration8 here?9
Jim Muller, Fleet10 Management.11 I do agree with the Union. In12 2007, the past Administration, we had a13 big layoff in Fleet Management. Our body14 shop was devastated, and since that time,15 we have not ramped back up. I mean, we16 have only six openings right now. And17 the responsibility that we have to make18 decisions every day so we have enough19 police cars and enough vehicles, that's20 the decision. There was never a decision21 made to privatize everything in the City.22 We are not at all looking at that23 initiative.24 We also lack -- first of all,25 30 5/19/11 - WHOLE - BILL 110135, ETC.1 our body contracts go out to vendors that2 are in the City of Philadelphia, that3 have businesses in the City of4 Philadelphia. I can name a few -5 Pacifico Ford, Rocco's Twins Auto Body.6 Any vehicle that is sent out7 for a private contractor to repair, the8 vehicle is brought back in and gone over9 by our people, and they sign off to make10 sure that that vehicle is safe to operate11 before that vehicle is put back in12 service.13 The other thing we do contract14 out is some of our warranty repair work15 for engines, transmissions, because, like16 I said, we just don't have the people to17 do it, and we need to have vehicles on18 the street every day. A vehicle in the19 shop or a vehicle in a parking lot is not20 helping the City of Philadelphia, the21 Police or Fire do their job, and that's a22 decision that we have to make every day.23 Our supervisors when they come in in the24 morning, they look at the down count, how25 31 5/19/11 - WHOLE - BILL 110135, ETC.1 many vehicles they have. We need2 vehicles on the street every day.3
So why4 can't we make these people City5 employees? Why can't we hire people6 to -- I'm glad we use companies in the7 City. That's the next best thing to8 using the City itself, but certainly we9 are concerned that we hire people to take10 care of us who are City workers. Why11 can't we do that? And we're also12 concerned about the discrepancy and the13 disparity in salaries between folks who14 work and folks who don't between the15 exempt employees, union employees. All16 employees don't -- we're concerned about17 the discrepancy in what they're paid as18 well. It seems unfair that you have to19 check behind somebody and you're not20 making the money that they're making as21 well. So there are other discrepancies22 as well.23
Madam President,24 Dave Wilson, First Deputy Managing25 32 5/19/11 - WHOLE - BILL 110135, ETC.1 Director.2 Councilwoman, the concerns that3 Mr. Muller has raised have been -- are4 issues that we've been dealing with for5 some time, and, quite frankly, we're not6 aware of -- to get to your position,7 we're not necessarily aware of the8 difference or any discrepancies in what9 the compensation is for those contractors10 and things like that.11 So what I would ask is that you12 give us an opportunity to look at the13 information that Mr. Fragale has put in14 front of us to do a much more in-depth15 analysis of what it is that they're16 proposing relative to what we contract17 out.18 One of the things why we do19 contract a large amount of our auto body20 work is that in 2006-2007, there was a21 layoff relative or due to a budget issue,22 and there was also an issue relative to23 us having the adequate facilities to do24 body work. Our body shop at 11th and25 33 5/19/11 - WHOLE - BILL 110135, ETC.1 Reed is in a residential area, which2 prohibits us from doing any type of3 spraying or any type of painting. So4 there are a couple of issues that come up5 relative to our body shop, as well as6 some of the other things that we do7 relative to our contracted-out repairs.8
Well,9 we would like to -- and the President can10 speak to this better than I. We're happy11 to allow you the time you need, as long12 as we know before we have to pass the13 budget. But it seems to me when we meet14 with Public Property and others and they15 talk about selling off surplus property16 and all of that, I don't understand why17 Fleet Management can't get what it needs,18 and why then if you're saying it's not a19 discrepancy on pay but we -- and you can20 check that out and find out that21 different people are paid differently.22 That will take care of itself in your23 investigation. But I don't understand24 why Fleet Management can't get what it25 34 5/19/11 - WHOLE - BILL 110135, ETC.1 needs, because we know the great need and2 it is a need that won't go away.3 So I don't understand. I don't4 know why we -- certainly I'm sure that5 Council would support your getting the6 space you need to do painting or whatever7 else is required. So we would -- I'm8 hoping that this year we can have a full9 enough discussion to explore these issues10 so that all of us are satisfied that11 people are being paid properly or fairly12 and that men have the equipment they13 need, the space they need to do it, and14 we're doing all that we can to hire15 within the City during this harsh16 employment time, but that we're doing all17 we can to make sure that all can handle18 the job that needs to be done. We're19 always for hiring. I'm sure all20 Councilpeople would agree. They're21 always for hiring people to get the job22 done as opposed to privatization.23 But we'll look forward, and the24 President knows better our timeframe.25 35 5/19/11 - WHOLE - BILL 110135, ETC.1 We're worried about -- we would like to2 have all of this resolved before we pass3 out the budget.4
Again, we will5 look at the report that Mr. Fragale has6 put forth here. We will pull all our7 data and do analysis and get that back to8 the Chair.9
Thank13 you.14 The Chair recognizes Councilman15 Green.16
Thank you.17 I just really have a simple18 question. Is there a cost-benefit19 analysis that the department has done to20 demonstrate that the outside contracts21 mentioned are less expensive than the22 work otherwise being done by department23 employees?24
There has not been25 36 5/19/11 - WHOLE - BILL 110135, ETC.1 one. I know that that's part of some of2 the things that we are looking at right3 now based on the legislation that had4 come out earlier with --5
So explain6 to me very simply why you would make a7 decision to contract something out8 without knowing that it's going to be9 less expensive.10
Councilman, the11 decision to contract out was based on a12 lack of manpower. It was a necessity.13
Well, why14 not just hire more people, do a list and15 hire people?16
Well, because17 the -- it was a decision made in the past18 Administration to reduce that workforce.19
Past20 Administrations, but it's three years and21 four months into this Administration.22 It's a little late to be blaming past23 Administrations for lack of tests and24 lack of police --25 37 5/19/11 - WHOLE - BILL 110135, ETC.1
No. It's not an2 issue of a lack of a test, Councilman.3 It was an issue that the workforce was4 reduced, at which point we sought an5 alternative way in which to fill the need6 to get work done.7
That could be --10 when we do the analysis and we come to11 that determination --12
Don't you13 think we should have an analysis so we14 can understand whether or not it's more15 or less expensive to do things the way we16 used to do them or the way we're doing17 them now?18 (Witness approached witness19 table.)20
Councilman21 Green, Rebecca Rhynhart, Budget Director.22 I think what Dave was trying to23 say was that when the decision was made24 in '06 and '07 -- and I wasn't here at25 38 5/19/11 - WHOLE - BILL 110135, ETC.1 that point -- that it would be2 advantageous from a financial point of3 view to contract out, my understanding is4 that certain facilities were also5 reduced. So there are certain6 infrastructure that would need to be --7 that we've gotten rid of, so that we've8 downsized overall. It's something --9 could we look at that? I think that Dave10 said that he could look at the testimony11 that was presented, but that -- and that12 we could get back to Council really13 quickly on that, but I think that overall14 that it seems like the decision was made15 and that the analysis when that decision16 was made, there were also impacts in17 terms of facilities on that that would18 actually cost a good amount of funding to19 ramp back up. But, again, I think it's20 something we can -- we'll get back to you21 on.22
So you don't23 know, Ms. Rhynhart, as you're testifying24 here today whether or not we have the25 39 5/19/11 - WHOLE - BILL 110135, ETC.1 facilities necessary to do the work?2
We don't have3 the facilities necessary to hire. That's4 my understanding.5
My6 understanding is, there are empty bays in7 the facility we have every day.8
Councilman, there9 is the issue whether or not of being able10 to paint and have the noxious fumes and11 everything that's related to painting a12 vehicle occur there at that facility.13 Because it's in a neighborhood or in a14 residential area, there is -- we're not15 allowed to do that work there.16
Not just17 paint bays, but automotive bays, bays18 where other work is being done, et19 cetera.20
I believe the21 concern that Mr. Fragale has outlined22 here -- and, again, I just received23 this -- I believe it was stressing the24 issue of body technicians, auto body25 40 5/19/11 - WHOLE - BILL 110135, ETC.1 technicians.2
Well, it's3 everything - general repairs; auto4 collision and light repairs; emergency5 tire repairs; janitorial services.6 General repairs is not auto body.7 Engine/transmission repairs; steel rim8 wheel clean/paint; upholstery services;9 welding services; towing; refabrication,10 retrofit and installation of safety11 equipment on City vehicles. It's12 everything. It adds up to $2.6 million a13 year.14
I think in terms16 of the numbers, we just received them.17 We would like to look at those to get18 back to you on that to have a more19 educated conversation in terms of it. We20 just received the numbers that we got.21
It's really22 a simple question. Is it more or less23 expensive to do it the way we're doing?24
Well, at this25 41 5/19/11 - WHOLE - BILL 110135, ETC.1 point, since the decision was made in '062 or '07, there would be significant cost3 in order to ramp back up, but I can't4 tell you the exact cost without going5 back and looking at it, which is what6 we'll do.7
Okay. I8 appreciate that and I look forward to9 getting information back. Thank you.10
In about14 somewhere between the years of 1997 and15 1999, we had 572 people total in our16 department. I think total people in our17 department now is less than 330. About18 200 of those people that were lost are19 technicians. We still have the same20 amount of shops. I guarantee you that we21 have empty work bays. I guarantee you a22 blind person could walk into our shops23 and find empty work bays.24 I'm going to tell you that our25 42 5/19/11 - WHOLE - BILL 110135, ETC.1 auto body shop at 11th and Reed, we had2 34 people working there on two shifts.3 We now have 11 people working on one4 shift. We have plenty of room to bring5 body work back into our system. I mean,6 any work that's done, we have room to7 bring back into our system.8 You know, anybody can come with9 me at any time and I'll show you empty10 work bays in the Office of Fleet11 Management.12
Oh,18 I'm sorry. Did you want to be19 recognized?20
Good morning.21 COUNCIL PRESIDENT VERNA:22 Kindly identify yourself for the record.23
My name is Aaron24 Holliday. 3 First off, to the department's4 defense, I believe they would agree with5 us they would love to bring the staffing6 levels where they should be. 13 Like Mr. Muller stated earlier,14 vehicles have to get out. We understand15 that. 19 It's an issue of practicality. If20 there's no money there, what are they21 supposed to do? 2 Partially. You don't have the time to3 put a vehicle on the lift and do a4 point-to-point service check, because5 that's actually counterproductive to our6 members, who basically are assigned other7 vehicles. 9 The reason that we're arguing10 for having people in-house, because it is11 more effective. Privatization is not12 new. It's always done, and initially13 there are initial savings saying, well,14 the people who we contract out to don't15 pay benefits like we have to pay our16 members, but as we've learned from17 Wal-Mart, the citizens pay one way or18 another. Maybe not initially, but on the19 back end, they pay. There's nothing20 free. 1 greater control. They can determine the2 type of worker they hire, the training3 level of that worker and prioritize the4 work that they put out. 14 What we know is, in the City our basic15 function is to make sure that vehicle go16 out safe, but a vendor, his primary goal17 is to make sure he makes money. There's18 nobody I know that gets in the business19 to lose money. Now, if he has to cut20 something, he's not going to cut his21 profit margin. He's going to cut22 somewhere else. 4 There's one factor that every5 single vendor, no matter what the6 department realizes, if you don't have7 the manpower to do the work yourself, you8 definitely don't have the manpower to9 watch me do the work, and that's where10 the lack of oversight. 1 our shop. We sent a job out to Pacifico2 Ford and our team leader in the shop3 noticed there were a couple of screws4 missing. So he said, Let me put it on5 the lift just to give it a further check,6 and what he discovered was, there were7 braces and stuff that weren't replaced8 that were still broken, and one of the9 rails had some epoxy put on it because it10 was bent and spray-painted black. That11 was like fraud. If that's one of our12 employees and he's caught doing that,13 he's out the door. 18 Somebody walks the floor just to see19 where they're at and if the priority20 changes. A group leader can say, You21 know what, we need more EPWs on the22 street, put Recreation Department outside23 right now and get that in. How do you do24 that with a vendor? 1
And if they do4 that on the very first job, they're5 trying to make a good impression. What6 are they telling you? You can't really7 watch what I'm doing.8 Basically what we're asking for9 and of all the members of Council,10 basically move some of the money that's11 currently in the 200 class and put it in12 the General Fund. Now, we're not naive.13 We know you can't eliminate contracting14 out, because as a tool, managers need15 that to use it like a bleeder valve.16 When the shop is overwhelmed with work or17 there's basically a City emergency, they18 can then use that. But a vendor19 shouldn't constitute the makeup of your20 workforce. And basically since the21 layoffs and through attrition and stuff,22 that's basically what our department has23 become.24 Like I said, I don't believe25 49 5/19/11 - WHOLE - BILL 110135, ETC.1 it's the department's goal to basically2 say we're just going to privatize3 everything, because I know for a fact4 they don't want that. They like having5 control over the people they hire, but6 you basically still have to get work out.7 So they have no recourse but to do it8 when there's no funding in the General9 Fund.10
Thank17 you, Madam President.18 Just quickly, because my19 questions were kind of along the same20 line that Councilman Green asked, but21 maybe of the Administration, I don't22 know, Rebecca or Dave or whoever. I know23 the decisions originally were made in a24 previous Administration, but I guess my25 50 5/19/11 - WHOLE - BILL 110135, ETC.1 question is, do you have the study that2 first showed that -- it must be around3 somewhere -- that it was to the cost4 benefit to contract out? And then I5 guess a follow-up, has there been6 monitoring of those numbers, if you will,7 to show that that's still successful or8 still beneficial financially, I guess I9 would say?10
Councilman, I11 don't know what the study was back prior.12 I do know, I mean, basically from some13 information that we have right now, based14 on the number of employees that we had in15 the late '90s, in 1999, going to lough16 (ph), that we have -- are more efficient17 with less employees relative to how we18 use the contracted firms than we were19 back in 1999. I guess the case in point20 is in 1999, we had 451 employees and our21 contracted -- our Class 200 contracted22 amount was about $4.5 million. Looking23 at 2010 -- or I'm sorry; 2009 with 30024 employees, our contracted Class 200 piece25 51 5/19/11 - WHOLE - BILL 110135, ETC.1 is just about $4 million. So there is an2 efficiency with -- again, and that's just3 off the paper and not doing any type of4 in-depth analysis on that type of the5 efficiency measure there.6
I guess7 what I'm getting at, does the8 Administration -- and this Administration9 has obviously been in three years now --10 look at those numbers to see if they're11 still -- because as was stated,12 oftentimes contracting out, the numbers13 work in the beginning, but as time goes14 on, they might not. I'm just trying to15 see is there sort of a consistent16 monitoring, I guess.17
There hasn't been18 a consistent monitoring that I know of,19 and, again, I think it's part of -- it's20 not that -- should we? Yes. And we can21 do that. But I guess in part is that22 it's not that we are constantly looking23 to go out and move more of our operation24 or more of our business outside. We25 52 5/19/11 - WHOLE - BILL 110135, ETC.1 value our employees. We value the folks2 that are on the floor. They're the ones3 that do the job. They're the ones that4 are the magicians in a lot of cases. So5 we value our employees. We look at them6 as partners in this process, and, again,7 the contracting out is just a part of our8 business.9
I10 understand, but it goes back and the11 whole cost-benefit analysis thing. I12 know that's not just with this department13 but all over, but it seems like there14 should be some justification --15
Is it20 justified to keep -- maybe the21 contracting out isn't the most economical22 way now. Maybe hiring City employees.23 Even besides the fact that they are City24 residents and all like that, as25 53 5/19/11 - WHOLE - BILL 110135, ETC.1 Mr. Fragale said, I think we have to look2 does it save money. And I know you3 haven't looked at this yet, but it seems4 like his analysis, the Union's analysis,5 shows that it very well could.6
Okay.9 Thank you.10 Thank you, Madam President.11 COUNCIL PRESIDENT VERNA:12 You're welcome.13 Are there any other questions14 from members of the Committee?15 (No response.)16 COUNCIL PRESIDENT VERNA:17 Seeing none, thank you, gentlemen. We18 appreciate your coming in.19
I really want to20 thank all members of City Council for21 this great opportunity of letting the22 Union's voice be heard.23 COUNCIL PRESIDENT VERNA:24 You're welcome, sir.25 54 5/19/11 - WHOLE - BILL 110135, ETC.1 This Committee of the Whole2 will stand in recess until Tuesday, May3 24th at 10:00 a.m.4 Thank you.5 (Committee of the Whole6 recessed at 11:30 a.m.)7 - - -8 9 10 11 12 13 14 15 16 17 18 19 20 55 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 May 19, 2011, and that7 this is a true and correct transcript of same.8 --------------------13 MICHELE L. MURPHY14 RPR-Notary Public15 (The foregoing certification of this19 transcript does not apply to any reproduction20 of the same by any means, unless under the21 direct control and/or supervision of the22 certifying reporter.)23