COUNCIL OF THE CITY OF PHILADELPHIA PUBLIC HEARING BEFORE THE COUNCIL COMMITTEE ON FINANCE - - - Room 400, City Hall Philadelphia, Pennsylvania Thursday, May 28, 1998 10:20 a.m. - - - BILL NO. 980405 - An ordinance amending an ordinance approved April 2, 1998, relating to the Capital Program for the six fiscal years 1999-2004, inclusive, by transferring from Fiscal 1998 to Fiscal 1999 projects and amounts in various department and by adding, increasing, and/or decreasing projects and amounts in various departments. BILL NO. 980406 - An ordinance amending an ordinance approved April 2, 1998, relating to the Fiscal 1999 Capital Budget by transferring from Fiscal 1998 to Fiscal 1999 projects and amounts in various departments and by adding, increasing, and/other decreasing projects and amounts in various departments. PRESENT: COUNCILWOMAN ANNA C. VERNA, Chair COUNCILMAN DAVID COHEN COUNCILMAN JAMES KENNEY COUNCILWOMAN HAPPY FERNANDEZ COUNCILWOMAN MARIAN B. TASCO - - - VINCENT VARALLO ASSOCIATES, INC. Registered Professional Reporters Eleven Penn Center, Suite 600 Philadelphia, PA 19103 (215) 561-2220 2 I N D E X Bill No. 980405 and 980406 Dean Kaplan. . . . . . . . . . . . . . . . . . 4 Budget Director, City of Philadelphia Bill Hankowsky President . . . . . . . . . . . 7 Philadelphia Industrial Development Corporation 3 P R O C E E D I N G S
Good morning. This is the public hearing of the Finance Committee. I would ask the clerk to please read Bill No.'s 980405 and 980406 which, are companion bills.
Bill No. 980405, an ordinance amending an ordinance approved April 2, 1998, relating to the Capital Program for the six fiscal years 1999-2004, inclusive, by transferring from Fiscal 1998 to Fiscal 1999 projects and amounts in various department and by adding, increasing, and/or decreasing projects and amounts in various department. Bill No. 980406, an ordinance amending an ordinance approved April 2, 1998, relating to the Fiscal 1999 Capital Budget by transferring from Fiscal 1998 to Fiscal 1999 projects and amounts in various departments and by adding, increasing, and/other decreasing projects and amounts in various departments.
Good morning, Mr. Kaplan. Please identify yourself for the record 4 and proceed with your testimony.
Thank you, Madame Chairwoman. Good morning, I'm Dean Kaplan, the City's Budget Director. I'm here with Cathy Paster, the City's Deputy Budget Director, who handles capital programs. I appear before you today to offer testimony on the two bills just read.
Mr. Kaplan, I'm sorry to interrupt you. Would you please pull the microphone closer to you.
The noise level in the room is much too high. Please proceed, Mr. Kaplan.
Thank you. As we do each year, we're proposing to amend the City's Capital Budget for FY '99 and the Capital Program for FY '99 to 2004 to carry forward unobligated funding from FY '98 appropriations to make certain 5 technical changes and to include additional appropriates from sources that weren't anticipated when the original Capital Budget and Capital Program were passed. In the proposed bills today, all unobligated capital appropriations have been carried forward from FY '98, with very few exceptions. The exceptions are made up mainly of two categories, the first of which are unspent PICA or general obligation appropriations for which projects had been completed under budget; and the second, where there were federal, State or private appropriations for which there were anticipated grants and did not materialize. As members of the committee know, there are a large number of projects in the Capital Budget which had been included at the direct request of Members of City Council. As we do each year, I can assure you that the remaining funding for these projects has been included in the carry-forward recommendation for you today, and the legislation does not include the lapsing of any unencumbered funding for projects of this nature, whether or not those projects have been 6 completed. Let me also draw your attention to one specific item in the carry-forward, and that's the increase in the Free Library's FY '99 Capital Budget of $900,000. This is an increase to Line 74, the branch library renovations and development, and it raises it from $3.675 million in general obligation funding to $4.575 million. This recommended increase has been included as a direct result of City Council's request at the February 11, 1998 budget hearing, and will allow the library to move forward with all planned renovations for FY '99. That means that in addition to the eight branches included in the Administration's original Capital Budget proposal for FY '99, three more branches will be able to be renovated next year. Those would be Bushrod, Fox Chase, and Chestnut Hill. I've previously submitted testimony in more detail on the bill. And at this time, I'd be happy to skip going through that in detail and allow you to ask any questions that you might have. 7 I would also request that the committee suspend rules to allow first reading of the bill 4 today.
Thank you. Can you tell the committee why you proposed to reduce funding for defense conversion efforts by $550,000? I'm somewhat concerned about this reduction since the overall defense conversion efforts are moving very, very slowly. We've seen little movement on the Naval Hospital, Capehart Homes, and the defense personnel support depot. How will these cuts affect our going forward in a very expeditious matter?
Yes. Bill Hankowsky from PIDC is here to answer that question in some detail.
My name's Bill 20 Hankowsky, President of the Philadelphia Industrial Development Corporation. Madame Chairwoman and members of the committee, when the request was made to us if we could accommodate a $900,000 reduction in various economic development funding in order to 8 facilitate the increase for the libraries, we took a look at the various line items that we had in the Capital Budget in order to determine where we could do that without impacting things we wanted to do in the next months. 7 And this would not impact anything 8 we're doing in the next 12 months. I mean, quite 9 candidly, we will be hopefully back in front of 10 Council next Capital Budget year, and I'll be 11 looking to, quote, get the money back. But we can 12 proceed with designing the various projects and moving forward. We still have enough money in this line item, both this year and in the new budget and in carry-forward to -- we will inquire -- we will get a deed for a portion of the Navy base this year which, I would hope, will include the Capehart Homes and that we will be able to issue the RFP for Capehart Homes this year. And we have enough money to do that; this does not impact us being able to do that. As you know, in the Defense Supply Center, we are still working -- those people are still moving out as they move to the Northeast. 9 And, actually, this has no impact on that because we can't really move on that project until they move out. And so that project -- we were very successful last year and, we actually got $10 million in the federal budget for demolition, which will be done by the Army Corps and will start next spring, roughly a year from now, when almost all the DPFC people are out of the way; i.e., have moved up to the Northeast. And we continue to try to figure out how to move on the hospital. And at the moment, we are working through with the Navy issues related to the Advisory Council and Historic Preservation in Washington in getting them to sign off on the demolition that we think's necessary to move on that. But I can assure you, this will no 19 impact anything we were planning to do within the next 12 months.
You say you expect that we would receive the deeds this year? Do you have any indication as to when? Will it be in December?
I hope not. We have 10 gotten a revised agreement of sale from the Navy in the last, roughly, 30 days and have been going through that. I think it's pretty much their lawyers talking to our lawyers, and I think we should be executing it in the next 30 to 60 days. Deeds will probably follow late summer, fall -- would be my guess right now.
Well, I certainly don't want to see us be hampered because we don't have money in moving forward on any one of these three localities.
Madame Chairwoman, I might mention that although this amendment would -- although this bill would reduce the defense conversion line from 6.5 million to a little bit under that, 5.95 million, there's still -- not only is there still $6 million in the '99 budget, but the carry-forward is about 2.5 million. So there is a substantial balance of about $8.5 million available for defense conversion immediately, on July 1st, after this is passed. 11
Thank you. According to your testimony, Mr. Kaplan, you say three additional libraries will begin renovations with the additional $900,000 you are seeking. Will these libraries be able to be completely renovated with this additional money, or will it require additional monies in future years?
My understanding is that the original libraries that we budgeted -- the eight plus these three -- can be completely renovated with the funding we're approving for FY '99.
Can you tell us what the status of the Byberry reuse plan is and why you do think it is feasible to reduce funding for this project by $250,000 for FY '99?
The status of Byberry is as follows. As we all know, this was the State hospital that was closed by the Commonwealth. It continues to remain in State ownership. An act of the legislature was passed early last calendar year that allowed another way for the State Department of General Services to 12 dispose of real estate. Historically, the way they had to dispose of real estate was to bid it in an auction to the highest bidder. The change in the Act, which was, in part, sponsored by Representative Kenny and Senator Salvatore in response to the hospital being in their legislative districts empowered the State Department of General Services to issue a request for proposal and evaluate proposals on issues in addition to pure monetary return to the Commonwealth. The State issued an RFP in the fall of last calendar year. There were three proposals; two submitted by private parties and one submitted by PIDC. One of those were eliminated. Then the State went to what was called the "Phase II submission," which we submitted in March. They now have that. There is sort of -- sorry to say this, but the facts are, there is no schedule as to when they're going to make a decision between the two proposals. We monitor it closely. So when we looked at this, we didn't know exactly what the schedule was. Again, we 13 think that even if they made a decision, even if they picked us and even if we got a deed, in terms of the planning work and whatever, it would carry us -- this money would carry us through, again, the next months. 7 Again, I think you'll see this line 8 item in next year's Capital Budget where we'll try 9 to have funding to begin to implement the project 10 up there if, in fact, the State picks our 11 proposal. It's just as conceivable they'll reject 12 both proposals and start all over. And so that's where we're at, unfortunately.
Thank you. And I can assume that you are keeping the District Councilperson apprised --
Yes. And, in fact, we'll be up there in a week meeting with some of in community groups to keep them apprised. Yes, we are.
Thank you. 14 The Chair recognizes Councilwoman Fernandez.
Thank you, Madame Chair. First, I want to say I really strongly support the transfer of the $900,000 so that the renovation of the libraries keeps on schedule. But my other question regarded the transfer of unspent PICA funds from the House of Corrections. I know there was some discussion when we were discussing voting machines and how to get new high-tech voting machines, that unspent PICA capital dollars might be a source for those funds. Does the transfer you're requesting today in any way impact on having enough money left for the new high-tech voting machines?
No, it does not. As you're aware, the proposed capital program appropriates approximately $21 million in FY '01, '02 and '03 for new voting machines. The Administration has continued to look very carefully at the new proposals to get new voting machines; and that's, obviously, why the funding's 15 been restored to the Capital Budget for this year. You know, clearly, some of the issues that happened in the primary election, I think, have focussed our attention even more closely on the problems involved and the time that's going to be necessary to put new machines in. We're expecting that it will take us probably at least that long to probably both put out an RFP, select a vendor, purchase the machines, and put them into operation. And so FY '99 funds would not be contemplated at this time.
But it's coming out of unspent -- or are you looking at other sources for -- I thought one possible source discussed was unused PICA capital dollars.
Right. We had suggested, actually, general obligation funding in the future for the voting machines. The reason the PICA money was dedicated to the new House of Corrections had to do with the dynamic of trying -- for the City's efforts to assure the court in 16 the prison litigation that we had sufficient funding to build a new House of Corrections and move forward with that project, which is also related to our being able to release -- have the court release PMA funding, which it controls. And, therefore, the Mayor specifically actually requested PICA to make the first priority for available PICA money, the House of Corrections, so that we can move forward in our efforts to end the consent decree in that case and build a new House of Correction. I think it's possible to do all those things. We had to show money in the FY '99 budget in order to begin to bolster our case with the court.
I want to thank my colleague for raising that question. And just to probe slightly deeper, Mr. Kaplan, I think the Councilwoman was going down the path of, are you in fact spending all of the old PICA available dollars in this transaction so as to prevent us from accessing those same dollars, which this 17 Council passed a resolution asking the Mayor and the Council President to seek. Are there still old PICA dollars from capital projects that were unspent, available for that purpose as well for the voting machines?
At this time, no. I believe, as we go forward, there will be additional PICA dollars available, as we continue to complete projects. And they're obviously interesting earnings on available PICA balances as we go forward.
So you're saying, out of this project, we're spending all of the old PICA dollars from '92?
That are currently available. We're assuming there are going to be additional PICA dollars available as we go forward.
Thank you. I just want to be clear on what we're 18 doing here. All of the money projects in this bill are projects where the money has not been encumbered?
So you have projects on the book from, say, City Hall renovation from '94 --
Right, if you want to continue to be able to spend that money, we need Council's approval, or authorization.
On , you have a lot of money that has been appropriated for the Youth Study Center. And then a new Youth Study Center seems to be $32 million. What progress is being made to move that project forward? Or do you know?
I -- the -- yes, there is -- there is an active -- I should say a recently 19 renewed interest as a result of Council's questions at the budget hearing a little earlier this year. The City has reconvened its group which is working on siting of the Study Center and is actively looking at potential locations for the Center.
Is there anywhere in this document a decrease in funding for a project for a project? Where would I find that? I just saw this morning.
I don't think you can look at the bill and find the decrease in funding for a specific project. In my testimony, I mentioned a couple of specific examples of the kinds of things where we have decreased funding. For example, there was $2600 from a completed landscaping project, $18,000 now required to build the West Park side industrial project, a match for a SEPTA project. We can provide with you a separate list of the projects which were not carried forward. But, by and large, those two categories which I mentioned earlier are either things where the project was completed and we have -- the 20 funding is no longer necessary; or federal, State or private grants which we had authorization for and we haven't gotten the grants, aren't going to get the grants and no longer need the authorization.
Again, I think you probably answered this question. Are you in contact with the District Councilperson relative to those projects in their district that you are not carrying --
There are no projects requested by District Councilpersons which we are not carrying forward the funding, so. . .
Would the House of Corrections, if I may continue on that line, we are now adding $14 million to that project?
What we've done is take advantage of two facts. One, as Councilwoman Fernandez and Councilman Nutter noted, there are additional PICA funds that are becoming available since the Capital Budget was prepared, because of additional interest earnings and additional projects completed. 21
So that increases by $9.6 million, as I read it, from PICA.
Right. That's the share the City's putting in. And the flip side is we have also, in our discussions with the U.S. District court judge, on a case, believe that she is amenable to the idea of funding under the additional $5.1 million from the PMA account which she controls. And while that has not been finalized, those two pieces are kind of tied together.
Thank you. Are there any other questions from members of the committee? The Chair recognizes Councilwoman Fernandez.
Yeah. Madame Chairman, I just can't let it go by, the statement about the Youth Study Center. I've only been in Council for seven years but I know that even before I came, every year, there was a study group. So, you know, I just can't let it go by that that means anything. But it would be a very welcome change if, in fact, that process, you 22 know, did move forward. So it's not really our topic today, but another group looking at it has meant nothing, at least in my seven years here.
Thank you. Are there any other questions or comments by members of the committee? (No further questions at this time.) Is there anyone else to testify on these bills? (No response.)
Seeing none, this will conclude our public hearing of the Finance Committee. - - -
We will now go into our public meeting. The Chair recognizes Councilman Nutter regarding Bill NO. 980405.
Madame Chair, I move that Bill No. 980405 be reported out of committee with a favorable recommendation, and a further recommendation that the rules of Council be suspended so as to permit first reading at our 23 next session. (Duly seconded.)
It has been properly moved and seconded that Bill No. 980405 be reported out of committee with a favorable recommendation, and also a recommendation that the rules of Council be suspended so as to permit first reading at our next session of Council. All in favor will signify by saying aye. Please let the record note that Mr. Kenney is a member of this committee and has also voted aye despite the fact that he's not sitting at the table. The Chair recognizes Councilman Nutter regarding 980406.
I move that Bill 19 No. 980406 be reported out of committee with a favorable recommendation and a further recommendation that the rules of Council be suspended so as to permit first reading at our next session. (Duly seconded.)
It has been 24 properly moved and seconded that Bill No. 980405 be reported out of committee with a favorable recommendation, and also a recommendation that the rules of Council be suspended so as to permit first reading at our next session of Council. All in favor will signify by saying aye. The motion is carried. This concludes our public meeting. Thank you. (Adjourned at 10:45 a.m.) - - - 25 C E R T I F I C A T E I HEREBY CERTIFY that the foregoing proceedings of the Council of the City of Philadelphia of Thursday, May 28, 1998, were reported and accurately by me, and that this is a correct transcript of same. RE: COUNCIL COMMITTEE ON FINANCE BILL NO.'S 980405, 980406 __________________________________, JOSEPHINE CARDILLO, Registered Professional Reporter