So the 20 vacant positions you mentioned earlier, 110 3/24/08 Whole 08022,154,55,56,57,60,61,68,73 that's on the Revenue side?
We intend to fill these positions. We're trying to work with Central Personnel to get all of these positions filled.
Well, based on your testimony, Project Ocean created efficiencies, you said, that many of the tasks that were performed manually can now be performed automatically. How are you within your own agency changing work-flow processes to take account of these efficiencies?
A lot of efficiencies were made in the area of automating our collection process. So we're in the process now of working with the staff, of redesigning our work flows. But that's where the great 111 3/24/08 Whole 08022,154,55,56,57,60,61,68,73 efficiency was obtained, in a case- management system for the Water Revenue Bureau, which we didn't have before.
Okay. So do you need all of the positions, with the efficiencies that have been created by the automation of many of the former manual processes?
Yes, because a lot of the attrition that's taken place previously, we've gotten rid of most of the fat. So what we have now is, we have a new type of worker. And the numbers that we have been carrying reflect previous drops in staff, so I will say yes, we still need that.
I would be very interested in seeing what the work flow processes change is that you come up with as a result of doing this study.
Do you take -- I know that you take online payments. Do you still continue to charge people for the use of a credit card?
Yes. We are still currently charging. Again, we're looking, as a committee, to look at that fee and other fees to do away with them, which we, again, probably would increase usage.
And would that not lower costs of collection, otherwise getting checks and having people deposit them and et cetera? 113 3/24/08 Whole 08022,154,55,56,57,60,61,68,73
Having people pay online eliminates a lot of the back-office costs of having people pay by check, by mail, otherwise 'cause letters don't have to be answered, deposits don't have to be made. Have you done a comparison of that, you know, 1 percent fee versus the savings that the department will undertake in back-office operations?
We have not done that currently with the committee, but that's something we're looking to move forward with to get a comparison on it.
When you complete that comparison, would you please provide it to the Chair?
Do you allow automated debit, like when I -- people get loans, people, you know, for a car 114 3/24/08 Whole 08022,154,55,56,57,60,61,68,73 or other things, you can sign up with that provider or that dealer or whatever to allow you to automatically debit your bank account so that you don't have to worry about it every month. Do you permit automated debit at the moment?
We do currently have taxpayers and citizens paying taxes and water with ACH payments currently and even credit cards, yes. And that will hopefully continue to increase --
The automated clearinghouse, when someone's going to do it automatically through their account on a monthly basis.
Okay. What efforts -- can you describe any efforts 115 3/24/08 Whole 08022,154,55,56,57,60,61,68,73 by the administration to increase revenues from the State and federal government?
You're just talking about in general? Life, for example, the money we may --
Okay. You mentioned that Project Ocean came in under budget.
And I was confused by that because I think I've read in numerous newspaper reports and other things that you were way over budget. Are you talking about the last process that was conducted by MOIS, or are you talking about the overall project?
For me, I'm talking about the current project. 116 3/24/08 Whole 08022,154,55,56,57,60,61,68,73 Working with MOIS, I know over the previous years, it has gone over budget, but I'm specifically looking at this Project Ocean with basis two.
So I have a specific question now about, and this is probably for the Deputy Water Commissioner. My understanding of the previous accounting system for the Water Department or for revenues owed to the Water Department is that there were no audit controls in it. In other words, an employee could go in, zero out someone's account or, you know, add $10,000 to what they owe, and there would be no 18 way of checking that because there are no sort of other records, and there was no log-ons required. Is that correct with respect to what was true in the past?
That was -- that was true in the past. In the new system, there is an audit trail that's 117 3/24/08 Whole 08022,154,55,56,57,60,61,68,73 left by anyone who interacts with the system. And there is a -- there is a security profile put in place so that anyone who has to access the system must use a non-generic sign-on.
So it's not the computer itself; it's that per person's log-on.
Any change they make is recorded, and the old information --
Thank you very much. 118 3/24/08 Whole 08022,154,55,56,57,60,61,68,73
Thank you. The Chair recognizes Councilman Rizzo.
Thank you, Madam President. Commissioner, good morning.
I don't know if you can answer all of this question at this time, but if not, I'd appreciate you providing a report to the Chair. Here's the question: During this budget process in years past, we learned that the Revenue Department, along with the Police Department, was not collecting monies due to the City in a program where police officers work overtime. The police officers were paid and there were millions of dollars uncollected by the Revenue Department and the Police Department. Could you tell me the 119 3/24/08 Whole 08022,154,55,56,57,60,61,68,73 condition of that program presently, and that your satisfaction or lack of satisfaction on how collecting the money that is due to the City of Philadelphia that the Police Department had paid officers to perform work off-duty and security applications?
Councilman Rizzo, currently, we have a meeting set for two weeks from -- actually two weeks from now to discuss that program. From looking at the numbers currently -- and I can't tell you off the top of my head of them -- I'm not really satisfied with that program, so we're going to sit down to put our hands around what we need to do between the Department of Revenue and with MOIS to work on trying to increase those collections.
So you're telling me that right now, you're not satisfied with the way that is working? 120 3/24/08 Whole 08022,154,55,56,57,60,61,68,73
I'm not satisfied on the collection numbers. There's a lot of cases out there that are probably 60 days' delinquent with us. Again, I can't tell you the numbers, but for me, I'm not satisfied with it.
Commissioner and Madam President, I would like on this issue to have the Revenue Department come back -- as you know, we were quite involved in this issue -- to report after that meeting, 'cause I've been assured for years now by the Police Department, by the Deputy Commissioner, that this program is working and working well. And for the Revenue Department to have some concern, whether it's founded or unfounded, I'd still like to have them back eventually to report on that particular issue.
Very well. 121 3/24/08 Whole 08022,154,55,56,57,60,61,68,73 Are there any other questions from members of the committee of the Revenue Commissioner? The Chair recognizes Councilman Green.
While we have Mr. Agostini here -- and thank you, Madam President -- I thought maybe he could answer the question I just asked. What are we doing to get additional resources from the State and federal government, or what's the administration trying to do to increase funding from those two sources, for the record?
Madam President, Steve Agostini, Budget Director. I knew I shouldn't have said anything. For the record, we have had conversations. We had one meeting, briefing with the Secretary of the Budget from the Governor's Office. And we have raised concerns -- 122 3/24/08 Whole 08022,154,55,56,57,60,61,68,73 I believe these are longstanding concerns -- with issues like court funding and funding for similar kind of State-mandated programs. I guess the best we can say is that they understand our concerns, and it isn't -- it isn't clear or likely that we would get additional revenues for that, but they certainly understand where we are with that and what our concerns are with that lack or absence of additional funding.
Was there any specific discussion about the Supreme Court opinion that requires the State to fund every court system in the -- county court system?
Councilmember Green, not in any of the meetings I attended. That may have occurred in other meetings.
Is there any objection by the administration to zeroing out the court system budget 123 3/24/08 Whole 08022,154,55,56,57,60,61,68,73 since that is -- clearly, we've all taken an oath to uphold the state laws and the constitution, and the Supreme Court has ruled that it's a state legislature obligation, and I'd just like to know, why don't we just zero it out of the budget?
Yeah. We actually used that approach. I guess, ten or fifteen years ago, we used it every year. And in the end, it meant that we had to come back and do a transfer ordinance because -- I mean, in the end, the courts will mandamus us and we'll lose.
Well, I think that was before the 1998 special master order, but the court cannot --
I don't see how the courts can mandamus the City of Philadelphia when there's a Supreme Court order that the state legislature 124 3/24/08 Whole 08022,154,55,56,57,60,61,68,73 is responsible. Have we --
I understand what you're saying, but that's the way it's played out in the past, and I can give you more information off line about that.
Thank you. Are there any other questions from members of the committee? The Chair recognizes Councilwoman Miller.
I just want to have a couple of, I guess, for me clarifying issues under "Customer Service Standards Improvements." In the second paragraph, when you say that the taxpayer services 125 3/24/08 Whole 08022,154,55,56,57,60,61,68,73 side, that the response rate is expected to improve from 55 percent to 56 percent, on the Water Revenue, 63 to 65, what exactly does that mean? Does that mean, like, 44 calls go unanswered? What do you -- can you clarify that?
We're primarily saying that we will get to more calls and be more responsive to them than what we have been currently into the next fiscal year.
So -- but if you say that you have -- right now, you have a 55 percent response rate, and you want to move it up to 56 percent. That's 55 percent of what, telephone calls being answered, moving up to 56 percent of unanswered calls? I mean --
So there's like, 40-some percent of people that just can't get through because you 126 3/24/08 Whole 08022,154,55,56,57,60,61,68,73 don't have enough staff?
Forty percent of those calls would be dropped calls; some people may drop off. Some of them due to, right now, the limited staffing, per se, are not getting in to be serviced efficiently and effectively.
You know, it is frustrating when you call departments. As a customer, you know, when I call places and I get that voicemail that tells to you push this and push that and push this, then you just get disgusted and you just hang up, or you just hang in there and it takes forever, you know, for calls to be answered. So I just wanted -- so you're moving towards the voicemail and increased staff? 127 3/24/08 Whole 08022,154,55,56,57,60,61,68,73
Yes. We're looking to increase our RVR systems and the staffing to be able to get to the phone lines and take care of the taxpayers as they should be satisfactorily serviced.
Okay, all right. Thank you. Thank you, Madam President.
Any other questions from members of the committee? (No further questions.)
Seeing none, thank you, Commissioner. Thank you.
Thank you. All right. The committee will stand in recess until tomorrow, 128 3/24/08 Whole 08022,154,55,56,57,60,61,68,73 Tuesday -- oh, Councilman Clarke?
Madam President, I had a couple of questions for Mr. Dubow, a couple of follow-up questions.
Mr. Dubow, please come forward. (Mr. Dubow returns to witness table.)
Hello. Mr. Dubow, on the wage-tax issue with respects to the different rate for resident versus a nonresident, what's the history of that? Why do we have a --
I believe it's in the state legislation. I think there was -- it dates back to a rate increase, I think, in the '80s. There was a reaction among the nonresidents to the increase, and then I think there 129 3/24/08 Whole 08022,154,55,56,57,60,61,68,73 was state legislation that required that the nonresident rate be lower than the resident rate.
Is there -- do they require to the level of specificity that there has to be a difference in the percentage between the two? Do they set -- should there be -- I mean, let me ask you the straight-to-the-chase question.
Yeah, right, basically. So, basically, are we allowed to reduce the resident wage rate without reducing the nonresident wage rate?
I want to -- I think the answer is yes, but I want to make sure and check with people in the Law Department.
So why -- 130 3/24/08 Whole 08022,154,55,56,57,60,61,68,73 is there a reason why we wouldn't do that? Given the fact that a resident in -- I think my understanding is, if a person lives in the City, the likelihood of that money generated by that individual will probably go through the local market several times as opposed to a person who lives outside the City that gets their check and the likelihood is they're going to spend their money outside of the City of Philadelphia.
Yeah. I think the reason is concern that what happened before when there was legislation mandating that a nonresident tax not be increased would happen again.
Well, we're not talking about increasing the nonresident wage tax; I'm saying, why would we opt to focus most of our wage tax reduction on the residents?
I think we actually -- 131 3/24/08 Whole 08022,154,55,56,57,60,61,68,73
If you -- if you're looking at the gap between resident and nonresident, I'm... I think I'll have to -- I think over the life of this plan, it actually shrinks a little. And I understand your question and I think the reason is our concern about what the recreation from the State would be in terms of imposing requirements on reductions on the nonresident side, so I think we have to be really careful with how we proceed.
Thank you, 132 3/24/08 Whole 08022,154,55,56,57,60,61,68,73 Madam President. Are there specific rates set in terms of wage-tax reduction reductions from gaming revenue?
No. There are -- there is a distribution of how that money has to go between resident and nonresident, so that money has to be allocated in a specific way.
-- in terms of how wage-tax reductions have to be set in terms of resident and nonresident.
How those dollars have to be distributed, but if we're putting some of our own money in, then we can change rates.
Okay. Thank you. 133 3/24/08 Whole 08022,154,55,56,57,60,61,68,73 Thank you, Madam President.
I didn't hear that question. I mean, I heard the question; I didn't hear the response. I'm sorry.
And that's the way that money has to flow. If we -- it doesn't say, though, that the City, in allocating its own money, has to have a specific split between resident and nonresident.
So we don't have to apply any of our tax-reduction 134 3/24/08 Whole 08022,154,55,56,57,60,61,68,73 program money generated from the City's General Fund. We can apply that if we wanted to, we can apply that only to the resident.
We could. My concern is, then, the restrictions on the State money would probably change, 'cause they would probably try to compensate for that, if we only did resident with our money.
Well, 'cause I think they would say that we were taking money from around the State that was going for tax reduction and using that so that we could change our program to put less of our money into the nonresident rate, so that we're getting money from around the State, and the result of it was that we were pulling money away from tax reduction for people who don't live in the City. I mean, it's something we can 135 3/24/08 Whole 08022,154,55,56,57,60,61,68,73 explore with people at the State, but that's my concern.
The Chair recognizes Councilman Green for a point of information.
I apologize. I stepped out for a second. Can you just repeat what you think the law is with respect to what we can do with the money that comes from the State in terms of --
The gaming revenue comes to us and it is divided between resident and nonresident reduction. There's a specific amount that is allocated for resident and a specific amount that's allocated for nonresident.
In terms of 136 3/24/08 Whole 08022,154,55,56,57,60,61,68,73 percent, and then they actually just tell us what the dollars are.
And that formula doesn't change if, say, we had far more people all of a sudden working outside of the City or inside of the City; it's a fixed formula?
So then what was the discussion you were just having about the resident portion?
The Councilman asked, could we then decide that we're going to take our money, the City's General Fund money, that we, you know, dedicate to reducing rates and say we're only going to do it for resident, we're not going to use any of that reduction for nonresident. And I said I had a concern 137 3/24/08 Whole 08022,154,55,56,57,60,61,68,73 that if did that, that there would be reaction from the State, and they would switch the formula for the -- for the gaming money. And I said, you know, we could talk to them and see how they'd react, but that that's my concern.
Okay. Real quick, getting back to the earlier discussion about job creations.
As a result of tax reduction. When you're doing an analysis on what taxes to cut, 'cause now we're looking at net-profits tax, and I know in prior years, we were looking at specific taxes to -- based on the lobby of the day, to cut taxes that would benefit different categories of employees or employers. Do we look at -- or can we look at the people who are of most 138 3/24/08 Whole 08022,154,55,56,57,60,61,68,73 need? And I know we've done that to some degree with Councilman Goode's tax credit program. Looking at the job opportunities that most likely will employ these people based on the statistics related to the unemployment rolls or the underemployed rolls, to focus tax reductions on those businesses that will more than likely hire people from the City of Philadelphia who are either unemployed or underemployed. And that's a complicated question.
Yeah. I think what we can do is look at, you know, for example, for the gross receipts portion of the business privilege tax, we can look at, you know, who the largest payers are and what kind of businesses they are and, you know, what kind of jobs they typically would have. I think that's a way of getting at your question. 139 3/24/08 Whole 08022,154,55,56,57,60,61,68,73
Yeah. I'm -- yeah, my issue is, as I said earlier, you know, cutting taxes is fine, but at the end of the day, it should at some point equate to creating job opportunities for the citizens in the City of Philadelphia. I mean I don't represent the suburbs and, you know, I'm sure that their elected officials look out for the people that they represent. But I would like to see us focus on a program that's going to, you know, aggressively attempt to employ the people in the City of Philadelphia.
I'm just looking as you do your analysis on what taxes. Now, some people say, Well, a particular tax that we propose, well, the lawyers, you know, get reductions as a result of that. Or some people 140 3/24/08 Whole 08022,154,55,56,57,60,61,68,73 say another category.
And at what point do we look at those folks who are of most need? When do they get the, quote/unquote, tax cut, particularly given the fact that in this discussion, we're being asked to eliminate the tax- reduction program for lower-income individuals.
I mean I know -- I've been sitting in this room, you know, for a lot of years. And people say, Yeah, we're going to look into it. You know, there's looking 141 3/24/08 Whole 08022,154,55,56,57,60,61,68,73 into it and then there's really looking into it.
Well, we'll do the analysis and we'll get it to the Chair, and then we'll sit down with you and make sure that it gives you what you want.
The Chair recognizes Councilwoman Miller for a point of information.
I asked a similar-type question about a week or so ago in the budget hearings. And my question was: Is there some strategy to reduce business taxes but is there some strategy that also ties in, you know, recruiting those types of businesses that will then hire Philadelphians to help us begin to decrease the poverty rolls and the 142 3/24/08 Whole 08022,154,55,56,57,60,61,68,73 unemployment rolls? I mean, you just say, Oh, we're going to reduce taxes. Okay, fine. Then people say, Oh, we're going to get more businesses in the City, but I don't think that -- I've never heard since I've been here that there's some type of strategy, you know, to go and outreach to businesses that will then be able to either move in the City or open in the City to begin to employ City residents that need jobs.
We'll make sure, when Commerce comes here, that they can answer that question and describe that strategy for you.
Yeah. I was at the -- on Thursday, I was passing by the Philadelphia Convention Center -- or Pennsylvania Convention Center, and I saw all these men coming out. So I went in, and it was 143 3/24/08 Whole 08022,154,55,56,57,60,61,68,73 actually the Urban League and Sunoco were doing a recruitment, and so I took the recruitment for something they call "refinery operators," and I took the information home and I read it this weekend, and it looks like they may hire ten people per refinery. There's three -- you know, Marcus Hook, Philadelphia, and I believe the other one's in New Jersey. But there were hundreds of men coming out, you know, for potential maybe 30 of them getting employed. So we do have people out here with skills, with knowledge, that can work and want to work. And that was a pure indication, if people think there's a chance of getting a job, they're there. So we need to tie in our tax reductions to recruitment to help decrease the poverty rates and the unemployment and increase the unemployment rates here in 144 3/24/08 Whole 08022,154,55,56,57,60,61,68,73 Philadelphia. People need jobs.
But I don't think -- you know, none of the administrations since I've been here have actually, to me, ever said, This is our goal as it relates to increasing employment around here. Thank you, Madam President.
You're welcome. The Chair recognizes Councilman Green.
Thank you, Madam President. As a corollary to the issue about unemployment, just to discuss the working poor and an issue was raised by Councilman Clarke, would there be any objection from the administration to applying the local General Fund money to keep the Cohen tax cut in the out-years? And if you could address two things there: 145 3/24/08 Whole 08022,154,55,56,57,60,61,68,73 Number one, money in those hands is most likely spent in Philadelphia, so it has a positive economic impact that is extremely local. And number two, just -- I'm not sure I would understand the objection to that, given the large wage tax decrease we're going to get through gaming anyway.
Let me -- I will take that question back, and we'll get back to you.
You're welcome. Are there any further questions or comments from members of the committee? (No response.)
Seeing none, this committee will stand in recess until tomorrow, Tuesday, March 25th, at 10 a.m. 146 3/24/08 Whole 08022,154,55,56,57,60,61,68,73 Thank you very much. (Proceedings end at 12:19 p.m.) * * * 147 C E R T I F I C A T E I HEREBY CERTIFY that the proceedings of the City of Philadelphia Council Committee of the Whole are contained fully and accurately in the stenographic notes taken by me on Monday, March 24, 2008, and that this is a true and correct statement of same. __________________________________ JOSEPHINE CARDILLO Registered Professional Reporter (The foregoing certification of this transcript does not apply to any reproduction of the same by any means, unless under the direct control and/or supervision of the certifying reporter.)