Committee Hearing, June 14, 2011

COUNCIL OF THE CITY OF PHILADELPHIA2 COMMITTEE ON FINANCE3 Room 400, City Hall6 Philadelphia, Pennsylvania Tuesday, June 14, 20117 1:25 p.m. PRESENT: COUNCILWOMAN MARIAN B. TASCO, CHAIR10 COUNCILWOMAN JANNIE BLACKWELL COUNCILMAN W. WILSON GOODE, JR.11 COUNCILMAN BILL GREEN COUNCILMAN WILLIAM K. GREENLEE12 COUNCILMAN JAMES KENNEY COUNCILWOMAN BLONDELL REYNOLDS BROWN13 BILL 110480 - An ordinance authorizing the Bond Committee to sell bonds at public or15 private negotiated sale, to provide funds toward various capital municipal purposes;16 providing for appropriations to the Sinking Fund Commission...17 - - -19 2

Good2 afternoon. The Committee on Finance will3 come to order.4 Let me note that there is a5 quorum in the presence of Councilman6 Greenlee, Councilwoman Blondell Reynolds7 Brown, Councilman Green, Councilman Goode8 and Councilman Kenney and Councilwoman9 Tasco.10 We'll have the Clerk read the11 bill.12

Bill No. 110480, an13 ordinance authorizing the Bond Committee14 to sell bonds at public or private15 negotiated sale, to provide funds toward16 various capital municipal purposes;17 providing for appropriations to the18 Sinking Fund Commission for the payment19 of such bonds; authorizing agreements to20 provide credit or payment or liquidity21 sources for the bonds in connection with22 issuance of the bonds, and certain other23 actions; providing for obtaining the24 consent of the electors to increasing the25 6/14/11 - FINANCE - BILL 1104801 indebtedness of the City; and fixing a2 day and providing for arrangements for3 holding the election for obtaining such4 consent.5

Thank you6 very much.7 The Chair recognizes Finance8 Director Rob Dubow.9 (Witness approached witness10 table.)11

Good afternoon,12 Councilwoman Tasco and members of the13 Committee. I'm Rob Dubow, Director of14 Finance, and I'm here to testify in15 support of Bill No. 110480.16 The purpose of the bill is to17 obtain approval to place a loan18 authorization question on the General19 Election Ballot on Tuesday, November 8th.20 The loan question requests an increase in21 indebtedness in an amount not to exceed22 104,015,000. This amount will fund the23 FY12 Capital Budget that's pending24 approval before Council. Since state law25 6/14/11 - FINANCE - BILL 1104801 requires the City to place a question2 before the electorate during -- I'm3 sorry. State law requires the City to4 place a question on the ballot before5 increasing its borrowing authority.6 As of July 1st, 2011, the7 City's legal debt limit is anticipated to8 be about 1.57 billion, and the amount of9 debt applicable to that limit will be10 about 1.43 billion. As a result, the11 City has debt capacity of about 13812 million.13 The loan authorization, if14 approved, would finance capital projects15 classified for the following purposes:16 Transit; Streets and Sanitation;17 Municipal Buildings; Parks, Recs and18 Museums; Economic and Community19 Development, and you see the testimony20 has the amounts for each of those21 categories.22 In order to provide appropriate23 time to advertise the ballot question24 prior to the November 8th, 2011 election,25 6/14/11 - FINANCE - BILL 1104801 the bill should be enacted no later than2 September 8th, 2011.3 Finally, attached as part of4 the testimony is the proposed ballot5 question requesting loan authorization6 from the electorate.7 This concludes my written8 testimony. I'd be happy to answer any9 questions.10

Thank you11 very much.12 Are there any questions of this13 witness?14 Councilman Kenney.15

Thank you,16 Madam Chair.17 Just out of curiosity,18 Mr. Dubow, the amount of 104,015,000, why19 that particular number?20

That is the amount21 that's included in the Capital Budget for22 FY12, plus 4 percent for borrowing costs.23

So what24 makes it an odd number is the 4 percent?25 6 6/14/11 - FINANCE - BILL 1104801

Yes.2

Fine.3 Also, not to get into the Capital Budget,4 but the 48 million, almost 49 million, in5 Municipal Buildings, what's the bulk of6 that for?7

The biggest portion8 there would be for IT money, probably the9 biggest single portion.10

Is that 20?11 (Witness approached witness12 table.)13

And Parks and Rec.14 The improvement to facilities is in there15 too, so all the Recreation --16

Just17 specifically -- so in the Municipal18 Building line, that includes recreation19 centers, or is that the Parks and Rec?20

It includes21 Finance lines with some of the ITEF money22 under Finance. So Finance is all in23 municipal buildings.24

No. I25 7 6/14/11 - FINANCE - BILL 1104801 understand, but of the 49 million --2

Right. So the3 biggest --4

What's the5 biggest items?6

The biggest items7 would be the DOT money, which is about8 seven and a half million, the improvement9 to facilities money that sits in Finance.10

And those11 facilities are?12

Well, it can be13 really for any facility. Typically it's14 used for recreation facilities, but15 there's some discretion at how that's16 used.17

Is there18 anything in there for police or fire19 stations?20

Fire stations21 are in buildings, as well as I think22 police should be in there as well. Fleet23 Management, the Library improvements are24 all in Municipal Buildings and the health25 8 6/14/11 - FINANCE - BILL 1104801 center improvements as well.2

So of the3 17 million in Parks and Recreation, that4 does not include recreation centers?5

That's right.6 They're under -- right, Recreation and7 Parks --8

Now, there are two9 parts to the ITEF, one part that's in the10 Finance budget, and then the bulk of it11 is actually in the Parks and Recreation12 budget.13

That's right.14

So there15 are rec centers in Line 4?16

Yes.17

And there's18 also rec centers in Line 3?19

Well, the ITEF20 money that's in Finance can be used for21 recreation, but it can be used for other22 facilities, too.23

Okay. But24 the stuff in Line 4 is only for the rec25 9 6/14/11 - FINANCE - BILL 1104801 centers?2

Yes.3

Okay.4 Thank you.5

And parks and6 museums.7

Which8 museum?9

Art Museum.10

The main11 Art Museum?12

Yes.13

Okay.14

Any other15 questions?16

Just one.17

Councilman18 Green.19

Good20 afternoon. Has it been determined how21 the DOT money is going to be spent?22

It has not. We're23 going through our prioritization process24 now to determine that, but it has not25 10 6/14/11 - FINANCE - BILL 1104801 been finalized.2

And when3 will it be finalized?4

We'd have to get5 back to you with a date for that.6

If you could7 get back to the Chair about that.8

Yes.9

Would it be10 possible to have electronic monitors in11 the capital program?12

I guess -- I don't13 think so. I don't think they have a long14 enough useful life, but, I mean, that's a15 question we can look into if you'd like.16

Okay. Thank17 you.18

Any other19 questions?20 (No response.)21

The Chair22 calls on Councilman Goode for an23 amendment.24 I'm sorry. We will now go out25 11 6/14/11 - FINANCE - BILL 1104801 of the public hearing and go into the --2

I have a3 question on the -- could he highlight the4 amendment? Because I just have a5 question on them before we go into the6 public meeting, on the amended numbers,7 which have not been read into the record.8 I want to question the amendment, but9 it's not been read into the record yet,10 so I wanted to do that before we get into11 the public meeting.12

Okay. Go13 ahead. There's an offer for an14 amendment.15

Thank you,16 Madam Chair. I'm offering an amendment17 to Bill No. 110480, which is essentially18 increasing the appropriation power. On19 of the amendment, you will see20 Streets and Sanitation is improved to21 $29,550,000 and Economic and Community22 Development is increased to $11,567,000.23

Question?24

Yes. What25 12 6/14/11 - FINANCE - BILL 1104801 does that entail? Why the increase?2

The3 increase is Council's request for4 increase for alley lighting and5 commercial corridors.6

Okay. I7 just wanted to know what I was voting on.8

So I move9 for the adoption of the amendment.10 (Duly seconded.)11

We're12 going into the meeting.13

My question14 was for the hearing, and it was answered.15

So the16 explanation is in the hearing. We're now17 in the meeting, and we will now ask for18 the adoption of the amendment.19

Thank you,20 Madam Chair. I move the amendment that21 was just discussed to Bill No. 110480 be22 approved.23 (Duly seconded.)24

It has25 13 6/14/11 - FINANCE - BILL 1104801 been moved and seconded that the2 amendment to Bill 110480 be approved.3 All in favor will say aye.4 (Aye.)5

Is there6 any opposition?7 (No response.)8

There9 being none, the motion is carried.10 The Chair recognizes Councilman11 Goode to move the bill out of Committee,12 as amended.13

Thank you,14 Madam Chair. I move that Bill No.15 110480, as amended, be reported out of16 Committee with a favorable recommendation17 and the rules of Council be suspended so18 as to permit first reading at our next19 Council session.20 (Duly seconded.)21

Thank you.22 It has been moved and seconded that Bill23 110480, as amended, be reported out of24 Committee with a favorable recommendation25 14 6/14/11 - FINANCE - BILL 1104801 and that a request for suspension of2 Council rules so this bill can be heard3 at Council's next session.4 All in favor will say aye.5 (Aye.)6

Is there7 any opposition?8 (No response.)9

There10 being none, the motion is carried, and11 this meeting is adjourned.12 Thank you very much.13 (Committee on Finance concluded14 at 1:35 p.m.)15 - - -16 17 18 19 20 21 22 23 24 25 15 1 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 June 14, 2011, and that7 this is a true and correct transcript of same.8 9 10 11 12 --------------------13 MICHELE L. MURPHY14 RPR-Notary Public15 16 17 18 (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 24 25