I'd like to look into 108 2/20/03 - TRANSPORTATION - RES. 020748 that further.
Fine. Just the other day I was reading -- because President Bush wants to shift, in essence, the burden of the people who receive government assistance, welfare or Medicare, other things, to a means test situation. And they're not doing it, in essence, in order to provide a greater degree of services. They're doing it because every study that has been done in terms of government programs and assistance in this country has shown that once you shift that, a huge number of people fall through the cracks and do not get the services and the assistance that they need. So when anybody says to me, we're going to shift to the means test, it means to me that they're taking away the net that we put there, and that a lot of people will suffer for this. We have a great number of people today that do not -- it's been put in the testimony, do not receive the medical assistance insurance because of many of the forms they have to go through and fill out. And I think that this -- it sounds good. It sounds good: If you have 109 2/20/03 - TRANSPORTATION - RES. 020748 $150,000 and you live in a mansion in Chestnut Hill, why should you get a PGW discount? Sounds good. But the vast majority of the people that that change is going to affect do not live in mansions in Chestnut Hill. They live in rowhouses in North and West Philadelphia and in other places in this City. So I cannot understand how you decide to implement such a drastic change to public policy in this City without prior consultation with this Council. I just cannot for the life of me understand that. We would ask you right now, really I would ask you, that you write the PUC taking back your recommendation until this Council -- (Applause.)
-- until this Council decides what the public policy of this City should be on this issue. Because we do not want that agency to act upon your recommendation thinking that it has the support of this legislative body when it doesn't. So I want you to make it very clear that until and when this Body decides to act on this -- and it will be soon -- that the PGW management does not -- and takes back the issue of recommendation of elimination of the Senior Citizens Discount. 110 2/20/03 - TRANSPORTATION - RES. 020748
I would be pleased to write the Chairman and inform him of the intent of this Committee.
What happens currently, Mr. Knudsen, when a senior citizen dies, how does the Gas Works recompute their records to make a change in the billing for that property, or does it do that at all?
Well, we are having corrected a whole series of things that have gone wrong with our tracking of customers. We are now in a position to essentially start a program to make sure that those who are on the program are still appropriately receiving the benefit.
Do you feel confident that those people who now receive the Senior Citizen Discount are entitled to it?
All those customers who do enjoy the discount today, if I understand your question, will continue receiving those discounts. 111 2/20/03 - TRANSPORTATION - RES. 020748
That was not my question. My question was, whatever the number is of -- how many do you say exist that get billed as senior citizens?
Are you confident that all of those 79,500 are entitled under the current rules, not the ones the PUC is considering, how do you know that they're still entitled to receive that discount?
The answer to the question is, we are not a 100 percent sure.
We don't know exactly, but we presume that most of these people who are coming through are entitled to the program. We are now going into a program that we haven't done for many years of verifying participation, which is to say, verifying that people are still in the residence, are of the appropriate age, and are receiving gas. 112 2/20/03 - TRANSPORTATION - RES. 020748
Well, it would certainly seem to me that before you would even contemplate presenting to City Council any intent to change, you would want to have up-to-date information. Mr. Chairman, with your leave, I would like to ask that this testimony be suspended for a short time to permit two witnesses who have knowledge with respect to this matter to testify briefly. Would both of you prepared to remain for a few minutes?
Would the two witnesses who believe that the records are faulty please approach the dais. Mr. Chairman, swear them in.
My name is James Lennox, L-E-N-N-O-X, and I am a union representative for Local 686. MR. NARDELLA (ph): Joseph Nardella, and I am also a representative for Local 686.
Which of you would 113 2/20/03 - TRANSPORTATION - RES. 020748 like to speak first with respect to the question I've raised of Mr. Knudsen?
I'll start off by saying the number 79,500, who Christine has said she believes is eligible for this program, the last time they did any checking on the Senior Citizen Discount, we used to get a listing from the City, who got it from, I believe, the state Social Security Department, which we used to check records of people who have passed away. That hasn't done been at least in the last eight to 10 years, that I'm aware of, because I used to do that job. I've been out of that department that handles that work for the past eight years and it hasn't been done, in my knowledge, up until that time. They used to have what was called a "dead letter". What would happen is, we'd compare a list from Social Security with Social Security numbers of people receiving the 20 percent discount at PGW. If we had definite information that the customer was deceased, we canceled that discount immediately. If there was any question of whether or not maybe a child's name and a father's name -- father-son or mother-daughter had the same name and we needed proof that either 114 2/20/03 - TRANSPORTATION - RES. 020748 one was still alive to receive that discount, we would send out what was called at PGW at that time a "dead letter." You would be still receiving that discount for a period of 90 days. You had 90 days from the time you received that letter to come into PGW's office with proof that you're still alive and you should be receiving that discount. In my own opinion I would say that that number 79,500, I would say at least to 20,000 of those people do not 11 belong on that discount. And we believe that if 12 management did a better job policing the Senior 13 Citizen Discount, every senior who is eligible for 14 the discount should receive it. There's no reason 15 they should have to cut that discount in any way, as long as they provided the service to make sure and check records to make sure that customers that are receiving the discount do indeed live at that property and should remain on that program to receive that discount. You can have someone who is on a Senior Citizen Discount -- I worked the telephones at PGW. I have people that call in on those lines that are new customers who moved into a property a year ago that are just now applying for service. They've used gas under somebody else's 115 2/20/03 - TRANSPORTATION - RES. 020748 name who was receiving a percent discount on a bill for up to year that should have never been. These people are not eligible for that program, but yet they've taken rate payer money that they should have never got percent off the bill. These 7 people should have been paying a full bill every 8 month and yet their using gas under somebody else's 9 name receiving a discount that is not rightfully 10 theirs. 11
No one condones that 12 improper use, but it seem that PGW think it's easier 13 to crack down on senior citizens than to take the 14 necessary steps to be efficient. 15 (Applause.) 16
When the program was 17 policed and checked on a monthly basis, you didn't 18 have the problems that you have with seniors. There 19 was never any talk of canceling the Senior Citizen 20 Discount because the people who were on that program did indeed belong on that program and should receive that 20 percent discount.
I work in a district office 116 2/20/03 - TRANSPORTATION - RES. 020748 and a lot of times --
James Lennox. The way we police it in the district office, when we find out that someone passed away, it's usually through one of their children coming in applying for LIHEAP, and we ask for the customer of records, that information or Social Security or any kind of information to that effect, we find out that that person has passed away and that's when we change the gas out of their name and put it in the proper person's name and we eliminate the discount.
Are you agreement with the testimony given by the person next to you would be saying?
Thank you both for testifying. Thank you for being here and giving us this information. Thank you. (Applause.)
Mr. Knudsen, what is 117 2/20/03 - TRANSPORTATION - RES. 020748 your response to -- the young woman also.
I'm not sure where Mr. Nardella gets the size number that he does. We have no indication of that. The issue for us is that there have been numerous problems with the billing system, with tracking our customers and so forth. We have done what we had to do in order of priority. We are now in a position to implement this kind of screening program or more accurately reinstitute it and Ms. Coltro is in the process right now, within weeks of doing so. We will have a much more accurate count on the senior citizen complement within a relatively short period of time. But I do not subscribe to the numbers that have been presented without some proof.
But you have know basis to disagree. You have no information at all.
That's correct. He and I disagree on -- I don't think that there's that order of magnitude, but we will find out as soon as we're able to screen these folks.
Well, it seems to me that before you would ever contemplate this kind of a severe change in your plans that you would want to 118 2/20/03 - TRANSPORTATION - RES. 020748 make sure that everything fully is in order, that you've taken every step to make sure that the programs are being honestly and competently administered, because there may be great savings in that. We know the waste of money that was involved when they changed the computer system. Wasn't there a computer system you ordered a couple of years ago that cost about $35 million and then proved not to work at all?
So the record of the company, if we call it that, although I think there are serious questions as to whether you're a company or not. But assuming that you are a company, the company's record of efficiency is not such a breached confidence. And it would seem to me that before you would want to punish so many senior citizens and run the risk of denying service to people that earn the service at cost they can afford that you would certainly want to make sure that everything is done to economize properly and to see that there are not any people, through your own inefficiencies, that are taking advantage to the 119 2/20/03 - TRANSPORTATION - RES. 020748 system. We want the system to work honestly and efficiently. We assume that, that's the reason you haven't been asked any questions. We had assumed that you were handling these, but apparently you have done nothing in the last eight to years, as 7 the witness testified, to check on that. 8
Your admonishment is 9 received and, as I indicated, I can do more than to 10 say that the program is about to be launched to essentially clean up our file and we will have the appropriate information and can present that to you.
Now, let me go back to the matter raised by Councilman Ortiz, because I'm not quite sure what your answer was to his question as to what you ought to write to the PUC. Are you going to withdraw the request from the PUC so that they have nothing before them considering a change in the senior citizen status, at least until a later date?
I have to check with counsel as to what we can do at this point. But the record before the PUC right now is, it has five or six briefs before it, from "do away with it all immediately" to "keep it the way it is 120 2/20/03 - TRANSPORTATION - RES. 020748 indefinitely." So the PUC can receive information right now from parties, in this instance from the City Council, I think it would be probably received, indicating their interest in a particular solution.
We requested the elimination of the program as it's presently constituted and would place in instead a means --
That's what I'm saying. You requested the elimination of the program prospectively as of September.
So there isn't a lot of briefs in front of them so that they have to choose from column A and column B. You made a very specific recommendation.
But we are only one of four or five parties to this proceeding. Each of them has expressed their particular position on this.
You are not a party to this. 121 2/20/03 - TRANSPORTATION - RES. 020748
This is a public policy established by this Council. And this Council has not been consulted in the change of this public policy.
And I said I would write to the Chairman and tell him that, in fact, that is your position.
That's not our position. That's the facts. Are you saying you don't believe us?
Are you denying the right of City Council to have set that policy?
Then by what right did you assert your right to go to the PUC and say, "We want an Ordinance that was passed by City Council, the legislative body of City Council, we want you to ignore that and change that policy"?
Because on the advice of my counsel I was informed that following September 122 2/20/03 - TRANSPORTATION - RES. 020748 1st, it is not a matter of public policy for this Body. It shifts to the PUC to determine.
If it isn't in that specific form, I'll have him write a letter to that effect. We've been working under that assumption.
Wouldn't that put you under a special obligation to inform City Council that you believe, on advice of your counsel, that you believe that as of September 1st or whatever date you believed it to be, that the authority of City Council was going to lapse and, therefore, you had no reason to do anything about it except to ignore it? You didn't ignore City Council when you 123 2/20/03 - TRANSPORTATION - RES. 020748 needed funds, did you? You came to us. You pleaded with us. You said the question of the vitality and life of PGW was only a matter of days unless we acted. And many of us had serious concerns because we knew the City also had problems. We acted in good faith only to find ourselves now paid no 8 attention to. When you needed us, you listened politely. You worked with us. We worked with you. Now, apparently, you feel that the financial crisis of PGW is over, at which time you ought to be expanding the benefits to senior citizens, but instead, it seems like you're cutting back on them.
Let me be very specific, Councilman Cohen. The crisis at PGW is far from over. We specifically had to ask for an extension on the repayment of the $45 million to 2006.
Well, I'm dead set against any extension unless in the first place, this request made to the PUC is strictly withdrawn.
Well, I will consult with counsel. Coming back to Mr. Ortiz's question. Our understanding was that you had complete control on the program through August 31st. Come September 124 2/20/03 - TRANSPORTATION - RES. 020748 1st, those rights shifted to the PUC for determination.
I believe it was. It was certainly in all conversations. I'm sure it's in writing and I'll get you what we have.
But you cannot say for certain whether that advice was put in writing?
We have a filing this thick. There were advisory letters from them and I'm sure in one of those --
Let me try to help you out a little bit. Let me suggest that if that advice was put in writing, it might have prompted you to come to City Council. My assumption is that that advice was not put in writing. Now, is that true or is that not true?
The advice that we got was that it passed from City Council to the PUC. And so there was this jurisdictional issue.
So the advice was not to end the Senior Citizen Discount. The advice was not to take a particular position on it. 125 2/20/03 - TRANSPORTATION - RES. 020748
The advice was that we needed to put a position before the PUC that the PUC would determine.
Was the advice limited to Council's jurisdiction, or was the advice related to what position PGW should take regarding the PUC?
More the latter than the former, but I will look to see whether there was communication on the former.
Thank you, Mr. Chairman. I'm just baffled. It says here, "Does the Gas Choice Act authorize the City to modify the Senior Citizen Discount Program. The issue here is that the Act further specified that City by Ordinance -- that means us -- is the only entity which may make any further change in the Senior Citizen Discount program. The PUC may not, on its own initiative or the initiative of any party, directly alter the Senior Citizen Discount Program or refuse to take the cost of the discount into account when it is setting PGW's rate nor make PGW 126 2/20/03 - TRANSPORTATION - RES. 020748 on its own alter the Senior Citizens Discount Program as currently grandfathered by the General Assembly. If City Council takes no action then the program will terminated by means of a moratoria phase out extending over the next few decades." Obviously, the Act says that we are a party involved in the actions that need to be taken. You went ahead in forum and did not consult us as to whether this is the right road that needs to be done. And the reason we're having this is that we're trying to find what the correct public policy should be. But obviously this is not the way that we thought it was going to be implemented or phased out or eliminated. It's kind of hard to get notice of issues such as this through newspapers, but that's how we found out about this. That's why the Resolution was done. We found out. Some people and some individuals called us up and said, "Do you know this is happening?"
Will Mr. Bertocci please approach the witness table? A simple question, Mr. Bertocci. In 127 2/20/03 - TRANSPORTATION - RES. 020748 your research on this issue, you mentioned a possible drafting of a Bill. Have you, in fact, drafted a Bill or would you be prepared to draft a Bill?
I have never drafted a Bill. I would be prepared to assist in the drafting of a Bill once City Council decides what kind of Bill they want and it's a bill that would ostensibly be designed by City Council to induce the PUC to modify the Senior Citizen Discount Program which has been grandfathered by state law. So legislature did this, the General Assembly, not even the PUC. So it's really City Council that has to come back. One other thing, if you will allow me. I disagree with Mr. Knudsen -- and, again, people debate about what this law means. But I believe that -- and I would like to see City Council pass an ordinance as soon as possible because September first is coming up. But I don't agree that after September 1st it's all over. I think that at any time after September 1st Council could come and say, "This is what we want to do," but you're still going to have to get the PUC to approve.
That's actually where 128 2/20/03 - TRANSPORTATION - RES. 020748 I'm going. From your legal knowledge of the Gas Choice Act and what it does to Senior Citizen Discount and the role in jurisdiction of Council within that Act, do you believe that if a Bill was introduced and passed by Council and if it became law, that before September 1st, before the PUC makes a decision, or before this would take effect September 1st, that that supersedes the recommendations of PGW?
What's going to happen next is PGW has a restructuring plan that is supposed ruled on by the PUC by April 1st. And that --
My question is, if a Bill were to be drafted, introduced and passed by this Council, with your legal understanding of the Gas Choice Act and how it affects Senior Citizen Discount, would that legislative action supersede any recommendation made by PGW?
I think it would go forward on a different track. It's the PUC that ultimately has to approve.
I understand that. I'm talking about how the Gas Choice Act was 129 2/20/03 - TRANSPORTATION - RES. 020748 written. I'm asking you for -- from your knowledge of the actual Act itself, there was a role carved out for City Council. Some people said, begging out for Council's voice since Council created the Senior Citizen Discount. If a bill was drafted, introduced and passed before April 1st, do you think that that's not, in fact, what the Gas Choice Act calls for and that would take precedent over any other brief or opinion offered?
I didn't ask if you said that. I'm asking for your opinion now.
I think you have to key on the fact that the PUC has to approve what happens.
And that's why I can't say that automatically City Council passing a Bill 20 just would veto whatever ruling the PUC had already taken.
They can't approve anything if we don't pass a Bill, though?
That's right. You have to pass a Bill. 130 2/20/03 - TRANSPORTATION - RES. 020748
Mr. Bertocci, would you be prepared to present to us your best effort with respect to the kind of Ordinance -- actually, I think you're familiar with Council Ordinances because you've appeared before us on many occasions. If you could get us what, in your opinion, is the best legal approach combined with Mr. Knudsen's request to withdraw from the PUC consideration of the request previously made by PGW, that would be helpful. That would begin moving the process. We'll go from there and deal with it step by step. We know that no lawyers can ever predict in advance what judges or commissions or other bodies might ultimately determine. But what I want to know is -- because I will never vote for anything proposed to us by PGW unless PGW is prepared to acknowledge that it is City Council, and not PGW, that sets public policy in this area. That's what I think is wrong with the action taken by PGW. He has eliminated 131 2/20/03 - TRANSPORTATION - RES. 020748 City Council from the triangle of those that have influence and under law to make decisions. He has supplanted us by his own decision that he, on behalf of PGW, has more right than we have to set the policy towards the senior citizens, the Gas Works and I don't believe that's the case. If so, I want to do something to make sure that PGW does not survive because I think it would be a terrible thing to have a runaway commission uncontrolled by the City Council.
I would work with anyone who was putting a Bill together. My concern -- and this comes from me as a lawyer recognizing that I'm trying to get the approval of the PUC. I don't like the idea that the City would have to seek the approval of the PUC to maintain its Senior Citizen Discount. But the fact of the matter is, that unless the Gas Choice Act is overturned, I think we do have to obtain the approval of the PUC because the PUC has control over PGW's tariffs. Then the question is, well, how do you justify what you want to do, what we've done all this time? And my view is that you would have to do something that documents strongly the City's position, that in 132 2/20/03 - TRANSPORTATION - RES. 020748 setting up a Senior Citizen Discount without means testing, that actually what's happening is that people's financial circumstances and other personal circumstances like disability, like half of the senior citizens I believe -- some very high percentages of senior citizens have disabilities. That what you are doing is focusing a Senior Citizen Discount in such a way that it inevitably catches people that -- where you can make a case that this is a particularly vulnerable group of people with specific needs. Up until now, we talked mainly in terms of a notion of means testing which is when people talk about means testing, it's always been a notion which is, you file an application and you show exactly what your income is and go through that whole process, like applying for welfare. And obviously in this room and on both sides of the table you hear that that is absolutely a non-starter. We know that we have 80,000 people receiving the Senior Citizen Discount now have. But we may have 100,000, 115, 120,000 seniors who are customers of PGW. We don't really know. Now, if that's the case, then the so-called concern that all 133 2/20/03 - TRANSPORTATION - RES. 020748 these rich folks are getting the Senior Citizen Discount may, in fact, be simply not true. There's a lot of information out there that we do not have. And it would seem to me that in trying to craft something which has the best chance of success, which as a lawyer that's what I have to do. I have to say, look, you have a law out there and you have to do something that has the best chance of success to win. I would want to be able to put together something which is based on some demographic information. Right now, we don't sufficient demographic information. Absent from this hearing today was anybody coming in and saying in, these are really the situations of Philadelphia seniors. We have a little bit of information in the consultant's report, but very, very slim to in the PGW consultant's report, and I've pointed that out. We need much more concrete information. And CLS doesn't have the funds to get a demographer in there. I would think that basic demographic information could be worked out if we could get a demographer to do that, to sit down with us and give us some basic parameters so that we can defend what it is that we put into some kind of proposed 134 2/20/03 - TRANSPORTATION - RES. 020748 Ordinance.
Well, maybe Mr. Knudsen has a thought. I don't know how to resolve that issue. But it would certainly seem to me that between Community Legal Services and PGW, if there is the will, we certainly ought to find the way to make it clear to the PUC that it is the public policy of the City of Philadelphia to maintain the current Senior Citizen Discount. It is my personal belief, but I have no facts to justify it that most senior citizens of affluence do not request the Senior Citizen Discount. I know I've never even thought about it, because it seemed clear to me it was meant for people who needed the help. I remember speaking once to Councilman Longstreth and asking him and he said he never would have thought of applying and never has. And I haven't found any senior citizen that I've asked, a vast number of them of affluence, who said that they applied for the Senior Citizen Discount. So I believe that most overwhelmingly the people on the list, except for the kind of folks that were testified to by the two witnesses that testified just before you did, I believe the people on the list are there honestly 135 2/20/03 - TRANSPORTATION - RES. 020748 except for those that, you know, passed away and somebody continued the use of their names. Therefore I, think that the number endangered is a large number. I think there's no 6 justification whatsoever for any kind of a means test. I think that one reason PGW wants it is they know that automatically based upon historical conditions, that will automatically eliminate large numbers of people from ever applying and, therefore, denying the people the use of the Senior Citizen Discount. And in that case, PGW is in violation of City policy. It's clear to me that the City policy is what the Chairman stated before, that City Council will overwhelmingly be for this. We have a simple rule, nine votes passes an Ordinance. We would hope that the Mayor would sign it, but if not, 12 votes overrides it and just by the count, as the Chair was giving it before, I think there will certainly be far more than 12 votes to sustain the current policy's continued existence. It may be unanimity on the question. So I just think the two of you ought to get together and come up and offer to the Committee your proposals on how to clear this up. By clearing it up I mean get it off the PUC 136 2/20/03 - TRANSPORTATION - RES. 020748 agenda. It ought not to be there. We ought to save the state taxpayer money by not having the PUC waste its time considering a petition that has no vitality and no current life to it. That will happen if Mr. Knudsen withdraws it , not just informs them that he understands that City Council has a different opinion.
Two responses, Councilman. I don't know what our legal rights are. I'll get some clarification on that. The PUC will be informed of this discussion today. There's no 13 question of that. With regard to, if you charge Mr. Bertocci with the formulation of an Ordinance we will work with him to provide whatever information he feels he needs to provide substance to the appeal -- or to the proposal.
Would that be satisfactory, Mr. Bertocci, if Mr. Knudsen's words were effectively carried out by PGW?
And would you let this Committee, the Chairman, know if there's any failure on the part of the PGW to live up to the 137 2/20/03 - TRANSPORTATION - RES. 020748 commitment Mr. Knudsen is apparently prepared to make?
Yes. But I also think that demographic information would be important in putting together something that would have the strongest possible chance of success. Ultimately the PUC is going to have to approve this.
Mr. Bertocci, by way of analogy, let me say that what you're referring to in terms of coming up with the best legally defensible Bill is somewhat like hiring the most qualified person. There is always someone who is more qualified. You have limited options before you have. What people actually set out to do is hire someone who is qualified enough. And if we find that this Bill is not qualified enough legally, as you said, in your opinion, we can always go back. It's something very simple this Council has the ability to do. We can introduce and pass legislation in a matter of weeks.
Thank you. There are no further questions of this panel. We will continue this hearing hopefully with 138 2/20/03 - TRANSPORTATION - RES. 020748 a Bill drafted to respond to. I thank you all for coming out. This hearing is recessed to the call of the Chair. (Council adjourned at 4:15 p.m.) - - - 139 2/20/03 - TRANSPORTATION - RES. 020748 C E R T I F I C A T I O N I HEREBY CERTIFY that the foregoing proceedings of the Council of the City of Philadelphia of February 20, 2003, were reported fully and accurately by me, and that this is a correct transcript of the same. RE: COMMITTEE ON TRANSPORTATION AND PUBLIC UTILITIES ___________________________ Lisa C. Bradley, RPR and Notary Public