COUNCIL OF THE CITY OF PHILADELPHIA2 COMMITTEE ON FINANCE3 Room 400, City Hall6 Philadelphia, Pennsylvania Tuesday, March 8, 20117 1:25 p.m. PRESENT: COUNCILWOMAN MARIAN B. TASCO, CHAIR10 COUNCILWOMAN JANNIE BLACKWELL COUNCILMAN FRANK DiCICCO11 COUNCILMAN W. WILSON GOODE, JR. COUNCILMAN WILLIAM K. GREENLEE12 COUNCILWOMAN BLONDELL REYNOLDS BROWN BILL 110001 - An Ordinance amending Bill No.14 100307, entitled "An Ordinance approving the Fiscal Year 2011 Capital Budget providing for15 expenditures for the capital purposes of the Philadelphia Gas Works"...16 BILL 110109 - An Ordinance authorizing the17 continuation and modification of the extended trial program authorized by Bill No. 090003 by18 establishing an Authorized Program under which advance approval is given to the Philadelphia19 Facilities Management Corporation to enter into certain contracts...20 - - -22 2
Good2 afternoon. I'd like to call the Council3 Committee on Finance to order and note4 that there is a quorum in the presence of5 Councilmembers Blondell Reynolds Brown,6 Bill Greenlee, Wilson Goode, Jr. and7 Jannie Blackwell and yours truly, and8 Frank DiCicco, who just popped in. Thank9 you.10 It's either feast or famine.11 Good for the feast.12 Let us move forward and have13 the Clerk read the title of the bill.14
Bill No. 110001, an15 Ordinance amending Bill No. 100307,16 entitled "An ordinance approving the17 Fiscal Year 2011 Capital Budget providing18 for expenditures for the capital purposes19 of the Philadelphia Gas Works (including20 the supplying of funds in connection21 therewith) subject to certain constraints22 and conditions, and acknowledging receipt23 of the Forecast of Capital Budgets for24 Fiscal Years 2012 through 2016," by25 3/8/11 - FINANCE - BILLS 110001 & 1101091 approving a Revised Capital Budget for2 Fiscal Year 2011.3 Bill No. 110109, an Ordinance4 authorizing the continuation and5 modification of the extended trial6 program authorized by Bill No. 090003 by7 establishing an Authorized Program under8 which advance approval is given to the9 Philadelphia Facilities Management10 Corporation to enter into certain11 contracts and transactions arising12 thereunder for the purchase, storage,13 distribution, transportation and/or14 transmission of natural and other gas15 supply on behalf of the Philadelphia Gas16 Works, subject to certain terms and17 conditions.18 (Witnesses approached witness19 table.)20
Thank you21 very much.22 The Chair recognizes the two23 witnesses before us.24 Would you state your name for25 3/8/11 - FINANCE - BILLS 110001 & 1101091 the record and begin your testimony on2 Bill 110001.3
Thank you,4 Chairwoman Tasco. My name is Janet5 Parrish. I'm the Executive Director of6 the Philadelphia Gas Commission.7
Good afternoon.8 I'm William Gallagher. I'm Director of9 Budget Reporting for the Philadelphia Gas10 Works.11
Thank you for the13 opportunity to appear today on behalf of14 the Gas Commission in support of this15 bill. We have submitted written16 testimony, which I'm not going to read,17 but attached to that testimony is a copy18 of the Gas Commission's Resolution and19 Order in this matter, which was approved20 at its January 18th, 2011 meeting.21 We are urging approval of the22 bill, which reflects the Gas Commission's23 recommendations in this matter for an24 amendment to PGW's Fiscal Year 201125 3/8/11 - FINANCE - BILLS 110001 & 1101091 Capital Budget. We will also be2 requesting a suspension of the rules so3 the bill may have first reading at the4 next session of Council.5 As is detailed in the6 testimony, just briefly, we are7 recommending a $1.168 million amendment8 to the approved Capital Budget, and this9 would support a project which will10 deliver gas service to the Philadelphia11 Water Department's biosolids treatment12 facility, which I think you're familiar13 with from much prior discussion in14 Council. What's needed at this point is15 to do certain expansions to the City Gate16 Station where the interstate pipeline17 connects to PGW's system in order to18 provide the gas service required to19 service the facility and also be -- there20 will be a requirement to install21 additional high-pressure gas mains. And22 so that is what this amendment would23 support.24 PGW does anticipate that 10025 3/8/11 - FINANCE - BILLS 110001 & 1101091 percent of the cost of this project will2 be reimbursed by third parties. There is3 a little bit of a question mark on some4 of that, so that's why we're bringing5 forward the budget amendment, just to6 protect PGW in the event that costs may7 vary slightly from the cost estimates.8 And this project will benefit9 PGW ratepayers by generating some10 $300,000 a year in new revenues.11 Now, relatedly, as is our12 custom, we have taken a hard look at what13 the DBE participation goals would be in14 conjunction with this project. PGW has15 established goals that are in the range16 of to 35 percent for this particular17 project, of which 15 to 20 percent is the18 range for MBEs and 10 to 15 percent for19 WBEs. About 70 percent of the total20 project cost does represent internal PGW21 costs as well as the highly specialized22 equipment, for example, to do the23 upgrades at that interstate gate station24 that I mentioned. But there is a DBE25 7 3/8/11 - FINANCE - BILLS 110001 & 1101091 participation opportunity for $331,000 of2 the total project cost.3 And for your information, the4 Gas Commission has continued to require5 quarterly updates on PGW's attainment of6 its stated DBE participation goals.7 We've also been meeting quarterly with8 the City's Office of Economic9 Opportunity.10 You may recall that PGW's goal11 for Fiscal '11 was in the range of 17 to12 21 percent, and to date -- that's the13 first five months of the fiscal year --14 they are at 19 percent. That is actual15 spending, by the way, not just a contract16 amount which may or may not result in17 actual expenditures.18 So that's the gist of the19 project. PGW also has submitted written20 testimony in this matter which provides21 additional detail, and we're happy to22 answer any questions you may have.23
Thank you.24 Are there any questions?25 8 3/8/11 - FINANCE - BILLS 110001 & 1101091 (No response.)2 COUNCILWOMAN TASCO:3 Mr. Gallagher, you want to say anything?4
Well, we8 thank you very much for your testimony.9 Janet, we thank you and PGW for10 having such a good, collaborative11 relationship and working towards the --12 bringing PGW working together on the13 issues that come before us as a14 Commission and that have to come before15 this Council, and certainly know you took16 heed to the questions that the Committee17 asked around minority participation a18 couple years ago and took the initiative19 to move forward to take action to develop20 your own goals. So we appreciate that.21
Now we24 will hear testimony on Bill 110109.25 9 3/8/11 - FINANCE - BILLS 110001 & 1101091 (Witness approached witness2 table.)3
Good afternoon.6 Once again, I'm Janet Parrish, the7 Executive Director of the Philadelphia8 Gas Commission.9
I'm Douglas Moser,10 Senior Vice-President of Gas Management11 at PGW.12
Good afternoon,14 Chairwoman Tasco and members of the15 Committee. 24 These recommendations to City Council25 10 3/8/11 - FINANCE - BILLS 110001 & 1101091 were unanimously approved at the Gas2 Commission's meeting on February 8th,3 2011. 7 Just briefly, the bill is a8 continuation of work that we have done9 with City Council and others regarding10 PGW's gas purchase/procurement contracts11 and a series of ordinances that this12 Council has approved since the year 2004,13 and what we have done is provided a trial14 program whereby PGW's gas purchase15 agreements could be pre-approved by this16 Council so long as they fell within17 certain constraints and conditions. This18 program has been renewed a year at a19 time, two years at a time. 4 So we are now before you5 recommending a further extension of this6 program, but we really don't think we7 need to regard it as a trial program8 anymore, and we're proposing that it be9 renewed at this point for a four-year10 period of time. 18 Each time the ordinance has19 come up for renewal, we've carefully20 reviewed it, together with all the City21 stakeholders, to see what, if any,22 modifications were required. 9 Secondly, we would be reducing10 PGW's ability to outsource procurement of11 its gas supply from 50 percent of its12 volumes down to 30 percent of its13 volumes. 24 And, finally, the ordinance25 13 3/8/11 - FINANCE - BILLS 110001 & 1101091 would institutionalize the process2 whereby the Gas Commission has acted more3 or less as the overseer of implementation4 of the ordinance, and if in fact there5 would be a situation where we would6 identify there might possibly have been a7 violation of the ordinance or potential8 violation, the Gas Commission would be9 charged with bringing that to the10 attention of the City Solicitor, City11 Council, et cetera, and that really just12 codifies the process we've already been13 using, which has worked very well, we14 think, in identifying any problems which15 have arisen, which actually have been16 quite few. I can count them on just a17 couple fingers. 21 On another related topic, I'm22 glad to report to you that we have taken23 a first-time look at DBE participation in24 terms of PGW's gas procurement25 14 3/8/11 - FINANCE - BILLS 110001 & 1101091 activities. This is a very specialized2 area of purchasing, and there are3 obviously just so many suppliers out4 there who are generally national,5 sometimes multi-national corporations,6 but we felt that it was important to take7 a good hard look at whether or not it was8 possible to increase participation in9 this area of PGW's purchasing. And I'm10 glad to report that as a result of the11 Gas Commission's actions and directives12 in this matter, we anticipate that very13 shortly there will be an EOP, an economic14 opportunity plan, issued by the City's15 Office of Economic Opportunity that16 pertains to PGW's gas procurement17 activities, and also PGW has already18 undertaken, with the assistance of a19 consultant, a good hard look and research20 out into the market to see if they can21 identify any potential suppliers who22 could be brought within this program. 7
No. I've submitted10 written testimony, so any questions you11 have, I'd be glad to answer.12
And at any21 time a member of the Committee needs an22 update or information relative to what's23 happening with PGW or the Gas Commission,24 Janet Parrish is always available to come25 16 3/8/11 - FINANCE - BILLS 110001 & 1101091 and meet with you on an individual basis2 to share what -- because it's a very3 highly technical kind of department, but4 they're always willing to come and share5 information and answer any questions that6 you may have regarding activities at the7 Commission and/or PGW.8
This ends14 our public hearing. We'll now go into15 our public meeting.16 The Chair now recognizes17 Councilwoman Blackwell to report out Bill18 No. 110001 with a favorable19 recommendation and suspension of the20 rules.21
Thank22 you, Madam Chairman. I move that Bill23 No. 110001 be reported out of Committee24 with a favorable recommendation and also25 17 3/8/11 - FINANCE - BILLS 110001 & 1101091 for a suspension of the rules so that it2 may be considered at our next session of3 Council.4 (Duly seconded.)5
It has6 been moved and seconded that Bill 1100017 be reported out of Committee with a8 favorable recommendation and a9 recommendation for the Council rules to10 be suspended so this bill can be heard at11 its next Council session.12 All in favor will say aye.13 (Aye.)14
There18 being none, the motion is carried.19 The Chair recognizes20 Councilwoman Blackwell regarding Bill21 110109.22
Thank23 you, Madam Chairman. This Committee24 reports out Bill 110109 with a favorable25 18 3/8/11 - FINANCE - BILLS 110001 & 1101091 recommendation -- in fact, I move that2 Bill No. 110109 be reported out of3 Committee with a favorable recommendation4 and also a recommendation for suspension5 of the rules so as to permit6 consideration at our next session of7 Council.8 (Duly seconded.)9
It has10 been moved and properly seconded that11 Bill 110109 be reported out of Committee12 with a favorable recommendation and13 recommendation that the Council rules be14 suspended so that this bill can be heard15 at Council's next session.16 All in favor will say aye.17 (Aye.)18
There22 being none, the motion is carried, and23 this meeting is adjourned.24 Thank you.25 19 3/8/11 - FINANCE - BILLS 110001 & 1101091 (Committee on Finance concluded2 at 1:40 p.m.)3 - - -4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 20 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 March 8, 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