Committee Hearing, December 13, 2005

COUNCIL OF THE CITY OF PHILADELPHIA COMMITTEE ON LAW AND GOVERNMENT - - - Room 400, City Hall Philadelphia, Pennsylvania Tuesday, December 13, 2005 10:30 a.m. - - - PRESENT: COUNCILMAN JAMES F. KENNEY COUNCILMAN JACK KELLY COUNCILMAN RICHARD T. MARIANO COUNCILWOMAN DONNA REED MILLER COUNCILMAN MICHAEL A. NUTTER COUNCILMAN FRANK RIZZO COUNCILMAN BRIAN J. O'NEILL BILL 050344 - An ordinance providing for the submission to the qualified electors of the City of Philadelphia of an amendment to the Philadelphia Home Rule Charter regarding City Council approval of rates and charges fixed by the Water Department... RESOLUTION 050355 - Resolution proposing an amendment to the Philadelphia Home Rule Charter regarding City Council approval of rates and charges fixed by the Water Department... RESOLUTION 050869 - Resolution authorizing City Council's Committee on Law and Government to hold public hearings on reestablishing the Veterans' Advisory Commission... - - - V A R A L L O Incorporated Litigation Support Services Eleven Penn Center 1835 Market Street, Suite 600 Philadelphia, Pennsylvania 19103 215.561.2220 215.567.2670. 2 12/13/05 - LAW - BILL 050344 - RES. 050355

Good morning, ladies and gentleman. I apologize for the delay. The Council Committee on Law and Government is now in session, with a quorum consisting of Councilmembers Rizzo, Councilmember Mariano, Councilmember Kelly and -- Councilman O'Neill, are you on the Committee?

No. 12

Councilman O'Neill is sponsor of one of the bills, and Councilman Nutter is on his way or has been in already. So the first issue we're dealing with today is Bill No. 050344, which is an ordinance providing for the submission to the qualified electors of the City of Philadelphia of an amendment to the Philadelphia Home Rule Charter regarding City Council approval of rates and charges fixed by the Water Department for supplying water and sewage disposal services, as approved by resolution of 3 12/13/05 - LAW - BILL 050344 - RES. 050355 the City Council; fixing the date of a special election for such purpose; prescribing the form ballot questions to be voted on; and authorizing the appropriate officers to publish notice and to make arrangements for the special election. We will also hear testimony on Resolution No. 050355, which is a resolution proposing an amendment to the Philadelphia Home Rule Charter regarding City Council approval of rates and charges fixed by the Water Department for supplying water and sewage disposal services, and providing for the submission of the amendments to the electors of Philadelphia. The Chair recognizes Councilmember O'Neill.

Thank you, Mr. Chairman. I thank the Committee for allowing me to testify today. This is a first step. I don't expect the bill to be reported out of 4 12/13/05 - LAW - BILL 050344 - RES. 050355 Committee today, but I hope it's the beginning of some discussion about the one area where people have substantial bills in this City that there is absolutely no oversight over, and it's something that started in 1951 in the Charter where the Water Commissioner has always had the absolute right to raise rates. But I would just give some perspective. I bought a rowhome in 1975. I remember getting all my pre-settlement costs, and the water bill estimate for that property, 1,800 square foot Northeast rowhome with a garage on the first floor, was $15 a quarter, $60 a year. I assume that back in 1951, it may have been $5 or $10 a quarter, not something that I'm sure was a big item on the Charter Commission's agenda. Now the new rates, I believe, are up around $60 when these rate increases become effective over the next three years for that same property, but 5 12/13/05 - LAW - BILL 050344 - RES. 050355 it's $60 a month. That's $720 a year. That's a 1,200 percent increase in three decades. As bad as gas bills are, they haven't gone up 1,200 percent in the last three decades or anywhere near that. That property has probably gone up 300 percent, three times the original value over 30 years, but the water bill is 1,200 percent. And I believe that City Council should be responsible to the voters for final approval of water rate increases. I understand the Water Commissioner will testify as to some legal difficulties with that, and I think they can be worked out. Historically, apparently back before 1951, there was some under-funding of the water system or the water infrastructure. I think we're way beyond that at this point. And I understand one of our witnesses from Community Legal Services, who knows a lot more about this than I do, will testify 6 12/13/05 - LAW - BILL 050344 - RES. 050355 that this doesn't go far enough, that there actually should be an independent body similar to the PUC that would review the Water Commissioner's rate increase, not a Hearing Examiner appointed by the City. It's kind of the fox and the hen house thing where you just knock the -- the Hearing Examiner always seems to just take a shave off of the recommendation. Often times when that occurs, it's a built-in shave that was expected, but it's not what I think the rate payers of this City deserve. And there's also not an incentive to manage well. There's not an incentive to be as efficient as possible, because you basically print money if you're the Water Department. You get to raise rates as your costs go up, but there's no intervening force that keeps those rate increases at a minimum. And that's all I have to say today. I hope this will be a 7 12/13/05 - LAW - BILL 050344 - RES. 050355 continuing process, and I consider the testimony that I had summarized for me from Community Legal Services to be a friendly amendment.

Thank you, Councilman. The Chair recognizes Councilman Mariano.

Thank you, Councilman Kenney. Councilman O'Neill, I appreciate your statements, and I think I understand what you're talking about. If this wasn't the way it was and it would go to per se the Public Utility Commission, I mean, we still have the same problems with other utilities. They're raising -- and you're absolutely right, and they're going to rise because of whatever reasons that you and I cannot affect, no matter Councilpeople or not, but what would you suggest? What's the way out of this?

I'm not 8 12/13/05 - LAW - BILL 050344 - RES. 050355 suggesting -- I think the Public Utility Commission would be sort of the drastic last step in this evolution, which I hope never gets that far, but let me just say that the last time I heard testimony from the Gas Works since both City Council, which has some say over the Gas Works, and the Public Utility Commission, which now has ultimate say over the Gas Works, had held up a lot of their requests because of their poor collections, their collections have gotten better than the Water Department in less than two years. That's a sad state of affairs, because you can live without gas, not comfortably when it's degrees out, but 18 you can't live for two days without water. Water is something that should have a 99.8 percent collection, because I've seen enough families try to do it. You go about two days, and your neighbors make sure you're out of there if you're not paying your water bill, because 9 12/13/05 - LAW - BILL 050344 - RES. 050355 there's certain things that happen that people can't live next door to you. So you have the ultimate hammer to be able to turn it off. We have worse collections than the Gas Works. We were only as good as the Gas Works if we took five years of water collections rather than just the one year when all this controversy about poor gas collections occurred just two years ago. The Water Department eventually gets its money, and they have pretty high collection rates if you go over five years. It shouldn't take five years when you can shut something off and two days people can't survive. And we're not talking about the kind of bills -- I said $60 a month. We all know the gas bills are a lot higher than that. This is a very collectable amount, but I think it's indicative of the fact that there is no true oversight here. And it's not the Commissioner's fault, it's not the Department's fault. 10 12/13/05 - LAW - BILL 050344 - RES. 050355 It goes back to the Charter when this wasn't a big deal and I'm sure there were problems with water infrastructure. But bills were tiny at that time. They're large now, and I don't think there's any question about it, but I'm not requesting that this be governed by the PUC. Most water companies are, but I think the idea or the suggestion that we'll hear about, an independent review by people who are knowledgeable. I mean, let's face it, we wouldn't be knowledgeable when it came to you. We'd be learning this, but I still think it's our role. We're not budget specialists either, and there's a whole lot of things we're not experts on. We take the best evidence we get. We have the best staff work, and we try to combine the two and make good judgments. But the more information we have, the better off we are with judgments, and I wish I had thought about that as another step in the process. 11 12/13/05 - LAW - BILL 050344 - RES. 050355

Thank you, Councilman. Your idea about the collections is something I didn't think about. It makes it make more sense. Thank you.

The Chair recognizes Councilmember Rizzo.

Thank you, Councilman O'Neill. One of the things I guess I've wondered about is the fact that the Water Department does not actually collect the revenue. Have you looked at or is there any statistics or any thoughts about the fact that another department entirely, the Water Revenue Department, is responsible for the collection? Would there ever be a day where that maybe should be a Water Department function itself, or do you believe it's okay where it is? Because Water Revenue, I don't know how motivated they are to collect money, like you identified early, the motivation. They get what they get and 12 12/13/05 - LAW - BILL 050344 - RES. 050355 the Water Department just raises the rates if they don't get enough. Should there be some consideration of how that is structured?

That may be a totally separate issue. I'd save that for another day. I just point out that -- I mean, the Water Department eventually gets to a pretty high collection rate, but five years means that there's collection agencies, attorneys involved and less revenue collected. I just think with a relatively small bill, still 60 compared to the gas bills and electric bills is small, but you have the ultimate weapon, water. It's the one thing -- you can't bring a space heater in, you can't run things off the other utility, electric running instead of gas. People use an electric burner if they're not paying their gas. They use a gas burner if they're not paying their electric. Water, you can't function. 13 12/13/05 - LAW - BILL 050344 - RES. 050355

Thank you.

Something called toilets.

Councilman Kelly.

Thank you, Councilman, for your testimony this morning. I just have, I guess, a question. It has to do with following up on Councilman Rizzo's question on collections. I think I would probably put this to the Water Commissioner rather than anyone, because I would like to know the rate of collections and how they're collecting, but I think one of the problems that we're facing, and I'm sure he's going to point it out, is the infrastructure problems. Now, I know they've been raising these rates over the years because of probably the infrastructure of Philadelphia is a very old one and they're replacing probably the whole 14 12/13/05 - LAW - BILL 050344 - RES. 050355 system eventually. I don't know where we're at on that, but I know over the last probably ten years, they've been working on this, and I think that's probably one of the reasons that they're going to be using to justify the increases.

Well, I'm not here to fight the increase at this point. It's already been approved. Infrastructure is a viable and very sound reason for a rate increase if you've got to replace things, but that should be all laid out and reviewed. It shouldn't just be this is what the Water Commissioner says it should be. I'm an absolute czar in this area, except I hire a Hearing Examiner to review it and make a recommendation, which I don't even have to follow.

Thank you.

Thank you very much. Anyone else testifying on this 15 12/13/05 - LAW - BILL 050344 - RES. 050355 bill? I think the Water Commissioner has testimony that's been submitted. Excuse me. I'm sorry. Anyone from the Administration here at all to say anything on the record? If you'd like, yes. Please identify yourself for the record. COMMISSIONER BRUNWASSER: Good morning, Councilman Kenney and other members of the City Council. My name is Bernard Brunwasser. I'm the Water Commissioner, and if I may, I'd like to read my testimony into the record.

Well, what I would suggest, since it's about seven pages long, is, we'll submit the entire testimony to the stenographer. I think maybe you could hit some of the salient points that you think should be talked about in today's discussion. If you'd like to read the whole thing, that's fine, but we all have a copy of it, the stenographer has a copy of it, and if you 16 12/13/05 - LAW - BILL 050344 - RES. 050355 want to just highlight some -- since the bill is not coming out of Committee today, if you want to just highlight some of your issues. COMMISSIONER BRUNWASSER: Can I give you a somewhat shortened version, then?

Sure. Thank you. COMMISSIONER BRUNWASSER: Thank you. I'm here to testify on Bill No. 14 050344 and Resolution 050355. These bills are designed to transfer final water and sewer rate-making authority from the Water Department to the City Council. It is my strong opinion that this bill and resolution should be withdrawn. In the first decade of the 20th century, the citizens of Philadelphia were coping with hundreds of deaths from typhoid fever each year. The death toll peaked in 1906, just about 100 years ago, 17 12/13/05 - LAW - BILL 050344 - RES. 050355 with a loss of 1,063 citizens. The large number of typhoid deaths forced the City to adopt the filtration process for its drinking water supply. When the first filtration plants were built a few years later, they were considered outstanding engineering accomplishments of their day. Unfortunately, this momentum to improve water quality soon ended as a result of two world wars, a depression and the inclination of City leaders at the time to use water and sewer funds at their own discretion. The utility went into a long period of decline, and by the 1930s and '40s, Philadelphia's drinking water and river environment were a laughing stock. It was said that one could stand at City Hall and smell either the Delaware or the Schuylkill River depending on which way the wind was blowing. The rivers were for factories and refineries, not for marinas and condos. 18 12/13/05 - LAW - BILL 050344 - RES. 050355 As noted in the Water Department's Annual Report of 1952, and I quote, In more recent years, however, the water works system began to suffer from lack of sufficient funds for proper operation, from lack of maintenance and failure to renew depreciated equipment, and from lack of funds for new construction to keep abreast of expanding demands and modern practice, unquote. The Water Department was given the authority to set rates by the Home Rule Charter in 1951. The Charter on goes on to explain why this power was granted. Quote, The Water Department is to fix and regulate rates and charges for supplying water and sewage disposal services so that this function will not be subject to the political pressures that have been brought to bear upon Council when it has undertaken to perform this task. Rate-making for utility services has long been regarded as being primarily an administrative function 19 12/13/05 - LAW - BILL 050344 - RES. 050355 subject to legislative standards, and this section follows this practice. Council is to ordain the standards pursuant to which rates are to be fixed, a proper function of the legislative branch, and the Department is to fix rates within such standards, an appropriate function of the administrative branch, unquote. The public outcry about the City's poor water quality had made the new reform government of Joseph Clark take notice and resulted in the transfer of the water and sewer utility into the hands of professionals who were somewhat insulated from public and political pressure when determining the funding requirements necessary to maintain an efficient and professional utility. With the adoption of the new City Charter and under the leadership of Commissioner Samuel Baxter, the utility prospered and finally began to build long promised wastewater treatment facilities 20 12/13/05 - LAW - BILL 050344 - RES. 050355 in the mid 1950s, facilities that were first recommended as an essential step to protecting the public health in the early decades of the 20th century. New and improved water treatment plants soon followed, along with universal metering and other major advancements. The progress has continued up to the present day.

Today, the Philadelphia Water Department is considered a model public utility, a utility that supplies drinking water of a quality that substantially meets and exceeds purity goals set far higher than any of those required by state and federal regulation and one that processes wastewater to award-winning levels, overseeing the cleanest water environment in 150 years. Thereby, protecting our watersheds to keep our streams and rivers clean. I and my predecessors have had many opportunities over the past years, during both the annual and capital budget 21 12/13/05 - LAW - BILL 050344 - RES. 050355 reviews, to share with you our successes in cost containment and revenue enhancement. Council has direct authority to approve appropriations for both the Water Department's operating and capital fund. All the costs included in the existing Water Department cost of service rates are based on those appropriations. In terms of rates, we continue to have some of the lowest rates in the region for water, wastewater and stormwater services. The Water Department has had great success in containing costs, increasing employee productivity and improving services. These cost-saving measures have succeeded in keeping our services high and our rates low. 4 percent during that entire 22 12/13/05 - LAW - BILL 050344 - RES. 050355 nine-year period. That was less than half of the rate of inflation, even though inflation was low during that same period. However, the costs of providing services, including personnel, debt service, chemicals, gasoline, environmental mandates and increased security, have continued to rise, and as a result, the Water Department increased rates beginning last February. Compared with eight local utilities serving the Delaware Valley, Philadelphia's rates for residential water service are lower than all but one local provider, the City of Trenton. That's for water. They're slightly lower right now. Our sanitary sewer rates are the lowest of all local providers surveyed. Now, the current rate process we believe has tremendous checks and balances in it, and we approve the actual rates, of course, under the Charter, but 23 12/13/05 - LAW - BILL 050344 - RES. 050355 we have to ensure that those charges cover the operating expenses and debt service obligations. The Water Department-related revenues are placed in a separate Water Fund account. The standards established by City Council in The Philadelphia Code at Sections 13-101 and 13-201 provide further direction to the Water Department. These sections establish basic standards of fairness and equity. Rates for each class of customer are based on the actual cost of service. There can be no cross subsidies between classes of customers. There is no 17 provision in the City Code regarding the affordability of water and sewer rates, except for the discounts provided to qualifying senior citizens and charities. All proposed changes in rates must be submitted to City Council 30 days in advance of a formal filing with the City Department of Records. Under the Water and Sewer General Bond Ordinance, 24 12/13/05 - LAW - BILL 050344 - RES. 050355 the Water Department is not permitted to operate at a loss. To do so would result in the violation of the Department's bond covenant. In 1992, the Water Department, in coordination with Community Legal Services and City Council staff members, established the current rate process regulations. The rate process was modeled on the rate proceedings in place at the Public Utility Commission. The regulations authorized the Mayor, City Council President and City Controller to jointly appoint a Hearing Officer to oversee the rate-setting process and a Public Advocate to challenge the necessity of a rate increase. Any affected member of the public can appeal the rate filing and become a party to the formal technical hearings.

In fiscal 2001 and fiscal 2005 rate filings, the parties included large commercial customers, senior citizen advocates, the Interfaith Coalition on 25 12/13/05 - LAW - BILL 050344 - RES. 050355 Energy, multi-family property owners and managers. CLS has been consistently chosen as the Public Advocate. This process takes approximately one year and costs the Department in excess of $1 million per rate case, including significant outlays for funding of the Public Advocate and their experts, the Hearing Officer and an outside rate consultant and a substantial amount for advertising. The regulations provide for an extraordinarily open process, with disclosure of the Water Department's supporting documentation for the rate increase, the examination of Water Department personnel and other City witnesses, expert testimony and testimony in opposition to the rates. The Hearing Officer is charged with managing both the technical hearing process and receiving testimony from the general public at scheduled public hearings. The Water Commissioner does not participate in the 12/13/05 - LAW - BILL 050344 - RES. 050355 rate hearings. At the conclusion of the hearings, the Public Advocate, the Water Department and all other parties may file 6 briefs and reply briefs in support of their various positions. The Hearing Officer reviews all testimony and, based on the records, provides the Water Commissioner with a report and a recommended decision on the rates. The Water Commissioner, in making his final determination, must fully consider and give substantial weight to the Hearing Officer's report. If the Commissioner disagrees with the report, he must state the reasons for that disagreement, citing to support in the record for his decision. The Commissioner's rate determination can be appealed by any party to the Court of Common Pleas. The current water rate process provides for many checks and balances and for significant oversight by the public. 27 12/13/05 - LAW - BILL 050344 - RES. 050355 So basically what we're saying is that the rate process that's currently in effect works. It's very extensive, it's very comprehensive, and it's very open. There is abundant evidence that the system I have just described is working. It is not, as some may believe, a rubber stamping of the Water Department's rate filing. For example, during the 2005 rate process, after the experts for the Public Advocate and the commercial consortium reviewed evidence and testimony, the Water Department agreed that certain reductions could be made from the original rate filing. These reductions were incorporated into the Water Department's brief with a reduction in proposed rates. The Hearing Officer's report recommended further reductions. I accepted some, but not all of the Hearing Officer's reductions in my final determination. Where I disagreed with his report, I believe there was 28 12/13/05 - LAW - BILL 050344 - RES. 050355 significant evidence in the record to support my decision. 3 million in reduced revenue over the rate period. Neither my fiscal 2005 rate determination nor Commissioner Kishinchand's fiscal 2001 rate determinations were appealed by any of the parties. The process we now have works well. It complies with the guidelines outlined by the framers of the Home Rule Charter, yet provides for significant public input. It does not allow politics to enter into the process, nor should it. Nearly all of the Water and Sewer Bonds now in circulation were issued under the 1993 General Revenue Bond Ordinance. This ordinance provides the basis of covenants or contract terms 29 12/13/05 - LAW - BILL 050344 - RES. 050355 under which the bonds were issued.

The bond covenant regarding rate-setting authorities states, quote, Under the Charter, the Water Department is empowered and required to establish, one, rates for water and wastewater service in accordance with standards ordained by City Council, but without further authorization required by City Council, at levels which provide sufficient revenue to meet operating expenses of the water and wastewater systems, including interdepartmental charges for services provided to the Water Department, and, two, debt service requirements on all obligations issued for the Water Department, as well as other specific covenants of the General Ordinance, unquote. I have been advised by the Law Department that the proposed amendment to the Charter would be in direct conflict with a bond ordinance and this covenant. As a consequence, if the amendment was 30 12/13/05 - LAW - BILL 050344 - RES. 050355 passed, the City would be in breach of its bond covenants. Bond holders and the trustee for those bond holders would have various rights that they could pursue against the City. Among these are invalidating the Charter change or requiring immediate redemption of all the bonds. The invalidation of the Charter change would likely last for the term of the longest bonds, or about years. If 13 a redemption requirement were imposed on 14 those bonds, the Water Fund would face 15 very large transaction costs. 9 billion in water and 17 wastewater bonds outstanding, and the 18 transaction costs for refinancing could 19 be over $50 million. 20 Most of the bonds were issued 21 at interest rates lower than the 22 now-current interest rates so that 23 refinancing would have significant 24 increased interest costs to the rate 25 payer. Redemptions would also result in 31 12/13/05 - LAW - BILL 050344 - RES. 050355 the imposition of a substantial call premium for bonds for which the call date has not yet been reached. I am also concerned that the proposed Charter change will be perceived very negatively by the bond-rating agencies and investors. Over the years, I've seen many statements in investor reports that list the Water Commissioner's authority to set rates as a positive attribute of the City's Water Fund. Often it was one of the few positives among negative attributes, such as declining population base and low General Fund bond rating. Bond insurers, institutional investors, private bond holders and others have a keen interest in who sets the rates for this utility. Rate-setting by a political body would be viewed as a negative by those financial experts and investors, and would make Philadelphia's water and sewer revenue bonds less desirable. 32 12/13/05 - LAW - BILL 050344 - RES. 050355 Thank you for allowing me this time to share my views on this very important matter to the City and to the Water Department. I hope you will consider my concerns as this Committee goes into its deliberations. I would be happy to answer any of the questions that you have. Thank you.

Thank you for your testimony. Councilman O'Neill.

Yes. Commissioner, you mentioned that your rates are pretty competitive with the area. An investor-owned utility has to pay taxes and also has to provide investment return to its investors, right? COMMISSIONER BRUNWASSER: Correct.

There's a lot of pressure with those additional costs that you don't have. 33 12/13/05 - LAW - BILL 050344 - RES. 050355 COMMISSIONER BRUNWASSER: Correct.

You just have to make sure you have enough money to operate. COMMISSIONER BRUNWASSER: Right, and meet our bond requirements.

Right. Well, that's part of your operation. COMMISSIONER BRUNWASSER: Yes. Yes.

If you were put under the authority of the PUC or some other independent regulatory body that would have ultimate approval over rates, let's assume first just the PUC, would that put all our bonds in jeopardy? COMMISSIONER BRUNWASSER: I would have to explore what that would be, what that would mean. I think it's clear and I have --

I can assure you it wouldn't put our bonds in jeopardy. Maybe having a political body 34 12/13/05 - LAW - BILL 050344 - RES. 050355 somebody can make a case, but I really don't think if you had an independent body like the PUC or a similar agency, that anyone would question that the decisions on rates are not political. So I appreciate your legal advice. I'll have it checked on the Council review, but I've already stated I really think there should be somebody with a lot more expertise than Council that stands in the middle between you and us. Right now we're totally unregulated. Council review would just be one level of regulation, but I do believe there probably should be a very forceful level that is similar to the PUC. And I don't think it would have any impact on our bonds at all.

Thank you. Councilman Kelly.

Yes. Good morning, Commissioner. COMMISSIONER BRUNWASSER: Good morning. 35 12/13/05 - LAW - BILL 050344 - RES. 050355

According to your testimony, you're the one that sets the rates for your department. COMMISSIONER BRUNWASSER: Yes.

Now, when you set these rates, you, of course, take in consideration and can take the recommendations of the Hearing Officer. COMMISSIONER BRUNWASSER: Yes.

But there's nothing to probably force you to take his recommendations. In other words, you are the one that takes the sole responsibility in projecting that. COMMISSIONER BRUNWASSER: That's correct, but if you look back as long as we've had Hearing Officers, and I guess that dates back to the late -- like probably, I think, 1979, in those days, in the early days, the Hearing Officer did not make recommended decisions. He summarized the record. But since the time that Hearing Officers have summarized the records and made a 36 12/13/05 - LAW - BILL 050344 - RES. 050355 recommendation to the Commissioners, the Commissioners have not strayed very far from the Hearing Officer's recommendation.

Does a Hearing Officer get involved in actually the functions of your department? In other words, for instance, there's no 10 oversight by anyone, as far as I can see. COMMISSIONER BRUNWASSER: Oversight in what way?

Well, for instance, collectables, the collections. I'm going back to PGW. Whereas until they were taken over by the PUC, their collection rate was horrible, it was terrible, and they were practically in bankruptcy for that whole system of theirs. Now they have to do something and they have to do it because it's an oversight. These people are under the gun. And I don't think it's a bad thing to have somebody reviewing what 37 12/13/05 - LAW - BILL 050344 - RES. 050355 you're doing or what your department is doing. If they're operating in an efficient manner to maybe not cut down the cost but maybe cut down the increases as they come up, then this isn't too bad of a bill, as far as I can see. This is something we really have to look at. I think there are ways that we can just hold these increases down. As Councilman O'Neill testified earlier, it's about a 1,200 percent rise over the years. COMMISSIONER BRUNWASSER: Well, if I --

And, there again, it's not your fault, because of the infrastructure problems and a lot of other problems that you have, you have to deal with, but I don't think it's bad to have somebody, really an independent body you might say, to overlook and to review the steps that you're taking to run your department. COMMISSIONER BRUNWASSER: I 38 12/13/05 - LAW - BILL 050344 - RES. 050355 understand your point. I think our typical bill at this point in time is about $47 per month, and I think it's scheduled to rise to 53. Obviously, a $60 bill is not out of whack. It depends on usage, obviously. I was around in the Water Department when these bills began to rise, and they began to rise in the late '70s through 1991. They rose very rapidly because the department was forced to go to full secondary wastewater treatment. We rebuilt three wastewater treatment plants at a cost of close to $900 million. This was the biggest project, next to the stadiums. In real dollars, it's bigger than the stadiums, because $900 million in the late '70s and '80s was a lot more money in terms of those years. But we went to full secondary treatment, and basically the water bill 25 was fairly stable, but the sewer side of 39 12/13/05 - LAW - BILL 050344 - RES. 050355 the bill went up tremendously, not only in Philadelphia but all over the country, because this was a federal mandate. We were fortunate enough to get about two-thirds of that payment from the federal government. And when we took that, we also -- when we took federal dollars, we also promised to have cost of service rates and certain other strings attached, and we did that. Let me say one other thing about not being regulated. In effect, we're regulated by the federal government, the Environmental Protection Agency. We're regulated by the Department of Environmental Protection. We're not necessarily regulated on the dollar amount that we charge, but, again, it's been true for a long time that we are the lowest priced water and sewer utility in the region.

Who sets the rates for the suburban customers? COMMISSIONER BRUNWASSER: Well, 40 12/13/05 - LAW - BILL 050344 - RES. 050355 for example, you may have seen that Aqua Pennsylvania, which was Philly Suburban, has just recently filed for a new rate increase, and their cost of water is already more than double. I'm talking about the water side now. Their typical bill for water alone is the same as our typical bill for combined water, wastewater and stormwater utility. And with us, 60 percent or more of the charge is the sewer side. It is extraordinarily challenging for us, and what we've done is avoided some of the multi-billion dollar solutions that other cities have had to do recently, Baltimore, Washington, Pittsburgh, go on and on. Most of the large cities who have combined sewer systems like we have have had to sign consent decrees and have been forced to build deep tanks to capture their combined sewer overflows and keep them out of the river. We have to have some 41 12/13/05 - LAW - BILL 050344 - RES. 050355 flexibility in our capital program and our operating budget to deal with these issues. Otherwise, if we're slow at meeting federal standards and state standards, we're going to have about a one and a half billion dollar capital problem added to our chores here, and the debt service on that is going to be amazing. And it's happening in many places throughout the country.

Thank you, Mr. Chairman.

Thank you very much. Councilman Rizzo.

Thank you. Commissioner, you heard one of my, I guess, question, comments, observations earlier about the collection process and what really motivates you as the Commissioner to collect and what interaction you may have with Water Revenue to collect more money, not just simply say, Hey, look, we have a 42 12/13/05 - LAW - BILL 050344 - RES. 050355 shortfall, let's raise the rates. A manager, I think, has to be motivated, and I don't really see, but maybe you can explain, your motivation. Being the Commissioner of the Water Department, could you point out anything that you would like to see changed to make that relationship better or point out some things because of being a municipally owned company, facility, what would you do if you could make some significant changes in the remainder of your career to make this a better operation and what could City Council do to help you accomplish that? COMMISSIONER BRUNWASSER: That's a great question, I think. Anyway, first, I want to answer the question about motivation. First of all, we have about 2,000 employees, give or take, in the Water Department and plus we fund people in the Water Revenue Bureau, about 200 or so. We have some great motivation 43 12/13/05 - LAW - BILL 050344 - RES. 050355 to keep rates low, because each and every one of us lives in the City, or at least are supposed to live in the City. So that all of us are paying these rates as well. I always kid my neighbors that I get free water, but it's just a joke. But we pay these rates just as everyone else does, and our neighbors pay these rates because we're all in Philadelphia, and our families. So that in itself is quite an inducement to keep rates low and to become efficient. Another thing is, we have tremendous pride in the Water Department. We have folks that are in the Water Department 20, 30, 40 years. We had a fellow who just retired a year ago with 50 years of service in the Water Department. We have tremendous pride in what we do. We have lots of engineering. We have people who love coming to work and getting the job done. It's just amazing, and we have a lot of pride in 44 12/13/05 - LAW - BILL 050344 - RES. 050355 what we've done over the last 50 years, which is one of the reasons I'm here today. So we have a lot of motivation, and we're trying to get that motivation over to the Revenue Department, the Water Revenue Bureau, and one of the things we want to do is take them out to some of our facilities and kind of see what their work is helping to support. If you ever see these facilities, I'd be glad to take anyone from City Council to the water and wastewater plants. Some of these facilities are over a mile long, but most of it is underground, and that's where the hundreds of millions of dollars were spent, and most people don't see them. These plants are tucked away under a bridge somewhere. Anyway, so we have a lot of motivation and pride to do a good job. I was involved in rate cases for 20 years and I had to face the public 45 12/13/05 - LAW - BILL 050344 - RES. 050355 when we raised rates. So I had a lot of motivation to say, Hey, here are where our problems are, this is what we'd like to do. And you bring up our relationship with the Water Revenue Bureau. I think it makes a lot of sense for us to merge with the Water Revenue Bureau and have them become a department of the Water Department. Now, that would take a Charter change also, but the motivation perhaps being close with us would make it -- and answerable on a daily basis would make them a little more responsive, although I think they're trying to do a good job with what they have at the present time.

Commissioner, I've talked to some people in the Water Department. It's very frustrating to work in a department that responds to do shut-offs and know that there are people out there that owe a significant amount of money to the Water 46 12/13/05 - LAW - BILL 050344 - RES. 050355 Department, and the next statement is, Well, it's not owed to the Water Department, it's owed to the Water Revenue Department. Could we do a better job if in fact the Water Department was involved making some decisions on who should be -- my question is, do you have any input at all or is it strictly a piece of paper that pops out of a computer and we decide whether to turn this one off, leave that one on? COMMISSIONER BRUNWASSER: We work very closely with the Water Revenue Bureau, especially on shut-offs. In fact, we have a fellow that's in charge of shut-offs for us who takes great pride in the success of his unit. He has statistics and he works closely with the Bureau. They are the ones that tell us who to go and shut off, but we have the fellows with the wrenches. And in any given day, he can shut off 500 accounts in a single day. 47 12/13/05 - LAW - BILL 050344 - RES. 050355 And also when we see that there's a problem, there's an account that continuously turns itself on illegally, eventually they're going to cement that thing. We've also developed our own locks that you place over the valve at the curb stop. To some people, it's a game, but we take it very seriously, and, again, we work closely with the Water Revenue Bureau, and over the past ten years or so, we've really made some improvements that have actually worked out for us.

Thank you.

Councilman Mariano.

Thank you, Councilman Kenney. Commissioner, probably -- I might not be -- but out of the three new water treatment plants, I think I had the pleasure and the displeasure, depending on how you look at it, to work on the construction of two of them. They were 48 12/13/05 - LAW - BILL 050344 - RES. 050355 big-time jobs and they were big-time money, and I appreciated it at the time. It was a different world, a different time. That money came from the federal government. And I think from listening to you and Councilman O'Neill and Councilman Rizzo and hearing Councilman Kelly and Kenney here, we're just trying to figure out to get to one point, but the point keeps coming back in my mind that the water is pretty comparable, the water rates are pretty comparable to our neighbors in other counties, but it's the sewage part. Did I misunderstood you? COMMISSIONER BRUNWASSER: Our water is about half the cost of our neighbors. Most of the people that are outside of Philadelphia, in Pennsylvania at least, are served by Aqua Pennsylvania or Pennsylvania American, and their rates for water are more than double ours.

But the sewage -- COMMISSIONER BRUNWASSER: The 49 12/13/05 - LAW - BILL 050344 - RES. 050355 sewage, they don't know -- they're not sewer purveyors, and some of our suburbanites have cesspools. Some of them pay large fees on a quarterly basis or what-have-you, and many of them pay for their sewage and stormwater in their taxes. They don't know how much they're paying. Those utilities, I think it's in the testimony, a little table there, those utilities around us that do sewage treatment are more expensive than us on the sanitary sewage basis. Nobody outside of Philadelphia knows how much they pay for stormwater. We know that, too, and that goes into the service charge, and that's why the service charge is relatively high, because stormwater happens whether you use water in your house or not.

How are we compared to the other major cities? Like I think you spoke about Baltimore, New York and Boston. 50 12/13/05 - LAW - BILL 050344 - RES. 050355 COMMISSIONER BRUNWASSER: Right.

They have the combined water and sewage? Are they on the same system we're on? COMMISSIONER BRUNWASSER: Right.

And are about the same age? COMMISSIONER BRUNWASSER: Yeah. We're similar. We're sort of in the middle of the boat when we compare ourselves to those utilities. However, many of them don't include the stormwater. So it could be that we're even better off, but some of the factors that we're faced with is, we have a fairly high utility bill here in this region compared to some other regions in the country. And utilities -- I mean, electric for us, just like for the Streets Department, is a huge ticket item, and so you have those kinds of differences. Each utility in certain 51 12/13/05 - LAW - BILL 050344 - RES. 050355 regions is a little bit different. Now, if you take a look at other sections of the country, you take a look at the southwest, you want to talk about how expensive water is, you can't imagine some of the places.

Because of the climate and the weather and the way it rains? COMMISSIONER BRUNWASSER: Right. It's a scarce commodity and it's priced that way, and many of them, the more you use, the higher your rate.

Thank you, Commissioner. Thank you, Councilman.

Thank you very much. Any more questions for the Commissioner? COMMISSIONER BRUNWASSER: Can I make one point? I just got reminded of something, and I'm sorry Councilman O'Neill is not here, but I think under 52 12/13/05 - LAW - BILL 050344 - RES. 050355 our rules, I think putting us under the PUC would be a major problem for bond-rating agencies and under our ordinance as well.

I'm sure all of this will be discussed during the course of the ongoing discussion about this issue, so thank you very much. COMMISSIONER BRUNWASSER: Sure.

Anyone else to testify on this bill? Please come forward. Good morning. Please identify yourself for the record.

Sure. My name is Bruce Warren Hochman. I'm a resident, I'm a taxpayer, and I'm coming here to be in -- to agree to the proposals of Commissioner O'Neill on 044 and 045 -- or 055 (sic). Excuse me. This is my first experience here. You'll have to forgive me.

Just take your time. You're everybody's friend up 53 12/13/05 - LAW - BILL 050344 - RES. 050355 here. You're okay.

Well, I know most of you. Surprised the heck out of me this morning anyway. I live in the Northeast. I have been paying my water bills on time, but I'm in the $80 range per month because we use quite a bit of water. I have a son that wishes to take a shower every day and hold back nothing for 12 minutes at least. 13

That could 14 be a good thing, too. 15

But something, 16 quote/unquote, stinks here. 17

Not your 18 son. 19

And I'm going to 20 put this in perspective. The first thing a person coming into the airport in Philadelphia smells is the sewage plant, and it's the last thing a visitor smells as he leaves Philadelphia, is a sewage plant. That's what I mean, something 54 12/13/05 - LAW - BILL 050344 - RES. 050355 stinks here. I'm not saying that the people are not doing their job, but it is odiferous, is a good word, especially in the summertime. But I'm looking at the standpoint of having an oversight committee to check with -- having checks and balances within the system. We cannot as taxpayers keep going to meetings and requesting a Board to take a label to a Commissioner who has oversight to everything and doesn't matter what he says or comes from the public. Even though he takes it into consideration does not mean that he will follow it. We need assistance. We are getting into higher, higher rates of taxation without representation in this situation. It's not a fair situation. And that's what I'm coming here to state, and that's what I've done. Thank you.

Thank you 55 12/13/05 - LAW - BILL 050344 - RES. 050355 very much for your testimony. Any questions for this witness? (No response.)

Thank you for taking the time to come in and express your views.

Thank you.

Good to see you, Bruce.

Anyone else on this bill? Please come forward. Good morning. Please identify yourself for the record.

I'm Talmadge Belo. I'm a resident of North Philadelphia. Some of the other titles I hold, I'm the Vice-President of the Brewerytown Civic Association, and that's a 501(c)(3) non-profit in the North Philadelphia area, Brewerytown to be more specific. I'm also the Eastern Region Staff Director for the SEIU Local 668 of the Pennsylvania Social Services Union, 56 12/13/05 - LAW - BILL 050344 - RES. 050355 changed to Win, which is the new founding fathers of our new union. We're also the second largest union in the State of Pennsylvania. Good morning, Councilman.

Good morning, sir.

Today I'm here to give testimony in support of Resolution 11 050344 and the -- correction, 355 as corrected, which intends to amend the Charter to allow City Council to have a say on the approval of the increases of the water and sewer rates if the voters approve that amendment in the May elections. My first thoughts when considering the proposal was that of Mrs. Elvira Loney of the 2400 block of Turner Street in the North Philadelphia area. Ms. Loney is a senior citizen in her 80's who lost her husband of 50-plus years about two years ago. I talked to her last night. I asked her about this. 57 12/13/05 - LAW - BILL 050344 - RES. 050355 When her husband passed away, she was left with a much-reduced fixed income. Her life has been a struggle ever since. This wonderful lady struggles to maintain an independent existence in a home she and her late husband worked hard to purchase. But as we all know, her everyday expenses continue to grow literally, without mercy. Her water and sewage, along with the other utilities, continue to increase in costs whenever the Commissioners decide an increase is necessary. These actions may, in fact, be necessary. However, there are no checks and balances, as we said, that look out for the Elvira Loneys and the hundreds and thousands -- or thousands of others like her in the City of Philadelphia, and that's the great City of Philadelphia. So I speak to the approval of the amendment, and I thank you for your attention.

Thank you 58 12/13/05 - LAW - BILL 050869 very much for taking the time to come in and testify. Thank you. Anyone else on these two issues? (No response.)

Councilman O'Neill, I assume you're going to be working with the Department to have some further discussions on where we're going with this issue.

Yes.

Thank you. The next issue for the Committee today is Resolution No. 050869, which is a resolution authorizing City Council's Committee on Law and Government to hold public hearings on reestablishing the Veterans' Advisory Commission and its appointment of members thereof by revitalizing the Commission's mission and restructuring the Commission's funding. I would just like to read a few opening remarks to give you some idea as to the genesis of this issue and the 59 12/13/05 - LAW - BILL 050869 direction we would like to be going. In 1957, Philadelphia's City Council established the Veterans' Advisory Commission to work with appropriate governmental agencies engaged in the distribution of veterans' benefits and to advise veterans of those to which they are entitled. This Commission was also presumed to periodically report to the Mayor and Council their findings and proposals for relevant legislation. While the Commission was effective for a number of years, it has regrettably become inactive, resulting in strained resources, loss of communication between the Commission and City Council and between the Commission and veterans organizations throughout the City. A major setback for the Commission includes the failure to replace Commissioners who pass away or resign. Presently, the seven-member Commission consists of two Commissioners and five vacancies. Additionally, the 60 12/13/05 - LAW - BILL 050869 Commission has not filed an annual report since September 1966. There is also a need to modify the member veterans organizations to permit relevant organizations to participate. While the resolution 8 identifies these relevant organizations, I must recognize other groups that were unintentionally not mentioned in the initial resolution. They are the Vietnam Veterans Memorial Society, the 82nd Airborne, the United Veterans Council of Philadelphia and Philadelphia Stand Down and Philadelphia Municipal Employee War Veterans Association. Taking steps to revitalize the Commission and its mission will certainly prove beneficial to the City's nearly 190,000 veterans and their families, and significantly assist the Commission's Director and staff with daily operations and services. I strongly support increasing the number of appointed Commissioners 61 12/13/05 - LAW - BILL 050869 from seven to nine, or even more, to provide the opportunity for veteran representation from around the City. Furthermore, I think it is necessary to establish a meeting schedule and identify Commissioner responsibilities. I want to thank everyone who has come here today. I know many of you veterans are used to hurrying up and waiting, and we've made you wait a little longer today. We appreciate your patience. I want to thank everyone for their support and attendance while we discuss what I think is a very pressing issue in light of what our country is going through now and currently and in recent years the veteran populations continuing to grow, and I think it's very important that we have a thorough discussion of this issue and hopefully, through the course of this process, come out with an additional resolution or ordinance that will reestablish the 62 12/13/05 - LAW - BILL 050869 Commission, make recommendations coming from the veterans community on who should serve on this Commission, and also trying to deal with the funding issues that have plagued the Commission and also try to find some outside funding sources that may want to match what the City is willing to provide. So I would like to first offer testimony, which is written testimony, in support of this effort from Lance Haver, who is the Consumer Affairs Director for the Administration, and ask Ed Lowry and Tom Murtha to come forward, and Tom Finnerty, if you want to come up also to begin your testimony. Good morning. Please identify yourself for the record and proceed. COMMISSIONER LOWRY: Good morning. My name is Edward J. Lowry.

I'm the Executive Director and Founding Director of the Philadelphia Veterans Multi-Service Center and one of the two remaining Commissioners on the 63 12/13/05 - LAW - BILL 050869 Philadelphia Veterans Advisory Commission. I have served the veteran community in Philadelphia for years 6 and have served on the Advisory 7 Commission since 1984. I was originally 8 appointed by then-Council President 9 Joseph Coleman. 10 I would like to thank you, 11 Councilman Kenney, Councilman DiCicco, 12 for co-sponsoring this bill and the 13 members of this Committee for the 14 opportunity to testify in support of this 15 critically needed resolution. 16 The support and endorsement of 17 this resolution will help ensure that our 18 City's present and future veterans' 19 voices will be heard. Your endorsement 20 of this resolution will send a positive 21 message of support to the City of 22 Philadelphia veterans population, young 23 and old, male and female, and also to 24 those serving to protect us from 25 terrorism. 64 12/13/05 - LAW - BILL 050869 The City of Philadelphia has a proud history of service to our country and, over the years, has always had one of the highest ratios per capita of veterans that serve in uniform. In 1957, when Resolution 123 was recommended and approved by City Council, it addressed the informational benefits, educational and legislative needs of World War I, World War II and Korean War veterans. The veteran service organizations of that time, 48 years ago, were well represented and given the opportunity to recommend and/or place members on the Advisory Commission to represent them. Since that time, much has changed in the Philadelphia veteran community. We, as a nation, have been involved in several wars, conflicts and military actions, which have all resulted in the need of additional benefits, programs, services and legislative action. New veteran service 65 12/13/05 - LAW - BILL 050869 organizations have surfaced to address the needs and concerns of their veteran peers. It is common knowledge that over the past to years, the 7 Veterans Advisory Commission has become 8 inactive and strained. As the faces, 9 ages and needs of our veteran population 10 have changed, the Commission members, the 11 veteran service organizations and the 12 directions, the goals and objectives of 13 the Advisory Commission office have not. 14 The need for the 15 reestablishment of the Veterans Advisory Commission is critical for several reasons. One, to give the newer veteran organizations a voice on the Commission; two, to reactivate and revitalize the Commission to effectively and efficiently address the changing need of all our City's veterans, young, old and in the future; and, third, to act as a liaison between our Mayor, City Councilmembers, cabinet members, City agencies and the 66 12/13/05 - LAW - BILL 050869 the City's veteran community. The goal will be to ensure that City government knows and understands the needs, problems and concerns that face our City's veteran population and, secondly, to ensure that our veterans are aware of benefits, programs and entitlement that they may be eligible to claim. In closing, Resolution 050869 recognizes and addresses the needs for revitalization and change. By supporting this resolution, this Committee will be authorizing the critically needed changes necessary to keep both our veterans and our City leaders well informed and aware of veterans' issues. I would strongly ask and recommend that the Committee support this resolution. It's greatly needed, and it's something that's long overdue. Thank you.

Thank you very much for your testimony. We'll have 67 12/13/05 - LAW - BILL 050869 Mr. Finnerty give his testimony and then we'll have whatever comments.

Good morning, Councilman and members of the Law and Government. My name is Thomas P. Finnerty, Director of Veterans Advisory Commission. We are here today to discuss the reconstruction of the Commission members to the Advisory. In doing this, the Advisory could work with members in making this office more productive to veterans' concerns. With an active Commission, we could also have someone to act as a liaison with Council and the Mayor's office. It also would enhance my work with the veterans organizations and the following duties of our office. We are responsible for the following: Administering state benefits. This is a huge portion of our work. We have a program for war-time veterans who have fallen on hard times. The program is called the Emergency Assistance. 68 12/13/05 - LAW - BILL 050869 Response to the City's observance of Veterans Day; ordering and distributing flags for Memorial Day and grave markers; assist and direct veterans and their families with the benefits, entitlement, filling out and processing necessary forms; investigating and arranging burials for indigent veterans that remain in the City morgue; and to attend meetings at the VA Hospital and the VA. The only drawback to our office is that we are not handicapped accessible. Only good can come from this reconstruction. We are all here to help our fellow veterans. We're happy to help assist with the reconstruction of the Commission. I would be glad to address any questions at this time. Thank you.

Thank you very much. I'd first like to just compliment Mr. Finnerty and Joyce McHugh 69 12/13/05 - LAW - BILL 050869 on their extremely hard work in that office. They are by themselves. They're doing their best every day with a minimal amount of resources, and they really do show us that they care. And I think that we owe them, no matter how long Tom stays here with us on staff, to show them that we really want to make the commitment that they've made over the years to serving veterans. With a lot of things, good ideas sometimes fall by the wayside and we don't pay attention to them, but I know that two of you have paid attention to this every day, and I think that you deserve a reconstituted Commission with active members who come up with ideas, who are willing to see those ideas through by fighting for budget resources from the City, by going outside and trying to find foundations and other resources to really make this an effective agency that it once was back in the '50s and '60s. 70 12/13/05 - LAW - BILL 050869 So I appreciate you coming in. I know Councilman Kelly has a comment, and I'd like to recognize him.

Councilman, we have another woman down there whose name is Maddie Johnson, and she's a big part of the team, because it's a three-member team. When I went --

You're the two I most see, but Ms. Johnson, I'm sure, is as active and hard-working as you guys are, too. So thank you for correcting me.

Right.

Councilman Kelly.

Thank you, Mr. Chairman. I just want to put a comment out, that I can't think of a more worthy group of people to be helping than our veterans. Because if not for our veterans, none of us would be sitting at this table. And I think that I want to 71 12/13/05 - LAW - BILL 050869 commend you, I want to commend your hard work and your efforts to help our veterans in any way possible, and I think this Council also agrees. Thank you, gentlemen.

I also think one of the important things that this Commission -- and the goal of this Committee is to work over the next month or two. I don't want to drag this out forever. I'd like to really come to some conclusion over the next 30, 60, 90 days so that we can come back with a piece of legislation, either ordinance or resolution, that would specifically name the new members of the Commission, with agreement from all the veterans groups, and lay out what their duties are and attempt to really address some of the budget issues. So I'd really like to come back with a piece of legislation that we could pass before we leave in the spring to get this thing rolling. 72 12/13/05 - LAW - BILL 050869 Councilman Mariano.

Thank you, Councilman Kenney. I'd first like to start out by saying kudos to Councilman Kenney and Councilman DiCicco for bringing this up. This has probably been long overdue. I have a question for Mr. Lowry, and it's historical. If you started this in 1957, I guess most of the people -- you were the young guy when it started. Most of the people were World War II and Korean veterans. So through what we know this happening to World War II veterans, I hear a staggering figure like thousands of them die a day or a week. I don't know which figure is right, but it is a thousand, and if it's a day or a week, it's amazing, because they're basically in their 90's. Is that what happened to this Commission? It wasn't a lack of City government not paying attention. Is it 73 12/13/05 - LAW - BILL 050869 just because of the attrition of the older age or the seniority of the people that were on it? COMMISSIONER LOWRY: Well, first of all, in 1957, I was in grade school, so I wasn't on the Commission. I was appointed in '84.

I didn't think you were on in '57. You said '84, I think.

You had a rough paper route. COMMISSIONER LOWRY: Right. I was appointed in 1984 during the height of the Vietnam Veteran Memorial Fund drive. Chairman Lederer had recommended me for the appointment. And to answer your question, without placing the blame on anyone --

That's not my intention. I just wanted to get to that point. COMMISSIONER LOWRY: I understand. 74 12/13/05 - LAW - BILL 050869

Because I have a further point after this. COMMISSIONER LOWRY: But what happened basically was, the World War II vets predominantly served on the Committee, and basically over the last 8 or 15 years, their average age is 9 probably somewhere between 75 and 85, and 10 that they become older, ill and have other issues in their lives, physical and otherwise. And basically what happened was, because of the inactivity of the Commission itself, some of our elected officials -- over the years, the President of City Council has been responsible for overseeing the Committee, and the few of us that were left, several had died and were dead for ten years before they were taken off the Committee. But basically what happened was, we've made an effort to try to, over the years, revitalize and look forward to some of these ideas. We have no goals and objectives, no oversight. We had no 75 12/13/05 - LAW - BILL 050869 Councilmembers on the Committee for probably ten years, and I believe there was always supposed to be at least two, a minority and a majority or just a majority. However, we had no teeth. We were like the watchdog with no teeth. And, therefore, we really tried to make recommendations, we tried to move forward, we tried to revitalize the Committee over the years. And, yes, there are approximately 1,500 World War II veterans dying a day. We're losing about 35,000 a month. I believe at the present time it's down to probably less than 3 million of the 29 million or so that served. So it's the nature of the beast.

My further point, the reason I asked you that question was, once you understand veterans politics, which I don't claim to understand -- and there are certain levels of veteran politics depending on 76 12/13/05 - LAW - BILL 050869 who is giving the talk on politics, as is any politics, there are combat veterans, there are Army veterans, there are Vietnam veterans, there are Vietnam era veterans, there are Gulf War veterans, there are guys in between but went in Bosnia that are veterans. But my point would be is, the reason this has to happen is, there's a lot of young men and women over there now between the age of and 30 and are going to come home and 13 they're going to come home with some 14 post-traumatic stress problems probably 15 from what I'm seeing on the news and 16 seeing with Afghanistan, and depending 17 what's happening with this Administration 18 in Washington, who knows where or what's 19 next. I mean, we have to be ready for 20 that. But that's a big burden on the City of Philadelphia, and I think we do the best we can knowing the information we know. I know both you guys are veterans and probably historically you 77 12/13/05 - LAW - BILL 050869 both have read a lot of stuff about veterans. Veterans basically have been turned the other cheek to since World War I by the federal government, not by the municipalities. So for this Commission to get up and running, I mean, the City can do so much, and I think possibly the City should do more and it should possibly maybe even be beyond City Council, but I know that the little -- not the little, but the individual organizations -- and Councilman Kenney mentioned some that were mentioned, there's probably more that him or I or you don't know about. I'm sure we'll hear from them, but there's a whole lot of people here that need to be represented. And my point, to sum this all up, is, I don't know how you do it. I don't know how you keep the veterans in -- to find out who everybody is without help from the federal government. We have a Congressman here who is a good 78 12/13/05 - LAW - BILL 050869 Congressman, is the Chairman of the democratic party that's on the Armed Services Committee. That may be one way, but there must be something that the federal government can help. I know your organization, the Multi-Service Center, does great things, and I think you got some federal money somewhere from one of the Senators or something. That's what we need here. The City can just start it, but pretty much the federal government or someone else has to do this, because this becomes overwhelming just trying to figure out who is who or what's what. That's not making any excuses for anybody or anything that happened in the past. But thanks for your help, guys, because I know you guys both -- COMMISSIONER LOWRY: I'd like to just mention one thing, that one of the reasons that I'm really interested in trying to reactivate this Committee, the point that you make is extremely 79 12/13/05 - LAW - BILL 050869 important, because I'm only going to be around for a couple more years serving in my capacity hopefully, but we have to relinquish the hats and the buttons and the pins. Like a lot of the older veterans, for example, have a problem with doing that because of being the greatest generation. And basically the issue about the future veterans is right now. I can tell you last year we had 39,000 visits at our small non-profit agency, and we run three homeless programs. We are already seeing homeless Persian Gulf veterans, Iraqi and Afghan veterans that are showing up in the homeless veteran population with serious problems, physical, behavioral health issues, combat-related issues and problems. We have 95 veterans living with us for up to two years in a program we run in Coatesville. We also have a women's shelter there that has 30 beds for female veterans, which have been 80 12/13/05 - LAW - BILL 050869 really neglected since they started entering the military.

So the future is today really. My concern is, when this Committee is fully functioning and we have a great platform to advise the Mayor and the City Council and our other agencies that are as important within the City because they deal with veterans every day and they should know the issues, but, as I say, we're already seeing the veterans from the war on terrorism. We have probably seen probably 150 to 200 have come back with serious physical wounds, mental wounds, and are seriously suffering from the financial issues of being called to active duty. The hearing that Councilman Kenney had recently really addresses the issues of the National Guard and reserves that we discuss, but that's the tip of the iceberg in a lot of respects, because for the first time in 50 years, we're asking reserves and National Guardsmen to 81 12/13/05 - LAW - BILL 050869 do things that they would never have done since Korea. But I really think that this is a great step forward. It's important. And if we're ever going to address the needs of Philadelphia County veterans, we have to do something along these lines to really make it work, because it's all we have.

See, I view this as a two-pronged process. One is providing the resources to Tom and staff to do the day-to-day service stuff that's necessary, but the other to me is the composition of a Board that has some clout that people will listen to to have the ability not only to deal with county veterans issues, but to look at legislation that may be pending in Harrisburg and be able to be a pulpit to talk to other legislators within the City, outside the City, and to kind of be an advocate out of the largest area in the state to talk about these things. 82 12/13/05 - LAW - BILL 050869 I mean, when you think about veterans issues, you think about Veterans Day and you think about World War II and Korea veterans, and, of course, the Vietnam veteran community is very active, but as you said, there's a lot of younger people who are in the service going through some very difficult times and difficult places that are going to have different needs, and those needs need to be addressed on an ongoing basis, not just in a feel-good way. And my goal here is to have the Commission be a source of both information and the ability to get people's attention, so when the Philadelphia Veterans Affairs Commission issues some type of position, that our Congressional delegation pays attention, that the U.S. Senators pay attention, that maybe we can educate them on how they can better serve all veterans, not only of Philadelphia but around the country. 83 12/13/05 - LAW - BILL 050869 So I really would like it to be a resource and a clearinghouse of information and an ability to communicate with not only elected officials, but people who run agencies. I mean, look at the connection we have already with the homeless veterans you've talked about, Councilwoman Blackwell's Committee on Homelessness and Housing, our homeless offices in Philadelphia. I mean, the ability to have an Executive Director at a Commission that can coordinate those services specifically designed for veteran needs I think is really what the goal is here. And that's what you put in my head when we had the conversation, and I called to ask him for support on the bills for the reserves and the Guard. You expounded on what you really would like to have seen done with the Commission, and that really was kind of the catalyst for dusting this off and trying to get it back online again. So I want to thank you for bringing that to my 84 12/13/05 - LAW - BILL 050869 attention. And, Tom, I know you had a comment you wanted to make.

Yeah. The war that's going on now is the worst war since World War II. I went down to Walter Reed Hospital over Martin Luther King. I rented a van. I took a couple guys down, and we went down there and we stayed over two days. We went to Walter Reed in Bethesda. And if you seen how these guys -- one guy jumped up, had his leg missing and he was going to be an airborne ranger. I mean, they're young. As they get older, the same thing will happen to them that happens to me, happens to Ed. You start breaking down. We have the veterans coming in now, because one of the places they have to put their discharge on down in Room 22 154, then they come up to the office and deal with them. We've seen a couple women veterans, and if you heard the stories 85 12/13/05 - LAW - BILL 050869 they tell you, it's tough for a woman veteran to be in war. I mean, I didn't see that in Vietnam. And it's going to be a different operation. People are going to have to be prepared. I think Ed is prepared, I would be prepared, because we've been dealing with this so long and we're compassionate to the veterans' needs. When I retire, I'm still going to be active in veterans' needs. It's something that has to go on. It's like a labor of love. Veterans are hard people to deal with, very, very hard, but you have to be in their face. They're in my face. So we usually -- it's like politics. You work out a compromise, and it works out pretty good. But we're all in for a surprise. Their post-traumatic stress booklet is that thick. Vietnam veterans' was that thick. But the Vietnam veterans fought and fought and fought, and they're still fighting, and we need people to 86 12/13/05 - LAW - BILL 050869 give us a hand.

Some of the things as you're talking about, your testimony is popping ideas into my head. I mean, we have probably one of the most comprehensive medical center research areas in the region. You can rattle off many, many very well-known hospital facilities, teaching hospitals, rehabilitation hospitals, cancer hospital. I mean, you can go on and on, and the ability to try to reach out through a Commission like this to those institutions to be involved in looking at veterans' issues. Perhaps the University of Pennsylvania would want to study something to do with psychiatric issues relative to people coming home from Iraq and the Gulf. There's a myriad of possibilities to bring in, not just government resources, but outside institutions in the City and in the region to help with this issue to get 87 12/13/05 - LAW - BILL 050869 everybody on board in recognizing the contributions that the veterans have made and trying to deal with some of their special problems as a result of their service. So, I mean, there is an unlimited amount of opportunities, I think, but you really do need a voice that has some clout and that has some standing in the government that can go out and seek out that kind of help. That's what excites me about this whole idea, is there's so many different -- I mean, all of our educational institutions, for example. How do we plug in our veterans coming back that may be disabled or have some difficulties in readjusting to work life to get them in some training program that they would be willing to sponsor. I mean, there's so many opportunities. So I just think it's the right thing to do and I think it's long overdue and I'm glad we're starting to kick it 88 12/13/05 - LAW - BILL 050869 back in play again. Councilman Rizzo, do you have anything to say?

No. 6

Any other comments? (No response.)

I thank you for your testimony. We'll be working with staff here, both tech staff, tech of the Commission that exists and my staff here, to try to come up in the next hopefully 60 days or so with some piece of legislation to get this thing moving again. So thanks for coming in. COMMISSIONER LOWRY: Thank you for your effort.

Thank you. Is there anyone else to testify? Please come up. Good morning. Please identify yourself for the stenographer.

John J. 89 12/13/05 - LAW - BILL 050869 Plenskofski. Born in Philadelphia November the 6th, 1926, 1937 South 4th Street. My father was a Philadelphia police officer, died in the line of duty August the 8th, 1927. I was nine months old. I served in the United States Army during World War II, August '44 to September '47. I reenlisted for Korea August the 21st. I got shot in Korea. Two months and nine days later my mother got a letter. I wasn't even in the Army. I spent four months in a hospital, come back with a 100-something disability rating, gun shot wounds, partial paralysis in my right arm, shoulder, frostbite in my hands and feet, so forth and so on. I always said Korea was America's forgotten victory. I found the Philadelphia-Korean War Memorial with two other Korean veterans starting in 1987. I got the battle casualty list for 2003. 2,333 men from Pennsylvania was killed in 90 12/13/05 - LAW - BILL 050869 action, missing in action, died in captivity. We contacted Councilman Francis Rafferty, and Mr. Kelly was a member of the Commission then, with Brian O'Neill, Thatcher Longstreth. We had Resolution 8 1154 passed, establishment of the Korean War Memorial of Philadelphia. We named our chapter after Private First Class Stanley Gogoj, who was killed in Korea June the 30th, 1950, five days after the war began on June the 25th, 1950. We named our Korean War veterans chapter 15 after him. We hold our meetings in Am-Vets Post 100 February 24, 1991. We had 38 veterans of the Korea War. So that's why we named our chapter, the 38, Stanley Gogoj, after the first man killed in the Korean War. I raised most of the money, over a million dollars, to get that Memorial built, yet I have nothing to say, because politics took over. We need 91 12/13/05 - LAW - BILL 050869 more people like this gentleman over here, who represents all veterans, not certain groups. I'm a life member of the 106 Infantry Division. I served in World War II. I served in 24th Infantry Division in the Korean War. I'm a life member there. I belong to the Life Member Military, earned a Purple Heart, Disabled Veterans, Am-Vets. I can keep going on ranting and raving. Korea lost 37,000 men. That means 1,000 men in eight months died over there. It's rated as our country's worst wars for the amount of time and the men that served there. I don't know if you ever heard of James Garver Maverick. He served in A Company, Fifth RCT. We had a man in our chapter who won the Congressional Medal of Honor. We had over 1,000 men killed in the 5th Regimental Combat Teams attached to every division that was in Korea. The last man that was killed in the Korea War 92 12/13/05 - LAW - BILL 050869 happened to come from Company K, 5th Infantry Regiment, who was attached to the 45th Division. His name is Sergeant Harold Cross. We was the first ones to meet the Chinese at the last week of October 1950 up by the Yellow River with the British 27th Brigade. I'm a walking encyclopedia about the war because I spent so much time. When I can raise the money through the efforts of Congressman Lucien Blackwell, contact Mayor John Street for the 50th anniversary of making arrangements to have that ceremony -- he pledged he could be able to raise $650,000. I got $100,000 installed into the 1998-'99 state budget to start construction. We hired Frank Fatetta in 1992. And he knows me. I have the original plans and the design of that Memorial. We did everything, but yet I have nothing to say. You know why? I tried to protect our rights from being 93 12/13/05 - LAW - BILL 050869 infringed upon. In plain words, I'm an outcast because I ask too many questions. We need a man like this and a few others, the younger veterans, to be on this Board so we have a legitimate complaint. We have a voice to say what we did. I think it's a slap in the face to me and other veterans of the Korea War who served there to have nothing to say about this Memorial down there at Foglietta Plaza.

I tried to get that Korean War Memorial site named after Lucien Blackwell, and there was name-calling about it by certain people. I could cause a lot of problems, which I don't want to do, but my concern is, I want to protect my rights as much as I can at 79 years old. I don't know how long I'm going to be around. And I'm the type of a person, like some members of your City Council, who will defend theirself when the time comes and necessity. And my concern is, like I said, we have nothing to say or do 94 12/13/05 - LAW - BILL 050869 about that Memorial even though we raised the money. And the Memorial has been copyrighted on under our name, PFC Stanley Gogoj, Chapter 38 in the Library of Congress, March 1994. I was told we turned it over. I never turned it over. I never turned that copyright over neither, because I got the copies right here. I can prove anything I say or put into writing. Fairmount Park Commission, 1992, from Delaware Avenue to Mather Street to Second Street and Spruce Street. We received a letter right here -- okay to mention his name? Who assisted to raise the money? He never raised the money for us. I think I was misled, deceived. I found out there our members, our Board of Directors, were meeting with a lawyer, which I don't care to mention his name. He controls the Memorial, and yet he is not man enough to serve in the military. I think he always watched too many Marine 95 12/13/05 - LAW - BILL 050869 movies when he was growing up. He has aspirations, because he put a First Marine Division plaque down there that says World War II, Korea, Vietnam, Southwest Asia for a Vietnam veteran who lives in Bucks County, Richie Gresco. He had won a Navy Cross in Vietnam. Supposedly he jumped on a grenade. He has a tear in his meniscus, I think, in his right leg. I got tears in my meniscus from being hit by kicussion (ph). I got a Great Conduct Medal. Now, I'm not being smart, but when you have to go through what I went through, get removed from the Board of Directors to change the corporation to Friends of the Korea War Memorial, that Memorial has been started by 1992. Believe me, I got the papers that can prove it. I can cause a lot of trouble. But I'm looking to protect my rights, our rights. We want a person like that man. I seen him come down at ceremonies to honor Korean veterans. 96 12/13/05 - LAW - BILL 050869 I lost members of our chapter. I got two members in the hospital. 25 men that would be. I think it will be 23 men, who died waiting to see the Memorial get built. Like I said, I'm 79 years old. I got a lot of medical problems. I have nothing against Mr. Lowry or Mr. Finnerty, because I had a petition submitted to Anna Verna to get Mr. Finnerty in the job as the Director, not the assistant, because he does a good job. Sometimes me and him have a disagreeance. If you have a disagreeance, it's just -- we all have the right to opinion. And as some members of the Board -- Frank Rizzo knows me, Rick Mariano, Jack Kelly when he had black hair. Let's go back.

You're going back some now, John.

I had hair. Like I said, it's really something to spend that much time and 97 12/13/05 - LAW - BILL 050869 have nothing to say. But we really need an Advisory Board or the Veterans Affairs, or whatever it is. Here you are in City Council. And when I can't say nothing, nobody ignores me, there goes that goofy Pollock ranting and raving again -- I heard that name many a time. And who sponsored my father's name was nothing but Congressman Bob Brady at 5th and Snyder. I know Bob Brady fairly well. And like I just said, I don't want to take up your time. I see Frank Rizzo looking, but, like I said, my concern is a person like me who raised most of the money, did his best to work with other people, wind up get a Memorial built, compiled the names of 605 men certified that was killed in the Korea War. We have a Marine down there, Frederick W. Mausert, III, that comes from Dresher, Montgomery County, 7th Marine Regiment, got a Congressional 98 12/13/05 - LAW - BILL 050869 Medal of Honor. There's Bruce Mathewson, another Marine from Bucks County. He served in World War II. He got killed at Chosa (ph) Reservoir. We have a black guy, Corporal Levi Jackson, got a Distinguished Service Cross. I contacted Senator Rick Santorum and Senator Arlen Specter. And Richie Gresco wants a Congressional Medal of Honor for what he did? Corporal Levi Jackson as a Distinguished Service Cross was a combat medic, a heavy-weight boxer due to the 24th Infantry Regiment, shielded two men with wounds with his body and gave his life. Who would be more appropriate? So because I pick at that dedication of that first Korean division associated plaque down there on November the 11th, 2003, I got voted off the Board of Directors, because he went down -- he's got a hand-picked Board of Directors. That's what gets me. Some are not veterans of the Korea War. Some 99 12/13/05 - LAW - BILL 050869 are not even veterans, period. I don't know why he can do it and I can't get no 4 support from members of City Council. I got letters I wrote to Jannie Blackwell, Mayor Street again. I got beaucoup letters. That's French for plenty. Because the idea, it's a slap in the face to me and other veterans of the Korean War. Some of the men on that wall I compiled I served in Korea with. I know men been delayed up in North Korea since November 1950. I had to come up with the idea, get paper bricks down there at Hunterdon. They just put up a couple more down there. But like I said, I think I've done enough, done taking credit. But if it wasn't for me and members of Chapter 20 38, that Memorial wouldn't be getting built, but yet we can't say nothing about it. That's my concern. They're making accusations or allegations against everybody, but I'd like to see a man like that young fellow 100 12/13/05 - LAW - BILL 050869 there. He's a veteran, come back from Afghanistan or Iraq. He's the type of people you need down on that Advisory Commission so we could go see and talk to him if we have problems. Frannie Rafferty was the best man we ever had, I think. He's one of the toughest guys, tough Irishman. And if it wasn't for Frannie Rafferty, we wouldn't have got that resolution passed in that ground at Fairmount Park Commission. And that's the way I feel. That's why I'm here for, to try to protect my rights, let other people know what the hell goes on behind closed doors.

All right.

I think you need a Veterans Advisory Commission where we could go see somebody, have a hearing before City Council.

Thank you very much for your testimony and for your historic perspective. 101 12/13/05 - LAW - BILL 050869 Frank, do you have anything? Councilman Rizzo.

I've known John a long time, and I can tell you that this is his life and I think the people that -- and his wife. And I think that the people that need to know, John, know of all your hard work and your commitment to veterans. And, again, it's just been your life. So I just wanted you to know publicly that I've recognized your hard work, and God bless you for that.

That's okay, but like I just said, I'd like to see some young blood get on the Veterans Advisory Board. Tommy Finnerty, he's getting to be an old man like me. You got Eddie Lowry. They're not spring chickens. You have to move on, and we need some people like this young character who comes over -- I only talked to him two or three times he was up with that Polish guy, that police officer who was shot and killed at the BVM. They're 102 12/13/05 - LAW - BILL 050869 mentioning the Plenskofski family. I said to Jimmy Binns, a fighter, they're using my name wrongly. So he come up there. Him and Rick Mariano was there and I --

Mr. Chairman, for the record, that young fellow that he keeps pointing to over there is Pat Dugan, a member of my staff. We're all aware of Pat Dugan. Pat would stand up, but he got his meniscus operated on yesterday. I can never speak for John, but I think John's heartfelt thanks -- and I've seen Pat do this. On Veterans Day, he speaks to the Korean War veterans and he tells them that he was in Korea with the 2nd Infantry Division way, way after John was there, and he said the South Koreans are very, very thankful for what people like John and Lou Blackwell and all the other names that he mentioned did. And my point, what I had said 103 12/13/05 - LAW - BILL 050869 before of the veterans politics, is exactly this. There has to be young people, regardless if it's Pat Dugan or anybody else, just to be able to carry this torch, because we're all going to get old and we're all getting there.

Do you know the 2nd Infantry Division, Woral Winchell (ph) once said, If you have a son in Korea, write him a letter. If you got a son in the 2nd Infantry Division, pray for them. They have 7,094 men killed in Korea in 37 months. And I don't know if you ever know the light-weight champion of the world. He was formerly a police officer. I can't remember his name now. I'm getting Alzheimer's. But he won a Silver Star and he was from Sweetwater, Texas. He was a light-weight champion of the world, a wild man, but he was a police officer. I just found that out. And he retired. But you talk about 7,094 men 104 12/13/05 - LAW - BILL 050869 was killed in 37 months. The 3rd Infantry had Battle Stars. Three 4 Invasion had 4,000 men killed. So in 5 comparison, the battle casualties during 6 the Korean War was more severe than World 7 War II or Korea was. I've always said 8 it's America's forgotten victory. 9 And I had to prove that down 10 there just recently with someone trying 11 to sucker-punch me. So I retired. I had 100 fights, 100 losses. So I'm going to retire from fighting people. The only thing I try to do is protect myself. My wife is tougher than me.

Thank you. Keep ducking.

I'm from Fishtown originally.

Thank you very much. We intend to be back here in about two months with something definitive to bring before Council.

I'm going to 105 12/13/05 - LAW - BILL 050869 ask you a -- is that man eligible to run to be on the Board of Advisory because of his experience of being overseas and he's a young blood and --

It's our intention to work with the veterans community and all the groups that we've mentioned and have them recommend members to the Board to be appointed by the Council President.

I belong to a lot of veterans organizations you'll be seeing, believe me.

The purpose of this whole effort is to get the current veterans groups and the newer veterans groups that are involved and have them make recommendations to the Council President for appointment. Okay?

And you know (unintelligible) carries brother Jackie Dunn. I talked to you before. Stevedore, right?

Yes. 106 12/13/05 - LAW - BILL 050869

See you later.

Thank you very much. Thanks for your attendance. (Committee on Law and Government adjourned at 12:00 p.m.) - - - 107 CERTIFICATE I HEREBY CERTIFY that the proceedings, evidence and objections are contained fully and accurately in the stenographic notes taken by me upon the foregoing matter on December 13, 2005, and that this is a true and correct transcript of same. ______________________________ MICHELE L. MURPHY RPR-Notary Public (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.)