CORRECTED TRANSCRIPT COUNCIL OF THE CITY OF PHILADELPHIA PUBLIC HEARING AND PUBLIC MEETING BEFORE THE COMMITTEE OF THE WHOLE - - - Room 400, City Hall Philadelphia, Pennsylvania Tuesday, October 17, 2000 3:07 p.m. - - - BILL NO. 000583 - Authorizing amendment of PFMC Agreement to provide for temporary change in amount of temporary financing that the City may provide to PGW. . . BILL NO. 000590 - Making certain additional appropriations needed to meet unanticipated emergency created by a cash flow crisis at PGW. PRESENT: COUNCIL PRESIDENT ANNA C. VERNA, Chair COUNCILWOMAN JANNIE BLACKWELL, Vice Chair COUNCILWOMAN BLONDELL REYNOLDS BROWN COUNCILMAN DARRELL L. CLARKE COUNCILMAN DAVID COHEN COUNCILMAN W. WILSON GOODE, JR. COUNCILMAN JAMES F. KENNEY COUNCILWOMAN JOAN L. KRAJEWSKI COUNCILMAN W. THACHER LONGSTRETH COUNCILMAN RICHARD T. MARIANO COUNCILMAN MICHAEL A. NUTTER COUNCILMAN ANGEL L. ORTIZ COUNCILMAN FRANK RIZZO COUNCILWOMAN MARIAN B. TASCO - - - VINCENT VARALLO ASSOCIATES, INC. Registered Professional Reporters Eleven Penn Center, Suite 600 Philadelphia, PA 19103 (215) 561-2220 2 10/15/00 - WHOLE COMM. - BILLS 000583, 590 I N D E X Joyce Wilkerson. . . . . . . . . . . . . . 5 Mayor's Chief of Staff Charles McPherson. . . . . . . . . . . . . 7 Chief Financial Officer Thomas Erickson, Council Attorney. . . . . 12 9 Dan Hertzler . . . . . . . . . . . . . . . 17 City Solicitor's Office 3 10/15/00 - WHOLE COMM. - BILLS 000583, 590 P R O C E E D I N G S
This is a hearing of the Committee of the Whole concerning Bill No.'s 583 and 580. Are there any questions from members of the committee? Do any Councilmembers have any questions?
This is the continued public hearing on PGW. Councilman, do you have any questions?
Do we have anyone to testify on these bills? (No response.)
Seeing none, we will now go into our public meeting. - - -
We're voting on the amended bill, correct? 4 10/15/00 - WHOLE COMM. PUBLIC MEETING
The first bill we will be considering is Bill 583, and that was amended last week.
Bill No. 583, as I recall, was a bill that was amended at the request of Councilmember Tasco regarding certain controls and timetables for the loan of $45 million. Bill 17 No. 590, could either the Chair or a member of the Chair's staff explain what 590 does, as a refresher? Is it in -- is this a companion required bill for 583, as amended, or is this some something distinct? I apologize, I just don't remember.
This was an Administration. Miss Wilkerson? (Witness comes forward.) 5 10/15/00 - WHOLE COMM. PUBLIC MEETING
My name is Joyce Wilkerson, Chief of Staff for the Mayor. That was the emergency appropriation bill that would provide the funding for the loan to PGW.
Now, if Bill No. 10 590 passes, is it passed under the jurisdiction, or in accordance with Bill No. 583 as amended?
Or is it -- so the $45 million authorized in 590 would be controlled through 583, as amended?
All that 590 does, then, is just increase our appropriating power, right?
Any other 6 10/15/00 - WHOLE COMM. PUBLIC MEETING questions? (No further questions.)
Seeing none, this will conclude our public hearing. We will now go into the -- Joyce, do we have amended copies?
I want to make sure we're voting on the amended version.
Oh, it's attached to it. Okay, very good. Madam President, this is just a question. I see the amendment to 583, but I'm looking at 590 and I don't see any amendment that 7 10/15/00 - WHOLE COMM. PUBLIC MEETING was similar to the amendment of 583.
Well, a question. I'm being told that 590 increases the appropriating power by $45 million. My understanding is, it not only increases an appropriating power but makes the appropriation. Isn't that the bill that makes the appropriation?
And my understanding of appropriations is that once we make the appropriation that that money is then available to the Administration to deal with it, without any further reference to anything other than the fact that they've been authorized to spend $45 million extra. If anybody else has a different version, I would like to hear it. We're just 8 10/15/00 - WHOLE COMM. PUBLIC MEETING talking technically now about the bill. I don't understand -- in -- when we did the --
I think Mr. McPherson is ready to respond to your inquiry, please.
What Bill 590 does is -- and Tom Erickson is here -- is, based on Section 2-301 a. of the Philadelphia Home Rule Charter, which talks about emergency appropriations, the Administration is identifying this as an emergency, and is, therefore, increasing the total appropriations to the General Fund for Fiscal 2001 as an emergency. So there's only a "to" side to the ordinance; there is no "from."
I must have missed two sentences in that last paragraph. I heard everything until the very last "and."
Therefore, there is only a "to" section from the ordinance, not a "from." So this ordinance, under the emergency powers of the Home Rule Charter, increases the General Fund appropriation from $2,830,455,918.00 9 10/15/00 - WHOLE COMM. PUBLIC MEETING to $2,875,455,918.00, for an increase of $45 million.
And, therefore, I conclude that it means that that additional $45 million is available to the Administration.
Yes. And following your statement, I draw the conclusion that as a result of increasing the emergency appropriation by $45 million, that 45 million, that total amount, would now be available to the Administration to deal with in the same fashion they deal with any other appropriation. Is that not right?
Well, I mean, Bill No. 18 583 then gives the Administration the authority to pay over to PGW $45 million.
Bill 583, as amended, gives the authority only with respect to $25 million. 10 10/15/00 - WHOLE COMM. PUBLIC MEETING
Before the final million, there are other steps that have to 5 take place. 6
But, again, you need to 10 have the appropriation power in place for the 11 total payment. And before the Finance Director 12 can authorize the payment of the -- I want to call 13 it the second $20 million. The first 25 can go 14 immediately, the additional $20 million cannot be 15 paid over until certain conditions are met and are 16 approved by the Gas Commission and City Council. 17 And it can also be paid, I think, under the 18 ordinance, without a resolution by City Council 19 specifically approving that payment. 20 But what Bill 590 does is put the full 45 million of appropriation power in place so that in the event that when the Administration comes forward with the five-year plan and that gets approved, that the Administration then has the ability to pay that over, once Council approves 11 10/15/00 - WHOLE COMM. PUBLIC MEETING it.
It's always been my understanding -- and maybe I've been wrong for the last 30-odd, but it's always been my understanding that once this Council votes an appropriation, that there is nothing that can bind the Mayor in the expenditure of that appropriation unless the restrictive clause is a part of the appropriation. .
Actually, I don't even think a restrictive clause on the appropriation would do it. The restrictive clause in the amendment to the PFMC agreement is what would prohibit the Administration from paying the second $20 million over to PGW.
What's to stop the Mayor from saying this money has been appropriated by City Council, and I have the right as the Mayor to expand that appropriation?
He would not have the ability without Council approval under the PFMC agreement to loan money to PGW.
Well, suppose he violates that agreement? What is our relief? 12 10/15/00 - WHOLE COMM. PUBLIC MEETING Suppose he just moves to strike that and moves on the basis of his appropriating power? I'm talking legally now of his legal ability to spend money --
He cannot spend an appropriation if we don't authorize it. But once we authorize it, I am very concerned that we have lost control of it.
Councilman, there can be no loan without specific authority from City Council. Bill No. 583 grants that specific authority under certain terms and conditions. One of those conditions is that before you can spend the second $20 million that is authorized in Bill 16 583, he must come back to City Council. If he doesn't, he's in violation of the agreement, he's in violation of the ordinance, we can seek an injunction to prohibit him from spending that money at such time if he would do such a thing, which I do not think he would do.
Do we have an interpretation from the City Solicitor's Office that supports that?
Well, I can give you my 13 10/15/00 - WHOLE COMM. PUBLIC MEETING 20 years of experience in the City Solicitor's Office.
But I can't speak for the City Solicitor, that would be my opinion.
I know it's your opinion, but I'm not sure it's the Mayor's opinion, but if the City Solicitor's Office writes such an opinion, I will be prepared to accept it, but I can't -- why hasn't the City Solicitor furnished us with that kind of opinion? Can't we get it?
He hasn't been asked. I mean, this is the first time we heard that there might be a problem with this issue, seeing that we didn't even realize it was an issue until about ten minutes ago.
Point of order, Madam Chair. Because the title of 590 specifically says that we're appropriating and we're raising the appropriating level specifically to meet the 14 10/15/00 - WHOLE COMM. PUBLIC MEETING need and the cash flow crisis of the Philadelphia Gas Works. It doesn't -- that title -- that title clause and the beginning of the ordinance doesn't specify and does not put into place any, any restriction in terms of how this $45 million is going to be spent. So the argument can be made that 590 actually supersedes 583, and since there was no 10 limitation and no restrictions on the $45 million of appropriating power that is being passed by the City Council, and I think it's a technical situation, and I think we should have it clarified before we go forward.
I have one other question along the same line. Madam Chair, while Mr. Erickson's determining the questions asked by Councilmembers Cohen and Ortiz, I would also like to add a request that he give an opinion as to whether or not the Administration can spend the $20 million on anything else other than the PGW loan. For example, if he is bound by not giving the second 20 million unless there's a five-year plan, can he use the 20 million for anything else once it's 15 10/15/00 - WHOLE COMM. PUBLIC MEETING been appropriated, outside of PGW's needs? Shall I repeat the question for Mr. Erickson?
The question, Mr. Erickson, is, when you're determining Councilman Cohen's question or Councilman Ortiz's question, if the appropriation of $45 million is made with the restrictions in Councilmember Tasco's amendments, it's restricting the second 13 million to a time after the five year plan is 14 accepted and voted on by Council, can that 15 $20 million be used for anything else of capital 16 need -- I'm sorry, any other governmental need 17 other than PGW since it's been already 18 appropriated? 19
Yes. We don't condition appropriations. It's subject to the Mayor's line item and recommendation.
Well, we're semi-conditioning this one, are we not? 16 10/15/00 - WHOLE COMM. PUBLIC MEETING
All right. So that money could be used for any other purpose that the Administration determines.
Yes, but if they did that, then it wouldn't be available for the loan.
Okay. I just wanted to -- we're getting technical here, so I just want to get, you know, I just want to get everything covered.
Point of order. Did I hear that right? Or it can be used for any purposes? Is that what Mr. Erickson -- (inaudible, off-mic.).
Do we have anyone from the City Solicitor's Office in the room? UNIDENTIFIED PERSON: Yes, I'm here.
Please 17 10/15/00 - WHOLE COMM. PUBLIC MEETING approach the table. (Witness comes forward.)
I think you heard the concerns expressed regarding Bill 590. Can we have your legal opinion on that?
I'm Dan Hertzler, I'm the corporate chair. I'd appreciate it if you could clarify or repeat the questions.
Councilman Cohen, do you want to repeat your question, please.
It seems to me that if we enact Bill 590, increasing the appropriating power and, therefore, the funds available for expenditure by the Administration by $45 million, that the Mayor technically and legally will have lieutenant have the right to spend that $45 million without respect to the restrictions we placed in Bill 583. I further now understand something that I -- I -- was incomprehensible to me, that even 18 10/15/00 - WHOLE COMM. PUBLIC MEETING though we increase this emergency appropriation specifically for the purpose of making this loan to the Gas Works, if for any reason that loan is not paid, this $45 million becomes totally available to the Mayor for any Administration purpose that the Mayor chooses. Now, that's not what our hearings have been about, and it's not what I think, speaking for myself, I'm prepared to go along with. I thought this request was being made only for the Gas Works. And so I would want assurance from the City Solicitor's Office that the money can only be spent for that emergency purpose that it's being authorized. And not intent, or we expect, or we hope that the Mayor will do; so I'm talking of legal binding determinations.
We just left a public hearing and moved into a public meeting. Was that public hearing on both bills?
Can we move back 19 10/15/00 - WHOLE COMM. PUBLIC MEETING into a public hearing?
I think we're asking for clarification from the Law Department regarding Bill 590.
I believe the Councilman was asking for clarification.
But before we deal with the issues of 590, since we're still in a public meeting, I'd like to call for the question on 583. (Duly seconded.)
Okay, the Chair recognizes Councilwoman Tasco regarding Bill 20 No. 583.
But we are in the public meeting, and I had recognized you and I think there was some questions question about the 20 10/15/00 - WHOLE COMM. PUBLIC MEETING amendments being circulated, the amendments have been circulated.
That's where we were, in the discussion about the amended copy of 583. And I did not call for a vote on the bill 7 yet, so there is no motion on the floor.
I have called upon Councilwoman Tasco for -- regarding Bill No. 14 583. And her question was that the amended copies were not circulated and she was interrupted before she was able to make her motion.
Which is why I'm asking that we move back to 583 and the call for the question.
There was no 21 10/15/00 - WHOLE COMM. PUBLIC MEETING question at the time.
They are companion bills, and the Councilmember has a question on the companion bill.
If they are companion bills, a companion bill is -- my understanding is that we will entertain them separately. We were entertaining 583. Someone raised a question about 590. Therefore, rather than interrupt the discussion on 583, I'm calling for the question on 583, rather than move into a discussion on 590, rather than move back into a public hearing on 590.
I think that we have not asked for -- I did not call for a vote on 583 yet. I think all of the Councilmembers the respect for their consideration of questions on a companion bill.
If it's the call of the Chair that this is a companion bill and it 22 10/15/00 - WHOLE COMM. PUBLIC MEETING can't be voted on separately, that's fine.
Point of clarification, Madam Chair. I think what we have here is, in my mind, and I'd like someone to clarify it for me if I'm wrong, is that I think there is an agreement among the majority of Council to be able to vote on a loan to the City and to PGW based on the conditions that Councilwoman Marian Tasco has proposed. The issue then becomes, does 583 become moot, based on the way that 590 has been drafted? And so I think the question of whether -- because I would have no problem voting on -- I gave my conversation with Councilwoman Tasco to vote 83 accordingly to the way it has been written. The key situation is whether 590 just gives the appropriating power and the power to then give that money forward to the Gas Works to 23 10/15/00 - WHOLE COMM. PUBLIC MEETING the Mayor without adhering to the clauses that were put forward by the amendment of Councilwoman Tasco. And a clarification before -- has to be given because, otherwise, I would change my vote and I would vote no if those -- if those limitations are not put into place and secured.
Madam President, I think to my colleagues, it's very important if the intent here is to vote in a positive manner on 583 and 590, I think we ought to give the Councilmembers an opportunity to be clear on what they're voting for, so that there is no confusion. And that when we vote the bills out, that they would come out the way we would like them to come out. So I would like to have the opportunity for us to clarify all questions around either of the bills so that we are clear on what we're doing.
That and good conscience. Okay, Councilman Cohen, again, you were able to -- 24 10/15/00 - WHOLE COMM. PUBLIC MEETING
Ask your question of the City Solicitor, please, since he's here waiting to respond to your question.
I believe that Mr. Erickson is correct that as long as the money is spent within the particular category for which it's been appropriated, that theoretically, that could happen. If you wanted more ironclad assurances, you would create a separate budget category and it would say something along the lines of advances to the Philadelphia Gas Works in anticipation of revenues authorized by or pursuant to Bill 583 or similar ordinances. In other words, you can make it more specific if you want to. I think everyone does understand that this is the purpose of that, and I think there would be some breach of trust were it to be used otherwise, especially because this is an emergency appropriation for this particular purpose. However, it is possible to amend to get 25 10/15/00 - WHOLE COMM. PUBLIC MEETING more specific language, if that's what you want to do. It's up to the Councilman.
Madam President, I think it's particularly important to note that the Mayor sought approval from City Council for an additional $20 million. I think it was for the schools at the time, several months ago. Council kept interrogating the Mayor's representatives, where was this $20 million coming from? Well, I went to make sure that this $20 million does not come from this appropriation. We never gotten answer from the Mayor, and we stopped asking about it. Now, I think the Council is entitled to get assurances to the greatest extent possible along the line that the City Solicitor's just suggested. We ought to make the restriction because that's what we're considering, a specific loan under emergency conditions for Philadelphia Gas Works. And I think the Council and the taxpayers and the City of Philadelphia are entitled to assurance that that money will be spent only for that purpose.
Point of order, 10/15/00 - WHOLE COMM. PUBLIC MEETING Madam President.
Councilman Cohen, I had talked to the President about offering an amendment to 590. And if I offer it, maybe that could give you some level of comfort on the bill.
, Section 2, where it says, "This ordinance shall take effect immediately," I placed "in accordance with provisions of Section 2 in Bill 000583, as amended."
Councilman Cohen? Councilman Cohen? (Council President Verna and Councilman Cohen confer off record.)
Madam Chair -- 27 10/15/00 - WHOLE COMM. PUBLIC MEETING Madam President, I'd like to offer an amendment to Bill 590. But I haven't circulated it. Do I have to circulate it? It's very short.
If it's very short, the stenographer, I'm sure would. . . I'm sure that we could all write it down. The Councilwoman is going to offering an amendment to Bill 590, if you want to jot it down, because it isn't typed up. Councilwoman?
We'd like to amend Bill 000590, Section 2, which states, "This ordinance shall take effect immediately, in accordance with provisions of Section 2 in Bill 16 000583, as amended."
Does anyone have any questions on the amendment? (No questions.)
No one has a question on the amendment? (No questions.)
Councilwoman 28 10/15/00 - WHOLE COMM. PUBLIC MEETING Tasco, do you want to move for the adoption of the amendment?
Madam President, I move for the adoption of the amendment.
It has been moved and seconded that the amendment to Bill No. 12 590 be approved, as read by Councilwoman Tasco. All those in favor will signify by saying aye. Those opposed, nay?
Okay, the record will reflect that Councilman Goode has voted nay on the adoption of the amendment. All other Councilmembers have voted aye. The Chair now recognizes Councilwoman Tasco regarding Bill No. 583. 29 10/15/00 - WHOLE COMM. PUBLIC MEETING
Thank you, Madam President. Madam President, I move that Bill 4 000583, as amended, be reported out of committee with a favorable recommendation. (Duly seconded.)
With a suspension of the rules, as amended. The amendments are here but they won't be incorporated with the bill.
It has been moved and properly seconded that Bill No. 583 be reported out of committee, as amended, with a favorable recommendation, and also a recommendation that the rules of Council be suspended so as to permit first reading at our next session of Council. All those in favor will signify by saying aye. Those opposed?
The record will reflect Councilman Kenney voted no. All other members have voted aye. The Chair recognizes Councilwoman Tasco regarding Bill No. 590.
Madam President, I move that Bill No. 0000590, as amended, by reported out of committee with a favorable recommendation and with a request for a suspension of the rules. (Duly seconded.)
It has been moved and properly seconded that Bill No. 590 be reported out of committee with a favorable recommendation, as amended, and also a recommendation that the rules of Council be suspended so as to permit first reading at our next session of Council. All those in favor will signify by saying aye. Those opposed?
The record will reflect that Councilman Kenney has voted no 31 10/15/00 - WHOLE COMM. PUBLIC MEETING on Bill No. 590. All other Councilmembers have voted aye. This concludes the public meeting. I thank you all for your attention and patience. (Adjourned at 3:55 p.m.) - - - 32 C E R T I F I C A T E I HEREBY CERTIFY that the foregoing proceedings of the Council of the City of Philadelphia of Tuesday, October 2000, were 8 reported fully and accurately by me, and that this 9 is a correct transcript of same. 10 11 12 13 RE: COUNCIL COMMITTEE OF THE WHOLE 14 BILL NO.'S 000583, 000590 15 16 17 __________________________________, JOSEPHINE CARDILLO, Registered Professional Reporter