Thank you, Madame Chair, for permitting me, who is not a member of this committee, to ask a specific question with respect to these First Judicial dollars. Mr. Kaplan, what specific plan does the Administration have to more urgently insist that local dollars be freed up for use with public 77 2/8/99 FISAL STABILITY - Res. 990038 schools? Now, in the Mayor's budget, the money that he planned to use to enrich public schools was coming from dollars not spent on the Judicial District. Well, this could easily be a boring (unintelligible) unless there comes a plan, a plan as urgent and as doggedly pursued as the plan to fund the stadiums. Now, that's a plan; that's not a dream, that's not a hope, that's a plan. Where is the plan to turn these dollars into something real that we can program and then expect direct results from some?
Well, Councilwoman, like the stadiums, this is a plan that apparently has worked fairly well in the past. In 1987, the State Supreme Court in Allegheny One said that it was the Commonwealth's responsibility to fund the courts. Again in 1996, the State Supreme Court said that it was the Commonwealth's responsibility to fund the courts. And again, as Mr. Kaplan alluded, last summer, when this matter went before Commonwealth court, that judge issued an advisory that it was, again, the Commonwealth's responsibility to fund the courts. 78 2/8/99 FISAL STABILITY - Res. 990038 And we are pursuing every available legal and political means to try to get the Commonwealth to live up to its obligation to fund the courts in Philadelphia. Including the (unintelligible), it's approximately $160 million that we're talking about. And as the Mayor made reference to in his budget address several weeks ago, one of the options that he's put forth to help adequately fund public education in Philadelphia and elsewhere throughout the Commonwealth, where a lot of the small and rural school districts experience the same kind of problems that we do, is that this is one possibility that you could basically come up with some sort of, quote/unquote, zero sum game, where the Commonwealth could take the money that they're supposed to be paying for the operation of courts throughout the Commonwealth and use that to fund public education.
But, Mr. Rost, until this gets down to a bumper sticker, okay, until it gets to be a rallying cry -- it took you five minutes to say that, and you've been studying it for years. You just detailed at least a 79 2/8/99 FISAL STABILITY - Res. 990038 ten-year history. We don't have that kind of history with stadiums. Where's the urgency? Who's mad about it? Who's got some kind of deadline beyond which they have no patience to wait? That's what I'm looking for here. And I see the legal pursuit; I don't see the political pursuit. Are we meeting with the other school districts around the Commonwealth who are experiencing the same problems we're having with respect to having the burden of the courts? What have we done besides annually put a line in that there's some dollars that we might be able to get?
Now, again, this is something that the Mayor has talked about with the Governor. It's something that we've pursued in terms of a legal strategy now for the past several years.
I know, Greg, and I don't want you to repeat your comment.
Now I want you to speak to the issue of the politicizing of this 80 2/8/99 FISAL STABILITY - Res. 990038 issue. Because the stadiums got passed because it got to be a political football that nobody wanted it to land in their lap. Who's going to get egg on their face if we don't get the money from the courts into the schools?
Well, regrettably, besides the Administration and the members of this body, there doesn't seem to be a ground swell of support for --
Stop. And that's my point, and that is exactly my point. Nobody's going to be real sad if this doesn't happen. I want somebody's face on the line, I want somebody's reputation, I want something real big to turn on whether this happens or not. Do you see that happening in this Administration, in the remnant of this term?
Well, I can assure you that the Administration's doing all it can to --
No, no, let me 81 2/8/99 FISAL STABILITY - Res. 990038 disagree.
When they're doing all they can, they go back and forth to Harrisburg, like they did all last week. Do you see what I'm saying? This is a dream. Where is the plan? This box of money, this pile of money that we might one day have is a dream, a pretty little dream that we can entertain ourselves with from time to time. Where is the plan to turn the dream into a reality? If you don't know, that's a good answer, but don't tell me what you just said 'cause I didn't forget it.
Again, I mean, the Mayor has had discussions with the Governor. We have talked to the business community business. The business community has lobbied in Harrisburg.
No, ma'am. In honesty, I 82 2/8/99 FISAL STABILITY - Res. 990038 can't say that they lobbied like they did for the stadiums.
And honestly, you couldn't because you know that I'm watching and then you know that's true.
I'm saying, where's the fire, where's the passion, where are the deadlines, whose face is on the line? I want to see the Administration put some passion and some political points behind turning those "maybe" dollars into real dollars.
Thank you, Councilwoman. The Chair recognizes Councilwoman Tasco.
I'd just like to make a comment along the comments Councilwoman Clark made. When an issue is very passionately felt by the Administration, they gather support from 83 2/8/99 FISAL STABILITY - Res. 990038 the media and the business community, and I echo her support that you all have good experience in putting together a full court press on an issue when you really want it, and I support her comments that that activity and action should take place to move the money forward so we can look at it for the public schools.
If my memory serves me correctly, wasn't that supposed to be in phases? Has any of that occurred? Have we gotten anything at all from the State for the courts?
One of the more interesting pieces to this is that the missing piece seems to be, in part, in the legislature, obviously -- but also, in part, in the Supreme Court. As you correctly point out, he suggested a phased plan. And the first phase of that plan was that the senior court administrators in each judicial district across the State would move to the State payroll, much as the judges are paid now. That funding was estimated to be about $12 million, of which about $800,000 to $900,000 in Payroll would have been in Philadelphia, and 84 2/8/99 FISAL STABILITY - Res. 990038 about 30 percent more in benefits. And in his FY '99 budget proposal, the Governor actually included that first phase that was in his budget. It went through in the budget. However, at the last moment, the State legislature included a proviso, which essentially stated that that money could not be spent for the court administrators until there was a broader comprehensive court-funding plan in place. That was -- that same provision was included in this year's budget, funded -- and the court administrators were funded throughout the multiple years of the State budget plan, and there was an additional increment for some technology, about a million dollars statewide. So the key issue here that's lacking -- and this gets back, in part, to what Councilwoman Clark and Councilwoman Tasco said -- is that, unlike the stadium situation, we're in a situation where we are at the mercy of the judicial branches enforcing its own repeated orders to make this happen. The Governor has, for better or for worse, at least put something on the table, the first step. The legislature has found ways to 85 2/8/99 FISAL STABILITY - Res. 990038 block that. The courts need to fulfill their role as an equal branch of government and insist that the State perform the duty that it believes that they have. And that's, I think, one of the key differences between this and some of the other issues we have faced, that there's a point at which, if the courts refuse to enforce their orders, there is only a limited amount that a smaller jurisdiction can do to make that happen.
Mr. Rost, given the comment of my colleagues and based on previous public comments that I've made and in private discussion that you and I have had, in an effort not to further irritate anyone -- specifically a couple floors below -- I'll reserve any further comment about the school funding issue to another point in time, but I can only echo the sentiments of my colleagues. Mr. Kaplan, though, when you raise issues about leverage with the Pennsylvania Supreme Court, let me also remind you that a couple of us at the table and a few others in the room have helped a few of the people who are on 86 2/8/99 FISAL STABILITY - Res. 990038 the Pennsylvania Supreme Court get to where they are. So, again, I don't take the position that we are solely at their mercy unless people want to forget where they come from or how they got there. And we have remedies to deal with that as well. So we should exert every possible pressure that we have everywhere in every venue to try to get a resolution to this problem. Madame Chair, I have three last issues. Hopefully, two of them can get very quick responses, and then I will be done. Do either of you know what the total outstanding amount of fines there are with regard to Traffic Court? Whether it's parking violations, moving violations, or anything else.
Okay. Does the Five-Year Plan take into account any revenues from the various TIF projects that have been approved? 87 2/8/99 FISAL STABILITY - Res. 990038 I think there are of them. 3
Yeah. As we have in prior 10 years, we have assumed that the growth in the 11 City's revenues -- most notably in this case, in 12 some of the TIF taxes but also in other taxes -- 13 is presumed to be generated by a variety of 14 sources, including economic development along the line of the TIFs. Part of our confidence in projecting the growth that we do project in all of our taxes across the Five-Year Plan is because of that development. We do not, however, allocate specific funding from any of those specific projects to the revenue projections going forward. So we --
Are you saying you build them into your various assumptions based on the models or based on the numbers that are presented at the time of the TIF presentation? 88 2/8/99 FISAL STABILITY - Res. 990038
Right, I think so. There are kind of two different processes. In terms of the TIFs, we look -- obviously, particularly the Commerce Department looks at specific projects and projects what specific projects do or might do. It's not possible for us across the City's entire economy to build our revenue model based on taking each individual taxpayer through the system and building a forecast for those taxpayers all the way through the five years.
I understand that, but I mean, we get tons of paperwork on these various projects, and they all have numbers associated with them. I mean, is that just best guess at the time and we kind of see what happens going forward? I mean, how does the -- you know, you pick a project. I won't name any one specifically, but I mean, there are two or three 89 2/8/99 FISAL STABILITY - Res. 990038 pages of anticipated tax revenues to come from those projects. Are you looking at the then 4 and figuring out as it relates to our current 5 budget and going forward, how they get infused in 6 the Plan? Or do you just say, you know, the 7 project's going to happen and we'll just see what 8 happens? 9
Well, I think our general 10 assumption of economic growth in the Plan is based 11 on numerable projects, including the TIFs. 12 However, we don't build our revenue model up on a 13 project by-project-basis. 14 In other words, each time we go out and secure a new economic development project, we don't increase our revenue estimate to account for that project. We assume that the growth in our tax base that we have looked at across the economy includes those kind of development projects. If we -- if we went the other way around, we would constantly be in a case of adding and subtracting on practically a daily basis across each project. The TIF projects, I think, are very important, but they are not the only growth in the revenue forecast, and they are not the -- as an 90 2/8/99 FISAL STABILITY - Res. 990038 overall percentage of on your economy, they're not a huge percentage.
Okay, all right. Lastly, there is -- I think it's all the way in the back, it may be the last complete section of the Five-Year Plan. It talks about capital projects. And I wanted to know from you, at times, it seems that it takes forever to get certain capital projects completed. And there was mention made somewhere in here of developing a disqualification process for non-performing contractors, . Whose responsibility is it, other than the Capital Program Office, for the departments that are not a part of that process to make any determination about if a project is taking longer than anyone thinks is reasonable. Do some contractors have more work than they can reasonably get taken care of, notwithstanding the fact that they were the lowest responsible bidder on the last five projects that they bid on but they've got, you know, eight people working, and there's no way in the world they're going to be 91 2/8/99 FISAL STABILITY - Res. 990038 able to get all of these projects done in any reasonable period of time. How do we deal with that?
The Capital Project Office is the lead agency for that. And, as you mentioned, Law and Procurement work on specific debarments and other criteria. But let me allow Emily Bittenbender from the Capital Office to speak of that. (Emily Bittenbender comes forward.)
Good morning. My name is Emily Bittenbender, Capital Director for the City of Philadelphia. Councilman Nutter, you've asked two specific questions. One -- and the first question that was asked was to the bullet or the issue of developing a disqualification process for the non-performing contractors. There's a program that has been underway for the last nine months that's a shared responsibility between the Law Department and the Procurement Department, with aid and help from the Capital Program Office and some other departments that also provide capital projects to actually 92 2/8/99 FISAL STABILITY - Res. 990038 look at a process of debarment. I believe that they have a schematic plan in place, and the debarment process is an evaluation of the contractors' work, and if those contractors have not performed up to their level or ability and have caused delays or harm to the City, a department process would be put in place that would not allow them to bid on public work projects for a certain amount of time.
Well, is the Law Department out monitoring all of these projects? I mean, are there --
No. It's more or less the process that allows us to disqualify, A, through the Procurement Department first of all; and then the ultimate would be the debarment process through the Law Department. But as far as the second part of your question as for the ongoing monitoring of capital projects, that management responsibility lies 93 2/8/99 FISAL STABILITY - Res. 990038 within the departments that are managing those departments. So, certainly, that would be the Capital Program Office, Recreation, Streets, Water, Aviation.
The departments that actually manage their individual projects themselves are responsible for the performance of those contractors and that ongoing management.
And so what's too long a period of time for a project to be completed and who makes that determination?
It depends on the scope of the work, how large the project is. It's very different if it's an airport project that's $500 million as opposed to replacing a boiler in a library.
The scope is basically determined on like or types of projects. And, as you know, in the City of Philadelphia, our projects span the entire scope. Eighty percent of our projects are smaller. Part 94 2/8/99 FISAL STABILITY - Res. 990038 of the Capital Program Office mission is to complete fiscally-funded projects of $500,000 or less in one year fiscal year. But it is also determined by season, when projects are designed and bid.
I think that you've hit on a very important point. I think that clearly, historically, the City's really struggled with its ability to -- because of the rules surrounding how we bid Public Works project, how you exclude people from the bidding process and how you disqualify people from doing projects.
Well, I'm not necessarily on a mad mission to disqualify people. If anything, I've probably been a person that argued for more inclusion. What I'm asking is, one, are there any limits on the number of projects that any one contractor can have at any one period of time? I mean, unless you have, you know, unlimited access to a labor pool, isn't it possible that someone could have five different jobs with us at the same time?
Yes, it is possible. 95 2/8/99 FISAL STABILITY - Res. 990038
That they could have themselves so stretched out, either financially or personnel-wise, that they just physically cannot complete the project? Isn't that possible?
We work with them to try to develop a plan with project schedules, we put our own construction inspectors on site to help to monitor. If the resources aren't there, then we work with them to put together a plan to make sure that they are providing the resources when they can and approaching the project as quickly as possible.
Does it make sense for the person to have five different contracts at the same time when we know they can't do all of the work? That's generally a yes- or no-question.
The issue isn't why we do it; the issue is can we prohibit people from having those five projects.
Councilman, one would hope that through an entity like CPO and CPO and Law and Procurement working with the various departments that aren't under the umbrella of the CPO, that you would have a good idea about, you know, "Company X" that may be bidding for five or more different projects, and you would know the capacity of that firm, and you would have some ability to determine whether they could handle five projects or whether they couldn't handle five projects. And I think that's a responsibility of city government -- and that would include the CPO, the Procurement Department, and the Law Department to make those kinds of determinations. 97 2/8/99 FISAL STABILITY - Res. 990038
Well, lastly on this point, then. For instance, let's take the Recreation Department. I would like someone to get me a complete list of every contractor that has been a bid in or has been awarded work with the Recreation Department, and tell me how many different jobs they have presently.
And with that, would you add something as simple as new swings? I understand that last year -- Commissioner, where did we have to get the swings from? There was one individual who filled the request or the bid -- where did he come from? COMMISSIONER DIBERARDINIS: (Responds inaudibly off-mike.)
We can't hear you. COMMISSIONER DIBERARDINIS: Okay, Councilwoman, if you're referring to the play equipment at Finnegan?
Finnegan and several others. COMMISSIONER DIBERARDINIS: Well, the one that we sort of struggled with together was a company in -- I think it was in Indiana or in the 98 2/8/99 FISAL STABILITY - Res. 990038 Midwest who fabricated and, you know, built this equipment and ships it here for the contractor to put it in. So the point is, there's --
I know we had to end up going to somebody who manufactures swings in Canada. I just can't believe that we don't have someone closer by that can manufacture swings.
I think Toys-R-Us has pretty decent swings down at their places. There are few of them around the city and in the region.
And I'd hate to tell you what the swings cost. COMMISSIONER DIBERARDINIS: But we bid the job, and then after that, the people who are awarded the bids then sort of go out and get the products. We don't order -- my department doesn't order the products. We create the standards within the contract -- this grade of this. And then, once Procurement awards the contract, they go out -- it's the person who gets the award who goes out and orders the specifics if they have to be fabricated in another facility 99 2/8/99 FISAL STABILITY - Res. 990038 somewhere. Or as I understand it -- am I right about that?
Well, let me just share one other small little horror story. This was with the Fairmount Park Commission. We were in a situation where one contractor had so much work with the City and a significant amount of money that was owed to the contractor, that the person then couldn't purchase the fabricated building that was a part of another contract until I worked with the Finance Office to get the person partially paid from previous jobs that they had done so they could go and buy another piece of equipment for another job that they were working on. They were stretched too thin, they did not have any money. So I got to sit around waiting for a prefab building that's on a truck coming somewhere from halfway across the country, which the manufacturer will not deliver until this person can give them their money, which they're waiting on us to pay them so that they can buy some more equipment. I mean, it's a vicious cycle of folks 100 2/8/99 FISAL STABILITY - Res. 990038 stretching themselves to the end, bidding on a million contracts. They know they're going to be the lowest bidder, and the they're financing their work based on payments from the Finance Office. But it took six months to get the building -- past the time that the job should have been done. So, I mean, it's not your department so you can say, you know, you can say, "Shame on the Fairmount Park people." For the moment, I will wait until they come. I mean, that person probably shouldn't have gotten that other job because they can't perform at that moment.
Well, the City was slow paying, there's no question. They actually weren't that overdue, though.
(Initially off-mike.) . . . at fault for people at the table was, what happens when people are a successful low bidder on more jobs than they can possibly do, one, because they're stretched too thin financially, and two, because their person power 101 2/8/99 FISAL STABILITY - Res. 990038 is stretched too thin?
But if somebody's holding the money that they're due and it's owed to them, they have a right to believe that that money's going to come at a reasonable time. So I would not like you to put that kind of twist on it 'cause then, you know, you give them an impossible situation. The first question that you asked is a legitimate one: Who checks to say and whose judgment will prevail when somebody says, You've already got more work than you can do? Based on what? That's a good question.
But don't put the City at fault for not paying them 'cause then that lets you off the hook. That's issuing a check and then let 'em take 20 jobs.
If I could, this is a subject that's near and dear to my heart, as you can probably imagine, as well as Commissioner 102 2/8/99 FISAL STABILITY - Res. 990038 DiBerardinis. And it is, as you say, a very challenging cycle because there's so many multiple departments involved between Procurement, our department, Law, the payment of the process. But I think that one of the things that is challenging, and I'd like Joe Resta, who is the First Deputy for the Capital Program Office, and a prior Deputy for Procurement for Public Works Bidding, just to explain some of the guidelines for Public Works Bidding and how those fiscal checks happen or don't happy per the requirements. (Joe Resta comes forward.)
Good morning. I am Joe Resta. I'm the First Deputy of the Capital Program Office. The initial check is a part of the prequalification process. It includes descriptions of prior project-related experience, it has financial qualification. These are reviewed by the department managing the project on a bid-by-bid basis. So the Councilman is correct that a given contractor can submit qualifications for many projects simultaneously. The Water 103 2/8/99 FISAL STABILITY - Res. 990038 Department -- specifically, the bidding cycles that are used as funds become available, there are many water-and-sewer projects bid on a given day, and a given contractor can win all of them potentially. How they are policed is basically on a contract-by-contract basis. So the department managing the project will basically -- has to look at the contracts individually. If a contractor is performing poorly on one and well on another, their responsibility is to basically take remedy on the contract that they are performing on.
Are they required to tell us what other contracts they're presently or recently within the past year have bid on or work that they are presently performing for us on other contracts? Is that on the form that they have to fill out?
The entire universe of projects is not required, but part of the process, if you are bidding water-and-sewer project and you would like to bid on another one, is to basically provide project-related experience of comparable scope and magnitude to be qualified for the one 104 2/8/99 FISAL STABILITY - Res. 990038 you're in essence bidding on or potentially bidding on.
Once the bids are awarded, doesn't the work have to be done within a certain period of time? And if not, are they penalized?
Basically, in the specifics for bidding, there is quite normally either a calendar day or working day time limit of the contract. It begins with the notice to proceed, and it ends if there's basically a calendar date when it does end. Due to the fact that -- the way that the City applies money to projects, there is many times almost universally a contingency fund that's placed on any given project for unforeseen circumstances on that project. So if we take, for example, a 30-calendar-day project, if it is, in fact, over 30 days, it may be for a multitude of reasons. The City could have come upon an unforeseen condition that it has to remedy, which would indeed require additional time and additional monies. Or the City may amend a project for the 105 2/8/99 FISAL STABILITY - Res. 990038 same reasons.
Thank you. The Chair recognizes Councilwoman Tasco.
Do the requirements allow for -- I guess, does the contract call for you to give -- does the law require you to give the contract to the lowest responsible bidder?
And how do you identify "responsible"? Can we set the standards of what "responsible" would be? Are there certain set guidelines for "responsible"?
The criteria basically prior to bidding is actually the review of the prequalification questionnaire. If the City has experience with a given contractor that has performed poorly on many past projects, it has the right, and the Operating Department has the right to attempt to disqualify that contractor on that particular bid.
Let me ask you a question. Would you tell me how your department 106 2/8/99 FISAL STABILITY - Res. 990038 interacts with the Procurement Department? Do the Public Works projects still go through the Procurement Department?
Are you the administrative arm of the Procurement Department? Or what is the difference between the two offices?
Basically, we have the direct interface with the contact and community. We will take these prequalification questionnaires and review them financially, their project-related experience, and we'll make the first determination whether we think a given contractor should be disqualified. At that point, any operating department managing capital projects will turn over a list of bidders that they feel to be approved or not approved for a given project. In the Procurement Department, there's basically some criteria for due-process hearings that takes place between the Procurement Commissioner and two other members of the City municipal government basically selected by the Managing Director. 107 2/8/99 FISAL STABILITY - Res. 990038 There's due process. A contractor has the right to basically come in and defend themselves if we deem them to be not qualified.
So in the prequalifying process and under the term of "responsible," to answer the concern raised by Councilman Nutter, couldn't you not at that point review all of the projects that the contractor has, to determine whether or not they would be stretched out?
In fact, we do. Councilwoman, we have been through the process before with contractors that have had poor performance in our capital projects and have gone through the process of disqualification. And hence, then, there's hearing that is held, as Joe said, by the Procurement Commissioner and the committee to review. So that process is used.
But after you finish with all of that, the Procurement Department puts it out for bid? 108 2/8/99 FISAL STABILITY - Res. 990038
Well, the committee votes on whether this contractor can be disqualified or not.
Okay. When a contractor's -- basically after the due process hearing, if the panel determines that the contractor is not qualified, they are, in fact, not qualified for that bid. They can bid on another project, they can bid on future projects. That is why it is basically imperative that the City really moves forward with the debarment policy for repeat offenders basically.
So that the disqualification's on a project-by-project basis, and debarment is a long term, a set term of three to five years.
How many people have been disqualified in the past year?
My question is: What happens to the contract if the contractor is 109 2/8/99 FISAL STABILITY - Res. 990038 deemed to be not able to finish?
Does it get rebid? What happens to it? That's the other end of her question.
Well, then you've answered her wrong question. We're talking about a person who is in the midst of a contract and is clearly not going to be able to do it.
In the midst of a contract, a contractor would, in fact, be defaulted on that contract.
And then the bonding company would be required to take up and prosecute the work from that point forward.
A good example, and one of the questions I'm expecting to be asked tomorrow during the capital program, is the contractor who is doing the toilet rooms in City Hall. We actually did, in fact, default him and 110 2/8/99 FISAL STABILITY - Res. 990038 he was removed from the contract in the midst of construction. So, yes, we do follow that process. Even after the disqualification, if a contractor has been awarded the contract, we do have the ability to default them. And, in fact, we have done a number of times this year on multiple projects.
Well, my question was not what did Councilwoman Clark said. The question was: How do we say prevent the guy from getting the contract if we believe he's too stretched out from the beginning before you award the contract in the prequalifying process, under the lowest responsible bidder. What I sense is that you look at his qualifications based on whether he's done a similar project; that's how you determine whether he might be able to do it. But do you ask for all of the projects he's presently working on now so that you can evaluate the ability to complete the project, the one he's bidding on? Do you have a list of all of the projects that he's presently working on -- 111 2/8/99 FISAL STABILITY - Res. 990038 whether it's for the City or anything else so that you can evaluate the ability to complete the bid he's working on now, that he's bidding on now?
Actually, no, we don't have a given contractor's entire universe of work.
We have their entire universe of work with the City but not in the private sector as well, no. 10
But what about the current universal work? What Councilwoman Tasco is asking you is, if "Contractor XYZ" is presently working on four different jobs for the City presently -- has men and women out, heavy equipment doing stuff somewhere. Now another project comes along and they bid on that. Her question is: The person wins the bid, they're the lowest responsible bidder. They've got employees, they're out at 4 20 different sites somewhere. They have no ability to bring on another person and possibly cannot do this fifth job, even though they were awarded the job. Her request is: Do you have the ability -- 112 2/8/99 FISAL STABILITY - Res. 990038
-- to find out first, Contractor XYZ, you have four jobs with us right now. How are you going to complete this fifth job with no expansion plans or without the financial resources to do this? Are you anticipating that -- I mean, does that kind of go back to what I got my hands smacked on by Councilwoman Clark, are you expecting that the revenues from the four jobs you're working on now are going to come in at such a point in time that you'll now be able to start the fifth job and hire more people? Do you know that this person is working on four other jobs for the city right now? That's the question.
It basically is depending on the type of project. I would assume --
Why does it depend on anything? Why doesn't the person have to fill out on the form the question, "Are you presently performing any work for the City of Philadelphia? 113 2/8/99 FISAL STABILITY - Res. 990038 Yes, no? If yes, tell us what they are, what's the scope of the work, when did you get the project, what's the dollar amount, how many people in your company are working on the project, and when is that one schedule to be completed?" Do you ask those questions?
We as similar questions to that, yes. Councilman Nutter, basically, the first --
Well, if your answer is "yes" to that series of questions, then your answer should have been "yes" to the earlier series of questions.
I would actually like to go back to if a contractor is performing poorly, the City has all available remedies to have that contractor discontinue work via the --
I'm not asking about you the contractor performing poorly. Maybe the contractor's doing a bang-up job on the four projects that they're presently working on. The problem is that they can't do anywhere near as good a job on the fifth project that they just got awarded yesterday. 114 2/8/99 FISAL STABILITY - Res. 990038 And what I want to know is, do you have the ability to evaluate not only what you're presently doing but your capacity to do the fifth? Or do you have to wait until the other four are done, which is automatically delay the fifth and result in my calling Mike D., Bill 8 Mifflin, or Miss Bittenbender, or somebody else, and screaming in the phone to them that "Contractor XYZ" is way behind schedule, and I'm taking a whole lot of crap for it. That's the real life of what goes on with these projects.
Yes, that's correct. Basically, if we make an assumption as to a contractor's future performance, if a contractor's performing well in four and we assume that he's going to perform poorly on the fifth, that's an assumption that the City would then have to basically prove in a due-process hearing -- which is very difficult.
Councilwoman Tasco took you through a series of questions about the lowest responsible bidder. Your response was, there are various criteria that we can use to evaluate the phrase or the term "responsible." 115 2/8/99 FISAL STABILITY - Res. 990038 The City could make a determination, "Contractor XYZ," you're doing a great job for us on the four projects that you're presently working on. We don't see any capacity or ability for you to do this fifth project in a reasonable amount of time; therefore, you don't get the work. You don't --
We can say that, but when comes to a hearing, if the contractor feels that they do have the capacity, bonding or financing or workforce, we have to basically dispute their claims that they are, in fact, capable.
Okay. How many disqualification hearings did you go to last year?
At the Capital Program Office, we went to probably -- I don't have the exact figures, but I've been participating in 116 2/8/99 FISAL STABILITY - Res. 990038 disqualification hearings for a number of years now.
We can get you that number today and report back to you tomorrow. There have been a number of hearings where we have disqualified. We also have one or two contractors that bid constantly on our projects, and we -- every time they attempt to bid, we go and disqualify that same contractor. So I --
Well, I'd like to know how many you've disqualified every year for the past three years, I'd like to know who they are, and I'd like to know the reason why they were disqualified.
What is the likelihood of the contractor also being a subcontractor on other jobs?
Would you be aware of that? Would you be aware of that?
The operating departments for the -- of the City that manage capital 117 2/8/99 FISAL STABILITY - Res. 990038 projects basically know the subcontractor pool on a given project during the project, yes.
So the contractor that has the five jobs may, in essence, really have eight jobs to do.
I think Councilwoman Clark has a question on this issue.
Oh, you're going to yield to the Councilwoman, okay. The Chair recognizes Councilwoman Clark.
Thank you, Councilwoman Tasco and Madame Chair. My question is, I hope, you will think relevant. Who has standing to initiate an investigation of a contractor whose performance falls below the City Solicitor's expectation? Who 118 2/8/99 FISAL STABILITY - Res. 990038 can bring the charge, how does it get before you? Who has standing to raise the issue?
Basically, the first cut is the department that's managing the project. If a contractor's performing poorly, they can request of the Procurement Commissioner to begin a default proceeding against that contractor.
Is "performing poorly" a legal term of art, or is it some kind of feeling of discomfiture?
I would say that it is a little more than a feeling of discomfort (sic) but, ultimately, when it comes to a due-process hearing, it would have to be proven via schedule, via cost.
How about a person who was a competitor who did not win; does that person have standing to bring an issue of adequacy of performance against the winning contractor?
Absolutely. If a contractor is, say, disqualified for a given project?
Well, he's not disqualified. You and I competed, you won, I 119 2/8/99 FISAL STABILITY - Res. 990038 watch, and you're not doing this job half as well as I could have. As a matter of fact, you fall below any reasonable community standards for acceptable performance.
I'm sure that they could raise concerns to the managing department, yes.
But if I'm raising it, I've got to raise the enabler, I've got to say, "I challenge you on the basis of. . . " and then I've got to reference a paragraph and a piece of paper somewhere, where I'm not going to get past shaking my fist at fate.
Basically, if a competitor of a given contractor has concerns --
If a successful competitor (sic) has concerns about the way a given project is proceeding or whether they're building that project to specification, they can absolutely bring that to the attention of the managing department.
Has that ever been successfully done, sir? In your term, has that 120 2/8/99 FISAL STABILITY - Res. 990038 ever been successfully done?
Okay. You know why? 'Cause it's an almost impossible burden to sustain, isn't it?
First of all, the person who hears my complaint can't get over my sour grapes, so you're -- everything I say is going to be said in the light of, "Well, you're just mad 'cause you didn't get the contract. So here you are nitpicking the winner." So I need a standard. And you -- I respectfully suggest that you need a standard for who can bring -- who has standing to bring the charge and what is the standard for going forward in an investigation. And does winning mean that the successful contractor is ousted and the contract is then put up for rebid?
Not necessarily. On a contract, the performance bond and the bonding company on a given contract, if that contractor has defaulted, the first -- basically, the first part of the process is that the bonding company 121 2/8/99 FISAL STABILITY - Res. 990038 would have to supply a qualified contractor to finish the work. It would not necessarily go to a competitor or the second bidder or the third bidder.
The Procurement Commissioner can actually reserve the right to rebid the project.
All right. How do you communicate this process? How do people outside the process know how to access it? Is it in the fine print somewhere? How would a person know to complain?
Well, basically, I think the answer would really be that the market will determine -- if you are a competitor and you feel that the winning bidder is performing poorly, it's in your best business interests to notify the Procurement Commissioner or the Capital Program Director or anyone in City government that the City is not basically getting the best performance for the price that they've paid. And it happens quite frequently.
At some point off 122 2/8/99 FISAL STABILITY - Res. 990038 the record, we really need to spend some time on what does "lowest responsible bidder" mean, as Councilwoman Tasco raised it. Now, that is a legal term of art.
I don't think that it is understood to be equal to some other performance criteria.
And in the defense industry from which I come, there have been some pretty good cases that would be useful, I believe, in helping to define what is "lowest responsible bidder." But I won't burden this record with this now. I thank you for yield.
I think I'm finished with the contracting business for now; I'll have some questions for you tomorrow when you come back. I want to go back to talk to Mr. Kaplan and Greg Rost about the impact of the welfare 123 2/8/99 FISAL STABILITY - Res. 990038 reform on the budget. When the Mayor gave his statement, his budget message in Council, he said that the impact of welfare reform could have a billion-dollar impact on the economy. Do you see that impact? Is that accounted for in this Plan? Or have you all discussed where the impact could impact directly on the City revenue?
The billion-dollars-plus that the Mayor talked about in his budget address is not reflected specifically in the Plan. Basically, that was a model of a worse-case scenario of money that would be taken from the Philadelphia economy by welfare reform. On of the Plan, there's actually a table that shows the total dollar value of the benefits that would be lost, and it runs down through the federal legislation and the State legislation. And what we've done is, we've actually taken and attached a dollar value to the benefits that would be lost, and it comes up over a billion dollars from Fiscal Year '99 Fiscal Year 2001 in terms of the benefits that are taken out of the Philadelphia economy. 124 2/8/99 FISAL STABILITY - Res. 990038 And the point that we were trying to make is that in addition to the devastating human cost of welfare reform if it's done inappropriately, there is an economic cost to the region as well that must be taken into account because folks won't have General Assistance dollars, and those dollars will be taken out of the economy. So there's a real ripple effect. But the important not to lose sight of, the important thing is the impacts on individuals and on humans. These are people that are going to lose medical benefits, these are people that are going to lose their cash assistance, etc. But you can show an economic cost to the region from welfare reform.
Well, it would have some impact on the revenue received through sales tax, through small markets, neighborhood markets that depend on a number of -- a lot of assistance recipients who buy in the local stores. Therefore, you would lose on taxes, you'd lose on sales tax, you'd lose on business tax if they go out of business. I mean, has any economic impact 125 2/8/99 FISAL STABILITY - Res. 990038 analysis been done on that which could impact on the revenue we receive here in the city?
Because of the full impact of the changes, it's not known yet, there's not a specific. You can't say, We've changed this assumption by this much because of welfare reform. However, there is a generic assumption in the budget. One of the things people have said to us since the budget was announced is, Well, look out the window -- buildings are going up, jobs are being created. The Administration itself has pointed out there's a preliminary (unintelligible) system out of 5,000 new jobs this year so how come your revenue assumptions aren't more aggressive? That's one of the several reasons that that's the case, and you very accurately pointed out the specific reasons there. The other issue is that we have, in several places in the budget, put in specific spending in anticipation of this. Most notably, we've funded -- provided the second half of an annualization of funding for a new City shelter, which will total about $450,000 this year. We've 126 2/8/99 FISAL STABILITY - Res. 990038 maintained the number of beds we've had for the last several years, despite the strong economy, because we know that there will be additional new people seeking shelter in the homeless system. We've continued -- although the overall visits to the health centers right now have levelled off over the last six months or so, we have maintained the increases in health center funding of 1.2 million that we put in over the last two years in order to -- under the assumption that there will be additional cases of uninsured people coming into the health centers. And if you look in detail at the Human Services budget, you'll see there's a tremendous continuing increase in Human Service expenditures, and some of those are because of new mandates, but some of that is because we are assuming that there will be increased pressure on that system as we go forward. So I think your comments are entirely correct.
One other question I want to ask you relative to the sales tax: Has any thought been given by the Administration and 127 2/8/99 FISAL STABILITY - Res. 990038 has any action been taken on the national level to address the Internet sales tax issue? And do you believe -- what do you feel the impact of not having Internet sales tax would have on the local economy if people suddenly start buying off the Internet.
I guess there are a couple responses to that. One is that the single most passionate advocate of the rights of cities, counties, and other local jurisdictions on the Internet sales charges has been the League of Cities, which obviously, as president, Councilman O'Neill has been very, very active in over the last year, as Congress, which had originally looked at a very broad expansive exemption from the Internet sales taxes, has instead put in a three-year temporary extension. I think that's a battle we're going to keep fighting again and again. Here again, we're in a situation where -- I think you've raised a good point: we have not done a specific analysis of this stuff, and I think that you've essentially given us an assignment -- and a good one, I think. 128 2/8/99 FISAL STABILITY - Res. 990038 The one thing I will say is that here again, our competitive position affects us a little bit because we have learned that even though the number of PCs per household in Philadelphia has gone up dramatically over the last year, we still do not have the penetration per household that perhaps they do in the suburbs. So there is clearly less Internet commerce in the City than there might be -- on a household basis, anyway -- than there might be elsewhere. But I think that you've definitely hit on an issue which we need to investigate further.
Let me just ask you a question. You've done pretty good with the Recreation Department and the libraries 'cause you know that we feel passionately about those two departments. But I have another department that I really care about, and that's the Department of L&I, because I get most of my complaints from my district regarding issues around L&I and specifically around the lack of enforcement. And it's not a lack of enforcement; it's the time it takes to inspect and enforce some action on a 129 2/8/99 FISAL STABILITY - Res. 990038 property. And I have looked at the -- you haven't increased the level of staffing in that department in the chart in the back of the budget summary. It seems that there will be no staffing increase.
While Mr. Rost and Mr. Dubow are looking up the details in that, I know -- as you know, there was an increase last year in staffing at L&I, and there was some delay in their personnel getting on the street because it takes sometime to train them. And, in fact, there's actually a slight dip, I believe, although this might be a better question to direct to the L&I Commissioner at her hearing. But they actually usually assign new inspectors to go with the experienced inspectors. And, obviously, that actually that will affect the number of inspections they'll do for a while 'cause they go through very carefully. And we have seen those -- I believe all of those people are on board now. And that's -- again, that's a question for her. But I believe that the department was relatively comfortable with those additions, with the current staff 130 2/8/99 FISAL STABILITY - Res. 990038 complement coming into the budget.
I would just like to add that that's one reason that the Department projects that it will increase the number of housing inspections from about 91,000 at the current situation to 105,000 in Fiscal Year 2000 and in Fiscal Year 1999 as well. The addition of those additional personnel will help make that possible.
With the City having 1.5 million residents, are 32 people enough in housing inspectors?
Councilwoman, it was my understanding that there were 57 inspectors.