We'll talk to the Commissioner when she comes. Thank you. Thank you, Madame Chair.
You're welcome. I just have a few questions. 131 2/8/99 FISAL STABILITY - Res. 990038 Councilwoman Clark, are you finished with your questioning?
Thank you. How much funding is contained in the Plan for the Economic Stimulus Program? And how are these funds going to be used?
The total funding for the Economic Stimulus Program, cumulative, is now $6.5 billion. I'm frantically searching for the breakout, so if you'll bear with me for one second.
The sixth year of the Economic Stimulus Program contains $881.8 million. If you turn to of the Economic Development chapter, you'll see the approximately $6.5 billion down at the bottom right-hand corner -- that's total sources, both public dollars and private dollars. And then the figure that I just gave you, the $881.8 million, is the column to the left, which is the new projected sixth year of the 132 2/8/99 FISAL STABILITY - Res. 990038 Economic Stimulus Program -- total of all sources again.
On , Challenges to Economic Prospects, this section of the Plan identifies the challenges to the health-services sector and the financial-services sector on the City. Please state for the record what the impact of these items are to the City's revenue projections budget and Five-Year Plan.
The impact on the health-services sector is a mixed one -- in part because the purchase of the Allegheny system by Tenet on the one hand means that we are assuming generically in the Plan that there will ultimately be fewer beds and perhaps fewer employees throughout the former Allegheny system. However, pending the eventual negotiation of the resolution 19 of the bankruptcy agreement and the evaluation of those properties, we're also assuming that that will be at least partially offset by the fact that Tenet is a taxable entity. So at this point, we are very cautiously projecting that there will be more or less over the five years a rough equivalency in 133 2/8/99 FISAL STABILITY - Res. 990038 the tax impact on the health side. That is somewhat offset by our again generic concern that the overall health system in the region and in the City remains a bit over-bedded in acute care. There is -- a number of the rating agencies have opined that we need more long-term beds and that those beds are supported by lower-paying positions and lower tax revenues. We are not completely convinced that -- we don't necessarily dispute that contention. However, we don't necessarily agree that that will have a significant revenue impact. And in the Plan, again, our assumption is more or less that the health-care sector will be not necessarily a growth sector but not an area where revenues will decline precipitously.
I'd just like to add as well that the health-services sector has been one of the real engines of the Philadelphia economy, even in the darkest of the darkest days. From 1987 to 1997, the health-services sector was the only sector of Philadelphia's economy that showed positive job growth each and every year. Although there was a blip in 1998, it appears as though the 134 2/8/99 FISAL STABILITY - Res. 990038 health-services sector has rebounded somewhat. As Mr. Kaplan referenced, the Tenet situation certainly helps the Allegheny mess. Also, there's the Abramson Cancer Center, which is planned for the University of Pennsylvania. That center, I believe, is a $450 million project that will eventually employ 2,000 people. So I think the health-services sector in Philadelphia and in the region at large is still a relatively strong economic engine for the City of Philadelphia.
Thank you. The Chair recognizes Councilwoman Clark.
Thank you, Madame Chair. I'd like to go back to a discussion on the Economic Stimulus Program, which I have given the acronym of "ESP." If you had to defend the ESP, what successes would you highlight by type, by increased employment, by neighborhood revitalization? What beyond your feeling that things are better would you say to skeptics to convince them that this was an important and 135 2/8/99 FISAL STABILITY - Res. 990038 successful public-private partnership?
Councilwoman, I think if I had to point to one factor that proves that the Economic Stimulus Program is working, it's the fact that between 1987 and 1992, the City of Philadelphia lost 100,000 jobs -- and that's not a City statistic, that's a federal government Bureau of Labor statistic. We lost --
I want you to frame your question in light of this too, sir. I need to refine my question.
I don't know how you determine what your work produced as opposed to a national upswing in the economy. About 1992, Clinton came on the scene, and in about 1992, things started to go up nationally. What can you say that we have done that either dovetailed with a national economy that was getting better? Do you see what I'm saying? 136 2/8/99 FISAL STABILITY - Res. 990038
Sure. And I mean, I don't want to take anything away from President Clinton 'cause he has enough things going on.
We didn't even start the Economic Stimulus Program, I believe, until 1994. And, again, if you look at between '87 and '92, we lost 100,000 jobs. It looks like we're going to end 1998 with a gain of 5100 jobs. In 1991 alone, in 1991, we were losing 2,700 jobs on average per month, per month. So if you look now where we've gained, you know, 5100 jobs -- last year, we gained about 3,000 jobs, and the year before that, we actually gained 100 jobs -- that was when we started to turn the corner, I think those simple statistics alone sort of capture the essence of what we've done. If you then --
Well, don't tell me that ESP works. I want you to say that as a 137 2/8/99 FISAL STABILITY - Res. 990038 result of our putting X-number of dollars of seed money in, this company came in and brought X-number of jobs. Do you see?
I need a direct correlation between some City intervention and an improved quality of life.
Right. And, Councilwoman, I wish I could sit here and tell you that there was a direct correlation between all of these things. And, I mean, as Councilman Nutter knows from his role in the Economic Development Committee, I mean, economic development is an inexact science. I wish I could sit here and tell you that there's a linear correlation between us cutting taxes and businesses coming here. Unfortunately, a lot of these things are a combination of variables -- some are real and some are imagined. I mean, the real things are the tax cuts, the HUD 108 loans, the TIFs, and those kind of tools that the economic experts use. On the other side of the coin, however, there's that ethereal sort of "Philadelphia's a city on the move." You know, that's the same kind 138 2/8/99 FISAL STABILITY - Res. 990038 of thing that went into the Republicans deciding to bring Philadelphia 2000 their convention here. I mean, those things are immeasurable, they're non-quantifiable. But, unfortunately, in that inexact science known as "economic development," those things mean a lot. So I wish I could sit here and tell you that there's a direct linear correlation between a lot of these things and the job successes. I'm sure some of it is because of the national economy, I'm sure of it.
But if you were here today to defend this program for continuation and against deletion, you'd have to say something that was fairly persuasive, wouldn't you?
Supposing we were trying to get together nine votes to kill the ESP.
Right. Well, basically, I'm a fairly simpleminded person. And if I think of things simplistically, the one thing that I keep 139 2/8/99 FISAL STABILITY - Res. 990038 coming back to is the fact that we, after losing jobs for, I believe it was 61 consecutive quarters, we've now gained jobs. And I think that's -- you know, the Mayor believes firmly, and I happen to believe that the Mayor's right in this. He firmly believes that the best opportunity that we could provide for people is a job.
Yeah, absolutely. So if you look at where we were and where we are today, and if you look at all of the projects that are in the pipeline -- I think the Mayor used the figure of $2 billion worth of projects in the pipeline in his budget address, and 500 million of those projects are already underway today. But if you look at all those projects teed up, if you look at how busy the building trades are, if you look at all the exciting economic things that are happening across the City of Philadelphia, you can't help but feel somewhat optimistic that maybe we're headed in the right direction. 140 2/8/99 FISAL STABILITY - Res. 990038 And, you know, again, those things would not have happened -- I'm convinced that those things would not have happened had Council not enacted the tax reduction program, had Council not enacted several of the TIFs that they've enacted etc., etc.
Partners for Progress. Can you tell us what the funding contained in the Plan is for Partners for Progress?
Council president, as you know, Partners for Progress is supervised by the Managing Director's Office, but it draws resources from the various departments. I believe in his testimony, the Managing Director will have -- I don't have a specific number for you. The one thing that in the plan and we have institutionalized due to success was that, as you will recall, two years ago, we added a half-a-million dollars in demolition money so that 141 2/8/99 FISAL STABILITY - Res. 990038 Partners for Progress would have its own ability to do demolition as needed in Partners for Progress census tracts. And we have institutionalized that throughout the Plan so that they should be able to, without regard to anything else, handle about 200 houses a year in the demolition budget. And the Managing Director, we'll ask him to make sure that he summarizes the different resources applied to the Partners for Progress Program in his testimony.
Thank you. Can you tell us what steps the City is taking to deal with the Y2K problem?
Yes, I can. But since the City's Chief Information Officer is here, I'm going to punt. While he's coming up, I might mention that in addition to a hearing Council has scheduled that we are in, hopefully, the final stages of putting together a more both formal disclosure for other entities and also a presentation for other government bodies on this specific issue. So I think that the CIO will be 142 2/8/99 FISAL STABILITY - Res. 990038 able to speak generally, but we hope to have additional detail for you in the near future.
Good afternoon. Please identify yourself for the record.
Hello. My name is Brian Anderson. I am the Chief Information Officer for the Mayor's Office of Information Services. To answer your question, we are actually doing a lot to minimize the risk of the Y2K problem impacting the City services. In particular, we are focussing on essential services. We have completed a substantial amount of work on our main frame traditional computer systems. In addition to that, in 1998, we conducted a citywide risk assessment, where we identified every essential service provided through the City. And then we identified those systems, those embedded technologies equipment and those suppliers that those services depend on. We're currently looking at all of those 143 2/8/99 FISAL STABILITY - Res. 990038 and assessing as to whether they will be impacted by the Y2K computer bug, the century date problem. If there is a problem, if we identify a problem, we are correcting that problem either by correcting the system, replacing the equipment, or working with our vendors to ensure that their problems are corrected and that our supplies are not interrupted.
Thank you. On , can you tell us, the Plan assumes that the City will provide half of the funding for the Park Rangers and that the private sector will fund the other half. Can you tell us if the private dollars have been secured and what changes you have made to this program in order to improve their mobility and visibility within the park system?
Yes, Council President Verna. As you'll recall last year in terms of our budget discussions, Councilman Nutter and others brought to our attention the fact that the funding for the rangers was coming to an end. In discussions with then-Council President Street, we took it upon ourselves to do three things: 144 2/8/99 FISAL STABILITY - Res. 990038 Number one was to increase the mobility and the visibility of the rangers; Number two was to increase the rangers' cooperation with the Police Department; And number three, last but not least, as you alluded to, to institutionalize some sort of joint public-private venture in terms of funding the rangers on a long-term basis. I am pleased that the Fairmount Park Board -- excuse me -- the Rangers Board, which is not to be confused with the Fairmount Park Commission Board, has provided us with a letter committing to fund for five years at $500,000 per year their portion of the private dollars necessary to keep the rangers afloat. The City, for its part, will pay the other 500,000.
Thank you very much. Are there any other questions from members of the committee?
Mr. Rost, so for the moment, you're saying that the City is fully committed to the $500,000. Is this commitment $500,000 flat commitment, is this a $500,000 145 2/8/99 FISAL STABILITY - Res. 990038 match, is this a challenge? What is it?
It was a challenge match, a one-for-one. But our Five-Year Plan contains $500,000 per year for the rangers. We have also been provided with a letter from the Rangers Board -- Pete Hoskins is President of the Rangers Board -- committing to provide their $500 (sic) per year for the next five years as well. I'd be happy to provide Council with a copy of that letter.
That would be helpful because I continue to get calls from different interested parties about the City's commitment to the rangers or potential lack thereof. And I'd like to be able to have --
Okay. And then 146 2/8/99 FISAL STABILITY - Res. 990038 you'll get me something besides what I have --
Okay. If I could ask one last question. You, in response to Councilwoman Clark, you touched on the issue of the amount of construction activity and other projects that are in the City, and you made a passing reference to the building trades. Do you recall that?
Okay. Can you get us information about -- and there are a couple of different sections in the Plan in the economic development area. But for instance, there are -- I don't know -- somewhere in the neighborhood of eight or so new hotels that are being built. There are various TIF projects in different places. And then there are the projects that have been completed -- whether it's the Convention Center or a couple of others. What are the reporting requirements as 147 2/8/99 FISAL STABILITY - Res. 990038 it relates to the people who actually work on these projects from the construction and temporary jobs standpoint? What are the reporting requirements for these various projects?
Councilwoman, that's probably a question that would be best addressed to one of the economic development professionals. I know that some of the projects, they are monitored by our Bureau of Labor standards, which is headed up by Deputy Mayor Gerry Murphy. These are projects that fall under Davis Bacon (ph.) and their prevailing wage requirements, so we monitor those projects. But that's really a question that I think one of the economic development folks could probably best address.
Okay. Well, more than likely, you'll probably see them, talk to them or access them a little quicker than I will over the next couple of days.
What I'm interested in is the level of detail that we get on who actually works at the site. Now, I know we go 148 2/8/99 FISAL STABILITY - Res. 990038 through -- for every project, we have this ongoing issue back and forth about composition of the workforce and who's working on the job and who's not and how many hours and the like. But do we get the level of detail that indicates who the person is and where they live or what section of the City or the region they live in? Do we get that kind of information?
It's not a part of any reporting requirement? How do you ever certify whatever targets you were trying to meet?
I'm sure that it's specific to each project. I mean, the example that people cite most frequently is the Convention Center, where I think they actually do know, you know, which section, if not which street people live on that are working there.
But I'll get back to you with information on that. I am not aware of any citywide number, but I'm aware that there are numbers kept on a project-by-project basis. 149 2/8/99 FISAL STABILITY - Res. 990038
Okay. Well, on a project-by-project basis, if you could ask those folks to begin compiling data on a project-by- project basis on the total number of people who worked on the project, a breakout by way of race and gender, and then the zip code of each individual where they live who worked on that particular project.
I have another job for you. I'd just like to note for the record that I, too, am very active with the National League of Cities. I recently read that -- and shared with Sue Jacobs federal grants that are available for cities to deal with the issue of brown fields. Have we -- is the Administration looking at that? 150 2/8/99 FISAL STABILITY - Res. 990038 What do we do with some of these abandoned buildings? And is that in this? I haven't read it, so I don't know if it's in here or not.
Councilwoman, the answer to your question is yes. On of the Plan, under the Managing Director's Office, you'll see the activities of the Environmental Cabinet. I believe also in the economic development chapter, there's a discussion of the City's efforts in terms of brown fields as well.
Like the court issue, because we do have so many abandoned factories which could create some economic income for us, what -- I mean, are you really putting on a full court press on this? Is a lot of energy going into trying to find a way to get money to clean up the sites and then maybe stimulate small business development in these areas?
Yes, ma'am. If you turn to of the Plan, under the Commerce Department, you will see that the City has actually obtained a number of grants from both the federal and State governments. There's a $200,000 151 2/8/99 FISAL STABILITY - Res. 990038 federal pilot grant that was paired with State dollars, an Industrial Site Through Use Grant. And down at the bottom, you'll see that in November 1998, HUD announced the award of a Brown Field Economic Development Initiative Grant totaling $2 million for two very important projects in Philadelphia. And those two projects are the Jump Street USA project and the West Parkside Retail Center. We'd be happy to alert the City's economic development folks that you have an interest in this. And when they come in, they can explain it more fully.
Are there any other questions from members of the committee? Councilwoman Clark?
I accept the answer that you've given. . . (Off-mike, inaudible). Thank you.
Thank you. Since there are no other questions, I assume this will conclude our public meeting. 152 2/8/99 FISAL STABILITY - Res. 990038 To any of the commissioners here, would any of them like to say anything for the record? (No response.)
On behalf of our commissioners, thank you very much. (Laughter.)
Okay. This committee will stand in recess until March the 9th, at 9:00 a.m. I thank you all for your patience. Thank you. (Adjourned at 12:20 p.m.) - - - 153 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 Monday, February 8, 1999, were reported fully and accurately by me, and that this is a correct transcript of same. RE: COUNCIL COMMITTEE ON FISCAL STABILITY & INTERGOVERNMENTAL COOPERATION RESOLUTION NO. 990038 __________________________________, JOSEPHINE CARDILLO, Registered Professional Reporter