COUNCIL OF THE CITY OF PHILADELPHIA PUBLIC HEARING - COMMITTEE ON COMMERCE AND ECONOMIC DEVELOPMENT - - - Room 400, City Hall Philadelphia, Pennsylvania Wednesday, June 2, 2004, 10:18 a.m. - - - 040048 - Resolution authorizing the Committee on Commerce and Economic Development to hold hearings to review annual community reinvestment goals submitted by City depository banks and the role of City depository banks in leveraging private investment from the proposed $500 million Economic Development Capital Fund, and further authorizing the Committee to issue subpoenas to compel the attendance of witnesses and the production of documents and other evidence. 040145 - Resolution authorizing the Committee on Commerce and Economic Development to hold hearings examining small business lending in low and moderate income and minority areas within the City of Philadelphia, and calling on the Small Business Lending Task Force of the Community and Economic Development Committee of the Greater Philadelphia Urban Affairs Coalition, to present tetimony on several potential solutions to lending disparity, including a loan guarantee fund, alternative loan programs, and an information and referral system for small businesses. 040414 - Resolution authorizing the Committee on Commerce and Economic Development to hold hearings to review the findings and recommendations of the Minority Business Development Subcommittee of the 21st Century Review Forum. 2 PRESENT: COUNCILMAN W. WILSON GOODE, JR., Chair COUNCILMAN MICHAEL A. NUTTER, Vice Chair COUNCILWOMAN BLONDELL REYNOLDS BROWN COUNCILMAN DARRELL L. CLARKE COUNCILMAN FRANK RIZZO COUNCILMAN JUAN F. RAMOS COUNCILWOMAN MARIAN B. TASCO COUNCILMAN FRANK DI CICCO COUNCILWOMAN DONNA REED MILLER COUNCILWOMAN JANNIE BLACKWELL 3 040048, 040145, 040414 - 6/2/04 - - - P R O C E E D I N G S - - -
Good morning. This hearing is called to order. This is a public hearing of the Committee on Commerce and Economic Development on Resolution 9 040414, 040048, and 040145. My name is W. Wilson Goode, Jr., Chair of this Committee. I note that a quorum is present. To my right is Councilman Michael A. Nutter, Vice Chair of the Committee. Other committee members present include Councilwoman Blondell Reynolds Brown, Darrell Clarke, Frank Rizzo, Juan Ramos, Marian Tasco, Frank DiCicco, and Councilwoman Jannie Blackwell is also present. The title of the first resolution to be heard, Number 040414, a Resolution 23 authorizing the Committee on Commerce and Economic Development to hold hearings to review the findings and recommendations of 4 040048, 040145, 040414 - 6/2/04 the Minority Business Development Subcommittee of the 21st Century Review Forum. Before we have our first witness, let me just announce that a couple of witnesses will not be able to make it or may not be able to make it. The Greater Philadelphia Chamber of Commerce... We invited former Governor Mark Schweiker to appear. He sent testimony which I will have read into the record. Mr. Michael Williams, the new Director of the Minority Business Enterprise Council has not yet decided whether he will be able to make it or not make it. But we will see if he shows up or not. (Booing from the audience.)
I will ask the Clerk to now read the Greater Philadelphia Chamber of Commerce testimony into the record. Good morning, Chairman Goode and 5 040048, 040145, 040414 - 6/2/04 members of the Committee on Commerce and Economic Development. For the record, I am Denise Earley, Director of Public Policy for the Greater Philadelphia Chamber of commerce. I come before you today to offer testimony on City Council Resolution 9 040414, authorizing the committee to review the findings and recommendations of the Minority Business Development Subcommittee of the 21st Century Review Forum. The Chamber served on the Regional Cooperation Committee of the 21st Century Review Forum, Chaired by Nick DeBenedictis, and as a regional chamber, is committed to increasing the opportunities for all businesses throughout the region. In conjunction with those findings, the Chamber is working to develop a series of programs which will help small and minority, including women, owned businesses develop skills and relationships that would help them pursue contract opportunities with larger private businesses. This has 6 040048, 040145, 040414 - 6/2/04 been a concern of not only minority-owned businesses, but has been consistently raised the Chamber's Small Business -- raised by the Chamber's Small Business Board. The Chamber hopes to roll out within the next fiscal year initiatives that would create increased value from minority businesses, as well as small and women owned businesses. By helping small businesses understand the procurement standards and opportunities available throughout the private sector, we believe that opportunities will be developed to allow small- and minority-owned businesses to more fully participate in the future growth of the region. These initiatives, hopefully, will benefit not only the City but also the region as well, in the form of increased jobs and tax revenues. Thank you for this opportunity.
Thank you. 7 040048, 040145, 040414 - 6/2/04 We look forward to inviting Governor Schweiker back to testify and to submit to questioning on his testimony. But our first panel of live witnesses is Miss Deborah Moore, Coalition of Voters, Taxpayers, and businesses of the African American Community, Mr. A. Bruce Crawley of the African American Chamber of Commerce. Please approach the witness table. Mr. Crawley, please state your name for the record.
Bruce Crawley, Chairman of the Board of the African American Chamber of Commerce of Philadelphia.
Thank you very much, Councilman Goode, and members of City Council. With the recent leaks of the City of Philadelphia's disparity study update, we all now know that the City has been doing 8 040048, 040145, 040414 - 6/2/04 an absolutely miserable job including minority businesses as part of its economy, no matter who has been the head of MBEC, no 5 matter who has been Commerce Director, no 6 matter who has been Mayor. 7 percent of City contract dollars. percent of City contract revenues. percent of the total. million, point 7 percent. And Asians received and even worse $800,000 or point 04 percent. 3 percent of City contracts, despite those same people representing the majority of the City's population. That being the case, it's easy to understand why their neighborhoods suffer disproportionately high unemployment, why they experience excessively high levels of blighted housing, why the great preponderance of abandoned vehicles are found in their neighborhoods, and why the crime rates in those communities have been so high historically. There's a simple economically based, officially condoned, centrally managed reason why the City has virtually no need to tow abandoned cars from Rittenhouse Square and Chestnut Hill. The residents of those communities for the most part share in nearly 98 percent of City contracts. We certainly recognize that no 23 person currently holds office in this City Council can be accused of creating the historical conditions that have led to 10 040048, 040145, 040414 - 6/2/04 unemployment, blight and crime in many black, Hispanic and Asian communities. We also know, however, that if you -- that if you in the legislative branch of government and the Mayor in the executive branch of the same government choose now to do nothing to change these historical patterns of discrimination, then you will absolutely guarantee that the economic conditions for this City as a whole and for the majority of the City's voters will not improve. We know the Fortune 1000 companies have not been net contributors to job growth in the United States for the past 17 jurors, and that virtually all net job 18 increases have come from small and minority 19 businesses. 20 The Census Bureau also informs us that 85 percent of the employees at a minority owned business are themselves minorities. If we don't stimulate minority business growth here in Philadelphia, 11 040048, 040145, 040414 - 6/2/04 therefore, we are absolutely insuring disproportionately high levels of minority unemployment in our City. I'm especially excited today because in deciding to convene these hearings, this Council has sent the first clear message from our City's public sector that it is time for a significant economic change in Philadelphia. By convening these hearings, the members of this Council have indicated that they are ready to consider a shift from an archaic, racially and ethnically divided economic philosophy that has produced slow growth, excessive bureaucracy, frivolous lawsuits, and an antagonistic set-aside mentality in both the public and private sector. In that context, it is highly appropriate that these hearings are being led today by discussion of the February 12, 2004 report by the Minority Business Development Subcommittee of the 21st Century Review Forum. 12 040048, 040145, 040414 - 6/2/04 Even the genesis of that subcommittee grew out of a recognition that we had to finally begin to include all of Philadelphia's economic resources, not just white but also black, Hispanic and Asian, if we were ever going to have economic vitality, meaningful job creation, and a viable tax base. That subcommittee was established after I was appointed to the Review Forum's Regional Cooperation Committee in January, and found that its mission was to increase business and economic cooperation within the five-county Southeastern Pennsylvania area.
I also found that there was absolutely no plan focusing any of that economic development strategy on black, Hispanic, Asian or Native American communities or in businesses owned by people who lived in those communities. I didn't sense malice or outright hostility with regard to the subject. The people who sat around that table simply 13 040048, 040145, 040414 - 6/2/04 never were asked to include that fundamentally important issue. And they believed that there could once again be a Philadelphia economic planning exercise without any real consideration of the unrealized value of minority-owned businesses. 6 percent of all Southeast Pennsylvania businesses. S. Department of Commerce that said, and I quote, economic growth cannot be sustained without the inclusion of minority businesses and an infusion of capital into 14 040048, 040145, 040414 - 6/2/04 those businesses. Absent broad-based institutional investor participation in minority and immigrant business communities which are assumed to be the new majority of businesses, continued growth in the American economy is impossible, affecting not just minority businesses, but putting the nations macro economy at risk. S. Commerce Department was telling us even then that having discussions about economic development without a meaningful inclusion of the true economic potential of communities of color is essentially a waste of time, and that it can have a disastrous effect on the municipal economy as a whole. Guided by that fact, we notified the Chair of the Regional Cooperation Committee, Nicholas DeBenedictis, and the Vice Chair, Innovation Philadelphia's Richard Bendis, that we would be establishing a new Minority Business Development Subcommittee for the 21st 15 040048, 040145, 040414 - 6/2/04 Century Review Forum. In so doing, we reached out to include the total of persons, including 5 two Hispanic business leaders and two Asian 6 business leaders, representing both the 7 Hispanic and Asian American Chambers of 8 Commerce, along with the African American 9 Chamber. 10 Over a one-month period we produced 11 a 20-page report with 46 pages of 12 appendices, one of which was Councilman 13 Goode's own Greater Philadelphia Capital 14 Access Report. 15 Before we go much further, I have to 16 reemphasize that this is a plan whose goal 17 is not to take economic resources from 18 white businesses or jobs from white 19 workers. Instead, this is a plan whose goal is to grow the pie, to expand the vitality of all businesses in Philadelphia, and increase opportunity for all Southeast Pennsylvania businesses. In order to accomplish any of that, 16 040048, 040145, 040414 - 6/2/04 however, we recognize that we will have to change the economic mind-set of the region, to shift from racial us versus them as relates to business opportunity. We know we will have to move to a region wide realization finally, that whether we personally like or socialize with people of other ethnic groups, we all, for the purpose of building a strong local economy, must be defined as us. We knew we'd need to have our political and economic decision makers finally understand that when a predominantly black neighborhood in North Central Philadelphia suffers job losses and its residents can't afford the upkeep on their property, then our entire Philadelphia economy suffers. If we can just finally get to that, to the realization that we have a shared economic destiny, then we can begin to move in the direction that makes sense for all of us. Let's deal now with the key findings 17 040048, 040145, 040414 - 6/2/04 of the report. 9 percent of the regional population. percent of the City's population. 5. 5. percent. 3 percent of Philadelphia's population. We found that minorities own and operate 15,532 businesses out of a total of 62,894 in Philadelphia. 7 percent of all the businesses in this City. 6 percent of all Southeast Pennsylvania businesses also are minority owned.
Blacks, with 9,285 businesses have the greatest number of minority businesses in Philadelphia. Asians are second with 4,463 businesses, Hispanics at 1,566 businesses, 18 040048, 040145, 040414 - 6/2/04 and Native Americans at 278. Even having been systematically excluded from the private and public sector economy, minority businesses in Philadelphia have created jobs. In fact, 19,392 jobs, excluding those of the principal owners, are maintained by minority-owned businesses in Philadelphia. An additional 16,000 jobs have been created by minority firms in four Southeastern Pennsylvania counties, for a total of 35,073 jobs. 5 percent of the City's jobs. Minority businesses are vital job creators. The City's minority owned businesses carry an annual payroll of $360 million, about two percent of Philadelphia County's annual payroll. 6 percent. 8 thousand. 6 percent of the region's gross receipts. S. economic census data, the most recently available. They include all public and private sector gross receipts. While amazingly close to the recently leaked revenue data for City 20 040048, 040145, 040414 - 6/2/04 contracts, these numbers are different. They do indicate, however, that there is just as much work to do in the area of inclusion in the private sector as there is in the public sector. 7 percent of the county's gross receipts. We have to do more to encourage the growth rate of minority businesses, especially among Hispanics and African Americans. We found that one in every 11 whites in the region owns a business. One in every 13 Asian owns a business. For Hispanics, however, the rate is just one in every 49. And for African Americans the ownership rate is one in every 64. 21 040048, 040145, 040414 - 6/2/04 Recognizing the key role that the financial institutions must play in any proposed economic revitalization of the total business community, the subcommittee carefully reviewed best practices both inside and outside the City, including City Councilman Goode's report, Chase Manhattan's Chase Community Development Corporation, and the recent effort to support minority contractors through the African American Chamber's Emerging Contractor Financial Assistance Program. 5 million in available lines of credit to minority contractors. While each bank has signed on, some banks are more equal than others in the depth of their commitment. And we will have more to share on that front in the not too distant future. 22 040048, 040145, 040414 - 6/2/04 Also demonstrating financial services leadership in this area of minority lending are the Philadelphia Industrial Development Corporation, PIDC, and the City Commerce Department. Those two agencies have joined to provide a unique project starter facility for under capitalized minority contractors. For banks that have chosen to participate, these financing programs are running like clockwork. Bids are won. Financing is made available. Work is successfully completed. And the first loans have already been repaid. We love it. And the program shows that minority businesses can represent profitable business opportunity for the bankers. With the problems and potential now having been outlined, we want to now move to a discussion of the big idea that grew out of our report. The big idea of this proposal which would produce benefits even beyond the projected impact of minority business is a 23 040048, 040145, 040414 - 6/2/04 call for Philadelphia and each of the other four Southeast Pennsylvania counties to adopt a county and region first procurement policy, one that would also include a shift to a mainstream inclusion of minority businesses in both public and private sector purchasing patterns. Such an approach requires an expanded definition of smart government and of good corporate citizen.
Smart county governments, including Philadelphia's, would under this recommendation recognize that every procurement decision transcends a simple fiscal responsibility, and includes the clear potential for job creation within each county and across the region. The same logic would apply to the 200 largest businesses operating in the region. The proposal certainly requires the bench marking of current levels of in-region procurement by the public and private sectors, and the development of 24 040048, 040145, 040414 - 6/2/04 mechanisms to identify appropriate quality vendors, both minority and mainstream, across the region and to manage and monitor the activity over time. Once the aggregate public and private sector procurement volumes are identified by industry, private and service sector, Philadelphia and the region will also be extremely well positioned to retain existent regional businesses, and to attract potential new businesses. Such businesses will be able to quantify specifically the potential for contract opportunity within the City and region, should they opt to remain in or relocate here. Participating governments and companies will be encouraged to calculate the percentage of their in-county and in-region purchases as a part of their overall procurement plan. Such an approach should produce immediate, incremental economic value for Philadelphia, for the region as a whole, 25 040048, 040145, 040414 - 6/2/04 and for minority businesses located here, that would be strategically included in the new purchasing patterns. How can this be implemented? In an effort to glean successful growth strategies for metro areas where there has been strong minority business development, our subcommittee reviewed best practices in a number of areas, including Atlanta, Georgia. Cited was the Atlanta Inner Circle, or the acronym AIC, that we've included the web site for the Atlanta Inner Circle, which was organized in that city in 1993, and which was comprised of business leaders and government officials. Meeting in a minority-owned restaurant, that group discussed and implemented proactive solutions for the challenges facing minority businesses in that area. In 2001, the AIC was incorporated as a 501 C3 nonprofit entity, as a forum for developing strategies and ideas for 040048, 040145, 040414 - 6/2/04 empowering Atlanta's urban communities. AIC was launched by then Mayor Maynard Jackson, who met with businesses and public sector leaders, to drive home the need for the powerful economic development network in the Atlanta metro area. Our subcommittee concluded its report with several specific recommendations. One, as a key component in forging reasonable, that a presentation be scheduled wherein local public and private sector leaders would be introduced to the potential for broad economic growth, through expansion of minority business in the City and the region. In fact, we've already begun to have discussions with Mark Schweiker at the Greater Philadelphia Chamber of Commerce regarding his idea for a procurement summit, where we would bring in the large corporate entities in the greater Philadelphia area to meet with minority 27 040048, 040145, 040414 - 6/2/04 business owners, for the purpose of extending contracts. The next recommendation was that the primary theme of the event be that minority business development should no longer be marginalized as a function of government mandated affirmative active plans, but rather, adopted as a principle source of job creation and tax revenue generation for each county and for the region as a whole. Next, that a priority be made of this strategy with a focus on substantial development over a two-year period. Next, we recommended that regional leaders adopt a plan to increase gross receipts at minority businesses, according to a table that would show a growth that would approximately triple the gross receipts at minority businesses in the Philadelphia area.
We then recommended that regional private sector, led by the Greater Philadelphia Chamber and all regional chambers be encouraged to adopt the county 28 040048, 040145, 040414 - 6/2/04 and region first approach to procurement, thereby contributing to job growth and regional economic development. We recommended that corporate procurement departments be asked to calculate their current percentage of in-county and in-region purchases and to work toward a goal of keeping a significant majority of all purchases within the five-county area; that within the overall county and region first strategy, private sector leaders be encouraged to set a standard for substantial and appropriate inclusion of minority firms within the region; that minority focused chambers assist in matching appropriate high quality minority vendors with corporate procurement departments. We then recommended that Veradyne, a minority-owned IT firm, be commissioned to establish reporting mechanisms for both the public and private sector participants. The subcommittee further suggests that the first report of public and private 29 040048, 040145, 040414 - 6/2/04 sector performance in this area be released in the fall of 2004. We recommended that public and private sector leaders continue to focus on appropriate inclusion of minority workers and businesses in the regional construction industry and in the building trades. We recommended that the regional economic development strategies include a mechanism for enhancing entrepreneurial retail growth in minority communities and by minority business owners. We recommended that Mayor John Street convene an AIC like leadership group to own and manage the ongoing development of minority business growth across the region. And finally, we recommended that a $50 million portion of the Mayor's proposed $500 million economic stimulus fund be devoted to the creation of a capital source for the development of emerging minority businesses. I want to thank each of you for your 30 040048, 040145, 040414 - 6/2/04 invitation to present this concept. It's been disappointing that while we've been attempting since 1995 as a Chamber to present suggestions for the improvement of minority purchasing, that the Mayor and some of the local media have tried to reduce our legitimate interests in this fundamental economic problem to a public debate about the appointment of the Mayor's MBEC nominee. This has constituted a substantial marginalization of this broad and fundamentally important economic issue. In addition to the Minority Business Subcommittee Report, the African American Chamber, and the Coalition of African American Voters, Taxpayers and Businesses sent the Mayor a letter on April 13th, outlining 11 other major issues that impede black and minority business opportunities. They include, among others, the need to establish clear goals for minority inclusion in non MBEC professional services contract. 31 040048, 040145, 040414 - 6/2/04 I saw in a recent article published in the local media, that was the recipient of one of the lead disparity studies, that during the year 2003, $84 million in legal work was contracted out by the City of Philadelphia, $84 million. And of that $84 million, that comprised 56 different legal engagements. And of those 56, one was to an African American owned law firm. And there was no evidence that that conformed contract was actually turned into business. And so, it is probably safe to say that every one of the $84 million in legal work that is let by the City's government without bid, at their whim, was let to white owned firms. And I remember seeing in the article 21 a reference to the Mayor's spokesperson who said, we do this by choice, and we allow these legal contracts to go to friends of the administration. Apparently the administration has no 32 040048, 040145, 040414 - 6/2/04 black friends. On funding City contracts, to facilitate small business bid participation, our problem is...
Our problem is that the contracts are bundled in such a way that de facto you can't have -- and you know when those contracts are bundled de facto you can't have minority bidders on these contracts. I've heard the administration say in recent weeks the problem is that minority contractors aren't bidding on the large contracts in the City. If you bid demolition, for example, in packages of 200 houses per unit, you don't have African American contractors able to carry that kind of financing, to carry that kind of bonding, to do that volume of work. You know that when you package the deal. And so, if you really are serious about including minority contractors, you unbundle some of those contracts. You have to establish goals for 33 040048, 040145, 040414 - 6/2/04 minority inclusion in the skilled trades unions as a prerequisite for union project designation at public works sites. It is incomprehensible to us -- And we've had this discussion with the administration. It is incomprehensible with us that project work sites, public work sites are designated as union only work sites, when the administration knows and the City as a whole knows that 60 percent of the people who are members of the skilled trades live in the suburbs and don't live in the City of Philadelphia, and they're working on Philadelphia projects. And they also know that whenever they've been asked to describe the participation of minority journeymen in the skilled trades unions, the skilled trades say they don't know what those numbers are. We would think that those numbers should be available, and there should be some mandate for inclusion. We are not antiunion. We are absolutely pro union. We understand, though, that when 34 040048, 040145, 040414 - 6/2/04 unions are involved in the employment cycle, the gap, the historical gap that exists in the private sector between minority business -- minority employees and white employees narrows. If you go out and work in the banking community, go out and work in the health care community, you happen to be black, you have the same degrees, have the same experience, you'll make less money. This is statistically provided by the Bureau of Labor Statistics. And the only way that those gaps narrow is when both whites and blacks are on the labor unions. So we're not against unions. We're against racist unions. And we are saying to this administration in our letter to the Mayor that there ought to be more done to include people of color as journeymen and not just apprentices in unions. Providing appropriate levels of financial support to the Progress Plaza Shopping Center redevelopment effort. It 35 040048, 040145, 040414 - 6/2/04 is unconscionable to understand why Progress Plaza should be having a problem getting money to do their redevelopment effort. Reverend Sullivan, who is an icon for minority economic development, he was a world leader in this effort. He created Progress Plaza. And we should do nothing to allow Progress Plaza to whither away and die. We recently had a shopping tour, an African American shopping tour, that boarded buses at Progress Plaza. And people in the neighborhood said to us how strange it was that you had to put African American people on the bus in the parking lot at Progress Plaza to take them somewhere else to find a black-owned shop. There should be more work done at Progress Plaza. Improving report formats to ensure accurate accounting for minority contract participation, we have not been pleased for the past several years with the way that 36 040048, 040145, 040414 - 6/2/04 minority inclusion and participation is counted. There are double counts. There are excessive counts. There are misleading counts provided by the agencies that do the counting, so much so that they have made it very difficult for elected officials like yourselves and for the media to question the minority participation because the numbers are so overblown.
They will take -- As you know, they will take joint ventures where there is an African American or Hispanic partner with a white partner. And if the total value of that contract is $10 million, they will say that the entire $10 million was a minority contract. And that certainly is misleading, and the City officials know that. And we don't understand why those numbers are still used. If we were getting those kinds of contract dollars, as had been disclosed in those kinds of reports, we wouldn't be 37 040048, 040145, 040414 - 6/2/04 sitting here today. We need to ensure that trained neighborhood residents have access to at least percent of construction jobs 6 taking place in their communities. 7 It is absolutely unacceptable that 8 people who live in these neighborhoods, 9 where work is needed, where jobs are needed 10 have to come out of their house where 11 construction projects are taking place and 12 look over an eight-foot high fence and see 13 people from outside their neighborhood and 14 outside their City having exclusive access 15 to the jobs. So we're wondering why the 16 City can't move in that direction. 17 Establishing a City-funded 18 initiative to support the development of 19 African American retailers, including a 20 firm policy to ensure support for African 21 American street vendors. 22 There is now and appears to be a 23 growing trend toward having a dearth of 24 African American street vendors. 25 In some cities street vendors are 38 040048, 040145, 040414 - 6/2/04 considered an attraction. They are certainly a way for people to move from the entry level of retail, to storefront, to wholesale, and up the vertical integrated chain. But it appears that in this City African American street vendors are being discouraged from participating as vendors, even when they have been on our streets for years, providing good service to customers. We need to ensure that there is a policy -- I don't know that there is a policy. But if we're going to have viable retail growth, we have to have a concern and a policy that relates to inclusion for street vendors in our Center City. I see all kinds of street vendors in Philadelphia downtown selling fruit, selling pretzels, selling newspapers. And very few, if any of those people, are African American, who represent, again, 43 percent of the population. Establishing a City government related committee to review the impact of 39 040048, 040145, 040414 - 6/2/04 gentrification on African American homeowners and neighborhoods as part of the City's overall residential strategy. There is great concern in our neighborhoods: north Central Philadelphia, South Central Philadelphia, West Philadelphia, parts of Northwest Philadelphia, great concern about the fact that the development that is taking place is leading to the gentrification of historically minority neighborhoods. Many of the homes are being replaced with market rate housing that the people in those neighborhoods cannot afford. And there appears to be a plan. Somebody appears to have a plan that will ensure that that trend continues. We need to understand if a plan exists, that that plan be shared with everybody in the City. We see people in African American communities, as an example, who are being enticed to sell their properties in North Central Philadelphia for $35,000, and those 40 040048, 040145, 040414 - 6/2/04 properties are flipped and sold again within a mere matter of months for low to moderate six figures. And the reason that the people in the community sell their houses is because they don't know what the plan is. If they knew what the plan was, I think they would be better negotiators at least, and maybe decide to stay in those communities. So, we recommend that the City do that. We want to adopt the government plan that would triple the gross receipts, as we stated before. O. level of our largest private sector entities.
In order for Philadelphia to gain competitive economic advantage, as compared to other municipalities, we do finally have to involve all of our citizens and all of 41 040048, 040145, 040414 - 6/2/04 our businesses in producing goods and services, in creating jobs, and generating tax revenue. Unless that kind of policy commitment to meaningful inclusion is made at the highest executive and legislative levels of City government, it quite frankly won't matter at all who supervises the MBEC staff, whether MBEC exists at all or whether it should be replaced in its entirety with an entity that has an accountable mandate for economic inclusion and the wherewithal to get all of that done. Thank you very much for this opportunity. )
Mr. Crawley, thank you for your very comprehensive testimony. Thank you for your work you've done on behalf of the 21st Century Review Forum and your work at the Chamber, and your continued participation, as this City 42 040048, 040145, 040414 - 6/2/04 begins to look forward to holding an Economic Development Summit, crafting an economic development strategy, supposedly doing a $500 million economic development investment fund. Just as your vision showed that we have to have inclusion in that plan, as outlined by the 21st Century Review Forum, we also have to have inclusion in the future work that's supposed to be done. Let me note for the record we've also been joined by Councilwoman Donna Reed Miller. All members of this committee have attended this hearing. I look forward to questioning this first panel after we hear from Miss Moore. Miss Moore, please state your name for the record and proceed with your testimony.
Thank you. Good morning. My name is Deborah Moore, and I'm part of a coalition...
Okay. I'm part of a 43 040048, 040145, 040414 - 6/2/04 coalition... Now I'm too loud, but then I'm used to that. I'm part of a coalition of voters taxpayers and businesses of the African American community. Who is Donna Reed Miller? (Indicating).
Oh, okay. Because I'm in her District, and I've never met her. I find it interesting that Michael Williams is not here. Is that going to be the representation that we're going to get? He's still making a decision? Very interesting. This is a great report; excellent. I'm going to put it another way. Black folks ain't taking it no more. (Applause.)
I see where we have African American representation here, even though this report says Hispanic and Asians. I never see anybody but black folks fighting for black folks. So I'm representing the African American community 44 040048, 040145, 040414 - 6/2/04 today. Now, I don't know how it sounds but here we are. My position is this: I'm with another community organization called It's a Family Affair. We established a pilot program called Give a Job a Chance. We can only go to black businesses for that because of the non-traditional way we were asking businesses to employ black people from the community. Well, our pilot program didn't last that long because there weren't too many black businesses to go to. Our position is this: We're not voting for Democrats or Republicans or independent parties any more. We're voting for folks that bring contracts and jobs back to our neighborhood. (Applause.)
It doesn't really matter any more about the party's representation. Other neighborhoods, other ethnic groups, they get jobs and contacts. What do we get? We get the opportunity to vote 45 040048, 040145, 040414 - 6/2/04 Democrat. (Applause.)
What's that? My position is this: I guess I keep saying that, but it's because I represent the black vote, the black taxpayer. And our frustration is represented in this auditorium today. You see the signs? They speak for themselves. We're here to represent this report. The African American Chamber has no 13 power without the black community because the African American Chamber is the black community. So, we want the focus to come away from personalities and come into the homes and the personalities of the homes of the people that don't have jobs. We need contracts so we can have jobs. We read and we hear where representatives of other ethnic groups get all kind of money. And they take it back to their community. 46 040048, 040145, 040414 - 6/2/04 So when we voted this last time, we had rallies everywhere. And we were, you know, told that we're going to make sure the African American community is represented. Well, what does that mean? Skin color? We want dollars. We want green. We don't want black. We want green. (Applause.)
Somebody came over to me this morning and said, do you have the paper? I said, no because when I thought about it, I didn't have to write anything down. They can look outside and see what's happening to us. I don't have to write nothing down. (Applause.)
Maybe this is not really the proper way to, you know, represent -- You know, you bring a paper. No. Our representation is proper because the people that standing behind us with these signs. So I'm fighting for 47 040048, 040145, 040414 - 6/2/04 those folks. Am I supposed to say anything else? (Laughter.) (Applause.)
Oh, I'm sorry. I'm sorry. Let me say something else. I know ya'll thought I was finished, Mr. Crawley. (Laughter)
What do we want? Respect. When do we want it? Now. What do we want? Respect. When do we want it? Now.
Thank you, Miss Moore, for your testimony. I'll start with a few questions for this panel.
I'm sorry. I thought I was finished. Am I supposed to stay here?
You can stay there. The members of the committee may have questions for you. 48 040048, 040145, 040414 - 6/2/04
Mr. Crawley, can you please discuss... I know you discussed it somewhat in your testimony... the problems your members have had, the African American Chamber, with access to capital and credit and bonding, and how your group has dealt with that, and what recommendations you have for this Council.
Well, primarily we found that bank lines of credit have across the board -- bank lines of credit -- commercial bank lines of credit have generally not been made available to African American businesses. We've focused in the past year on trying to change that, specifically as it relates to the contracting community. But about two years ago we did a financial services survey of our membership, and found that about 70 percent of them could not have access to a line of credit, although they were running viable concerns. 49 040048, 040145, 040414 - 6/2/04 We went to the banking community, and sat with them, and asked them to consider putting up secured lines of credit for our contractors. They had not done that in the past, had not been interested in doing it. When our people went to them one at a time, some of them had some disastrous experiences. I remember one of our members going to a bank, looking for a line of credit, and he was being denied the line of credit because he worked previously for a company that had an unfortunate experience with that bank. This is a white-owned company, for which he happened to be an employee, in which he had no financial management responsibility. But because he used the name of that company on his credit application as a place where he previously worked, they saddled him with the responsibility for the unfortunate experience they had with the 50 040048, 040145, 040414 - 6/2/04 previous borrower. We had to call that bank and let them understand that they were doing something that was absolutely illegal, and they reconsidered and made him a line of credit. But this kind of thing happens all the time. And so, we find that it's necessary to pull the banks together. And some of them have been very forthcoming and very cooperative. We've got eight of them, as we said, who have agreed to do the lines of credit. We said to them, we started the lines of credit with the contractors, that this should be considered the crack in the door. We want to be able to get them to do similar kinds of credit facilities with people outside the building trades, outside of the construction industry. Because all of our businesses suffer in the same way. They go out and they provide work. They issue an invoice. While they're sitting there waiting to get paid sometimes 51 040048, 040145, 040414 - 6/2/04 for 30 and 60 and 90 days -- and it's not just in the contractor industry -- but they're waiting to get paid, they lose their employee base, they suffer poor credit, and sometimes they have to file a chapter. So, what we've said to the banks is that although we're starting -- although we're starting with the contractor community, we want you to gain sufficient comfort level to begin to move across the board. Term loans have generally always -- Secured term loans have generally always been available. You put up your house, you put up your first two children, you can get a term loan at a bank. But lines of credit, secured or unsecured, have been like pulling teeth. So this is the first step. And our contractors have done an extraordinary job to today, and I think the experience the banks have had so far has been good. 52 040048, 040145, 040414 - 6/2/04 Again, eight backs have signed up. Not only the banks have done an extraordinary job; some, I think, signed up because they felt peer pressure to do so. They felt public awareness to do so. They have put their names on the paper, and they have not yet done the kind of work that they ought do, to be engaged in this profitable business with our community. And so, as we mentioned in the testimony, we will be providing information about the reluctance of some of those institutions to actually do what they promised to do.
But I think that the smart banks, the banks that understand that there is profit opportunity in our communities, understand that our community spends billions of dollars every year, that we do have 9,000 businesses in the City, that they do carry substantial payrolls, those companies, those banking companies, will do well by this inclusion. 53 040048, 040145, 040414 - 6/2/04 We're not there yet. We just got a crack in the door. The report that you did that specified the disparity in lending based on where you were located, if you lived in a predominantly low income, lived in a predominantly minority community, the average loan size was smaller, that information is experienced by people all the time. So, we think that we have a crack in the door. We hope it's going to be a lot better than it is right now. But we are coming off of years and years of neglect and years and years of lack of involvement by the major national institutions in this City.
Can you tell me you have some general estimation of what level of capital infusion is necessary to triple the gross receipts of minority businesses?
Can you tell me your general estimation what level of 54 040048, 040145, 040414 - 6/2/04 capital infusion is necessary to triple the gross receipts of minority businesses?
Well, that would vary. I mean, some businesses are capital intensive; and others aren't. I mean...
I'm talking more of an aggregate number, in terms of how many millions or billions of dollars you think needs to be infused to actually utilize minority businesses in the way they need to be utilized.
Well, you know, I think if you look at the level from your own report, if you look at the levels of investment in loans by banks in communities that are outside our community, if you were to apply that same kind of banking involvement, credit extension, to our communities, we would have more than enough to provide the kind of working capital financing that our community needs. We don't want anything more or separate or different. We want the same kind of credit facilities that have always 55 040048, 040145, 040414 - 6/2/04 been available. Your report outlines just what they get. We need to have the same.
And for the record, you're calling for at least ten percent of the proposed $500 million economic development investment fund to go toward minority businesses?
That's correct. That would include programming for training. One of the things that we're concerned about is retail, both on the vendor side, and on the storefront side, on the wholesale side, the totality of the retail experience. And we're going to need to provide some funds for training, for development, to put together group purchasing programs so that people can benefit by the discounts that would be available by those kinds of volume purchases. All of these things will require money. And it won't be sufficient simply to make the contracts available or to open the store and send in the traffic. 56 040048, 040145, 040414 - 6/2/04 We're going to need economic development stimulus money to ensure that those programs work. The program with our contractors could not have worked without the financing we got from the City Commerce Department. It wouldn't have worked. But we had a great idea. We thought it made sense on paper. We had contractors who are ready, willing and able to do the work. But unless we had that infusion from the Commerce Department, the Emerging Contractor Program would not have been the success it has been.
Okay. Thank you. Last, because I know other members of the committee have questions, as part of that economic development investment fund, do you support the creation of a loan guarantee fund for low income and minority businesses?
Yeah. I -- I think -- I think that loan guarantees are a part of the portfolio; you got to have those. 57 040048, 040145, 040414 - 6/2/04 The Federal Government has done loan guarantee funds, the SBA for years. Those certainly have a place. PIDC has been involved in loan guarantees. I think -- I think it is perfectly appropriate that we have loan guarantee funds that are targeted at minority business stimulation. We would be missing a valuable tool if we didn't happen to have them. There was talk about those kinds of things years ago. I mean, back in the early '70s when I was in the banking business, there was -- there were loan guarantee funds available. But those things have fallen by the wayside. Some of that has happened because the focus has shifted. People don't care about minority businesses. They're not as responsive to minority businesses because they're not as aware of the negative repercussions from not having a viable minority business community. 58 040048, 040145, 040414 - 6/2/04 And quite frankly, we've got some new larger players in the financial services industry here in Philadelphia. I mean, back in those days we had banks that were primarily based in Philadelphia. We had banks that were homegrown. And the people who were presidents of those banks went to school here, went to college here, and spent all of their professional career in those banks, and knew the neighborhoods and knew the people in those neighborhoods. Today the presidents of most of the banks that operate in this City are not the presidents of the institutions as a whole. They are regional presidents. The C.E.O., President, and Chairman of those institutions are in places like North Carolina, Pittsburgh and Boston. And so, we don't have people in the financial institutions who have as much hands-on concern about our communities. So we've got to bring that dialogue up to 59 040048, 040145, 040414 - 6/2/04 them. It's not going to come out of their own deliberations, unless they understand it. It seems as though every two years the leading banks in our community change their presence. They get rotated back to North Carolina or rotated back to Pittsburgh. And so, that causes lack of continuity. We've got to -- We've got to fill the gap in that regard. We can't count on them having the wherewithal, having the experience and the knowledge of this community, to do the right thing. So, it has to come from the public sector, and from the advocacy groups, and from the community itself.
Thank you. The Chair recognizes the Vice Chair, Councilman Nutter; then Councilwoman Tasco, then Councilman Rizzo.
Thank you, Mr. Chairman, and good morning, Mr. Crawley, 60 040048, 040145, 040414 - 6/2/04 and Miss Moore. Thank you both for your testimony. Mr. Crawley, I wanted to ask you about two parts of your testimony, and . If you could enlighten us beyond your written testimony with regard to the Atlanta Inner Circle. And I'm having the web site checked as we speak. Can you tell us a little bit more about this organization: What it did, what it presently does, and how such an entity would work, as you see it, here in Philadelphia.
I think the most important thing about the Atlanta Inner Circle was that it was a commitment to ongoing ownership of inclusion in the City of Atlanta. And they didn't relegate it to the public sector or leave it to the private sector to get its own enlightenment. Both public and private sector leadership came together. 61 040048, 040145, 040414 - 6/2/04 And the most important thing, I think, about it, as we alluded, was that the Mayor of the City of Atlanta played a visionary role in pulling all of those people together. And so, they knew that when they came to the table, that what they were coming to do was not to be involved in a minority set aside program. They weren't there to rob Peter to pay Paul. They were there to grow the pie. They were there to work together to do programs that would ensure that there was full participation and inclusion in projects that took place in the City of Atlanta. As you recall, when Mayor Jackson assumed the leadership of the City of Atlanta, one of his first projects was the Atlanta Airport Project. And he announced that he wanted to have percent of those contracts go to 24 minority business owners. And he got a lot of push-back from 62 040048, 040145, 040414 - 6/2/04 the private sector. He got a lot of resistance from the contractor community and from the labor unions in Atlanta. He got a lot of push-back from other elected officials, who challenged him in the courts, who tried to impede his progress in every conceivable way. And so he realized, as he fought this battle over two years... And finally after two years they realized that he wasn't going to go away, he wasn't going to stop. And again, the position he took, and the most important position that could be taken out of a group like this is to understand that we should not have development unless the development is inclusive. And that was Maynard Jackson's position. His position was unless we have inclusion at the level that we have specified, which we think is appropriate, then there won't be an Atlanta Airport. And so far we haven't heard those 63 040048, 040145, 040414 - 6/2/04 kinds of voices coming out of our City government. And then when he started to make that statement, he drew around him other people who understood that it was well within the enlightened self-interest of not just the public sector, but the private sector of Atlanta, to understand the value of inclusion. And that's how that project worked. It was a leadership group. They came together. They talked about what Atlanta needed as a City as a whole. They talked about the entire economic planning responsibility for Atlanta. And within that, they understood that it couldn't happen unless there was inclusion that came down from the very top of their corporations and from the very top of their government. In this City, we don't have that. There's nobody who's playing that role. We have -- We have some people in government who have been speaking out recently, and 64 040048, 040145, 040414 - 6/2/04 over their entire career we've had some people who have spoken out on this issue. We've had some people in the private sector that you could name on the fingers of one hand who have been really staunch advocates for this. But we don't have people working together, understanding how a combined effort could be good for all of us. And at the same time, we have a media... We have a media environment that reinforces every day the position that if African American, Hispanics and Asians grow their business, that they are taking something away from white people. And that creates a tension. That creates antagonism. I point to the article that was in the Inquirer recently about a man named Graham, who was an insurance brokerage. And the Inquirer took a great deal of time interviewing Mr. Graham and asking him about the ugly underbelly of minority participation.
65 040048, 040145, 040414 - 6/2/04 And he was very forthcoming in saying how much he disliked and resented the fact that the City government made him and the DRPA made him and the state made him and the Federal Government sometimes makes him include minority insurance brokerages. And he said that this was his business, and they shouldn't be allowed to participate. And he said some very mean-spirited things about it. But if you read the Inquirer's first two stories on this, it was clear that the Inquirer's reporters and the Inquirer's editors agreed with Mr. Graham. At no point did they ever ask Mr. Graham how he happened to get his contracts. Mr. Graham wrote a lot of checks to people in the public sector. And at no time did those reporters ask Mr. Graham if he earned his contracts by being an absolutely professionally competent insurance brokerage or whether he also was politically connected. 66 040048, 040145, 040414 - 6/2/04 The feeling that African Americans are the only politically connected people, the feeling that there should be an ongoing schism between people of color who do business and whites who do business is fed by the media. And they do an absolute disservice to our community in encouraging that. I hear people say to me every day, you know, how greedy are these African American businesses. They want to be involved in everybody's contract. 7 percent of the City contracts, and, you know, less than 10 percent -- less than 1 percent of gross receipts as a whole in the City. If you read the Inquirer, if you read the Daily News, you would get the impression that African American businesses are ripping off the business community, robbing all the Procurement Departments. And that has to stop. Unless that stops, we won't be where we are. 67 040048, 040145, 040414 - 6/2/04 And I think another role that an AIC can play is in understanding that -- that an appropriate tone has to be set in the City before we can have the kind of progress and involvement that we need to have. )
The second issue I wanted to raise on was the... You made reference to a letter that you had sent to the Mayor back on April 13th, outlining 11 other major issues that impedes black and minority business opportunity. And then you list them through your testimony. My question is, was there a response to the letter and its various points.
Yeah, there was a response from the Mayor. We sent our letter on April 13th. The Mayor sent his response... And I'm trying to see whether I have it as a part of my collection here. But we were deeply disappointed by 68 040048, 040145, 040414 - 6/2/04 his response. One of his responses, for example, had to do with the issue of the building trades. And he cited a problem with the First Amendment, saying that the First Amendment would prohibit him from --
Mr. Crawley, could you pull the mike a bit closer? The stenographer's having a...
He cited the First Amendment in saying that the First Amendment would prohibit the kind of inclusion that we were seeking for that. We asked him about the full inclusion of goals that would have us triple the volume of business done with minority contractors and businesses in the City. And as you know, it's a very meager volume of those contract dollars now. And we said, you know, would you be able to triple it over the next three years, just to get started? And his response was, I am unable to respond thoughtfully to this question in 69 040048, 040145, 040414 - 6/2/04 the time allotted. An answer will be transmitted under separate cover, after the administration has had an opportunity to review the findings of the disparity study. We are very concerned about the fact that many of his responses tie back to the release of the disparity study. And the disparity study, as we know, has been around for a while now, and has been leaked out. And we think it's well past the time that it should be formally released; and that the administration, one, have comment as to how we generated the numbers, the shameful numbers that exist on that report; but, two, how they intend to use that data to move ahead with some of the things that we have specified. So our great concern is that the tone of the response was not one that gave us much encouragement that this administration is ready to move ahead aggressively, with full inclusion of African American and other minority businesses. 70 040048, 040145, 040414 - 6/2/04
Let me, then, close with finally asking: If you are comfortable, could you forward to the Chair both a copy of your letter to the Mayor as well as his okay?
It just appeared next to me. Request withdrawn. (Laughter.)
But let me... So actually, I know you made reference in your testimony just now that the disparity report had been leaked. That may have been how it came to the news media's attention. But you play recall I actually sent every member of City Council a copy directly, with a cover letter, so that I don't think that qualifies as a leak. So, it is out. It is available.
Yes; I understand. Thank you very much, Mr. Chairman. 71 040048, 040145, 040414 - 6/2/04
Thank you, Councilman Nutter. The Chair recognizes Councilwoman Tasco.
Thank you so much for a very good, poignant, to the point report; quite good. I just want to say that you and I have been on this road, I guess it's the '70s, in trying to improve the participation of minorities in the business and the contracting. And it doesn't seem to be any better off than we were back then. And you look at all this black leadership in this City, and we're no better off than we were. I'd like to say that one of the areas you talked about was the commitment of the banks to participate in your program. 72 040048, 040145, 040414 - 6/2/04 One of our discussions, an ongoing discussion, is while we have the commitment, and you cited the problems now that exist that did not exist back in the '70s, where the bank President did live in Philadelphia but now they're some place else. Even then we recognized the fact that where the commitment came from the top to be inclusive, we never got the message down to the guy who was making the loan or the people who had the day-to-day decision-making powers to approve or disapprove a loan. In your discussions with our local banking institutions, have you thought about asking them to do some sensitivity training and training of their staff who have to make these decisions, so when a contract is turned down or a minority applicant is refused, that you don't have to go to the President of the bank, that there is some sensitivity and barriers that these companies need to know that exist 73 040048, 040145, 040414 - 6/2/04 that keep minorities out of the process. I think that's very important, that you go down below the President and the vice president, to reach to the person who's making those decisions.
You're absolutely right. And in putting together the and a 10 half million dollar line of credit, we had 11 worked with a number of middle management 12 and upper middle management people in the 13 banks over a period of about 15 months. 14 And we were still being delayed, and 15 we were still being avoided, even though 16 they paid lip service to the concept. 17 And finally we had to go directly to 18 the president of each local -- each local president of every bank in this region to get them to make the commitment. And the bank presidents did make the commitment. We do have an ongoing -- with the chamber -- we do have an ongoing periodic review with the staff people, the senior staff people, the lending groups, 74 040048, 040145, 040414 - 6/2/04 the senior vice presidents of the lending departments. We meet with them on a periodic basis, to give them feedback about our experiences, to let them ask any questions they might have of us. But we are so careful and so sensitive to what you just raised. We cannot tell our people simply to go and do business with PNC Bank. Because if they walk into any branch of PNC Bank, the chances are they're going to find somebody who knows nothing at all about the program, who knows nothing at all about the commitment, and who will tell them that we don't do this kind of business. So it is critical for us, one, to know where the commitment actually lies, who is capable of making the credit decision, and who understands the policy. And so, for us, with so many bank branches, with so many ways to access these banks, it's better for us to find out who 75 040048, 040145, 040414 - 6/2/04 in the corporation, who in the banking network is able to do that, and to send our people directly to them, than to try to ask them to train everybody in the institution, because I don't think they're going to do it. What we do is make sure that our people go to the people who have the direct line of communication with the top of the house. Other than that, they're going to have a bad experience.
Thank you. And the other issue is the line of credit really is important because the payment process from contractors to the minority contractors, subcontractor, can put them out of business.
They get delayed and delayed and delayed. And while they're waiting for their money, like you say, they lose their staff. So the line of credit is extremely important so that they can continue with 76 040048, 040145, 040414 - 6/2/04 their business ongoing. I have so many questions. And I don't want to hog the whole thing. But I do want to ask you a question. During the course of the Commerce Director's testimony, she talked about the Economic Development Summit. I noticed that you talked about the Chamber and your organization's doing a procurement summit, which I think is a good thing to do. Is there anyone from your organization on this economic summit? Have you contacted anybody or have you been contacted to serve on the planning committee?
No. We were contacted. We were contacted about the time that the Mayor made his announcement of the new MBEC nominee. We were contacted by Stephanie Nadoff. And we told her that we didn't think that they were ready to do the kind of plan that we needed to have, to have a 77 040048, 040145, 040414 - 6/2/04 comprehensive involvement from the Chamber. So what we're going to do is, as we said before, to go directly at the Greater Philadelphia Chamber of Commerce. We sent a letter that pre-dates Stephanie Nadoff's appointment and pre-dates the MBEC nominee's appointment. We sent a letter on December 22nd -- I think I have a copy of that letter -- to Mark Schweiker, asking him to pull together the heads of his largest corporations -- those are generally people who comprise his executive committee -- and have them to sit down to talk about ways that there could be more procurement involvement with minority businesses throughout the City and throughout the region. And we asked him to get back to us on the 25th of March, give him 90 days to think about ways that that could be done; where at the same time, one day later we sent a letter to the Mayor of the City of Philadelphia, asking him to get back to us, again, on March 25th, to tell us about the 78 040048, 040145, 040414 - 6/2/04 restructuring of MBEC which we had been waiting for for more than a year. To his great credit, Mark Schweiker got back to us with a hand-delivered letter on that day, on March 25th. And among other recommendations, he said he wanted to do a procurement summit. So we knew that that was already going to happen before we heard Stephanie Nadoff talk about her economic summit. Our focus is on what needs to happen for minority businesses and for African American businesses. To this day we have not received a letter from the Mayor responding to that December letter about the restructuring of MBEC. And so, our great concern when there was an announcement that there would be a new MBEC director, without us having sent a letter -- I have a copy of the letter -- having sent letters to the Mayor asking about the restructuring, dated December 22, 2003, and the first thing we know about 79 040048, 040145, 040414 - 6/2/04 MBEC is a leak again of the announcement of the name of the MBEC director. So that's why we have not been involved in the economic summit. We were already planning to do something else. And we hadn't heard anything back from the Mayor, so we began to talk directly with the private sector.
What is the ongoing role of the subcommittee of the 21st Century? Is that abandoned? Are you --
We don't really have an ongoing role, other than the fact that -- I mean, because that was a part of 21st Century Review Forum. And again, we had to create our own subcommittee. We were... There was no minority business subcommittee or no minority business committee established under the 21st Century Review Forum. And when I went to that first meeting, I heard them talk about what they thought the economic agenda would be for 80 040048, 040145, 040414 - 6/2/04 the City and for the region, but there was no discussion, none, of how minorities would play any role in that, how African American businesses would play a role in that. So we told them that we would be establishing a subcommittee. The group of people, the people 10 who came together, are still committed to 11 pushing this agenda, to ensuring that this 12 idea doesn't die. We're not doing it as a 13 part of the 21st Century Review Forum. 14 From what I understand, the Review 15 Forum's report is on the shelf and pending 16 further action. But I don't know what is 17 happening with the Review Forum. 18 All I do know is that the group that 19 we put together is still interested in making sure that the things that we uncovered in our report get implemented, both in the public and private sector of the City.
Let me ask you another question. On of your 81 040048, 040145, 040414 - 6/2/04 report you talked about sent the letter to the Mayor on April 13th outlining issues 4 that impede black minority business 5 opportunities, including... Did you get a 6 response to this? Was that the letter? 7
That we got a letter of response, but it was a disappointing response.
The one that you talked about you can't do anything with the unions because of the First Amendment.
What does the 82 040048, 040145, 040414 - 6/2/04 First Amendment have to do with that?
Somebody may be able to explain that to us. Mr. Chair, maybe you might ask that question.
We want the Mayor to explain it to us. He's the one that wrote the letter. (Applause.)
I certainly think that -- I think that -- And commend you on the report. You've certainly touched on all of the issues that are major issues in this community. One of the problems we have as a Council, in dealing with the professional services contract is that the contracts are let, and they're let for a year with renewals. If they were let with a three year -- under a three-year term, the Council would have to approve them. We 83 040048, 040145, 040414 - 6/2/04 have no approval over those professional services contracts. And a lot of contracts that the Council used to approve are no longer approved because they went -- we went to that process of letting contracts on a one year basis with a three-year renewal which does not give any input by City Council, in terms of what the terms of the contract are, what minority participation. I certainly think that this Council has been in the leadership, going back to Councilman Blackwell, when he established the minority MBEC program in the City, because then we knew that there was a need. But side -- side actions have taken place to undermine any effort by the MBEC office, as you said, no matter who leads it, has been put into place to prevent any meaningful participation of African Americans in the business of this City. And when the message is sent that we're not doing business with African Americans or any other minorities, then 84 040048, 040145, 040414 - 6/2/04 it's okay for the business community to ignore this community. So the message has to come from the top. And I thank you.
Our problem with MBEC is not related to who's going to be the managing or supervisor of the entity. It's whether the entity is still relevant in its current form in the year 2004. When MBEC was put together, the concept was that there would be minority involvement, but the only way that minorities could be involved was that they go through MBEC, which wouldn't include all of the contracts let in the City. The professional services and those other contracts were not even included in MBEC's purview. MBEC had no authority over those, as you know. And even worse than that, the assumption was that all those contracts would first be let to whites because the assumption was also that there were no 85 040048, 040145, 040414 - 6/2/04 black, Hispanic or Asian businesses that could serve as prime contractors. So the only way that we would be able to involve -- And this is the MBEC structure. The only way we would be able to involve minorities is, one, let the contract, let a white bidder bid on the contract, and then find some minorities to participate. That's an outmoded concept. There are certainly African American business owners who can bid as primes on these contracts. And that's another thing that comes out loudly and clearly in the disparity study. There are virtually no black prime, no -- virtually no Hispanic prime contractors bidding on City contracts. That has to stop. That is an outmoded concept. And it denigrates and marginalizes the great professional competence of the businesses that we now have in the City 20 years later. And so, we don't want to work in that kind of 86 040048, 040145, 040414 - 6/2/04 environment any more. And it does create a situation wherein you're giving that contract to the white bidder, and now he thinks it's his contract. And the minority participant has no say in that contract. That contractor, having won the right to exercise that contract, can eliminate the minority participant, even though that minority was on the contract at the time the bid was won. He can simply replace that person at his whim. And that shouldn't exist. So, for a number of reasons, we think it's time to revisit the whole way in which procurement is done. And we need to look at procurement from the top down. And procurement, at the top of this administration, at the top of the government, ought to have an inclusion mandate. Include people of color in all purchase considerations of the City, not just in some ghetto of procurement called 87 040048, 040145, 040414 - 6/2/04 MBEC. That worked for 1983, but it should work in the year 2004. (Applause.)
I just want to make one final comment. (Extended applause.)
I just want you to add in your... another part to your responsibility, is to look at how contracts are given out in the provider community because we're having problems in the Health Department, Department of Social Services, where a number of neighborhood providers, African American minority providers, were doing business, providing services in the community; and they are no longer getting those contracts. Those contracts are being awarded to friends of people in these departments; do not get an opportunity -- And MBEC no 22 longer monitors the nonprofit community. And so, therefore, they also provide employment in the communities while they are nonprofit. They provide the 88 040048, 040145, 040414 - 6/2/04 minority -- They provide access to people of color in the community to access services within the community, and not have to go outside of their community for services. They also provide employment for people in the community to provide those services to the residents of that community. But that is another area that we have to look at, and will be looking at because you will find that those community groups did testify during the course of the budget hearings, about how they are excluded, and how their contracts are taken away and given to other groups. And it's just not fair. And so, it is serious problem in the City that we have to address.
Thank you. 89 040048, 040145, 040414 - 6/2/04 Good morning to both of you. Thanks for being here. I'm working on an issue that makes me look back. And maybe you can help me. I don't know the answer to this question, on how we can do this particular type of business. But we just spent $50 million plus with Motorola Corporation to install a new radio system to support Fire Department, Police, and all the operating agencies of City government, $50 million plus. I don't have a clue whether there was minority participation or how you can even have minority participation, when you're giving a bid to a Chicago-based company that imports, I would assume -- and I'm assuming here -- much of the labor, professional laborers with them. And they come, they do their thing, and they leave. How do we begin to approach -- This is a big deal, $50 million plus. And I have no idea whether or not there was minority participation in that. 90 040048, 040145, 040414 - 6/2/04 Now that I look back, it was installed. Just turned on last year. What do you think about that?
I think that there shouldn't be a single contract that goes through this City government that's not reviewed for its appropriate impact on the City economy, and then the regional economy, and for its potential to provide appropriate levels of inclusion in communities that have been excluded. And that would relate to everything. And if you did it that way, if that was the way business was done in this City, we would simply go about the business of including people in the Motorola contract or whoever it happened to be. There are no brand names that exclude African American participation. There is no industry that includes African -- excludes African American participation. We have people who have gone to the very best business schools, technical 91 040048, 040145, 040414 - 6/2/04 schools, and professional schools in the country for at least the last 35 years. So they can produce anything. They can provide any service. You cannot -- You cannot say to us that $84 million in legal work was done by the City and no black firm did a single dollar's worth of that legal work, without having us have a strong suspicion that we were purposely and conscientiously excluded. So, when I hear you talk about Motorola, I'm simply saying that it doesn't matter what the brand is, it doesn't matter what the product or the service is; if there is a mandate, if we understood that it is well within the enlightened self-interest of this City and its residents to include people who live here in the economy of the City, then we'd simply do it. VOICE IN THE AUDIENCE: That's right.
So when we go out 92 040048, 040145, 040414 - 6/2/04 with a contract -- When we built the stadiums, obviously, we got lots of labor locally. But let's go back.
40 percent of it was City residents. 60 percent were people outside the Philadelphia. 40 percent. Our Philadelphia Phillies.
All the dialogue you guys had in Philadelphia City Council. 40 percent of the employees. (Applause.)
I'd like to have 93 040048, 040145, 040414 - 6/2/04 them bring some of the hay to me. (Laughter.)
But let's talk again about these big national contracts. Are you telling me that you believe if they wanted to, that they could structure a contract for the installation of that radio system, insisting that Motorola subcontract with local technicians, local antenna installers, rather than importing their work force from the midwest?
I think if Motorola knew that that was a part of the local mandate for the procurement process, Motorola would figure out a way to get it done. And in the absence of that, Motorola reverts to business as usual.
And maybe they did that. Again, I don't know whether that occurred or not. So, I want to make myself clear. I don't know the answer to the question whether that occurred or not. I don't know. But we're going to find out. We're going to look back because maybe 94 040048, 040145, 040414 - 6/2/04 looking back can help the future. Thank you. Thank you, Mr. Chairman.
Would the role of MBEC... Would they have informed you as to whether or not there were minority? You know, I don't like that word. If they -- Would they have informed you if block folks were working on that job, if they really led up to their role? (Applause.)
I think that if that were the case, that would have been something that, if I were Motorola or I were the Department of Public Property, that I would have talked about.
And it's not about Michael Williams. 95 040048, 040145, 040414 - 6/2/04
I know. But what I'm saying is, I don't know who you directed your question to, but I'm getting ready to bring you another answer. My position here is what you just questioned. If the elected officials and those other elected officials called ministers, if they were really on top of the business of being about the business of bringing jobs and contracts into the neighborhood, you wouldn't be asking that question. (Applause.)
But let me say this to you, Councilman Rizzo: Your office... I'm'a bring this to the attention of the public. We have reached out to your office, my organization. And you have helped us tremendously. I don't know the rest of these folks. (Applause.)
And that's... I think that's important to know. I mean, we're 96 040048, 040145, 040414 - 6/2/04 steady voting every, you know, four years, whatever it is. I have a report card here. I joined a group of people that make sure that the community knew the position of jobs and contracts for folks that were running for office. We made sure that this information were at -- this information was at the polling places. And a lot of those candidates lost because they didn't support jobs and contracts. So, Motorola, Mickey Mouse, Disney World. None of those folks should be able to come to this town... (Applause.)
Because you should be coming -- You should be coming to us and giving us the answer, not asking us the question. 97 040048, 040145, 040414 - 6/2/04 I'm sorry. But I'm not really sorry. You know, I'm just being...
And because of some recent issues associated with that job, it made me ask the question. And I'm not embarrassed to tell you that I don't know the answer.
And I'm not embarrassed to tell you that you should have known the answer.
And I agree. I agree. (Applause.) 98 040048, 040145, 040414 - 6/2/04
And I'm not trying to trash you, Mr. Rizzo. I'm just trashing the... This is a street fight, Street administration and community.
I'm trashing the process. I'm sorry, Mr. Wilson Goode, but it's time to go there. And like I said, who has the contract to bring the hay to Smarty Jones? Thank you.
Thank you. Chair recognizes Councilman DiCicco. COUNCILMAN DiCICCO: Thank you.
Not because she mentioned Mickey Mouse. COUNCILMAN DiCICCO: Pardon me?
Not because she 99 040048, 040145, 040414 - 6/2/04 mentioned Mickey Mouse. COUNCILMAN DiCICCO: Nothing to do with Mickey Mouse. He did run against me, actually. Thank you, Mr. Chairman. Thank you. Can you hear me? Can you hear me now? ) COUNCILMAN DiCICCO: Thank you, Mr. Chairman. And good morning, Miss Moore and Mr. Crawley. Councilwoman Tasco touched on something. She's talked about 30 years the struggle has been going on. I'm more familiar with it, obviously, for the last nine years that I've been in Council. And I've been at many different hearings. In fact, I even attended the African American Chamber of Commerce one time. I talked about my father's business including African Americans. He was a number's writer, as you remember. But anyway, that being said, in your testimony on is one of the items 100 040048, 040145, 040414 - 6/2/04 that you referenced in your letter to the Mayor, ensuring that trained neighborhood residents have access to at least 5 percent of the construction jobs taking 6 place in communities. 7 For me, that goes to the heart of 8 this whole issue, and this debate that has 9 been going on for decades. 10 Unless people are trained, they're 11 never going to get the job. How do you get 12 them trained, I think, is the question that 13 we really need to be dealing with. 14 There is an historical... It's 15 historical in this City that minorities, 16 people of color are less likely to be 17 trained in the trades to become journey 18 persons, which therefore excludes them from 19 the process. 20 So we can talk about investment and 21 talk about the business community, but 22 unless those jobs are made available to 23 people, we're going to be talking about 24 this for another 30 years. 25 So the question is, how... Do you 101 040048, 040145, 040414 - 6/2/04 have suggestions, recommendations as to how we do we get people into the position so that they're qualified to get the jobs when those jobs are finally let? And let me just finish this thought. Several years ago, eight years ago, I embarked on a mission to do a housing development in my District. I'm happy to say it's under construction. 93 homes were sold in four and a half to five days. Very diverse group of folks bought those homes. My vision was not only to remove the blight and build houses, but my hope was that we were able to employ people from the immediate community, from the Zip Code or two Zip Codes around that section of my District, so that they would become wage earners, which would then give them the opportunity to become homeowners, homeowners for maybe the houses that they were actually working on. See, I think it's very simple. I think if you give people the skills to be 102 040048, 040145, 040414 - 6/2/04 able to participate and to be true job holders, if you will, trades persons, this plan that you mentioned about housing in certain sections of the City could really be a massive... overall of our housing development throughout the City. Because those same people who would be trained to work could be employees on the jobs, and then become homeowners. I don't think it's that difficult. Only if we are able to crack the historical situation that we have in the trades in this City -- And I enjoy support from the trades, so I'm not fighting with them. But we've got to open the door. And unless we open that door, nothing's going to change. Nothing will change. And the key is, do we have the political will to say, it's got to stop. You just can't take care of suburbanites to come in and work in our neighborhoods and leave at the end of the day. And I don't have anything personal against those folks. They're entitled to 103 040048, 040145, 040414 - 6/2/04 work like everybody else. ) COUNCILMAN DiCICCO: But until we open the door and give people who live in this City the opportunity to have jobs, all those other social ills that we have are just going to continue because it's just never going to stop.
So we have to figure out, how do we get the door open into the trades, so that people become trades persons and not the apprenticeships? Because they don't get the jobs. That's just... That's just a lot of -- That's just a lot of fluff at the end of the day. And until we figure this out -- And maybe it's the political will. And I'm not saying it's this administration or any other administration. It's us collectively. We got to figure out -- We got to stand up and say, it's got to stop, and you got to start training those folks. So, you know, it's a question 104 040048, 040145, 040414 - 6/2/04 statement. I have a tendency to do that because I want to let you know what I'm thinking, where I'm coming from. How do we get to that percent, unless we open that 6 door? 7
Councilman, you are 8 clearly singing our song. 9 We explained earlier in the 10 presentation that we were perhaps most 11 disturbed by the Mayor's response to the 12 question about having appropriate levels of 13 inclusion in the building trades. 14 And when he gave us a response 15 that... 16 COUNCILMAN DiCICCO: I didn't get a 17 chance to read the response, so I apologize 18 if it's in there. I just... Is that the 19 Constitutional issue? 20
Yeah. He said the 21 First Amendment kept him from doing this. 22 Oh, here it is. We asked him to 23 establish goals for minority inclusion in 24 skilled trades. 25 He said, as you know, the First 105 040048, 040145, 040414 - 6/2/04 Amendment prevents the City from either requiring or prohibiting that any construction project be undertaken with union labor. Notwithstanding the constraint, the administration has worked in cooperation with the City's building and construction trades to fill over a hundred new apprenticeship positions with minority workers who graduated from a diversity apprenticeship program. See, that's back again to the program that doesn't work. Our issue is not how many people are in the diversity apprenticeship program, because they put people through there every year. The problem is nobody comes out the other end. The problem is, we need people who have journeyman cards. And the problem is -- And we've been discussing this with the School District -- that years ago, before the schools became 106 040048, 040145, 040414 - 6/2/04 85 percent African American and Hispanic, there were metal shops, wood shops, and all those other kind of shops. And when you came out of the public school having gone through that program -- COUNCILMAN DiCICCO: You had a trade.
You would be a journeyman. I know people who are friends of mine who had jobs as union organizers, and they would pull up on a construction site. And they would see four or five people there working. And his job was to find out if they had a union card. If they didn't have a union card, he'd either shut down the project or said, we'll put you in a union. You had a choice. Now, for black people they don't say, we're going to put you in a union. 107 040048, 040145, 040414 - 6/2/04 They say, we're going to put you in the DAP program, we're going to put you in the pre-apprentice program. And it's going to take you two years to finish that, another six or seven years to finish the apprenticeship program, and you will never have the subjective decision made, the purely arbitrary decision made to finally give you the journeyman's card. So the way we get around that -- There's two ways: One, we've got to ensure that we have more minority prime contractors because we have minority prime -- And that's what the Emerging Contractor Program is about. If you have minority prime contractors working in those communities, their first hope would be that they can hire people from their neighborhoods to work on those construction sites. And then if the unions don't have people who are -- who look like them, then these will have to be prevailing wage situations, where people will make the same 108 040048, 040145, 040414 - 6/2/04 wage that they would make in a union, have the same benefit package. They simply wouldn't have the journeyman's card because the union didn't give to it them. So sometimes we need to give them training. And we do have a training program at work with the emerging contractors. But sometimes people have all the training they need. They simply don't have a journeyman's card because the union won't arbitrarily make the decision to give it to them. That's why we're so frustrated because the Mayor says that it's the First Amendment keeping us from having the kind of inclusion we need, to get people in a position to make it work in their own neighborhoods, feed their families, and take care of their children.
Mr. DiCicco, can I respond also? I heard you say that one of the problems is the training programs in the neighborhood. 109 040048, 040145, 040414 - 6/2/04 I just wonder if anybody ever questioned the folks that get the jobs first, if they had training from the neighborhood. I just wonder if anybody thought with Motorola, if anybody there had been trained first. You know, we always have to be trained first and qualified. I'm saying, where is the jobs and the contracts? We're already trained. (Applause.)
You know, that's... See, I conform Mr. Crawley said when he said right away we have to go through the DAP program, and then we got to... By the time we finish, they doing something else. Person don't be trained, that's not the job they're hiring for any more. If you want to know how to approach it, call back to the community and ask us. Believe me; we know the answers. We will be able to help you get all of the training and all of the people that are trained that 110 040048, 040145, 040414 - 6/2/04 you need; believe me. We are already trained, and we are available for these jobs. (Applause.)
I don't know who the question was directed to, but I'm'a keep after it, because I'm not going to be beating around the bush. COUNCILMAN DiCICCO: Let me clarify. In addition to the training or having trained people, what I was mostly referring to was the journeymen. We get into apprentice program, and the journeyman is what I should have emphasized. You never get to that which entitles you to get to the job.
But was I clear? COUNCILMAN DiCICCO: I suspect with Motorola that MBEC applied some of their 111 040048, 040145, 040414 - 6/2/04 criteria to that. I'm suspecting that. But I can tell you that probably a lot of electrical work was involved in that. There was no way that contract was going to move forward unless the electrical workers union had its full participation with that, even -- And I'm not an attorney, and I don't know about Constitutional law, obviously. But the way -- The same way that union could go in and stop -- and keep the job from happening because until they reached whatever agreement they need to for their members, those same members should be included in that local that are minorities. And that's not coming -- I mean, constitutionally, unconstitutionally, there are ways in which we can get things done. And especially when we're letting City contracts out. There has -- There should be a way, there must be a way in which we can contractually guarantee certain participation beyond what MBEC. 112 040048, 040145, 040414 - 6/2/04
We agree with you a hundred percent, Councilman. And we're waiting for the Mayor to give back the appropriate response.
That's right. And the union's that stopping us from getting those jobs. COUNCILMAN DiCICCO: Just in closing, on the gentrification issue on the planning, I'd be willing to sit down with you to talk to you about the housing development I did which addressed that very issue, because when I started the project in 1996, many of the people who live there, mostly people of color, were concerned that I was looking to gentrify the neighborhood. And I realized after many heated meetings that they were the descendants of people who lived in other parts of my District which became totally gentrified. And there were promised 30, 40 years ago that they would be included in the plan and they weren't. We devised a plan that allows for folks whose homes we were 113 040048, 040145, 040414 - 6/2/04 condemning as part of the big plan for neighborhood revitalization to still remain in the neighborhood by using some of the relocation dollars as down payments on the homes, and other things. So I'd be more than willing to share that with you and other members of Council --
We look forward to that. COUNCILMAN DiCICCO: -- who have housing developments going on, where you may be faced with that same issue. We don't want to take people away from their community. We want to make it better for them and the future residents. So thank you. And thank you, Mr. Chairman.
The Chair recognizes Councilman Clarke. The Chair recognizes Councilwoman Brown.
Thank you, Mr. Chairman. 114 040048, 040145, 040414 - 6/2/04 Good afternoon now, Mr. Bruce Crawley, and Miss Moore. First let me start out my comments by underscoring the issue raised by Councilwoman Tasco. It was a very disturbing reality that came to our attention during the recent budget hearings, learning and hearing that many providers of color in our -- indigenous providers of color are in some ways systemically being moved out of providing services to people who look like them. And we are doing what we can from where we sit, but we will welcome helping to get this issue on the radar screen, and in a strong way, so that we do not have those same discussions, conversations and Q and A with the budget process next year. So I need to underscore that. And let me commend you for what I agree, too, is a very thoughtful but factual testimony. I'm particularly drawn by a lot of 115 040048, 040145, 040414 - 6/2/04 the stats here, and in particular on you mention where we are, where African Americans are, in terms of ownership. I am instruct struck by the... There's no mention of women of color in business. And when you cite your strategies, I'm curious to know would those same strategies apply to women of color in business? Because that's another layer, another hurdle that women have to go through when we're trying to get the fair and equity, with regards to the playing field.
We don't spend a special focus on women of color in the African American Chamber because we find that African American women get treated like African American men. They get discriminated against because of their race. And when we did the Emerging Contractors Program, some of our best graduates were African American women, ran the best businesses, had the best 116 040048, 040145, 040414 - 6/2/04 construction sites. They can do everything that everybody else can do. And when the government gives you back their data, the Census Bureau data, when they say women, they mean white women. (Applause.)
Black women are included with black people. Asian people are included with -- Asian women are included with Asian people. And Hispanic women are included with Hispanic people. When you see the category women on the government form, they're talking about white women.
That clarity needs to be pointed out. The focus here is City government. Are there any lessens we could learn from what Carl Green is doing over at P.H.A. or when we consider that the School District is getting ready to do this $5 billion capital campaign and build 11 new high schools, and I think five new elementary schools, and given the some might call it 117 040048, 040145, 040414 - 6/2/04 rumors, others would say facts, that the leadership there at the School District went over and above the stipulations when they did this in Chicago, is there an opportunity to sit down with the School District now and hear how they plan to actually meet some of the recommendations in this report?
On the School District we've been meeting with them since Paul Vallas got off the plane. We met him during the first week he was in Philadelphia. We were very familiar with his track record in Chicago. We knew that he did a very similar construction project with the Chicago School District that he is putting in place with Philadelphia. We knew that he floated a bond issue. We knew that he focused on making sure that African American and Hispanic contractors were involved as prime contractors. And this is a different kind of a 118 040048, 040145, 040414 - 6/2/04 thing than even the P.H.A. program. P.H.A. program has not made a great deal of involvement with African Americans as primes. And we want to see more in that regard from the Philadelphia Housing authority. But we know that it has been Paul Vallas's track record and experience to do that. And those businesses grew and prospered, hired people in Chicago, just as the experience was in Atlanta. And now, one of the things that I was discussing with somebody yesterday is that they said that in the City of Atlanta -- This was from a person at one of the largest private sector corporations in Chicago. And he said -- He was surprised to be in Philadelphia -- and he was here yesterday -- because in Chicago there is a simple understanding that percent of all 23 the businesses done in the City will be 24 done with businesses owned by people of 25 color. 119 040048, 040145, 040414 - 6/2/04 And I would think that people in City government in Chicago -- in Philadelphia should converse with the alderman and the Mayor's Office of Chicago to get that information. We certainly are going to be following up, having heard that. But Paul Vallas comes out of that experience and background. And we know he has a good track record. And we've been working with him ever since. And we fully expect that there will be substantial prime and subcontract involvement, not just on the -- on the -- on the -- on the capital development side, but also on the straight procurement side. You know, the procurement side of the School District had been ignored as to minority inclusion since 1988. From 1988 until Paul Vallas got here, there was virtually no minority business inclusion because there had been a lawsuit. And the School District overreacted and decided that it wouldn't do anything. 120 040048, 040145, 040414 - 6/2/04 You know... And when we hear people in this administration being concerned about lawsuits, when African Americans are getting less than one percent of the contracts, it causes us great dismay, you know. If somebody should be suing somebody, it should be black folk, who sit back and watch 42 percent of the population get 98 percent of the contracts. So to say that you're concerned about a lawsuit, when black people get less than one percent of the contracts, is unconscionable. The people in the School District are not operating out of that mode. In fact, they say if we're not getting sued, we're not doing -- we're not trying hard enough. And I think that's closer to the truth than what has been the case in the School District for the past 15 years.
So when you say you're working with them, you're actually working developing strategies that address 121 040048, 040145, 040414 - 6/2/04 the kind of issues we're confronted with with the City.
Reaching out -- We had -- The African American Chamber had, a vendor meeting for the School District, I guess about three, four weeks ago. We had about 150, 200 African American vendors, contractors, engineers, architects, all kinds of designers, a panel of people from the School District. They have a commitment. We're working with them to ensure that they achieve all their goals.
Very well. My final question is: Discuss, if you will, on -- and I quote -- you called us county and region first procurement policy. Is that a first? Is there some precedent? Just background on that and what that means.
We haven't seen anybody actually do that. I mean, I think we're inspired by two things: One, when I was in the hospitality industry, we were 122 040048, 040145, 040414 - 6/2/04 trying to bring more corporate meetings business to the Philadelphia hotels. And what we found out was that some of the large corporations in town had sales meetings, congratulatory meetings for staff for members that did well, all kinds of corporate business meetings. And they held them in hotels. But they held them in hotels in Miami and Phoenix, Arizona, and all kinds of other places. And we said, you don't have to rule that out entirely, but could you bring some of those corporate meetings back to Philadelphia's hotels? And we were surprised to find out how many of them actually did that. And it accrued to the benefit of the local hotel community. All we're saying is that when you talk about procurement, there should not be a situation wherein our government procurement departments and our private sector procurement departments don't first 123 040048, 040145, 040414 - 6/2/04 look at the probability of purchasing those goods and those services within the county of residents first and then in the region, in the four-county region.
And there should be a goal that we establish as to what would be the appropriate level of that kind of procurement. Maybe we find if we're doing 50 percent now, maybe the goal should be 75, 80 percent across the board. Just doing that with 200 largest corporations for Bucks County, Chester, Delaware, Montgomery and Philadelphia County, we would identify hundreds of millions of dollars that are already allocated, already in the budget, that could be brought back from Cleveland and Detroit and Chicago.
A goal would be useful, because currently Council members will ask of City departments how many of the vendors you're dealing with are from Philadelphia.
But setting a goal takes us to the next level of systemically making a change there.
It has to happen, both on the public and the private sector.
I got to make a... Here I come again. I'd like to make a point. When the black mayors were here... And I heard an interview. And I think it was a representative from the Convention Tourism Bureau? She was very proud to say that they were taking the black mayors up to Franklin Mills Mall. 125 040048, 040145, 040414 - 6/2/04 And I'm saying, I think you should have been proud to be able to say that you're taking the black mayors to the black folks' community, to those businesses, since you want to take about procurement, you know? But nobody asked me that part. Okay. Thanks. And another point. I think that we need to understand how important it is to know that when you bring black businesses to the forefront, it shows the pride of this City because it also represents your better schools, better homes, less crime because that's the position that contract and jobs will take. Thank you.
Chair recognizes Councilwoman Tasco for a point of information, then Councilman Clarke.
I just want to say to you that that is one of the issues I have spoken to, the regional... What's Merrill Levitz's group? 126 040048, 040145, 040414 - 6/2/04 UNIDENTIFIED VOICE: Greater Philadelphia --
To enhance the wonderful stores and the communities we have outside of Center City.
When we had the National League of Cities here in 1997, we had mobile tours. And I insisted that they do a mobile tour up to Ogontz Avenue so they can see the Nia Center, they can see what Dwight Evans had done with a blighted community, and took them to the Hard Shell Cafe so that they could eat.
We now have the Ogontz Grille up. There. We're getting ready to have a jazz festival. All that stuff has to be included.
There are African American stores on Broad Street, on Germantown Avenue.
-- and find a way to take them. I love Franklin Mills, but there are also other stores in the community --
-- that could use the dollars that come into this City. And whenever I have guests, I try to tell them how to go. But they need transportation. So, we have to include that.
-- the package 128 040048, 040145, 040414 - 6/2/04 that we do with the conventions when they come to the City, is provide that information, and give them a list of these various places --
And African American Chamber, they run shopping sprees. And they are specifically to target black businesses, but that also help black people know that there are black businesses in their neighborhood. Like Bruce -- Like Mr. Crawley said, they taking bus loads of folks out of the black neighborhood to take them back into the black neighborhood. There's something wrong with that picture. Thank you very much.
Councilman 129 040048, 040145, 040414 - 6/2/04 Clarke. COUNCIMLAN CLARKE: Good afternoon. I want to thank you for your extremely strong testimony. I know personally I agree with everything you folks said with respects to this issue. I just want to clear up a couple of things, and then just want to talk about a couple solutions. Mr. Crawley, just a point of reference to the testimony. On the average salary of black-owned firms, do you have the number for the average salary for white-owned firms, just for a comparison of analysis?
It just comes out of 130 040048, 040145, 040414 - 6/2/04 the census --
You referenced also Progress Plaza in your testimony and indicated -- Well, you implied that there was some issues with respects to ability to access financing for the project. And that's not my understanding. Can you help us --
Yeah. We had been in a conversation with the people at Zion Nonprofit Trust, who manage and own Progress Plaza. And they had given us the very clear perception that they needed to have more assistance, in order to carry out their redevelopment strategies at Progress Plaza. And we thought that given all of the focus on Center City redevelopment and development, that, certainly, that icon location should get at least the same 131 040048, 040145, 040414 - 6/2/04 kind -- commensurate. You're not going to get the same levels of investment that you get for a building for Comcast, but a commensurate investment in Progress Plaza at the neighborhood level, especially given the historic economic significance of that location. So we got that from the people -- Mr. Bracey at Zion Nonprofit Trust. And talk to him -- If you talk to him directly, he would probably tell you precisely what he thinks he needs.
Yeah. I mean, we've had numerous conversations with them. And we have put what I thought to be substantial financial incentives on the table, both on the City -- State Senator Kitchen has put a commitment from the DCED on the state level. And it was my understanding that it was more of an issue with respects to certain tenants, as opposed to financing issues, but --
Still when he talked 132 040048, 040145, 040414 - 6/2/04 to us, he still stated his concern.
Okay. All right. I'll follow up on that. Couple of issues. Listening to your testimony, and having had an opportunity to talk to you and Anthony in particular on some of the problems associated with contracts, the construction trade, we have... I've reached out to your organization on a couple of occasions when I've had major projects in the District, and personally had difficulty in identifying minority contractors, prime contractors to participate. And you've been extremely helpful in identifying those. And I know one is an example most recent was the Temple Hospital Ambulatory Center which was a 73 -- Well, it is a $73 million project. And I understand that there was real good dialogue between the Chamber. And we were going to be in a position to have a substantial amount of participation in that goal in that particular project. 133 040048, 040145, 040414 - 6/2/04 My question is: Understanding that from it -- It will be difficult for every Council member every time a project came into place to call the African American Chamber of Commerce or a similar organization and sit down and try and negotiate a deal -- And that's kind of, frankly speaking, what we're left with, can you give us some recommendations as to how we can take that process and fold it into a policy on a City-Wide level, so we wouldn't have to enter into every specific project and sit down and negotiate every specific trade and every specific goal as it relates to a particular contract on it, some of these major projects.
You know, short of having every T crossed and every I dotted, I would just say to you that if you could move to something that is akin to what the people in Chicago appear to be doing right now, if you could move to something that's akin to what the School District of Philadelphia appears to be committed to 134 040048, 040145, 040414 - 6/2/04 doing right now, then everything that you did would be covered. And it wouldn't take long. The big problem is, the reason that you have these kinds of very tedious discussions with the individual developer project by project is that the developers, in the absence of a solid policy, in the absence of a comprehensive policy at all or absence of any kind of a statement of commitment, assume that they've got room to move around in. They assume that they don't have to do it. They assume that they can get away without doing anything at all. And so, then you have that kind of dialogue. So, I mean, I think conversations with people in Chicago, conversations with Paul Vallas and others who have done this successfully will lead you very quickly. I know the rumor always was coming out of Detroit that people simply didn't even imagine going to Detroit to do business without having at the back of 135 040048, 040145, 040414 - 6/2/04 their mind the firm knowledge that they would be expected to have minority inclusion in their contract proposal. They didn't even think about it. It wasn't something that was written down. It wasn't something for which people could be sued. It was just the policy and the style of that administration. And I think that once that word gets out, developers understand that pretty quickly, and they begin to do it differently. In Atlanta, for example, as we said, for the first two years there was vocal and aggressive resistance to Maynard Jackson. And then after a while they realized that this is the way things were going to be, and it began to carve the pie up in a different way. Began to look at development opportunities in Atlanta in a different way. In the absence of having a stated policy, people will do whatever they can. I remember when the Republican 136 040048, 040145, 040414 - 6/2/04 National Convention came here. And we were at the Chamber trying to push for more African American involvement, business involvement, in some of the contracts, the catering, and all of the related kinds of things that we thought the Republican delegates would need. And we found out at the end of the day that one of the reasons that we were having so much of a problem in negotiating with the people who were putting that convention together from the Republican National Committee's perspective was that that committee was advised by somebody at the very highest level of the City government that they didn't have to worry about minority participation. And the Republicans came here thinking that there would have to be some because of course they had this convention in other cities. Isn't the first city they've ever had it in. So they came here and said in a side conversation, what do we have to do? What 137 040048, 040145, 040414 - 6/2/04 is expected? What is the style? How have people been included. And the people at the highest level in the Philadelphia government said, you don't have to do that. Don't worry about it in Philadelphia. So we wound up having to fight every battle one by one because there was no 10 blanket commitment or by policy that would say that people were expected to include people when they come to Philadelphia. So that has to be addressed, because again, every developer you talk to is going to try to do as little as he possibly can in that regard.
One of the issues about the numerous apprenticeship programs -- And I've had some concerns about the fact that we are providing assistance to people and putting them in programs, and at the end of the tunnel there is no job. I've recently introduced an ordinance that addresses the City's 138 040048, 040145, 040414 - 6/2/04 procurement process, in terms of apprentice, because I understand that the Constitution, i.e., amendment -- the First Amendment talks about race-based and gender-based requirements, you know, with the Bechtle [sic] ruling so it's deemed --
You brought it up. One of the things that we looked at was changing this whole structure around apprenticeship because that's not race based, it's not gender based. And I think it could potentially, you know, withstand constitutional muster. We looked at a situation in the trades in particular. They have these ratios. And depending on the trade it, would be five to one, five journey persons per one apprentice, three to one. And we said, we probably need to look at that as a possibility of creating opportunities for apprentice. And we that 139 040048, 040145, 040414 - 6/2/04 given the high number of apprentice coming out of these various programs that it would be possible to have access to that program. And we were looking at a three to one figure across the board. Do you think if we were in a position to implement that particular law, that it would enhance our opportunities for getting our apprentice in this City contract?
Our problem is that the apprentice -- the movement from apprentice to journeyman is purely arbitrary.
Would you be able to designate that it would be a minority apprenticeship that would result in a journeyman's position?
You can't do 140 040048, 040145, 040414 - 6/2/04 that because it's race based. But the issue is: Right now, given the level of apprentice, first of all there's no requirement on the City side of having -- We just essentially go by the union regs.
But what we're talking about is creating a number that will essentially be percent of 15 apprenticeships on all City contracts. And 16 it was my thought, first of all, because 17 it's not race based, it's not gender based, 18 so the Constitutional issue goes off the 19 table. 20 But if you created a high level of 21 requirements for apprenticeship on the job, 22 you can enhance your ability to get these 23 numerous apprentices that we have coming 24 out of the various apprenticeship programs 25 as a side discussion. 141 040048, 040145, 040414 - 6/2/04 And I probably shouldn't even bring this up because this probably will come back to bite me. But traditionally, when we do these types of ordinances as a side, we have certain provisions, in terms of where the apprentice can come from. As an example, when we passed a law in Council to require prevailing wages for properties that -- I think it was above ten houses that were done in the City of Philadelphia, as a result of CDBG and other government funding, that there would be a requirement to pass -- to do prevailing wages. I introduced an amendment that would require any particular contractor that took advantage of that provision will be required to do -- to hire -- participate in an apprentice program. We talked about Topwin, Congresso and DEP [sic] at the time. That's in the law. It's probably not being enforced. But as a result of the change in that 142 040048, 040145, 040414 - 6/2/04 language, we were able to instill that information. So I think that possibly we can create similar language in the bill if we get it passed, to require that they participate in some of those programs.
Our great concern is not so much for apprenticeship. Our great concern is how we are able to get people transitioned from non journeyman status to journeyman status. There are people who have been members -- We have a guy who was a member of the Emerging Contractor Program that said he was a member of 332 for years. 17 And he said that he had worked for a 18 number of contractors over all that time, 19 and had never worked for a black 20 contractor. And now he was a prime contractor and he was -- he's still black. So he was very proud of that. Our problem is that we don't want to continue to put people in this limbo 143 040048, 040145, 040414 - 6/2/04 apprenticeship status. We know that the labor unions have not had a great problem in putting white journeymen on the table if they've been able to demonstrate an ability to do the work. As I said, they make them on the spot on construction sites. You know, they say, sign the paper or we'll close you down, right? They make them on the spot. But for African Americans there is this nebulous status, this apprenticeship status which continues far longer than anybody can afford to stay. And what happens is that over time, as they are no longer able to feed their children and provide for the money that -- for the mortgage or for their rent out of an apprenticeship salary, they drop out of the program. And so every year you have the building trades in a position to say, we had X number of minorities in our apprenticeship program, and unfortunately 144 040048, 040145, 040414 - 6/2/04 we don't understand why, but 47 percent of them dropped out. They can't afford to stay in.
Let me understand you, because I thought I heard in your testimony that there was some concerns that we were -- we had people in the apprenticeship program; that there's a program but they never got an opportunity to get on the job. And let me because I --
What you're talking about -- (Councilman Clarke and Mr. Crawley began speaking simultaneously, not reportable.)
-- seven years as apprentices. We want them on the job with union cards.
I'm asking you a specific question about an issue that I've heard is problematic, is that... I agree 145 040048, 040145, 040414 - 6/2/04 with you that people will stay in the apprenticeship status too long. But I've also heard, talking to people, that there is an inability to get apprentice on the job. And what I'm trying do is to come up with a strategy that first I get them in the door. And then I agree with you that once you get them in the door on the job, then we can fight to get them journeyman status.
If you're going to move something to get more apprentices on the job...
...I think simultaneously and together, there should be some formulative way to ensure that we get people out of the school systems and into card-carrying status, and transition out of the... We've got people who are members of 332 who should be on some kind of a fast track ability to transition into the skill trades. There's no path for 146 040048, 040145, 040414 - 6/2/04 doing that.
You've been in 332 for or years, you shouldn't have to go 10 into an apprenticeship program to get into 11 the carpenter's or the electricians or all 12 those other. 13 You should be able to, with a 14 special program, be able to make that 15 transition. You're already a union member. 16 But there's no accommodation to have 17 that done. These things are being done to 18 delay and stymie our access to journeyman 19 status in the union. 20
It's not a program. I'm not -- 147 040048, 040145, 040414 - 6/2/04
-- institutionalize further apprenticeship without the consideration of when you move out of apprenticeship to journeyman status.
Mr. Crawley, Councilman, I want to make sure that we address every issue that we can that's in the letter to the Mayor. But I also want to make sure specifically, although we want to continue this hearing, that we also keep a focus on minority business development. And we'll also have other people testify, including Della Clark from the Enterprise Center. So I'd like you to focus questions very quickly for this panel. I'm hoping 148 040048, 040145, 040414 - 6/2/04 this panel can stay around. Then I want to bring Della Clark up to testify. But I want to keep a focus on minority business development. And we can discuss other issues that are contained in that letter.
Okay. I'm not sure if my next question falls within that category.
Thank you. Good afternoon, Mr. Crawley. Just to follow up real quick, one of the ways that I think that Councilman Clarke's concern and yours about people having a track that takes them from apprenticeship to a journeyman is to develop more African American with a capacity of African American businesses. Because I had a young man that I was working with. I got him in one of the trade unions. My major problem... And this was just my first and my test case. 149 040048, 040145, 040414 - 6/2/04 My major problem for that young man was to find a company that would sort of direct him, guide him, and use him because in the beginning he ended up being with five or six different companies. And then, when -- And I'll call the name -- Larry McCray -- because it was a project going on in my District -- and I called McCray and got him hired there. Ever since then it's been much easier. So, I think once some of our African American and minority companies grow, then they can take on more credits, and keep them there until they become journeymen. And I think that's one way, that that would be very helpful, particularly dealing with the apprenticeship issue.
And logically... It 150 040048, 040145, 040414 - 6/2/04 should be logical that the more would be given access to --
And I just wanted to comment on your testimony. And you know, we've met -- we've met with Anthony a number of times. I guess I wanted to know the status of your recommendations. And where is it at this point? Councilman, did I hear you say we're going to send a letter out?
Oh. Okay. Because just to say that your... the big idea of this proposal, and then the best practice in Atlanta, what are we going to do with that? It's good information here. 151 040048, 040145, 040414 - 6/2/04 One of my concerns since I've been here is the lack of minority participation or the level of minority participation with City government contracts, and public funded contracts. And it's very frustrating, as you know, an elected official to constantly deal with that. When we met, I talked about the fact that we just can't really review, monitor, et cetera. And I know that that's one of the services that Anthony and the Chamber said that they can help us with. But what is the status of this recommendation? Where are they right now?
Well, on most of the recommendations having to do with the county and region first, we are moving, as I've mentioned earlier, to set up meetings with the Greater Philadelphia Chamber of Commerce, to begin to bring them to the table. We've met yesterday with another private sector company. We've met with two others, two other large private sector 152 040048, 040145, 040414 - 6/2/04 entities in Philadelphia. We want them to be the nucleus of a group of large corporations that will put out the call to their peers, together with the Greater Philadelphia Chamber of Commerce, so you can, one, do the procurement summit; and grow out of the procurement summit the creation of this public/private entity, where we would be able to pull in Council people, state reps, state senators, and hopefully people from the administration, who would work as a public/private venture, to ensure that there was continued ownership of this. I mean, we can't go from City Council hearing to City Council hearing. The last time this issue was discussed in any need was about a year-and-a-half ago in City Council. City Council brought it up. And there was a great furor about it. Everybody talked about it. And then, you know, it went right back in line with the rest of the very important issues of the 153 040048, 040145, 040414 - 6/2/04 City. Somebody has to own this. Somebody has to take responsibility. And it has to be done jointly with both groups of people who let the contracts. And as we said before, nothing else matters if our people can't participate. We create 3.5 percent of the jobs in this City, even though we get 2.3 percent of the contracts. So we're doing more than our share of job creation. We would love to do more, but we can't do it unless that impediment is removed. So we're moving already. We're going to be hopefully coming back to the people in Council and people in administration, to get them to join up with us as we go after these private sector entities. But we're feeling a great responsiveness from the private sector. They seem to be -- seem to be understanding of the issue. The issue of diversity, the issue of inclusion seems to be something 154 040048, 040145, 040414 - 6/2/04 that they're just looking for some guidance and support in. They understand the importance of the subject.
All right. Thank you. I just wanted to make sure -- And again, you did say that the last time we talked about this was a year-and-a-half ago, that there was something that was actually going to happen, and that it wouldn't lay dormant until something else comes up. So... And if Atlanta has the best practices, if that's something that we -- And I think that when we first met with Vallas in July almost two years ago, you know, and he talked to us about the minority participation in Chicago, it kind of made me feel a little bit ashamed that a city such as Philadelphia is not really practicing things that way. So I'd be interested in the follow-up and having information. And I'm sure everybody on the committee -- You can 155 040048, 040145, 040414 - 6/2/04 just give it to the Chair. And I'd really be interested in knowing what's going on. Thank you.
Let me clarify for the record. The last time this issue came up in a major way in Council, it was because of legislation proposed by Councilman Ortiz, that I thought was excellent legislation. An executive order was patterned after that legislation. There was a whole signing ceremony of the bill and executive order. Then the bill -- the ordinance and the executive order have not been implemented. So I think a year-and-a-half ago Council took the action they thought that they should take, in terms of passing a new bill, trying to revamp what would exist. And we did what we were supposed to do legislatively, but that bill has not 156 040048, 040145, 040414 - 6/2/04 been implemented.
In fact, the executive order has expired, from what I understand.
Thank you, Mr. Chairman. Thank you, Mr. Crawley and the Chamber, for taking time out, and the people here that are sending a very clear message to us, of where you stand on a number of issues. As you all know, Mr. Crawley, and probably a number of you out here in the audience, that before my -- before I became a -- before I came on the payroll of the people of Philadelphia, I happened to be a laborer in my career. I'm very proud of it. And I still maintain my membership in the Laborers Local 332. So I know firsthand about these issues working out -- 157 040048, 040145, 040414 - 6/2/04 working as a laborer. I really didn't want to go join another union in the years that I spent in the field which was around years because 6 I learned a lot and developed certain 7 skills to be able to stay working, and to 8 be able to keep a family and pay a 9 mortgage, and so forth. 10 And then I came to the government in 11 the year 2000, and Mayor Street -- And I am 12 very grateful that back then he appointed 13 me Director of Labor Standards. 14 Sometimes I had the title of 15 Secretary of Labor and Deputy Mayor. But 16 my main job there was to enforce prevailing 17 wage laws. 18 And I was very surprised in my 19 tenure there that my biggest problem in 20 enforcing prevailing wage laws and having minority inclusion happened to be the government. And I, as an outsider, as an activist as well during my life, I said, wow, you know, the problem here happens to 158 040048, 040145, 040414 - 6/2/04 be the government. You know, it's tougher for me to get these things done because people in the government have all these roadblocks. And I can probably say that in the three years I was there, I was able to help about seven, eight minority contractors come into prevailing wage jobs. The one law that I do know exists is called the Davis Bacon Act. And that law does say that people that work on public works projects have to be paid a prevailing wage. It's like a minimum wage that's above the regular Federal minimum wage. And I did to the best of my ability enforce that law. But one thing that I realized was that certain City departments were my biggest obstacles. and I've said this publicly. I can say it again here. MBEC was a problem. And Procurement was a problem. And then, as I... you know, as my time went by, and I was able to help a handful of people, I said, well, I need 159 040048, 040145, 040414 - 6/2/04 then to bring in any new and minority contractor that would come to work for the City, that I would bring them into my office, show them the process. And I start to -- Believe me, the paperwork is so overwhelming with our people, that they just want to forget about it. But if you take time, and you streamline -- It's called streamlining, right? Where you reduce the amount of paperwork, that you could actually help people come into work for government. And we need more of that in government. ) -- high level decisions of this government. 160 040048, 040145, 040414 - 6/2/04 I think that's a very commendable thing. ) After being here and going through the budget process, I realized that our departments sometimes reflect the building trades. There's a couple departments that have a lot of folks that look like you and I, and then there's quite a few that have people that don't look like you and I. So in the process I realize that we had City departments that had -- Well, one department had one Hispanic, a few blacks; in another department, two Hispanics, a few more African Americans, right? That we need to also in government be able to integrate government so that -- so that when business folks from minority communities come, you know, and want to be helped, that we have people, we have an integrated work force here in those particular departments that know of the importance to spread the wealth around, spread the work around, and that those things are just as important. 161 040048, 040145, 040414 - 6/2/04 And I have already addressed this issue.
As you well know, I am -- I'll take a piece of the work and I'm going to run with it. This is an area of tremendous concern of mine, as well as my colleagues. And you and I have talked about this. We've got some things that we're going to be working on, to make some -- you know, to make some strides in this area. And our business community cannot expand, our minority business community, if we don't have the support from within, and we don't have the support from up top. Because it takes leadership to say... I go into my office sometimes, and my good staff tells me but Councilman, but Councilman, but Councilman. I said, I don't want to hear it. Make it work. So that type of leadership and message of make it work needs to happen, but we also have to have the support that you bring from the community, from the 162 040048, 040145, 040414 - 6/2/04 outside, but also from the inside, that we have people from our respective minority communities in positions to be able to be of help.
Councilman, you hit on a very valid point. We have had an experience of having an African American business move out of the City of Philadelphia, not because they couldn't get through the procurement impediments that we've been discussing all morning, but because of the bureaucratic problems he was having with the people who regulate retail and vendor relationships, and retail and vendor government relations in the City of Philadelphia. And this guy... And I'll give you his name. His name is Obadiah Robinson. And Obadiah Robinson walked up to me one day and said that he understood that we were with the African American Chamber of Commerce. And he just wanted to let us know that he was leaving Philadelphia. He had 163 040048, 040145, 040414 - 6/2/04 come up from Texas to start a barbeque business. And he had a big ole open pit barbeque thing that he did. And he did the whole cow. So this guy was good. And he was from Texas. And he said that every time he set up his grill, people from City government harassed him, told him to shut down, treated him as if black folk were not permitted to do business in the City of Philadelphia. He got so tired of that that he started looking for other cities in which to do business. And he wound up in another state. That state was Mississippi. Obadiah Robinson, who is a graduate of Princeton University, moved his barbecue business to Mississippi. And he said to us as he left, people in Mississippi welcomed us with open arms, and there's a more racist business environment for black people in Philadelphia than I experienced in Mississippi, and so I'm gone. 164 040048, 040145, 040414 - 6/2/04 (Moans from the audience.)
That's a horrible thing. And so when you say that we need to make sure that the people inside the government who touch the people who do business need to be sensitized, you have hit a very vital and sensitive point. And I wish you just could have gotten there before Obadiah Robinson left Philadelphia.
Thank you for your testimony. We're going to excuse this panel for the moment so we can bring on the second panel. (Applause.)
Ms. Clark, will you please approach the witness table. Good afternoon. 165 040048, 040145, 040414 - 6/2/04 One of the things we're trying to do -- And I want to make sure we drive this point home -- is that of the recommendations of this Minority Business Development Subcommittee report, we're trying to increase gross receipts of minority businesses from 2.2 percent to 6.6 percent as a start. We want to triple the amount of gross receipts. I've been very impressed with your work, particularly reports you did around accelerating minority entrepreneurship. I invited you specifically to give testimony around the capacity of minority businesses within this region that I know you're very knowledgeable about. So could you please state your name for the record, and then proceed with your testimony.
Yes. Thank you, Councilman Goode. My name is Della Clark. I'm President of The Enterprise Center, which is a 15 year-old nonprofit organization 166 040048, 040145, 040414 - 6/2/04 located in West Philadelphia. I've been involved with the organization for 4 years. 5 And I do not have a written 6 testimony today, but after my comments if 7 you'd like me to write it up I will and 8 present it to you. 9 But I wanted to make some comments 10 around -- 11
Yes. And I want to commend Bruce Crawley for his comments and his remarks. And I respect a great deal what the African American Chamber of Commerce is doing. I echo a lot of his comments, so I'm not going to repeat some of the facts or data that I know as well because it's pretty much in parallel with what he discussed. But I do want to make some additional comments around minority entrepreneurship in this City. 167 040048, 040145, 040414 - 6/2/04 And I broke it down into primarily two areas, the first one being entrepreneur assets. As you look around the City of Philadelphia, in terms of infrastructure, help minority businesses get started. This City is lacking in that. And if you think about how a business starts out, it primarily goes through three stages to get to that mature stage, kind of an infancy stage, adolescent and mature. Well, when a business starts out in the City of Philadelphia in its infancy stage, there is not infrastructure in place that helps them get through that infancy stage in a very accelerated process. Often time minority businesses are stagnated in the infancy stage because of some of the things that was discussed earlier today, but also access to capital, the infusion of capital coming in in a timely manner. So, I've seen a lot of businesses 168 040048, 040145, 040414 - 6/2/04 over the years that remain in the infancy stage far too long; whereas, if they had more infrastructure assets in the City, they would move to that process very quickly to get to that mature stage. And so, by working in an incubator world, we've seen a lot of businesses incubate far too long because of some of the problems that exist in Philadelphia that we've already mentioned today. I definitely think it affects the incubation stage of start-up companies. And if you think about start-up companies in this City, we need to look as a City, how do we strategically increase the business formation rate of start-up companies, knowing that initially we might have some short-term failures; but over time the success rate should increase. And as a City, if you look at business formation rate, we lag behind all other cities of same size and population of minorities. So we really need to put forth an effort to increase our business 169 040048, 040145, 040414 - 6/2/04 formation rate. Some of the other comments around entrepreneur assets we need to look at is that we really need to take a look at proposal and bid writing services for small businesses, to help them be able to bid more often on contract opportunities, not only as the City but the Federal, state and private sector. We also need to look at how do we help minority business with networks and client development as a City, to do a much better job than that, to help them get there faster with that. And also, too, it has been proven that companies and start-up companies who have assets, I mean, who have equity available to them start faster and accelerate faster than those companies who have deck [sic] And while deck [sic] is a form of capital that most people are familiar with, in the minority community we have a lack of equity. 170 040048, 040145, 040414 - 6/2/04 So I'm proposing that as we look at the City and what some of the things we can do to improve, that we take a look at an equity program along with a deck [sic] program, to help minorities, particularly in their infancy stage because equity would definitely help them grow faster. Another area that I also would like to recommend that we look at is the strategic communication and learning process. Entrepreneurship need to be elevated, particularly in high schools as a career option, as we do have other counselors and other people come in talk to public school kids. But entrepreneurship is not put up there as a career option, as other occupations. And if we want to improve entrepreneurship in this City, we also need to go down and start younger and begin to begin the early introduction of entrepreneurship.
We also need to improve our 171 040048, 040145, 040414 - 6/2/04 communication among a campaign of getting the word out, particularly in the private sector. There are about dominant 6 clusters, industries in Philadelphia. And 7 of those 17, 9 are very dominant. 8 And in all due respect to 9 construction, construction is one of those 10 sectors that is used in all of the dominant 11 clusters. But we need to do much better 12 job in connecting minorities to other 13 targeted opportunities in our City. 14 As an example would be 15 pharmaceutical. Pharmaceutical happens to 16 be a very large dominant cluster in our 17 region. 7 percent. So locally, if you look at pharmaceutical being a highly concentrated 172 040048, 040145, 040414 - 6/2/04 dominant cluster in our region, we have very few minorities that participate in that arena. Also another dominant cluster in our region is in the chemical areas. In our old days, we had Arco. We still have some remnants of that and have other large chemical providers in this City. And minorities participate very ill in that arena as well. So, one of the things I'm proposing is that we have businesses start up in some of these targeted opportunities and connect them early on. And the City could play a major role in facilitating those discussions and connect with a dominant cluster because every private sector view what the City is doing in their role in this arena to dictate what they going to do. So I think the City needs to step up and take more of a leadership role, when it comes to facilitating relationships between the large companies and the small 173 040048, 040145, 040414 - 6/2/04 companies. And I think you will see the bigger companies start to follow or at least take on a more leadership role. And one of the best ways to do that would be a campaign. Very seldom... And I think Bruce alluded to this in the Inquirer... that you pick up and see successes being talked about in the Daily News or the Inquirer. And we need a lot more stories because the more stories we put out there around successful entrepreneurs, the more other entrepreneurs will see that and want to emulate that level of success. Another area that I wanted to bring up is that in this City we have two different type of sectors, one called trading activity, and one called local serving. A lot of minority business in this City are around what we call local serving. About 65 percent of businesses are doing what they call local serving, which means they're doing business in the City of 174 040048, 040145, 040414 - 6/2/04 Philadelphia. One of the other ways that growth has come into a region or community is that if you can get businesses doing what they call traded sector, doing business outside of the local community and bringing in those dollars. I know we talked about the Motorola story, but we need to figure out how do we get the larger companies to do business with us in the minority community that brings in these jobs so that the minorities can count those jobs. And oftentimes the way contract opportunities is set up, minorities are not able necessarily to count those jobs in their contracts. And I want to give you an example that one of my entrepreneurs encountered just recently. He has a contract. He's in the construction business. And in his contract he was working on a job where the firm asked him to increase a contract because they needed to improve their 175 040048, 040145, 040414 - 6/2/04 numbers. And once he did that -- And they probably sent in their reporting. They did a change order downstream and changed that contract so that the minority had to take that out of his job. But I'm sure if we go back and check the record, they reported the minority participation at a much higher number than what they actually fulfilled on the job.
And so time after time that happens to minority businesses, in terms of the primes using them to get their numbers for reporting, but not actually using them in terms of actual construction on the job. Another example is... in terms of minorities is, they go after bids on contracts but they are dictated the gross margin that they have to receive on the job, if they want to participate. And that is very, very difficult for a minority business to put together an action plan for growth because the growth is typically around their gross margins. 176 040048, 040145, 040414 - 6/2/04 And when their growth margins are dictated in advance what they have to receive in order to get a job, it puts them in a very awkward situation. So most minorities are not able to accelerate their growth in a very short period of time. And what I mean by that is, to take a minority business from a half a million in sales to three million in sales, to five to ten million is all driven around not only sales, but the margins and cash flow that is derived from that. And oftentimes in the minority community that is stagnated, and they're not able to drive that process as well as they'd like to. In working in the start-up world, we've seen minorities come to us with primarily three barriers, that I am hoping the City will begin to address. The first one is capital. Capital needs to come in, an infusion that goes through the infancy stage, adolescent, and mature. 177 040048, 040145, 040414 - 6/2/04 And oftentimes capital comes at the adolescent stage, after they've gotten some contracts. But what has happened is they've kind of dug themselves a hole. And it's hard to get out of that hole unless you have capital at the early stage of infancy. The second one that most minorities come is little collateralization of a loan. We talked a lot about banks, banks making loans, having programs for entrepreneurs. But if minorities don't have the capital structure of asset based, then it's very difficult to get these loans. And it takes a long time to build that collateralization. And no one wants to put up their personal home for a business loan. So we need to look at new ways that we can help minorities get access to capital without pledging their personal assets or putting their personal assets on the line for a business and making it very difficult, if the business fails, to be able to resolve 178 040048, 040145, 040414 - 6/2/04 their situation. And then lastly, this City has not done a very good job in helping minorities get on the learning curve. In all of their areas they need to, in having their business. For a City of this size, we do not have a minority business kind of education program. We've had some early discussions with Wharton, Temple, and other higher education university. But it just seems to me that we should be able to work with the higher education institutions here and put together a program similar to executive education programs in other cities that can bring together minorities, CEO roundtable type, and take them through different levels of educational training, and give them certificates and things that hopefully that the banks and other -- and the other business institutions in the City will recognize. And I know we talked a lot about 179 040048, 040145, 040414 - 6/2/04 training. But I'm also a proponent that training needs to continue, but higher levels of training need to continue with the business, not always keeping minorities in the start-up mode, but taking them through the progression of all of the training that's required. And so we need in the City kind of a CEO training program for minorities that bring together other CEOs so they can share ideas, share collaboration, share their client development and their networks, to actually accelerate the growth and development of these businesses. I took a trip in September of last year. C. and met with three successful minority entrepreneurs his.
One was doing 40 million in revenue, one was doing about 30, and one was doing about 60 million. And I asked all three of them, what do they attribute to their success. And they all said that in their early days, having access to public sector 180 040048, 040145, 040414 - 6/2/04 contracts helped to get them to that next level. Now that they were at that level, what was keeping them in business was the private sector. So it was the public sectors that got them to that scale, but it's the private sector that has kept them in business and gave them the continuation of the business. So it seems to me that we need to figure out a way to put together a program to use the public sector contracts to launch and get businesses started, to improve their capabilities, improve their balance sheet, improve their cash flows in a way that makes sense, and then take them to the private sector, and then help them get to the next level. Because in this City we need a lot of businesses doing 30, 40, 50, 60 million dollars. And that's one of the ways we will address the employment rate, because those businesses will be the ones investing 181 040048, 040145, 040414 - 6/2/04 in the communities, in an infrastructure. )
Thank you for your testimony. One of the things I said that we we're dealing with here today is the major goal of trying to triple the gross receipts of minority businesses within the region. Can you tell me, from the research that you've done, do you believe the capacity exists right now to triple the gross receipts of those businesses?
I think the desire is there. I think we still need to build some more asset base in this community, in terms of entrepreneurship. There's still some lack in there. But I think in terms of having entrepreneurs that exist, who want to take out loans, who want to get access to 182 040048, 040145, 040414 - 6/2/04 capital through equity, who want to participate in the procurement of both private and public sector, that exists. But I think we need to bring the private and public sector together to match up with the desires and ambition.
I guess the question I'm asking is... I think you've probably documented in some of the research you've done the capacity exists, but it is in fact the underutilization of that capacity that exists or do you believe the capacity will only exist as we expand into other business clusters?
I think we need to expand into those other business clusters as well, because if we don't we're missing an opportunity. That's the private sector, and those are the dominant clusters in our region. So we would need to figure out a way to connect our businesses to those dominant clusters early on, and bridge those relationships early on, because otherwise 183 040048, 040145, 040414 - 6/2/04 we're missing an opportunity. I think that's the innovation that exists in our community. And we would be remiss if we didn't connect our entrepreneurs to those existing clusters of industries.
Can you describe for me the type of services The Enterprise Center offers clients, in terms of procurement?
Yes. Our services are evolving and changing. Effective January 1 of 2004 we were awarded a contract from the U.S. Department of Commerce to operate the Pennsylvania Minority Business Development Center. As a result of being awarded that contract, we are evolving and changing our services to accommodate more high-growth firms than what we did traditionally in the past because the contract dictates that. 184 040048, 040145, 040414 - 6/2/04 But some of the services we offer is not only besides space, but... And coaching and hand-holding, but we are now bringing together the public and private sector around procurement. This morning, for instance, we had a seminar on doing business with the government at the Federal level. One of the things that has taken place at the Federal level is that the government is outsourcing more of their professional services. An example is there's an RFP out right now for the Federal Government to oursource all 8-a certifications which is now comprised of about 80 to 100 jobs in the Federal Government. Well, as of July 15th, there's a possibility those 120 jobs could be put in a private sector's hands. So, I'm hoping that a minority firm in this City or in this state will go after that contract, as an example of what's being transferred at the Federal level. 185 040048, 040145, 040414 - 6/2/04 At the private sector level, I think, Councilman, we need more people calling on the private sector, to get them to pay more attention to minority entrepreneurship. There are a lot of programs in the private sector on having a diversity program. But I don't think the CEOs of those companies have put enough teeth into their procurement departments around diversity programs for the managers who operate those programs. And oftentimes they using the excuse that they put something out to bid and they didn't get anybody to respond. I just don't think the bids are being distributed in a way that gets them the response they should have.
So you would agree that if we could bring the City of Philadelphia together with the African American Chamber of Commerce, and the Greater Philadelphia Chamber of Commerce, and others chambers of commerces, that we 186 040048, 040145, 040414 - 6/2/04 should establish a public policy of county and region first, in terms of procurement, and then beyond that, specific goals for utilization of minority businesses?
Okay. Thank you. I have no further questions. Councilman Nutter.
Good afternoon, Miss Clark. I apologize for not being in the room when you started, but I wanted to be here for your testimony. You made mention just a second ago of some of the companies in the City who maybe are... given the issue of minority participation and regional access to Philadelphia firms, more weighed or being more upon responsive than some others. Can you tell us some of the companies, from your experience, who are actively trying to promote contracting opportunities for minority businesses, that you might be aware of?
Verizon is one that has 187 040048, 040145, 040414 - 6/2/04 put together active programs, and where a lot of the minorities I have worked with have benefited from Verizon and their programs with minority participation.
Another one that is just beginning, and I have seen some light of hope, is Citizens Bank. They recently hired a woman, a Myrna Ferguson, who is putting together that diversity program. And I've seen some short-term successes have come out of that. Don't know what it's going to be like long-term. I've seen Verizon perform more long-term than I have Citizens Bank, but I am pleased with that. But there are some others that I'm not so pleased with. And I would hope that they would begin to demonstrate that. One of the dominant clusters in our region, for instance, is Rohm and Haas Chemicals. And I would like to see companies like that do a better job. 188 040048, 040145, 040414 - 6/2/04 I've heard lots of complaints about Aramark, in terms of participation. While they have some programs, it's not as strong as it should be, and it has not done a very good job. One of the things we want to do is a food incubator. And I have tried to go to Aramark to get them to work with us on that with that food incubator because food happen to be a dominant cluster in the minority community, where a lot of minorities come to The Enterprise Center who want to have a food-related business. But unfortunately, they don't have access to a FDA stainless steel approved kitchen, so they are not able to sell their food wholesale or retail, only with the extent of family and friends and their connection. But if you think about a restaurant today, everything in a restaurant is pretty much a symbol. When you go to a restaurant and you eat bread, most times the restaurant did not make that bread. They 189 040048, 040145, 040414 - 6/2/04 bought that bread from someone else. But very seldom do you find minorities participating in distribution of bread. And that's not to say minorities can't make some of the best bread that people can eat here in the City, but don't have access to that FDA kitchen. So that's just an example of where Aramark could help sponsor a food incubator, and then turn around and produce their next generation of suppliers. For instance, they have the contract at University of Pennsylvania, but I bet if you took a look at that, there's very few minorities in this City who are benefiting from food-related activities with Aramark at the University of Pennsylvania, as an example.
Thank you. Thank you for the information. Thank you for your testimony.
Thank you again for your testimony and for your patience, but we had to actually give Mr. Crawley all 190 040048, 040145, 040414 - 6/2/04 the time he needed to present the report, but these recommendations should be and will be adopted by this Council. But we also thank you for your testimony as well.
Could you please offer some testimony, in terms of a response to the things that you've had a chance to hear today.
Yes, sir. I don't -- I haven't prepared any written testimony, but I'd like to make a brief statement, that... And I apologize for coming in late. I had a meeting with the Mayor at 10 o'clock, and it let out at 11:00. So I wasn't here for most... well, the beginning 191 040048, 040145, 040414 - 6/2/04 part of Mr. Crawley's testimony. But from what I heard, I absolutely agree with his points. I'm very angry as well about the situation internally and externally, as far as minority participation in contracts, not only at a subcontracting level but at the lack of prime contractors. And to the extent that MBEC can't do something about that, we will.
Thank you. I want to ask you two very specific questions, in terms of recommendations...
...made by the subcommittee. First, do you support a county and region first procurement policy? And what steps will you take to see that's implemented?
Absolutely, sir. I think that is a very, very good idea. I understand that at some point there seems to be a tension between trying to save some dollars on one hand, and 192 040048, 040145, 040414 - 6/2/04 trying to increase minority participation. I don't think there should be a tension to that at all. I think if that is --
Mr. Williams, I didn't mention anything about minority participation.
I mentioned a county and region first procurement policy. I'm talking about first buying Philadelphia and then buying greater Philadelphia.
Yeah. That's what I meant, sir. I said a tension between trying to use that model and trying to use another model where you would save some money. That's what I meant. And what I meant is that my emphasis would -- I agree with the fact that we should have a local and regional emphasis on doing that, as opposed to trying to find a best deal where you would, in my opinion, exclude minorities, people of color, from participating in these contracts.
But I'm still not 193 040048, 040145, 040414 - 6/2/04 getting a response, because my second question was actually going to be whether there should be a specific goal set within that policy, in terms of minority business utilization, but I was not talking about minority business utilization yet. My question is really, do you support a county and region first procurement policy, in terms of making sure that more of the things that we buy are from Philadelphians first, and then from the greater Philadelphia area second. And that is actually expanding business opportunities, expanding the gross receipts of those businesses. It's actually building the economy here. And so I can understand that there might be some tension between getting a better deal, but that money is staying here. You're growing the economy here.
That's what I'm saying, sir, that, yes, I do -- I do -- I want to illustrate a point there; but yes, I do support that. 194 040048, 040145, 040414 - 6/2/04
Earlier today before you arrived I asked a question, and I obviously didn't know the answer. And I guess I really should have, now that I look back on it. A major expenditure that the City made -- And it's prior to your time, but you may be aware of it. Because of the recent controversy in the media about the failure of our brand new 800 trunking radio system, we spent over $50 million. So I asked the question. And I'm confident or at least I believe that you might have to get back to the Chair with this information. My question is, when we have a global -- a big contract like this that involves a national/international company, we have maybe three people bid, like 195 040048, 040145, 040414 - 6/2/04 General Electric, Ericson, Motorola Company and another major communication provider, and one of those company wins -- and I can be specific because we spent over $50 million with Motorola to install this new system -- what minority participation, and what did we do to assure that when Motorola got that contract that there was local participation? And I'd appreciate it that you look back into that deal because this deal is still going. I mean, the system is still being constantly worked on, and there's maintenance contracts, and there's all kinds of things associated with this, as you can, imagine $50 million plus expenditure that we made. So I'd like you to comment on that concept of companies that, you know, you have to go to a Chicago-based company to, first of all, do business or a Denver-based company. What do we do when we have these major deals, like when we buy millions of 196 040048, 040145, 040414 - 6/2/04 dollars or lease, which we're heading in that direction I understand, vehicles? What do we do to make sure that we, our local business community is involved in that magnitude of a deal?
Okay, sir. For that particular contract I can't comment on because I wasn't here when it happened, but I can certainly get back to Chair with the specifics of that. In a general sense, MBEC sets ranges for these deals, for any kind of contracting, with that magnitude of anything. And they set ranges. And the folks that they set ranges from are people who are certified with MBEC which are primarily local minority people or firms owned by people of color or women based or disabled based.
Maybe I'm not making myself clear. We give a contract to Motorola Company, wherever they may be: Chicago, Denver... From what I understand -- And 197 040048, 040145, 040414 - 6/2/04 I'll, you know, be the first to apologize if I'm wrong -- that many of the people that came here to install the system got on an airplane, stayed at a local hotel for six months, did their work and left. What I want to... What I don't understand is, when we do a deal of that magnitude of a company that's not based here --
Absolutely. That's what I'm talking about. I'm talking about what opportunities did some young engineer and his company get, maybe in Philadelphia or at least in the area, to work for Motorola, as a subcontractor, to install this $50 million plus radio system in our government? I mean, from what I understand, that when jobs -- maybe not this one -- that many people that work for these big corporations travel with them when they install these systems, very little local 198 040048, 040145, 040414 - 6/2/04 work force is utilized. Because, you know... And you have to look at it and say, it is a very specialized area of expertise, where maybe you're not going to find anyone. But I'll bet that even the most technical people have to work for the corporation to understand its work because they designed it and it's their system. But with a $50 million plus deal, I'm curious if you could look back into that to see, and provide that to the Chair, what exactly did Philadelphia benefit of that major, major purchase that we made? Did any of our people get any business at all out of that or did we import everyone that was associated with that work?
Absolutely. I mean, work force development which isn't part of 199 040048, 040145, 040414 - 6/2/04 MBEC's mission -- However, in my eyes it should be. I think it's very important. And when you look at -- I mean, I could take it not from Motorola; just from looking at jobs that are done in the City and seeing that the composition of folks on the work force, it doesn't seem to be -- it doesn't seem to be benefiting folks from communities.
Again, maybe I need to better understand. Are there certain things like this that you can't do what we're trying to do here? Are there some things like this $50 million purchase that trying to get local people to work on the installation of that or is it absolutely necessary for that company to come and to bring all of their own people with them, and live here, and then eventually leave and turn over the system to us? Maybe there are some cases where what we're trying to accomplish can't be accomplished. Maybe I'm nitpicking on this 200 040048, 040145, 040414 - 6/2/04 particular one.
I don't think you're nitpicking at all. I think that sometimes that's on a case-by-case basis. But certainly I think that one of my earlier suggestions that we'll go back and look at the City contracting process until we make contracts like this. We can actually tie in a work force component, so that we can actually ensure more work force development in that contract for local people.
And you know, it's not often that we spend $50 million on a new system. It's not like something we do every five years. This is probably -- The system's probably got a life expectancy maybe 50 years. So this is maybe not the best one to pick out, but it's a good one because it was $50 million that we spent.
The smaller contracts, sure. I mean, a million dollars? I mean, anything that doesn't 201 040048, 040145, 040414 - 6/2/04 benefit Philadelphians, doesn't benefit Philadelphia's work force, I think it's an issue that is legitimate and we should be looking into that and actually doing something about it.
Great. And I'd appreciate it, if it's not a lot of research, to go back and maybe take a look at that, and see whether we did what we were supposed to do or maybe we didn't do as good a job as we should have on that particular contract because that's... Never even thought of it when it was going on, to tell you the truth, because it was such a specialty operation. But I could bet that there were a lot of opportunities for people from this region to support that work.
Thank you, Councilman. 202 040048, 040145, 040414 - 6/2/04 Councilman Nutter.
Thank you, Mr. Chairman. Mr. Williams, first, you mentioned that there was a meeting this morning that caused you not to be able to be with us when the committee hearing started?
The Mayor called together his deputies, and cabinet members, and other folks, to talk about the budget.
By our budget expenditures, about the spending that I want to do for next year about the plans I have for MBEC to expand. 203 040048, 040145, 040414 - 6/2/04
Right. And is there some problem, based on the budget that was just passed the other day?
Well, they didn't talk about that. The Mayor just made some general statements. I made a few statements to some of the folks on the staff that --
I made a few statements to some of the folks on the staff about my -- my concerns about the budget.
That there will be not enough money for me to do the things that I want to do.
I -- I... I didn't get that information, sir. 204 040048, 040145, 040414 - 6/2/04 They called -- He called a meeting, and we came over there. The Mayor made a general statement. I made a statement about my particular budget, and then the meeting was over.
You made a statement to the rest of the cabinet officers, and --
I guess I'm not understanding. You have a budget. The dollars I think you requested are in that budget. What's your concern?
I didn't have a concern. The Mayor called a meeting. We went over there. He made a statement about the budget.
The Mayor talked -- made -- I don't -- I don't remember 205 040048, 040145, 040414 - 6/2/04 everything the Mayor said. He made a general statement about the budget and the process.
Not -- Not by verbatim. He made a general statement about the budget and the process that the administration was going to.
They submitted it already. It was submitted last week. There's a hearing on Monday. So that was it?
Okay. You might 206 040048, 040145, 040414 - 6/2/04 want to keep track of those dates to make sure Personnel knows when you started. It affects when you get in the cycle, start getting paid, all that kind of stuff. So it's April 12th?
Okay. And were you aware when Councilman Goode, who Chairs this committee, introduced one of the Resolutions having to deal with the 21st Century Review Forum Resolution? Were you aware when that Resolution was introduced?
Okay. All right. It was introduced on April 22nd. Have you seen a copy of it?
Okay. Is there some reason why, between then and now, you did not have any testimony drafted or developed in response to either that issue or the two other matters that are in front of us? When you came up to the table you said you didn't have any testimony. 207 040048, 040145, 040414 - 6/2/04
The Resolution 5 was introduced on April 22nd. It has to do deal with minority participation, right?
Okay. Is there some reason why you don't have testimony?
I -- I did not prepare any testimony, sir. The only -- I don't have any reason, except that I was talking back and forth with the Councilman's Office. And I didn't understand exactly what the Councilman wanted me to do for today. And so, I didn't prepare anything; just came to answer questions.
Mr. Williams, I'm under the impression that Solomon Jones from my office sent you a formal letter, as he did all witnesses that were invited. Did you receive a formal letter?
Did the letter ask you to prepare a written testimony one week in advance to the hearing?
I can probably assure you that it invites you to testify, told you what you were testifying about, and asked you to submit written testimony one week in advance of the hearing.
If -- If it did, I'll -- I'll take your word, sir. I don't remember verbatim.
In addition to that, you were in budget hearings, I believe, within the last week or two? And I walked over there and asked you whether you were going to testify? 209 040048, 040145, 040414 - 6/2/04
Thank you, Mr. Chairman. I mean, I guess, Mr. Williams, what I'm trying to understand is, this is your area. I know you haven't been here that long. But, I mean, you've been around a little bit, and you've been through some parts of our process. What I'm not understanding is, given the heightened attention that's been ongoing, not just in recent times, but ongoing, your arrival on the scene, you're obviously trying to do a number of different things. But I mean, I would only speak as a member of the committee -- the Chair may have his own views on the topic -- I think it is... I think it is not helpful to our 210 040048, 040145, 040414 - 6/2/04 process and to the work that you're trying to get done if we can't even operate at a fundamental level of: A member of this body introduces a resolution related to an issue that is actually administration's work product, Philadelphia 21st Century Review Forum; you're the Director of the agency that is specifically tied to the work at hand; and it sounds like, other than the Councilman sending you a letter and having a sidebar conversation, there did not appear to be much effort on your part to either talk with him about this particular issue, prepare testimony to share with us on this particular issue. And I understand if the Mayor calls the top level people together, and you just can't be here at 9 o'clock -- I mean, 10 o'clock for the start. But I mean, it would appear that you're in a position to be less than prepared to respond to the issues either of the report or the Resolution or a number of other issues that may come up. 211 040048, 040145, 040414 - 6/2/04 Now, you know, I just don't know how we're supposed to have a certain level of confidence about the larger operation if we're not even getting the fundamentals done of... The Council Resolution goes in. I'm sure someone must be transmitting information. They've got, you know, two, three people up here on a regular basis monitoring what we do up here. So, I mean, I'd at least like you to be responsive to: What is your process? If a resolution comes in that's related to your area, what are you going to do about it?
And how do you plan to be prepared to be responsive to members who may have any number of questions?
Actually, I was responsive to Mr. Jones, who works in the Councilman's Office. There are e-mails back and forth from me asking for 212 040048, 040145, 040414 - 6/2/04 clarification. And if the Councilman wants to comment on that, that's fine. But there was conversations back and forth because I wasn't clear about what exactly the Councilman wanted for today. And when I talked to the Councilman, I was ready to testify which is why I came here. But I still -- I still to my satisfaction didn't get enough clarification as to what exactly happened. And I know --
...and I assume that he wants you to be responsive to the issues that are either in the report or to the resolution, about how we move the issue along, and its relationship to your office. I mean, what's the mystery?
No mystery, sir. 213 040048, 040145, 040414 - 6/2/04 I contacted the administration because I knew there was not an official response to this. And I didn't feel it would be appropriate for me to make an official response to this report in front of the Mayor. Now, I'm here to definitely testify to my own feelings about the report; but to actually make an official response on the part of the administration, I didn't think that was appropriate for me to do that.
All right. I mean, look, you know, it is the Councilman's Resolution. I think you know that when anyone is called to testify, at least any government person, you're generally not being called to give us your personal views on a topic.
You're on the public payroll. You have a job in the government. When government witnesses come to the table, we expect that they're 214 040048, 040145, 040414 - 6/2/04 representing either their organization or speaking on behalf of the administration.
How you figure that stuff out, and how you guys coordinate your efforts, I mean on a certain level, that's your business.
But I tend to think that you probably weren't invited just because you happened to be, you know, Michael Williams walking down the street. I think you were invited in your capacity as Director of MBEC, right?
Mr. Williams, can you tell me what conversations you had with any members of the administration regarding this hearing today?
I spoke to Janice Davis today about testifying, and that's 215 040048, 040145, 040414 - 6/2/04 the only conversation I've had.
You did not have any conversations with anyone from the Mayor's Office?
Okay. I can tell you that Joe Grace from the Mayor's Office asked me what was expected of the administration for this hearing. I told him that you would be testifying, and told him that it was directly in response to the findings and recommendations of the report.
I did not have a conversation with Mr. Grace, sir. I don't recall that.
Okay. Thank you. 216 040048, 040145, 040414 - 6/2/04 Councilman.
Councilwoman, before you sit down... Mr. Williams, two things.
One, I sent a letter recently. I don't think too much time has passed, but can I at least get from you... I sent you a letter recently regarding... I think nowhere near as bad as what Councilman Rizzo raised, but I received a notice in the mail recently about a -- I get these notices on a pretty 217 040048, 040145, 040414 - 6/2/04 routine basis. It's a Water Department project in my District. What I was struck by was in the notice it indicated that there were -- In accordance with the most recent executive order, which apparently there's some confusion, I think, as to whether it's 401 or 101 or 104 which it would be nice if you guys would get that straightened out. But what struck me is that in the notice it indicated that there were no 13 minority participation goals attached to that particular contract, in accordance with the executive order. Now, I didn't understand how, in accordance with an executive order that is about minority participation, there could be a provision that there were no MBEC goals attached to that requirement. It's a regular construction contract. It has to do with sewer pipes or something. Do you recall receiving that letter from me?
No, I don't, sir, 218 040048, 040145, 040414 - 6/2/04 but...
Within the past... Somewhere within the past couple weeks.
Okay. No, sir, it hasn't. I apologize. It hasn't gotten to my desk yet. I haven't seen that. But yet that would raise a bunch of concerns and flags; you're absolutely correct.
Okay. The second is, since you were last with us, can you give us an update on the reorganization?
Yes, sir. As you know before this, a consultant was hired before I got there. And I've been working with this consultant. The consultant has a one-year plan. I've been in negotiations with the consultant, saying that we need to have more benchmarks and a lot sooner. We have a high -- Well, I've made an offer to an enforcement deputy to come in to handle our monitoring, compliance and... 219 040048, 040145, 040414 - 6/2/04 monitoring, compliance and enforcement, new department. We have started to take care of our backlog of certifications. We are in the midst of bringing in some temporary folks to help us do that. And we are still working with the consultant to make a global reconstruction of the department. At this point we're in a transition stage. And things that I want to emphasize right now are just getting rid of our backlog to certification, and look into some options to take us out of the certification process. Also looking into working with our vendors. We just had a meeting with about 100 or 120 of our vendors, to work with them on honing their skills... to work on how to get into the bidding process, and how to -- Well, there are a number of things that it did, but we've concentrated on how to get into the bidding process in the City. 220 040048, 040145, 040414 - 6/2/04 I've also set up a meeting with Exelon Corporation, because I want to start a series of events where private sector folks will come in and talk to our vendors that are already certified, and to talk about their contracting opportunities. So, there's a lot of things that are happening over there. And I apologize for rambling on about that.
Okay. Why don't we do this: With regard to the reorganization, why don't you forward, like, an update memo or something.
What's the consultant's name? This came up during budget hearings.
Right. Well, at 221 040048, 040145, 040414 - 6/2/04 the time that you were coming on board, I think that an offer had been made. They were in the process of actually negotiating a contract. Have they, in fact, signed a contract with us?
Not that I'm aware of, but I'll have to get back to you on that, sir.
In response to a question I asked earlier, you said you absolutely supported a county and region first procurement policy?
Do you not believe that there was a firm within the county or region that could perform that work?
Do you not believe that there was a firm within the county or region that could perform that work?
I don't know if there were -- if there was or there was not.
But you would be seeking to find out, since it's only a one-year contract, correct?
You can talk about the consultant. What is the scope of work of the consultant?
The consultant is supposed to come in and look at the entire operation, and to make recommendations based on his investigations, looking at policies and procedures, as it relates to the City's MWDBE's goals and also to look at how this department functions, and its best way to function. So I know it's kind of a broad scope. And he's broken it down in -- in -- in -- in distinct parts.
Given the testimony today, what you heard some of, but certainly you have heard from a number of Council members and certainly Howard Rye, who is our minority staff person here, who has minority concerns with Council, there are a lot of issues that have been raised around problems that minorities have, in doing business with the City. Is any of that information taken into 224 040048, 040145, 040414 - 6/2/04 consideration by the consultant to address?
Absolutely. I recently have sent out a letter to all department heads, listing their fiscal year '03, their mid year '04 minority participation rates. I've asked them for compliance plans for their Fiscal Year '05 rates. And if they have let out contracts at this point for '05, to list all the minority participation rates on those contracts. That information has gone to our consultant so that he can factor that into our work.
Now, do you have an enforcement arm in your department?
We didn't have that before. I've made an offer to a person who I think is going to accept the offer; will be in in about a month. And that's going to start our enforcement arm, our enforcement, monitoring, and compliance arm.
So what will that consist of, enforcement? What will 225 040048, 040145, 040414 - 6/2/04 that person be responsible for doing?
The three main goals of this person: The first one is to ensure that department heads are actually utilizing our vendor database to put people on contracts, by looking at their participation rate. I don't have to tell you that it's not been that great in this City's history, even from the beginning of MBEC, actually.
Yes. I don't have to belabor that. But that doesn't mean that we shouldn't do anything about this now. And I don't really want to wait on that, which is why I sent those letters out to the department heads. My enforcement deputy will be the person meeting them -- with me on a 226 040048, 040145, 040414 - 6/2/04 quarterly basis, to see where their contracting is and where their participation rates are. It takes that kind of will, I believe, and some teeth behind that, to make sure that the City, the City departments itself are actually utilizing businesses owned by people of color, women and disabled folks. The enforcement person will be heading up that. The enforcement person will also be heading up our on-site inspections. Because of Federal certification requirements, we have to do those. And there are all kinds of situations that can fall -- Because we don't have enough folks to do this at this point, we don't have -- things can fall through the cracks. A prime contractor, for example, can put a subcontractor on a contract but not utilize them or utilize a shell corporation, where you have a minority person taking the money but there's no 227 040048, 040145, 040414 - 6/2/04 participation coming in. So it really is not worth anything. And we don't have the personnel to do that. But we're hiring that. I'm hiring the personnel -- the enforcement person and two people to work for her to do this. The person will also be looking at procedures in our office, because even though I've worked there, and I have not come across anything that would raise anyone's attention to being unethical, still there may be a perception that some things are going on in this department. And the first person will be our ethics guru.
Now, what is your enforcement mechanism for those contractors who don't comply with the terms of the contract? If they are -- get a contract, don't utilize or they subcontract to a minority firm, not -- they're not participating, what is your -- do you have an enforcement mechanism to carry out? 228 040048, 040145, 040414 - 6/2/04
Well, per the expired executive order which the Law Department is working on at this moment, to introduce another one, there is a mechanism to debar contractors. I don't think it's ever been used here, but I think that it should be used. There's another thing that I would add, Councilwoman, that there are some prime contractors who are very slow payers. And in my view, you can't have a subcontractor who is -- I mean, there's a reason that you're a prime contractor. You've got to pay some money. You're going into this business. You've got some -- You've got money here. You're not going to be dependent upon your payment from the City. However, a subcontractor, they absolutely have to be paid for that. I've been dealing with a lot of those issues, more than I actually thought since I got to the job. Almost every other day I've got someone in my office, that I'm trying to negotiate with prime contractors 229 040048, 040145, 040414 - 6/2/04 or GPUAC or someone, about getting them paid. That's really making me very angry. And I think that to me, that is something that you could use to debar someone if they are -- if they are habitually not paying people. I think that in the City contracts, as it's written right now, there's supervision saying that, well, subcontractors won't get paid unless prime contractors get paid. And I think that's ridiculous. I think that you can't... Because there may be some issues with some minority prime contractors themself, that you can't make a blanket rule. But you could certainly do something about that, and have some language where you could go in and say -- not to be so absolute, to go in and say, no, you really have to do this and you have to pay this person. And if they don't do that, they habitually don't do that, you need to debar 230 040048, 040145, 040414 - 6/2/04 them from getting City contracts. I think that's simple.
Well, I hope you're successful in that because that's the only way you're going to stop it because they just ignore the subcontractors. And these major contractors continue to get the same contracts, continue to do business with the City, and still engage in the same practices that put minority businesses out of business.
We saw the little piece. I saw your predatory contractor, right?
You see how they do it. So, it's systemic. I mean, it's built in the way the business is done, with this whole contracting business.
Absolutely. I mean, I fight with folks now, and I keep telling 231 040048, 040145, 040414 - 6/2/04 them that, yes, the executive order has been expired. But to my knowledge, if they don't do anything, I will move to debar them. You know, if it's going to be right, if there's going to be some kind of challenge, I don't know. But that's not my concern. My concern is getting these people paid and getting them their money. And so far that has been very successful with just confronting them, and telling them that something may happen there. You know, yes, I get in these painful conversations where they have some prime contractors saying that, well, you know, we've got friends on City Council, we've got friends in the government. That just doesn't matter because I think these people have to be paid. And I'm doing everything in my power to make sure they get paid.
I think that's very important; and that if we don't begin 232 040048, 040145, 040414 - 6/2/04 someplace it will never end. So I would wish you well. And do you feel that you, having been there such a short period of time, that you will be empowered to proceed in a fashion that you believe will be effective in that department --
Well, I think that, based on the fact that I sent these letters out to department heads, have gotten some heat from them. But I've just shot it back and said, it doesn't matter. You're going to have to do this. I know that I need the teeth, the ultimate club from the administration, to do this. And to that extent I've been told that that would be there for me if needed.
Again, I have a follow-up question from my earlier question. I won't repeat it. But your mission statement, if you had a mission statement -- I assume you do -- of what your goals and objectives are, it seems as though we've been doing business, you know, in a particular area for a lot of years. Have we... With your restructuring, are you looking out beyond the normal things that we've been kind of focused on? There are other opportunities out there for minority participation. Like, we spend millions and millions and millions of dollars. And again, maybe this is like Motorola, not doable. But how do we get some of the big, big companies that we do business with? We have telephone companies. We have Verizon. We have the energy companies. We have law firms. I heard today Mr. Crawley say that 234 040048, 040145, 040414 - 6/2/04 there are very few black law firms that are -- if any, that are getting any legal work. What about the computer support, and the computers that we buy? Are they areas that we are eventually going to be able to look at or, to be realistic, are there some areas that what your mission is that you're not going to be able to capture or have them get involved and then come aboard with your program?
Sir, I don't think I should -- I'll be inhibited by anything. I think that that -- that we'll be able to do everything that we set out to do. I -- The department -- My goal for the department is to move away for something like certification, which I think we do well. But it doesn't go to constituent services. I think constituent services are more marketing our firms internally in the City. And externally I think our -- we should move to enforcement and monitoring, 235 040048, 040145, 040414 - 6/2/04 to compliance, to doing outreach, to getting those folks into the system, and then to make sure they get work through the City and beyond, outside of the City. Okay.
What do we do when we have a vendor that we spend millions of dollars with? They're not a contractor. They're a vendor. They're providing a service to the City. Are those deals for service come under the umbrella of your organization?
Well, give me an example. A big supplier of technology to the City. I'll use the name, Verizon. We have probably hundreds of thousands of dollars a month we spend with them. How could you get minority -- How could you get Verizon to have minority participation, other than beyond what they do already within their organization? I mean, how could you get them to... Again, is it not even doable to even think 236 040048, 040145, 040414 - 6/2/04 about those big dollar items that we spend every month? How do you get them involved?
Candace Hitchcock. I'm the Deputy Director of MBEC. In response to your question, Councilman, we evaluate every project that comes before us for ranges. We look for the opportunities within those projects. Major equipment purchases, like telephone equipment, and I heard you mention the 800 megahertz... There are some opportunities within there that we have to find, in terms of installation, in terms of whether they have to construct something to put the equipment in. So we evaluate what's available and look for opportunities within those areas. The equipment purchase itself sometimes is a block of money. They spent, actually, about $51 million on the 237 040048, 040145, 040414 - 6/2/04 equipment for the 800 megahertz, but there were some $9 million worth of opportunity there that we could put ranges on for minority and women participation.
Given -- Okay. Here's an example of one I'd like you to look at. We're about to put the cellular telephone contract out for bid again. It's going to go out: Verizon, it's going to go to Cingular, it's going to go to Nextel, it's going to go to Sprint. What can you do to get minority participation in that type of an opportunity, where we're going to spend, again, a significant amount of money? What do you do? I mean, what do you do in your organization, when you hear that we're about to rebid possibly for a three-year deal the cell phone service for the City of Philadelphia?
Well, there are 238 040048, 040145, 040414 - 6/2/04 various components of the cell phone services. The biggest component would probably be the equipment itself, unless there -- We would look, see if there was a distributor for the equipment, if there's training on how to use it, any area that might be in there. I haven't looked at all the components of it, but that would be the approach to seeking whether or not there would be any opportunity on that project.
What's interesting: One of the vendors that's going to -- that already does business doesn't even have a presence in Philadelphia, doesn't even have an office in the City of Philadelphia. Forget the minority participation part. They're not even a -- They don't even have a presence here, and we're sending them a check every month. So, now this deal is going out. You're assuring me you're going to take a look at that to see -- 239 040048, 040145, 040414 - 6/2/04
Yeah, because one of the issues is a service -- he's a service provider. And they can do that, not on site. So we'll have to look at what components compose the activity.
One of them does not have a presence here. All the others do. But again, how do you bring or require minority participation in a multi-million dollar cell telephone contract? I just don't understand how you're going to accomplish that or what you can do to do that, other than what you just described, that possibly there's a minority distributor that would provide the equipment to us.
Well, whatever... Or if there's some training activity within there. There may be some other provisions in there. 240 040048, 040145, 040414 - 6/2/04 You have to look at it to make that determination. We do an evaluation of these projects. Not all the time are we successful; that's true.
But is this the normal part of doing business? In other words, if I didn't bring this up here today about this bid ready to be put out again, would you -- would your organization even be part of it? Or am I giving you the first heads-up you know about this?
Okay. It went out three years ago. Do you know what we... Did we have an opportunity three years ago? 241 040048, 040145, 040414 - 6/2/04
May have, but I can't tell you because I'm not sure of that one.
Okay. What I'm basically saying is, I believe that there are a lot of opportunities out there that we aren't focusing on. And I hope that that consultant comes back or to you now. I don't even think we need a consultant. I think you're both bright enough to be able to figure out how to make this thing work.
But I think that we really -- and I hate to use this expression -- start thinking outside the box here, of looking at opportunities. And I think sometimes because they appear to be something that isn't eligible, like cell telephone service or wire line telephone service or the purchase of computers, we just let it get away from us because, you know, it's not like... doesn't fit the mold. Am I making myself -- Am I 242 040048, 040145, 040414 - 6/2/04 expressing myself right? So I think that you should really start looking... We buy a zillion police cars from a particular car dealership a year. They're not even in Philadelphia. They're in New York State. We don't benefit by that. We don't have one mechanic working on those cars. We don't have any... anything... any input there at all. So, it's frustrating for me. It really must be frustrating for you because you're responsible to make it work.
And we're responsible after the fact. I mean, department heads, especially in professional services, make these purchasing decisions, and we get things to evaluate ranges on decisions that they've already made.
Our enforcement person will be doing that, along with working with the Law Department, so we can be on top of these.
The Police Commissioner doesn't have the authority to decide where we buy police cars. It's done by procurement --
-- and the bottom line, cheapest price. That's where those decisions are made. And I know we had this conversation before, where we can't require by basic -- I guess it's the City Charter or some other law, that we can't require the City to do business with City businesses. Do you see any effort to break through that barrier?
Unfortunately, I don't see any effort to break through that.
But Councilman, may I add a comment to that? On the car deal they had --
Excuse me. 244 040048, 040145, 040414 - 6/2/04 Please identify yourself for the record.
Candace Hitchcock, Deputy Director of MBEC. On the car deal, they had to put in computers and some other things that they do after they purchased the car. So that's a possibility for getting participation. In fact, we did get some last year.
One of the issues I'm concerned about -- and I would like for you all to go back and seriously consider again, revealing the provider contracts for nonprofits that go out because you have nonprofit contracts or contracts with the Department of Human Services and the Health Department, and there is no minority participation. We have a company, Warren E. Smith. A contract for $10 million was given out. They gave it out to three majority firms, was forced to do one minority firm. Warren E. Smith, the other 245 040048, 040145, 040414 - 6/2/04 majority -- minority -- majority mental health provider, doing business in the community now has to divest itself from a part of the program, and send their clients all over the City. And it's just not right, because there's nobody monitoring those contracts. Have you, in your capacity, contacted the Department of Social Services or the Health Department or was that part of your...
I understand at some point that MBEC stopped doing nonprofits.
Yeah, MBEC stopped looking at nonprofits, the reason being is that the certification process is different than the approval process. They're approving folks to...
It was effective 246 040048, 040145, 040414 - 6/2/04 last year.
In 1994 there was an attempt by the current Health Commissioner to try and lend some participation to the number of nonprofit contracts that were -- and the dollars that were spent with nonprofits. It kind of turned into something like a certification process. And you cannot, under the Federal regulations, certify nonprofits. So that we had to adjust that and not get into an approval process of nonprofits as minority, women or disabled. The criteria was established outside of the Federal regulations. At the time we were using the Federal regulations for certification processes. We cannot certify a nonprofit. Even though we use the word approval, we use a different criteria, but it still did not fall within the boundary of the Federal guidelines. So we stopped doing approval 247 040048, 040145, 040414 - 6/2/04 processes for nonprofit organizations.
We are looking at nonprofits, because they do buy goods and services, to develop something similar to an equal opportunity plan, that can have them provide to the MBEC how they buy their goods and services because they do do other things with the money that they get from the City and other sources.
I was going to say, for me that doesn't get to the point of these departments not utilizing these firms. Just because we don't -- at this moment aren't counting nonprofits doesn't mean that department heads can go out and not look at firms that target or nonprofit firms that target -- yes, or provide services to people of color to this 248 040048, 040145, 040414 - 6/2/04 community. I think that's a different question. And that's something that I think that they have looked at sort of as a loophole. At least that's what my impression is. I haven't had to sit down to talk with them. They've received my letter showing, both these departments, they've had very low participation rates. They want to meet with me talk to me about that. And I'm sure we'll be able to get information from them as to what this is. My point is that if we don't even count these folks, it doesn't matter. You still have organizations, nonprofit entities, that service or targeted or are made up primarily by people of color. And you should be using them, and particularly in these communities. You have majority firms working in West Philadelphia, in North Philadelphia coming in these contracts because they know someone in these departments. That's just 249 040048, 040145, 040414 - 6/2/04 untenable. And that situation should be rectified. And to my extent of talking with them, sitting down and letting them know that I want to see better numbers from that, that that will happen.
Not only in terms of it's important, that the departments... These social service departments contract with nonprofit groups that are also minority.
And that the majority contractors, providers, have minority employees.
So that is a very lucrative, lucrative business. And because we don't provide the services -- we contract all our services out -- we need to know who we're doing business with, and what kind of return is coming back to the community from those companies. So, I think it's a serious way, if 250 040048, 040145, 040414 - 6/2/04 you all can find a way to be inclusive, to include them in some reportable way, and some enforcement way, and to make them be more inclusive. It would be very, very helpful to us.
Yes, ma'am. And we are working on that. We're working on that mechanism to do that. I think part of this is just letting people know that we are looking into this, to start getting some movement.
Mr. Williams, very quickly. In a letter that I mentioned to you -- it's a letter dated May 24, 2004 -- you were over in the MSB in Room 330?
Okay. That's where we sent it. I received this notice from the 251 040048, 040145, 040414 - 6/2/04 Water Department regarding a relay of water mains: Woodbine Avenue, from 58th to 59th; Wynnefield Avenue, from 50th to 51st; and 58th Street from Malvern to Woodbine. The second location is literally about a block and a half away from my house. Gentlemen, you are hereby notified to proceed with relay of water mains for the area I mentioned. There are no MDBE, WDBE or DSDBE `participation ranges under Executive Order 1-03 for this bid. Bidders are encouraged to seek participation by disadvantaged, minority, women and disabled business owned... disadvantaged, minority, women and disabled owned business enterprises, but are not required to submit a solicitation and commitment form with this bid. A copy of the certification of insurance must be submitted to Bill Credle [sic], Aramark, second floor, et cetera. Limit of contract, $429,000. And 252 040048, 040145, 040414 - 6/2/04 it's signed by Bill Credle. Do you have any idea why a contract for this kind of work will go out with a letter to the contractor, indicating that there were no participation ranges for minority businesses or female or disadvantaged businesses, under Executive Order 1-03 for this bid?
No, sir, I can't tell you why that would. But I will look into that, sir.
Well, under the Executive Order, are you allowed to not have participation ranges for construction work?
Well, doesn't say it's an emergency. And I live a block down the street from the one location, and I know the other locations very well. And none of them have exploded recently. So, I don't think it was an emergency. Is this a regular -- 253 040048, 040145, 040414 - 6/2/04
I don't think you'd have an emergency at three separate locations. There's a purchase order number, there's a bid number, there's a work -- I mean, this is what I sent over. I'd be glad to give you a copy of it. I'd like not to read it into the record.
But I guess my question is, you can do all the investigatory work. How is something like that possible? Wouldn't this contract --
I don't understand. What do you mean most of the time?
Most of the time. There are occasions when some of those bids get through, and we don't see them.
Excuse me a second. Miss Dunn, could you identify yourself for the record.
Madalyn Dunn, community advocate from West Philadelphia. When you say an executive -- I was thinking an executive order. Something the 255 040048, 040145, 040414 - 6/2/04 Mayor sent down saying this don't have to be done; is that right?
No. In this particular case the Executive Order 1-03, is, as Councilman Goode mentioned -- as the Chairman mentioned earlier was, I believe, the companion executive order to the new Minority Business Enterprise legislation that was passed last year by City Council. The Mayor issued and executive order to go along with that legislation. And I think also as has been testified, that executive order apparently expired at some point in time. It had an expiration date on it.
It should also be mentioned that the executive order was done at the same time as the legislation, but the executive order was not nearly as strong as the legislation.
-- work tearing up 256 040048, 040145, 040414 - 6/2/04 Wynnefield, and like in front of our church. And usually when the Water Department is working, I see African American men. I have seen none on this job, and I was wondering why. I have so many calls in your office, Mike, I thought I'd give you a break. But now I know I should have done it anyway.
Yeah. No; that's fine. This job is actually not being done by the department itself. It's being done under contract with a private contractor. It's three separate locations in the Wynnefield community, one of which I drive through every day.
So if the Water Department was doing this, we would have had a conversation of people working, as usual.
Well, more than likely you would see Water Department 257 040048, 040145, 040414 - 6/2/04 trucks and Water Department personnel who are City of Philadelphia employees. And you're right, it allowed those jobs. I mean, there are a lot of African Americans working in the Water Department. So, I mean, I see them out doing work. This is a private contract by the Water Department.
And so why would the Water Department hire somebody else to do a job that their people can do? Because we've seen them tear up --
No; I understand. There's a lot of work -- There's a lot of work out there. We only have so many people who can do so much of the work. So, the City does hire a lot of private contractors to assist the departments because we have nowhere near, I think, as many personnel as we would need to do all the work that needs to be done, especially with regard to the Water Department. 258 040048, 040145, 040414 - 6/2/04 I don't have any issue with them issuing a contract to a private contractor. My issue is --
Well, that and the fact that they would send a letter to the contractor saying there are no 10 participation requirements at all. And then in the next sentence, but if you want to contact some minority businesses, that's fine. Well, I don't know these people from a can of paint, but if you tell me in the first sentence I don't have to do something...
So I'm still trying to understand how under the executive order or the present law can a letter like this go out in the first place? 259 040048, 040145, 040414 - 6/2/04
They're from the Water Department. I don't know what their title is. Gentleman's name is Bill Credle. He may be like a technician or administrative person or something.
Thank you so much for allowing me to get that question. Thank you.
Sure. No 13 problem. Ma'am, you were saying that from time to time people just don't send paperwork over to MBEC?
It happens. It's certain... Human people. 260 040048, 040145, 040414 - 6/2/04
Are the departments required to send their bids or the documents before they go out to MBEC?
Yes. Most of the time the Water Department does. I simply said that may be the case in that instance.
James Royal. Good afternoon. Thank you for your patience. We look forward to your testimony. First, please identify yourself for the record.
Good afternoon, 261 040048, 040145, 040414 - 6/2/04 Chairman, and to the committee. My name is Paula Peebles. I am the President and CEO of Renaissance Community Development Corporation in North Central Philadelphia.
And I am Sutan Ashley Shah (phonetic) with Renaissance Community Development Corporation. Also, I serve at the pleasure of the President and the CEO. Thank you. And thank you for having us today.
Again, we want to thank you for this opportunity. I feel very grateful for the fact to be able to proceed behind Mr. Williams because my testimony actually addresses some of the various concerns that were indicated in dealing with this critical issue that we are confronted with here in the City of Philadelphia and the surrounding region. We are honored to be among those who 262 040048, 040145, 040414 - 6/2/04 have presented today the case for parity and the time for equitable distribution of resources and opportunity. We would like to again thank the City Councilman Wilson Goode and the Committee on Commerce and Economic Development for providing us with the opportunity for input on this critical issue, economics. Economics, in our opinion, is the last frontier for African Americans, specifically, and other people of color in totality. Like the struggles of the 1950s and '60s for civil and human rights and for self determination, as we continue our sojourn in this country, so is it true for our struggle for economic parity, economic repair, and equity are no different. From a historical perspective, the pre-civil rights era and post emancipation era, blacks enjoyed a thriving business economy among themselves, realizing that the source of their existence was a 263 040048, 040145, 040414 - 6/2/04 mandatory commerce exchange with one another, thereby creating the growth of black entrepreneurs, such as the great Madam C. J. Walker, the first woman of any race to become a millionaire. Her startup business developed out of desire of black women who began a micro level of business, selling her product door to door in 1905. In our opinion, her business thrived despite segregation, indirectly because of it. When integration occurred in America, it stopped short of the integration of economic opportunity for African Americans. History has taught us that the only time black people and economics became important to America was when riots over the lack of economic opportunities for African Americans occurred. The government would then respond with a Band-Aid of some form of antipoverty program, fancy slogans such as War on Poverty, to silence the revolt. 264 040048, 040145, 040414 - 6/2/04 In the 1980s and 1990s when African Americans again sought economic parity, they were publicly scolded by American white ethnic majority, that blacks were moving too fast. After all, we were just given civil rights to share places with all other citizens. Blacks were moving too fast, as if we could afford to slow down, after some 400 years of criminal persecution based upon race. We must be pro-active about the issue of economic parity, as we were with the violation of civil and human rights in this country. 2 percent of the City's gross business receipts. This is criminal, and a 265 040048, 040145, 040414 - 6/2/04 violation of our rights to fully participate in the commerce of the City. 6 percent as a minimum, with a focused plan to exceed this proposal. The challenge, as we see it, lies with elected leadership from the state's mansion to the second floor of City hall. Ironically both share in Philadelphia as their political foundation. The challenge to them is to create equitable opportunity for inclusion, integration of black Philadelphians into the state and City's commerce. Today black contractors and black businesses are held to the same standards of governmental requirements as other ethnics in the City. However, these standards are structurally unfair, given the advantage afforded to ethnic immigrants, with infusion of startup capital, access to banks, and governmental aid, and therefore 266 040048, 040145, 040414 - 6/2/04 a greater advantage. In closing, we would like to make the following recommendation, to sincerely, with all vigor, begin the process for economic equality of Philadelphia and Pennsylvania and throughout America.
One, equal access to capital is pivotal to the successful growth of African American businesses in Philadelphia County and throughout the region. Job creation must be a prerequisite for participation in awarding of all government contracts. It can no longer be left to political leadership to decide who will be exempt, based on self-serving contributions. It should be optional. And I think there was an example of that, just based on the comments and the question to Mr. Michael Williams. Parity standards must be institutionalized to provide for more equitable distribution of public resources and business opportunity. 267 040048, 040145, 040414 - 6/2/04 Those who remain in the City should enjoy the benefits of engaging in City commerce. Presently those living outside of the City enjoy the benefits of City commerce, to the neglect and unemployment of City residents. This must be reversed. And finally, procurement policies must focus on development of an institutional requirement of inclusion, rather than relying on the shift to the mainstream, which amounts to hope -- which amounts to a hope and a promise to do the right thing without any structural process for enforcement of this requirement. I thank you for this opportunity, in being able to present before this committee today. I also want to add one footnote. I believe it was Councilwoman Marian Tasco, and I thank her for asking about nonprofits. And my only brief comment is nonprofits do business. We create job opportunities. We are entrepreneurs. And 268 040048, 040145, 040414 - 6/2/04 we would like to be included in the ongoing process. And I thank you.
Once again I thank you, Councilman, for allowing me this opportunity. Our testimony is as follows: Honorable members of this profound body, I come before you this day in the hopes of conveying to you what has been echoed to me by so many small and minority businesses here in our great City. These same individuals are the very ones that represent a portion of our tax base, yet the bar of standards to compete are always higher or constantly being raised. Therefore, we as a city of diversity, as a city of neighborhoods, and as a city for whom as a national role model, with statistics that say we as a major metropolis should be alarmed at such 269 040048, 040145, 040414 - 6/2/04 a disparate level of participation. Only 15,532 minority businesses, 4 percent of all of Philadelphia businesses. 5 And the region's 28,973 minority 6 businesses, 10 percent of all business in 7 the region. 6 percent, respectively, of the City and 10 regional gross receipts. 11 This body I know has developed a 12 measure of commitment towards this goal of 13 increasingness [sic], but I just believe we 14 need to be doing more. 15 We as a City must really take a more 16 committed role in allowing the so many 17 other minority contractors who are being 18 left out of the process a level playing 19 field so that they will allow -- be allowed 20 to equally participate in the high volume 21 of commerce that this City and region 22 enjoys, even in the leanness of times. 23 No longer can we be a process that 24 says you can only participate if you are politically connected or are financing 270 040048, 040145, 040414 - 6/2/04 someone's political agenda or that you happen to be one of those, one of the ones blessed to make it through the door of opportunity, and fail to remember where you yourself came from. Too many times success blocks our ability to realize that we, too, are a part of finding success have to have a sincere helping hand and not a handout, but rather a sense of belief and true commitment to wanting for your fellow man that which you would want for yourself. In closing, I respectfully request this esteemed body use the power that this great electorate has granted it, and do more in the way of putting real dollars and not a handout to acquiring a more level playing field for minority contractors. I have two little -- two small notes I'd like to address, if I may, Mr. Chair, first being, in my office I see people coming and going every day, in and out every day. I also deal with a major population 271 040048, 040145, 040414 - 6/2/04 of ex-offenders. I also deal with small business entrepreneurs whom are struggling, and I also deal with a small populous of individuals for whom have the misfortune of having to expend a lot of time and energy on the other side of the fence, but seek to correct that way of life and move into a cleaner mainstream. And the hallmark of my conversations with each and every one of these individuals is that they lack the adequate training necessary to put forth a quality business, whether it comes from, as the woman spoke earlier from West Philadelphia, because there's a lack of that or the level of public school systems or post secondary educational systems that our people are not afforded the opportunity to reach, that our people lack that capacity or the knowledge to know where to go to get this. So, I have been working with many, many of these individuals, and in sending them to, particularly, PCDC to get that kind of access to training or giving it to 272 040048, 040145, 040414 - 6/2/04 them ourselves, based on our experiences. But I find it, you know, a sad situation to know that they cannot get that type of structure without the opportunity to know where it's at. The second piece is, I just had a conversation with a minority contractor. And it alarmed me.
And that's why I spoke to a situation here, relative to wanting for your fellow man that which you would want for yourself, and talked about how other minority contractors for whom have paid to play or for whom have just been blessed to come through that door fail to understand that they have a requirement, to reach back and help those that are coming along, because who are the best teachers other than those who have walked through those same footsteps? But these individuals, they turn their noses. They want to -- This one individual, he told me a scenario whereby he was -- had access to some properties through NTI. 273 040048, 040145, 040414 - 6/2/04 But because he couldn't meet that -- meet that financial challenge and requirement necessary to put certain pieces in place, that he could not afford the opportunity -- be afforded the opportunity to continue in that playing lane. So there was another gentleman who's... eludes himself to be big in NTI, who garners many, many parcels of property from the City of Philadelphia, in our City. And this man here, this small contractor, has the capacity to take down four, maybe five houses a week. And this man who has all of these parcels is getting somewhere in the neighborhood of $15,000 per unit to demolish. Well, the man said, I'll tell you what: I won't dissolve my company, but I'll come to work for you for $15,000 a week at the same pace for which I would do for myself. This minority contractor who was getting all of these properties had the 274 040048, 040145, 040414 - 6/2/04 unmitigated gall to tell this man that he would not nor could he nor would he even entertain the opportunity of paying this man a decent wage to work. So again, because of, quote unquote, pay to play, however we want to look at it, whatever terminology we want to put on it or whatever spin we want to use to describe it and define it, but the reality of it all is that if you're not politically connected, you're not playing, the field's not level for you. If you're not supporting someone's political agenda, then the field is not level for you. But these are the same individuals that under the legal terminology of taxpaying citizen, they are equal in parity, but not equal in disbursement of opportunity. I would pray... I would prey that this body, this esteemed body, would not only look at the situation, as it stands externally, relative to those reasons that I stated as to why these individuals don't 275 040048, 040145, 040414 - 6/2/04 meet certain levels of standards, because either the bar is being raised or they just haven't had the public or the professional grooming to reach the bar, no matter where it is, but that they force the process to take a look at itself from within as well. Because that's where a large portion of the problem lies. And I commend you, Wilson, as Chair of this body, and the rest of the esteemed members of this committee, for taking on this challenge of looking at the serious crisis that exists in our City. Because again, if we don't pay our taxes, we are reprimanded. But if we pay our taxes and we do what we're supposed to do, then we're supposed to have equal access to all opportunities. Give you another quick example, and I'm going to cease this. I look at the dried out corridor. And I said I wasn't going to go here, but I need to. I look at the dried out corridor, and I look at minority entrepreneurship involvement in 276 040048, 040145, 040414 - 6/2/04 the City, and I see the word gentrification. I see the word gentrification in the sense of ownership, and I see the word gentrification in the sense of economic opportunity for minorities.
And when I look at that corridor, and I see all those small minority businesses that have been involved in that corridor for years on end, seeking to do certain things, and reaching specific goals and objectives, based on their visions as it relates to their ethnicity, their lifestyles, their community, their lives in that community, raising their children, their heritage, and their investment in that neighborhood. And I see what they lack in opportunity. Then I turn around and I see an organization such as the Dry Coalition come along, and look up and they have a budget of $500,000 or more working capital for just administrative purposes alone? Then I find disparity. And I find 277 040048, 040145, 040414 - 6/2/04 that disparity not coming externally or a portion of it is externally because certainly we have to bear some responsibility ourselves. But those dollars that they got are public sector dollars. So I asked internally that the public administrators of our City, and our state, and our Federal Government take a real serious hard look, because, see, where I come from guy, says speak out against injustice, even if it's against yourself, your family or your kindred. So, we first must take a look within and challenge ourselves to make the difference. And that's why I commend you. And I thank you, Chair, for this process, and thank you, Councilman.
Thank you. Any questions from members of the committee? (No response.)
Before you 278 040048, 040145, 040414 - 6/2/04 start, are there any other witnesses to testify? Okay. So, Miss Robinson and... Mr. Traylor, are you testifying?
Mr. Royal, please identify yourself for the record and begin your testimony.
Thank you. My name is Reverend James Royal. I'm a member of the CROP organization, Community Rebirth Organizational Plan. I do have a few copies of my testimony, of which I'm not going to read these 12 pages because most of what is integrated in the draft resolution has been given by others. C. and the state properly. One of the things that does not 279 040048, 040145, 040414 - 6/2/04 happen in the community, which has been stated over and over about training, is the manning table, the monies that come from the Federal Government? Where they go into a distressed neighborhood. Bruce Crawley was talking about 8 percent. Well, under the Federal mandate, 9 it's 40 percent in a distressed area. 10 In other words, if you have a 11 three-phase job, you go to that 12 neighborhood where the work is going to be 13 done. You get those people that are 14 unemployed, untrained and train them for 15 each phase of the job. 16 And so, we're looking at that as a 17 way to create immediate employment in the 18 neighborhood. It has been gone over step 19 by step for the last, I guess, three hours 20 that I've been listening. 21 There's three things that you really 22 need in order to create employment and 23 long-term employment. Number one, firstly, 24 the wherewithal, the guts to do it. 25 Number two, you need to train work 280 040048, 040145, 040414 - 6/2/04 force. And number three, you need to have that engine that drives your economy. And in this regard is, fossil fuel. In the information that we have given you, you will see that we do not really intend to just come down and testify again and again because this has been happening for many years. We intend to start that process in the public school system, and with the parents, and with the recovering addicts, and those people that are coming back into the work force. Our students need to be trained. There is a curriculum that we're giving Mr. Vallas, that he now has, of the public school system, that will, in fact, train our students and have them come up to the par that they need to as far as not only just as journeymen, but also business owners. A lot of the information and a lot of the testimony that's been confined to 281 040048, 040145, 040414 - 6/2/04 City contracts? Well, we need to look at the whole array. One of the things that Mr. C. I think that's fine. C. is banks and astronauts, and airplane pilots, and bankers-owners, and car dealers, spaceships, anything and everything a student need to learn. But the principal goal of the information that we've given to you is to show you that we need to have consumer stock ownership and employee stock ownership. We've been talking about that for the last ten years, and it look like it's going to start to come about. Because right now we're in a crunch with oil. And if we had hydrogen fuel, that would be readily available in the area of natural gas, and the area of SEPTA, in the area of these various schools and 282 040048, 040145, 040414 - 6/2/04 businesses, it would cost costs tremendously. But back to the point today is, the issue is, how do we generate jobs and money now? We believe that the manning table in these jobs, where they come to the community talking about NTI, is a perfect example. Those dollars that come from the Federal Government can train those people in the neighborhood right now to go to work right now. Simultaneously we can work with the parents and the students in the public school system. And again, I'll say Mr. Vallas has our plan. He's had it for about a year now. I can say without question our curriculum is superior to anything that the public school system has. It's anything that the -- superior to any of our charter schools. That's already in the curriculum. And much of it is in the statement that we give you today. 283 040048, 040145, 040414 - 6/2/04 We just ask you to look at it because we're going to be sitting down with Mr. Crawley and others, because I will say quite clearly, Mr. Mike Williams, we knew him.
We know him. He's not qualified for the job. He's a good middle management person. They should have put somebody like Bruce Crawley in that MBEC position. The idea is not to go on a job and learn when you're in crises. The job is to go in when you know what you're doing. And so, we would say that we'll be coming back from time to time to talk with Council, as we make steps forward. And again, in that document that we gave you, maybe or 911 will kind of run to the heart of it. But we're saying to you we need change, and we need it now. We say that everywhere we go. We can not do business as usual. The fact that the administration is 284 040048, 040145, 040414 - 6/2/04 not interested in supporting the process, even what we're going through right now with the budget, is really bad. It's a bad thing. But nevertheless, we want to cut it short because we understand you've been sitting in them chairs for a long time. But it's important for you to know, as you read that information, that we're going to be coming back to you from time to time to implement it. Because even if we can't implement it through Council, maybe we can implement it through referendum. The issue is now, people need relief. They need changes now. The seniors need relief now. People need jobs now. And just because the good ole boy network is still working, it's time for us to do something different than we've been doing in the past. Why? Because we need change now, Mr. Chairman. And again, I thank you for the 285 040048, 040145, 040414 - 6/2/04 opportunity to come. Again, as you get an opportunity to read that and adjust that, we'll probably be talking about that in the future, because we need change now. And again, that percent that 8 Mr. Crawley talking about, it should be 40. 9 This 50 percent that you talking about 10 regionally... Oh, by the way, I think this 11 is -- I would be remiss -- What I'm saying 12 is, this regional spending is a good idea. 13 But I think it ought to be in the 14 City and County of Philadelphia first. You 15 do it in the City and County -- Everybody 16 was talking about where is your 17 demonstration at? 18 Well, let's demonstrate in the City 19 of Philadelphia, because most of the 20 people, with all these tax cuts -- And I 21 hadn't really paid a lot of attention to 22 it. We walked up with the Chamber a couple 23 of years ago. 24 But I wasn't looking for these 25 drastic changes because I was looking for 286 040048, 040145, 040414 - 6/2/04 some balance. I know the Mayor kind of gives you information late. So I don't have it either, of what would actually happen if these cuts were going into effect, and in effect would it actually hurt the City? But at the same time I have to think about most of the people supporting the change don't live in the City. But they make their money out of the City. They live in region, but they don't make their money -- And a lot of them don't want to pay the taxes in the City but they want City taxes cut. So I don't want to see us cut off our noses to fight our face. But back to the point. If we're going to do anything that's going to be effective for the City of Philadelphia, it should be the City and County first. And then if we want to go to the region, great. So ends my short testimony.
Thank you, Mr. Royal. If you would, I would ask one favor, if you could send me an electronic 287 040048, 040145, 040414 - 6/2/04 copy of the bill that you offered.
Yes. I actually want an electronic copy. If you could send it to me e-mail.
Thank you. What happened to the -- Excuse me. First of all, my name is Judith Robinson?
Well, good. I want to make sure they hear me, because I don't like wasting a lot of time and energy. And we seem to be really wasting a lot of time with a lot of nonsense. I want to talk about the process first of all. I been coming to the 288 040048, 040145, 040414 - 6/2/04 Economic Development and Commerce Committee hearings for many years. And I don't really appreciate how this was set up, to be quite honest with you, with all due respect, Councilman Goode. When I saw this yesterday... And I don't want to digress too far off of this. But I saw yesterday a bill that came in front of the Finance Committee, regarding the Housing Trust, where people had gotten together before the Council hearing and sort of like set up a stacked deck, for lack of a better term. And when that happens, you have all those people sit up in front first with the same ole, same ole that you probably heard. But they want to get it on record, so they are put in front of individuals like myself that don't come here toting that I'm part of an organization of millions of people or whatever they say. Okay? So I just want to state that first, about the process. 289 040048, 040145, 040414 - 6/2/04 We always called. We got our names on a list. And we came in turn, based on when we called. And I think that's the way it went because it always seemed fair to me. Because I understand this hearing was about the 21st Century Forum's Review study.
It's about the report from The Minority Business Development Subcommittee of the 21st Century Review Forum.
Not the whole Review Forum document, but just that minority --
No, but just the aspect of -- the economic development aspect of that review study. And I did read that document. And from what I read, these were the Mayor's picked people who came back with 290 040048, 040145, 040414 - 6/2/04 information or recommendations. I think it was really laid out nice. They had findings. You had key findings, recommendations, et cetera. And as it relates to economic development, I'm sure you all read it, and you know, have referenced it, and you know, got briefed on it. And I understand that, so I'm not going to rehash that to that extent, because I want to ask the question: Do you all -- And I wanted to ask especially the African American members of this committee: Do you all have the political will, the guts, tenacity, et cetera, that it would take to deal with this issue of the unions? And... And, you know, you get donations from them. Do you have the will to say --
-- no to the unions? Mrs. Robinson, there's absolutely nothing within that report that relates to the unions. It's a report -- 291 040048, 040145, 040414 - 6/2/04
It's not a report on minority employment. It's a report on minority business development.
That's what I'm talking about, because what I'm telling you is not about jobs and how the unions stops African Americans from participating in the job market. Councilman Nutter, are you...
You and I know each other very well. And you know that I pay tremendous attention to what you say and what you talk about. I do... I have developed over time the ability to listen to a couple different conversations going on. So I'm aware of 292 040048, 040145, 040414 - 6/2/04 what you're talking about.
Okay. I just saw you moving your hand. I'm sorry. I'm sorry.
No. Actually, I'm trying to get something else resolved.
Oh. No, no, no. I'm sorry, then. I just saw you moving your hand. Okay.
I'm sorry about that. I'm sorry. But the reason why I'm not referencing the 21st Century Review Forum, because I did not see anything in there about the unions. Okay? And I want to get to that point to say to you all --
I'll how you to testify to whatever you want to testify, but it's not going to be a conversation about something that's not in the report.
Well, why would you waste the time of the community to have people come here and spend three hours going back and forth about a whole bunch of stuff I heard this morning that was not in that 21st Century Review Forum. And then here we sit here. It's just you, me and several other people. And now you're telling me you don't want to talk about something.
I didn't say I didn't want to talk about it. I said you can talk about it as much as you want. But this hearing is on the findings --
Excuse me. Excuse me. This hearing is on the findings and recommendations of The Minority 294 040048, 040145, 040414 - 6/2/04 Business Development Subcommittee report. That's the question.
And how -- who can get the $50 million, in the name of advocating for black people. That's what it's about.
You can talk about whatever you want to talk about. Go ahead.
Yeah; that's what I want to talk about, that little aspect of it.
Because we seem to be limited to that, where we're going to have $50 million being given over to somebody in the name of advocating for African Americans, the same group that supposedly has been advocating for them for the past ten years, the same members that were on... some of the same members, I should say, that were on this -- this forum. So -- So what I'm asking is, do you all have the political will to get past the 295 040048, 040145, 040414 - 6/2/04 studying, the hearings, and get to the bottom line so that our community can move forward? That's what I wanted to ask the African American members of your committee. Can you use your political negotiating skills? Are you willing to buck the unions with your donations? Are you willing to make sure that our youth, our youth -- Because I'm kind of past this group now that are talking about what they want. I want to talk about the future generation. Are we going to start -- stop lying about whether we have the skills in our community, when we have business owners that are -- have every document that you would need, everything that you need to be in business in this City? They pay their taxes. They do everything. And you know why they're not here? Because they're so busy trying to keep their head above water that they're not going to be able to come here today and fill up this Council like I saw the folks yesterday filling up this Council, 296 040048, 040145, 040414 - 6/2/04 regarding the issues that they were interested in. These folks that are already qualified, certified, and have all the licenses, documentations, and the taxes paid, et cetera, are not looking for handouts. They're not even looking really for you all to make up some special program for then. They just want equal opportunity in this whole process. When you divvying up things like what I saw yesterday where people come to you beforehand and determine that they going to get X number of dollars, make sure that you think of your folks. You know, that's what the question I'm -- the statement I'm down here to make, you know. Because I understand the political process. Thank goodness I learned it really well. And I see what happens. And I see that you all are obviously not putting a word in. You're obviously not making it a priority, else it would have 297 040048, 040145, 040414 - 6/2/04 been dealt with a long time ago. I know how people meet. I understand the stuff very, very well. And I know that obviously something is out of -- truly out of order. But I'm not going to put it all on you all, by any stretch of that imagination. Please don't think I am. Because I really want to start with the Mayor, the Mayor, John F. Street. years 12 we gave this gentleman of our vote and our 13 support and protection. 14 I'm not going to just badger you 15 all. I'm not here to do that today. It's 16 sort of like nonsense, but I have to get 17 this on record. 18 If it was up to me, to be honest, 19 I'll be dealing directly, directly with the 20 Mayor, because it starts from the top. 21 We have a model for this. I was 22 trying to look for Mayor Andrew Young's -- 23 You know, what did he do? What guts did he 24 have? You know, what did he leave us? 25 What legacy did he leave us? 298 040048, 040145, 040414 - 6/2/04 I wanted to bring that down here and put it in record. I haven't done, you know, enough research on the internet yet to get it. But what guts did he have at 35 years old to stand up and be a true black man? That's what I want to talk about. Look, how can we get beyond all this meeting and -- and having certain meetings with certain people, and then come in here today in front of the Council where you get on record, and then those people go in front, and then here it is o'clock or o'clock. I don't care how long it takes. You all met, like, late at night. How come they're not here?
Mr. Crawley went first because he was Chair of the subcommittee that issued the report.
So he was here to present testimony on the report that his 299 040048, 040145, 040414 - 6/2/04 subcommittee issued.
I heard that, sir, and I appreciate that. And I'm glad -- I appreciate you... But let me just finish on up and get on out of here. Regarding training, we go all the way back to the Negro Trade Union 30 years ago. We have trained people in our community. So please, stop. We have women trained. We have African American women that are part of these unions. They're not getting work, and we know that. You know, it's just ridiculous. And then we continue to train. Okay? And they are last hired. The unions are major factors. You have African American owned business people, that when they would even think of submitting a bid for contracts right in the heart of North Philadelphia and other urban areas, they are to ask, are you going to have a union members. 300 040048, 040145, 040414 - 6/2/04 The roofers union, for instance, one of the most corrupt unions in this town, they have the audacity to ask roofers that are African American roofing companies that are African American owned, and have licenses and documentation and all that, are you going to hire somebody from that corrupt union. It's just ridiculous. You're going to have some Joe six-pack type guy ask some black people are they qualified, are they trained, and all that nonsense. Meanwhile, those folks have moved out of our City to New Jersey and the suburbs.
Nothing, except they don't have no black people in them. COUNCLIMAN GOODE: Why not form --
Well, then, why not just form black unions? 301 040048, 040145, 040414 - 6/2/04
Well, I don't know if they'd get any work; that's why, because they'll be real segregated even more. But it's not about -- It's about those unions getting all the work, those unions being ahead of RDA, those unions being in places where they can see all the work coming down the pike, they grab it first. The problem is you all, the body, the executive body, and the legislative body --
We're not joined. We're two separate branches of government.
I understand that. But they determine and you all vote. And --
We vote on some things. Other things we do not vote on. 302 040048, 040145, 040414 - 6/2/04
We vote on some things. Other things we don't have the opportunity to vote on.
That's true. I agree with you on that. That's why I'm'a keep coming back, to the top, because I -- You know, this is the Forum today. I really wish it was at the Mayor's Office; but, you know, since we're here today, I'm'a get all this out. But I appreciate you keeping --
I appreciate you keeping me honest. Okay? But we have people that are qualified in every arena. What bothers me so much is that the stadia, already built. The schools. You only get to do these things every 30 years, it appears to me. The PHA, the Hope Six. All of that's a done deal. When the next time you going to have a NTI? You know. And we 303 040048, 040145, 040414 - 6/2/04 sitting here playing and talking and having studies. And the money is being spent. Every second and fourth Tuesday I go to the RDA board hearings. And that's -- The deals are just going through there. You know, I'm just going to say this and I'm going to get on off of this and go on about my business and have a great day. And I hope you all do the same. But if you all have any power or influence to do anything that can be of value to this whole agenda, do it. Do it. Do whatever you can. In your wheeling and dealing and creating and making things happen, all of that. That's all I'm asking of you all to do. But I really think it lays in the lap of the Mayor, Mayor John F. Street. That's where I'm going to put it. And then to the extent that you all vote on this stuff, and you do the legislation and all of that, just bring something to the table. 304 040048, 040145, 040414 - 6/2/04 When you're making your deals, I know what you can do. Because in my little small old business, occasionally I get a chance to pick somebody. Okay? And I pick somebody that I know can get the job done, and I pick them based on certain criterias. Okay? One of them is major, that they can get the job done. And then I look for African American contractors. I really do. In my little small business. So I know what we all can do with our little bit of power and influence. That's all I want to say. And I'm going to leave it alone. Thank you for the time.
Mr. Chairman, you just said something. I was getting ready to go out but then when you said --
Reverend James Royal. For the record, we are thinking 305 040048, 040145, 040414 - 6/2/04 about starting unions. I just thought you ought to know that. We've been waiting too long. And it's about ownership, because that's the other thing I'm really pushing real hard. That's why I talked about consumer stock ownership, employee stock ownership. We've got to own. So if we get caught up in the policies, if we own what we own, we won't have to get our throats cut simultaneously. But that needs to happen because keep knocking at the door, and begging folks to let you in, something's wrong with that. Thank you so much, Mr. Chair.
Thank you. Mr. Ali. Please state your name for the record.
My name is John Ali. I'm the President of the Contractors Roundtable Council. I was at the earlier session, and a comment was made by Councilman Clarke about 306 040048, 040145, 040414 - 6/2/04 the apprentices, which is something I wanted to address, because he -- the speaker at the time was Bruce Crawley. And one thing that he talked about was the trades. I'm a card-carrying carpenter. I've been in the carpenter's union probably for ten years. But one thing I wanted to be clear to communicate to you, to leadership was that when we talk about trades we're really not talking about transferring one trade to another. That in theory -- Theoretically that might be something that somebody might think that they want to do. But in practice trades don't transfer from -- You don't transfer from a laborer to a carpenter. And just in due respect, I would like to give the respect to the labor union. Although the labor union is called laborers, the labor unit in itself is a respectable trade. They make almost $25 an hour. That's in their pre-package before 307 040048, 040145, 040414 - 6/2/04 the taxes and whatever. Not to say that anybody disrespected them, but I would just like to respect them in the manner that they should be respected. In addition, 332 is the only predominantly black union that really fights on everybody's behalf and really gives their leadership to help all the causes across the board. So, I just want to be clear on that. But one thing that we can all agree on, we have to be able to help businesses because it's only by helping businesses will we be able to help the apprentices. And although a lot of the apprentice ratios are set by the Federal Government. But even in that, when I think Councilman Nutter, when we had the hearings on the stadiums, we saw that we were -- we weren't participating -- we -- this -- Philadelphia wasn't participating, in terms of participation of African Americans in their apprentices, but apprentices were on the stadiums. 308 040048, 040145, 040414 - 6/2/04 But even in that, we weren't maximizing our ratios on the apprentices. And the only way that's going to happen, we have to have business owners that's involved, because the business owners are the ones that are going to make those apprentices move along. And we also have to be in mind that there's trades. And all the trades 11 don't have the same amount of 12 apprenticeship time. 13 Carpenters might have five years. 14 Electricians might have three or four. 15 Cement finishers might have two. So we 16 just have to be mindful of that. But it's a great opportunity for young men and women, Hispanics, blacks and whites to get in. And the ones that's really leading that effort for the trades is DAP. But we have to give them support for them to tackle all the other 15 trades. So I just wanted to make that comment. And I think that the leadership of this Council as it is today, you always 309 040048, 040145, 040414 - 6/2/04 have to be the leadership for whatever we put forward, because there's always going to be people that's on there side of the table that really are going to be looking out for their own interests. And because you're looking out for everybody's interest, you're going to have to put us in check sometime. That's just the reality that you're going to have to be able to deal with. I thank you for giving me the opportunity to speak, and I support everything that all this Council is about.
Thank you. Thank you for your testimony. If there's no further testimony, this Resolution will be held in committee with the other two Resolutions. This hearing is recessed to the call of the Chair. (Hearing concluded at 2:55 p.m.) 310 CERTIFICATE I HEREBY CERTIFY that the proceedings and evidence are contained fully and accurately in the stenographic notes taken by me upon the public hearing of The Philadelphia City Council, taken on June 2, 2004, and that this is a true and correct transcript of same. _____________________________ DAVID A. DEIK, RPR and Commissioner of Deeds (The foregoing certification of this transcript does not apply to any reproduction of the same by any means, unless under the direct control and/or supervision of the certifying reporter.)