Committee Hearing, May 4, 2009

COUNCIL OF THE CITY OF PHILADELPHIA2 COMMITTEE OF THE WHOLE - - - Room 400, City Hall4 Philadelphia, Pennsylvania Monday, May 4, 2009, 10:20 a.m.5 - - - Res. 090226 - Approval of revised Five-Year7 Financial Plan covering FY 2010 through 2014. Bill 090212 - FY '10-'15 Capital Program. Bill 090213 - FY '10 Capital Budget. Bill 090214 - FY '10 Operating Budget. COUNCILMEMBERS PRESENT: Anna C. Verna, Chair Marian B. Tasco, Co-Chair14 Jannie C. Blackwell Blondell Reynolds-Brown15 Darrell L. Clarke Wilson W. Goode, Jr.16 Bill Green William K. Greenlee17 Curtis Jones, Jr. James F. Kenney18 Donna Reed Miller Brian J. O'Neill19 Frank Rizzo Maria Quiñones-Sanchez20 - - - V A R A L L O Incorporated Litigation Support Specialists23 1835 Market Street, Suite 600 Philadelphia, Pennsylvania 1910324 215.561.2220 215.567.2670 2 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1

Good2 morning, everyone. This is a continued3 public hearing of the Committee of the4 Whole.5 The first department to6 testify...7 MR. McPHERSON: ... will be the8 City Representative's Office.9 (Witness comes forward.)10

Good11 morning.12

Good morning.13 COUNCIL PRESIDENT VERNA:14 Kindly identify yourself for the record15 and proceed with your testimony.16

18 Good morning, Council President19 Verna and members of Council. I am here20 to present testimony on behalf of the21 Office of the City Representative FY '1022 Operating Budget request of $1,137,491,23 which is a decrease of $4,225,022 over24 FY '09 obligations. This budget request25 5/4/09 COMM. The Office of the City5 Representative is responsible for6 developing and promoting events to7 attract commerce, visitors, and new8 residents to Philadelphia and improving9 the quality of life for the people who10 live here. 13 The City Representative, under14 City Charter, is a member of the Mayor's15 Cabinet. The Office of the City16 Representative handles:17 Marketing, promotions, and18 branding internally and externally;19 international protocol; special events;20 ceremonial events; ceremonial documents,21 3,000 produced annually; ceremonial22 gifts, 4,000 presented annually; public23 relations; photographic services;24 presentations; and also oversees the Fund25 4 5/4/09 COMM. 9 In the November 200810 rebalancing, the Department of the City11 Representative eliminated two positions12 that were vacant, and notwithstanding the13 reduction to its workforce, this office14 has been able to carry out some important15 accomplishments in FY '09. Some examples16 are:17 Coordinate a strategy with the18 Mayor's Office to assist with public19 relations and marketing efforts for20 issue-based programs for seniors,21 mortgage foreclosure, hunger, and the22 education campaigns for all ages;23 Infrastructure-enhancement24 programs and collaboration with Commerce25 5/4/09 COMM. 22 And we have maximized23 efficiencies by finding creative24 solutions to do more with less. We have25 6 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 solicited engaged agencies to assist in2 our marketing efforts pro bono. percent over FY '0922 funding levels. The remainder, or23 $525,022, represents reduction over24 various classifications in this proposed25 5/4/09 COMM. 2 An analysis of the FY '103 budget by classification shows a decrease4 of $103,000 in Class 100, representing a5 reduction of workforce positions that6 occurred during the November 2008 FY '097 rebalancing. 10 Class 200 will be reduced by11 43 percent from FY '10 to $544,833. 17 Class 300 and 400 combined will18 be reduced by 10 percent from FY '09 to19 $72,250. These cuts will result in less20 resources across the board that help to21 support the basics operations of this22 department and our constituents such as23 ceremonial documents and presentation24 offerings, publications, office supplies,25 8 5/4/09 COMM. 2 Our office had planned to hire3 an in-house graphic designer who would be4 able to save the City significant money5 by providing graphic design support to6 all City departments. 21 Annually, we receive more than22 3,000 requests for documents and 4,00023 for gifts, including the ones provided24 for dignitaries. If Plan B occurs, we25 9 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 will have to revise the policy even more2 than we are currently to provide these3 services. 5 Thank you for the opportunity6 to testify before you. 8

Thank9 you very much.10 The Chair recognizes Councilman11 Jones.12

Thank you,13 Madam President.14 Good morning, Miss Johnson.15 How are you this year?16

I'm doing well.17 Thank you, Councilman.18

Good, good,19 good.20 I wanted to just take a moment21 to thank you, and I didn't see it in your22 testimony or hear it, but you, based on23 the budget and based on the recession,24 have probably been besieged with a number25 10 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 of additional expenses by way of parades2 and requests for assistance.3 I would also say that we4 probably, in this city, came a lot closer5 to cancelling worthwhile events than we6 care to know in the public but, but for7 your work, along with the Managing8 Director's Office along and others that9 formed ad hoc teams that individually10 saved these events.11 And I wanted to recognize also12 Congressman Brady, who most recently13 saved the Bike Race in the City of14 Philadelphia by bringing new sponsors to15 the table.16 Could you elaborate on what the17 behind-the-scenes efforts have been to18 save parades from the Bike Race to the19 Mummers to the Marathon to the Greek20 Parade to the Hispanic Parade that we21 have, ethnic parades, that we have around22 the City and what went into that effort23 to save them?24

Certainly.25 11 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 There's a task force of different2 departments that have something to do3 with special events throughout the City,4 and that task force meets individually5 with the organizers of the different6 events so that we can look at exactly7 what they need, what their services are.8 None of these events in the9 past have ever paid for City services.10 So we absolutely understand from the11 beginning that it's kind of a sticker12 shock for them when they see a bill that13 they've never seen before. So we try to14 work with them to produce an event that15 still gives them what they want but16 provides them with a lower cost as much17 as we can without messing up safety.18 So that's basically what we do.19 We sit down and we talk to them. And all20 of the departments, from the MDO's Office21 to Fairmount Park, just try and work with22 them to come up with a good plan that23 helps everyone.24

So what we25 12 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 do now versus what we used to do before2 we kind of did this service, whether it3 was Police, Fire, Sanitation, cleaning up4 after a parade almost gratis for the most5 part, and now we're itemizing each one of6 those expenses and kind of presenting7 them with a bill in order for them to8 understand what it costs us to provide9 it.10 Now, granted, we get in return11 positive public relations. I can't12 imagine what 4th of July does for the13 image of the City, but we also get hotel14 nights' tax that we get from that, so we15 have to kind of balance that out in a16 mathematical way to make sure that we're17 getting the proper return on our18 investment.19

Absolutely.20 Because of the current budget problems21 that we have, we've worked, as I said,22 with the different individual organizers23 of different events -- the Bike Race24 being one of them, as well as the St.25 13 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 Patrick's Day Parade was one of the2 first, the Mummers -- to try and figure3 out exactly we can still make these4 events happen because they're such a core5 part of Philadelphia.6 And Welcome America, it's7 little different. That's an event that8 we produce from my office, and we try to9 come up with different marketing ideas10 and figure out more sponsorship.11 And also, last year, when we12 first did it, we -- the total of the cost13 of producing that event was about14 3 million. We cut a million dollars from15 that budget to bring it in at about16 2.1 million. This year, we're trying to17 do the same. We've made some really good18 changes that help in cutting some costs.19 And we also came up with a marketing plan20 for the hotels that puts some money back21 into Welcome America and also gives them22 a opportunity to be promoted nationally.23 I'm not sure if you heard, but24 Channel 6 announced who our talent for25 14 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 the July 4th concert would be for this2 year, and that's Cheryl Crowe.3 (Timer bell rings.)4

Now, having5 said all of that, you know, the Dell6 isn't opening again this year.7

Yes.8

So we should9 anticipate from your shop a concert10 series? Or are we going to have to cut11 that?12

I believe that's13 going to be cut, Councilman.14

Okay.15 Finally, we, as "the Freshmen 15,"16 offered no swag, no kinds of gifts and17 stuff like that. But, however, under18 full disclosure, we had a group Chinese19 business people ready to relocate here,20 and your office was very helpful in21 making sure they understood that the City22 of Philadelphia, even though we were23 poor, somehow found a way to welcome24 them.25 15 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 And as a result of that, I want2 you to know that that small gesture meant3 so much that they are considering opening4 a plant here in the City of Philadelphia.5 So I just want to give and put6 into context that what the City Rep's7 Office does by the way of hospitality8 also sometimes every now and then results9 in new business coming to the City of10 Philadelphia, which means new tax11 ratables for the City. And I want to12 thank your office for cooperating with13 that.14 Also, the public relations that15 went into supporting the Senior16 Foreclosure Diversion Program that helps17 thousands of citizens take advantage of18 programs that are germane to them to keep19 them in their houses. And you don't get20 enough credit for your participation in21 that. And I wanted to thank you publicly22 for it, Miss Johnson.23

Thank you.24

Thank you,25 16 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 Madam Chair.2 COUNCIL PRESIDENT VERNA:3 You're welcome.4 The Chair recognizes5 Councilwoman Tasco.6

Thank you.7 I join in with my appreciation8 for the work that you do and as9 Councilman Jones has laid out and wish,10 you know, that you will continue. I know11 that you will continue to do what you do12 very well.13 On Page, I guess, 2 of your14 testimony, you talked about Plan B. You15 wanted to hire a graphic designer, a16 in-house graphic designer.17 Has there been any cost18 analysis to show that it's more19 cost-effective to bring that person20 in-house as opposed to hiring consultants21 or contracting that out, given the fact22 you have to have staffing for that23 position plus location and all of that24 cost.25 17 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1

We haven't done2 anything formally, but we pretty much3 know how much we spend when we use an4 outside vendor for graphic services.5

Mm-hmm.6

And those7 services -- even if we bring a graphic8 designer in, we would still need to do9 some outside but certainly not as much,10 but that graphic designer would be able11 to give more services to other City12 departments.13 We helped create the brochure14 that went out for the foreclosure15 program, and we worked with other16 departments to build up these collateral17 materials, but there's no formal cost18 analysis as to what could be saved at19 this time.20

Okay.21 Now, you said you have ten people on your22 staff now?23

We have seven,24 but there's also the Fund for25 18 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 Philadelphia, which is a part of my2 department, which adds three other3 people. There are three vacant4 positions, which brings it to ten.5 And also, we do the Welcome6 America and the Marathon, so they have7 staff which are consultants for8 part-time. Well, they're full-time, but9 only for a short period of time.10

So the11 Office of Cultural -- the Cultural12 Fund -- wait a minute. The Office of...13

The Office of14 Arts and Culture?15

Yeah, the16 Office of Arts and Culture and the17 Creative Economy, are you all located in18 the same facility?19

No. Their office20 is here, on the seventh floor.21

So why22 aren't you all sort of like together, in23 one location.24

That's the way it25 19 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 was set up when they set it up, my office2 being over in 1515 Arch. And when they3 hired someone for the Office of Arts and4 Culture, they're a part of the Mayor's5 Office, so they're located in this6 building.7

But do you8 work together on projects and events --9

We do --10

-- or just11 the planning for cultural events in the12 City?13

We haven't done14 anything formally. We do -- they have a15 monthly meeting where a member, one of my16 deputies, sits on that committee. And17 Gary and I, who run that department, we18 speak occasionally about some of the19 things that we're doing; for instance,20 something that we might be trying to21 create, a Mayor's Award for the Arts, and22 so forth.23 So we try to keep each other up24 to date on what's going on in each of our25 20 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 departments.2

Okay.3 Thank you very much.4

Thank you.5

Thank6 you.7 The Chair recognizes Councilman8 Green.9

Thank you,10 Madam Chair.11 I have a question that goes12 back to our Majority Leader's question13 about the graphic designer. Could you14 show me where in Class 200 for FY '0915 you're spending money on the graphic16 designer on outside services?17

Most of that18 money comes from the promotion and19 marketing, which was $175,000, which sits20 in the Fund for Philadelphia --21

Okay.22

-- which is the23 money for promotions and marketing for24 the City of Philadelphia.25 21 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1

Okay. So --2

And that's where3 that money is usually taken from when we4 decide to use it for graphic design.5

So how much6 of that Fund for Philadelphia money was7 used for graphic design?8

It depends,9 Councilman. We use some of that from --10

Well, so far11 this year, how much?12

I don't have an13 answer for your specifically.14

Okay. I15 note that you're lowering the Fund for16 Philadelphia by $27,500 yet you're hiring17 a graphic designer for $84,000, including18 fringe benefits.19

Actually, we20 haven't hired the graphic designer; it's21 a vacant position in my office. And22 since there's a freeze currently, I don't23 believe that we will be able to do that24 anytime soon.25 22 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1

Oh, I'm2 sorry. So --3

And we4 wouldn't --5

So if we6 took out the graphic designer from your7 budget, it would not impact your8 operations. In other words, you don't9 intend to hire it, so why would we fund10 it?11

I didn't say that12 we didn't intend to hire; I said that we13 have not been given permission to do that14 hire yet.15 As I said in the testimony, I16 believe that we could eventually save17 money if we had a graphic designer and18 didn't have to outsource. We work with a19 number of different agencies. We've been20 able to do some pro bono to get some of21 that work done.22 But we have someone that may be23 on retainer that we're spending money on24 for us to do this work if we had it25 23 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 in-house.2

You've3 issued RFPs for graphic design work?4

Yes.5

Do you know6 what you're paying on an hourly basis?7

Nothing from the8 General Fund. At the moment, we're9 paying a retainer of about $5,000 through10 the Marathon.11

Through12 the...?13

Philadelphia14 Marathon.15

I'm sorry.16 You just testified that it was being paid17 through the Fund for Philadelphia. I'm18 very confused.19

The Fund for20 Philadelphia runs the Philadelphia21 Marathon.22

Okay.23

And we pay money24 from the Philadelphia Marathon for a25 24 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 graphic design company, about $5,000 a2 month for a retainer.3

So that's a4 $5000-a-month retainer. Do we exceed the5 retainer in any month?6

Not usually, no.7 We try our very best to keep it under8 that. It's usually on a hourly basis so9 we'll know how many hours each month we10 have.11

Do you use12 all of the hours that you are billed for?13

Do we use -- yes,14 we do, because we use it not only for the15 marathon, but for other things, yes.16

Okay. Would17 you please provide all of the detail18 surrounding that contract, how much you19 spend, how much hours of service they20 provide at each month. And we'll take a21 look at that.22

Certainly.23 And so that you understand,24 Councilman, that's not General Fund money25 25 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 at all.2

But you --3 but a graphic designer on your staff4 would be General Fund money.5

Yes, it would.6

Okay.7 That's rather the point.8

And I'll9 certainly get that to you as soon as I10 can.11

Thank you.12

Point13 of information, please.14 Does the General Fund15 contribute anything for the Fund for16 Philadelphia?17

No.18

No19 City dollars go into that whatsoever?20

Only through when21 they get a grant. But, no, we don't --22 they're not City employees at all.23 There are three people that24 work in that office, but no City funds25 26 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 are used -- no general funds are used for2 the Fund for Philadelphia.3

Thank4 you.5 Go ahead, Councilman.6

Thank you.7 Could you please -- I happen8 to -- I have a lot of constituency that's9 very different, all the different ethnic10 parades, and they've dealt with your11 office along the lines that Councilman12 Jones has discussed.13 The estimates that were given14 to some of these parades, given their15 size and other things, are very large.16 It's hard to see how they can continue17 traditions that have sometimes gone back,18 you know, over a hundred years.19 Could you please, for each20 parade that's happened so far this year,21 provide the original amount requested and22 the detail that would back that up in23 terms of the number of police, the24 sanitation workers, et cetera.25 27 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 Then provide the amount that2 was actually agreed to, the specific3 number of police, sanitation, and other4 that were committed to be on that event5 that went into that calculation.6 And then the actual number of7 police, sanitation workers, others that8 were at that event and whether or not9 they were on overtime or on straight time10 when they attended the event.11 Because I think our goal here12 is to recover our costs. And based on13 the count of police officers I saw at the14 St. Patrick's Day parade, they were being15 charged for far more police officers than16 were actually present on the street.17 So I'm very interested in the18 detail of how you do these calculations,19 and I want to make sure that we get some20 reimbursement, but I also don't think we21 should be trying to make a profit off of22 these different activities.23

Certainly.24

Thank you.25 28 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 You discuss the Infrastructure2 Enhancement Program. Can you describe3 what this is.4

We work with a5 number of different organizations. The6 budget for the promotion and marketing in7 the City of Philadelphia doesn't allow us8 to do a whole lot, so we work with9 outside organizations such as PCVB,10 GPTMC, Center City District.11 (Timer bell rings.)12

All of these13 organizations -- and Greater Select14 Philadelphia -- that basically promote15 the City of Philadelphia.16 And there is a core group that17 has a monthly, sometimes more, meeting to18 determine exactly how they're marketing19 so that the City has a say and the City20 has a place so that we can help with the21 marketing with the little resources that22 we do have.23 So that's basically what that24 means.25 29 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1

Okay. So it2 meets monthly. Are minutes kept of those3 meetings?4

No.5

Can you6 describe any particular changes that were7 made to GPTMC or Center City District or8 Pennsylvania Conventioneers Visitors9 Bureau that -- in their marketing efforts10 that were a result of your meeting with11 those offices?12

They had a --13 GPTMC put together a committee from14 outside organizations, including our15 office, to talk about the new program16 that they're getting ready to launch, I17 believe, actually tomorrow. And everyone18 there sat down and looked at a number of19 different -- a number of different20 programs to determine which department21 and which -- which program would be used22 for the promotion of Philadelphia through23 their summer program.24 So that's something that has25 30 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 happened. And the Mayor is actually2 going to be a part of that as well.3 So our presence allowed us to4 have a say as to what the program that5 they would use for their marketing6 efforts were for this year.7

Who in your8 office is responsible for liaising with9 these organizations about what really are10 Philadelphia tax dollars being spent with11 respect to GPTMC and others --12

It depends.13

-- on14 marketing.15

All of us, all of16 us. We all sit on different committees.17 We all interact with the different18 organizations.19 I have a deputy who basically20 does all marketing and public relations,21 and she sits on a lot of those22 committees, as do I and as do the other23 deputy who does logistics for events. So24 we all are basically --25 31 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1

Who's in2 charge of that activity?3

That would be me.4

You, okay.5 Do you have a chart -- please6 provide a chart to the Chair that shows7 the different boards your people sit on,8 what those boards do, and the activities9 of those boards.10 That's the end of my time,11 Madam President.12

Thank13 you.14 The Chair recognizes Councilman15 Blackwell.16

Thank17 you, Madam President.18 I am hopeful that, given all of19 these cuts, that many of the programs we20 enjoy will survive.21 We do want to thank the City22 Rep and her deputy for helping us with23 our myriad programs we have and24 especially for people who come out of the25 32 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 City, state, and country.2 Thank you very much.3

Thank you,4 Councilwoman.5

The6 Chair recognizes Councilman Green.7

Thank you,8 Madam President.9 You also testified that the10 duties of the Office of the City11 Representative include handling12 marketing, promotions, and branding13 internally and externally. The proposed14 FY '10 budget includes 3 million in15 strategic marketing fees as to the FY '0916 budget.17 Is this -- could you describe18 what strategic marketing fees are and --19

I'm sorry. Where20 are you reading from, Councilman?21

Well, in22 your testimony, you stated that you were23 in charge of handling marketing24 promotions and branding internally and25 33 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 externally. In the budget, there are 32 million that we should receive for3 strategic marketing fees?4

In the budget,5 you said, that there's 3 million for6 marketing fees?7

Strategic8 marketing fees, revenue we should receive9 as a city. And I'm wondering what10 involvement you have in that, if any.11

Are you talking12 about the Cultural Fund, the 3.7 million13 for that?14

No. It's on15 the MDO's budget. It's on of the16 budget detail.17

I don't believe18 that's in my budget, Councilman.19

No, but it's20 marketing, and it's a revenue side item.21 It's not in your budget.22 I'm asking what your -- you're23 supposed to be handling marketing,24 promotions and branding internally and25 34 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 externally, and I'm wondering what2 connection, relationship you've had with3 respect to that $3 million.4

I don't know that5 $3 million because it's not in my budget.6

Okay. So7 the MDO's Office hasn't involved you in8 the strategic marketing that they're9 under -- revenue ideas that they're10 undertaking.11

There is a12 connection between my office and the13 MDO's Office for Special Events. I'm14 also involved with the MDO's Office in15 terms of a RFP that we're putting out to16 look at what the City may offer in terms17 of promotion of our assets; for instance18 Dilworth Plaza, courtyard, how we can19 look at those as an ability for us to20 promote that but also market it and make21 revenue from it, if that answers your22 question.23 But as far as $3 million, it's24 not in my budget so I'm not aware of what25 35 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 that is. If that's specifically for2 marketing out of MDO's Office, then yes,3 I am still a part of the MDO's Office; we4 do work together on those two things that5 I just told you.6

Okay. So I7 think this is probably street furniture8 and other things.9

Okay.10

Are you11 involved in that?12

I am not, no.13

Okay. Well,14 those are all of my questions. I have a15 few more questions; I'll submit them in16 writing to you so that we don't take more17 time on this.18 But I just want to say that I19 think your office does a terrific job.20 Part of our job here is to try to find21 savings and money.22

Absolutely.23

I think,24 through your testimony, we found at least25 36 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 $84,000.2

No, my graphic3 designer.4

That's it.5

Yeah. (Laughs.)6

And I7 appreciate the work that you and your8 team does for the City of Philadelphia.9 You represent us very well. And, you10 know, it's nice to see you here today.11 Thank you.12

Thank you,13 Councilwoman.14

Thank15 you.16 The Chair recognizes Councilman17 Jones.18

Just a point19 of information. How many events did you20 have last year?21

Wow. I don't22 know. Probably over 20.23

Have you had24 any major --25 37 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1

Plus the2 Phillies.3

Which was4 probably a record-setting parade.5

Oh, yes.6

Foe pass in7 any of those events.8

I think we9 produced them very well and most people10 were satisfied.11

Thank you12 very much just for the record.13

Are14 there any other questions from members of15 the committee?16 (No further questions.)17

Thank18 you very much.19

Thank you,20 Councilwoman.21

Thank22 you.23 MR. McPHERSON: The next24 department is the Commerce Department.25 38 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 (Witnesses come forward.)2

Good3 morning. Please identify yourself for4 the record.5

Good morning. 8 Good morning. My name's Andy9 Altman. I'm the Deputy Mayor for10 Planning and Economic Development and the11 Director of Commerce. 20 Good morning, President Verna21 and members of the City Council. I am22 here to present testimony on behalf of23 the Department of Commerce's FY '1024 operating budget request of $262,550,773,25 39 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 which is a net increase of $24,754,4482 over FY '09 obligations. 11 And $164,576,000 to the12 Aviation Fund. 5 million to the General23 Fund. Of this, 25 million is the24 Convention Center lease service fee,25 40 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 which represents an increase of2 $2,347,478 over FY '09. The remaining3 $3,553,000 is a $209,000 decrease over4 '09. 18 The Department of Commerce's19 mission is to create and retain jobs by20 fostering and improving the business21 climate, growing the City's business22 sector, while increasing population and23 enhancing the quality of life through24 sustainable development with the City of25 41 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 Philadelphia. All the work of the2 Department of Commerce takes place within3 the context of the Deputy Mayor's five4 economic development strategies:5 1. 7 2. 8 3. 11 4. 13 5. 20 In the rebalancing plan, the21 Department of Commerce had a reduction of22 10 employees as a result of the overall23 Department of Commerce reorganization, 824 were laid off, was transferred. And 125 42 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 resigned. 5 Notwithstanding the reduction6 to its workforce, Commerce has been able7 to carry out some important8 accomplishments in FY '09, which include,9 but are not limited to:10 Establishing the Office of11 Business Services and appointing Kevin12 Dow. 18 We are integrating the Office19 of Economic Opportunity, formerly the20 Minority Enterprise Council, and with the21 Office of Economic Opportunity now a part22 of Commerce, we can better implement the23 goals and objectives of the Economic24 Opportunity Cabinet, most notably25 43 5/4/09 COMM. 14 We've been supporting efforts15 to increase the educational attainment16 levels of our citizens through the work17 of Graduate! Philadelphia. 24 And, finally, we've been25 44 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 reorganizing the Penn's Landing2 Corporation into the Delaware River3 Waterfront Corporation, seating new board4 members, and making all board meetings5 open to the public. 11 FY '10 Budget Details in Plan12 A. 25 45 5/4/09 COMM. 6 And I just want to point out7 that the chart that we have submitted as8 a part of the testimony was our9 attempt -- 'cause we understand that the10 Commerce budget is often somewhat11 confusing 'cause we have, unlike other12 departments, so many different sources,13 and we wanted to put them in one place so14 you had the whole picture of sources for15 our staffing. 17 An analysis of the FY '1018 budget by classification shows an19 allocation $3,091,818 in Class 100, an20 increase of $1,065,000. The variance is21 a result of:22 The full FY '10 staffing costs23 attributed to the integration of the24 Office of Economic Opportunity, as they25 46 5/4/09 COMM. 10 Class 200 will be reduced by 2411 percent from FY '09 to $1,720,495. 18 Of particular note is the Class19 250 allocation that's provided through20 PIDC for the Department of Commerce21 business attraction and retention. 25 47 5/4/09 COMM. 4 Class 900 reflects a payment of5 $25 million in FY '10, consistent with6 the City's commitment to support the7 Pennsylvania Convention Center. 10 To improve operations, the11 Department of Commerce will seek to12 augment its services through13 integrational functions currently14 provided through the Philadelphia15 Commercial Development Corporation. 22 In so doing, Commerce will be23 able to eliminate redundant commercial24 corridor functions, refocus on core25 48 5/4/09 COMM. 8 Plan B.

If Plan B is9 implemented, it will result in an10 additional $794,405 in reductions to the11 Department's proposed FY '10 budget. 24 Reductions in Neighborhood and Business25 49 5/4/09 COMM. 11

Thank12 you.13 Mr. Altman, can you tell us the14 amount of unspent Stimulus Funds that15 PIDC has.16

Unspent. I would17 have to -- Council Chair, I'm looking18 now -- I would have to do an account --19 let me do a full accounting of that and20 submit that for the record for you.21

Thank22 you.23 While you're doing that, I24 would also like to have a detailed25 50 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 breakdown of the Stimulus Funds that the2 City has given to PIDC.3 I would further like a4 breakdown, to be by fiscal year, of the5 amount that was awarded, the project that6 it went towards, and the benefits the7 City received from the project.8 Any funds that PIDC still has9 under contract and the status as to10 whether it's been committed to a project.11 If so, what is the status of that12 project. And can the City cancel its13 commitment and the amount of uncommitted14 funds?15 I know that all of this16 information would be readily available to17 you, and I would appreciate it if we18 could receive that information by the19 close of today's business.20

I, um...21

You22 have all that information.23

I would have to24 work with PIDC to get the full accounting25 51 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 of all that. I would --2

Thank3 you. We would appreciate it if we could4 have it by the close of today's business.5 On -4 of your detail, it6 reflects a $580,966 increase for a7 consolidation of OEO. Can you explain8 the consolidation and what its funding9 level was in 2009?10

Yes. I'm sorry.11 Could you just repeat the page,12 Chairwoman? I'm sorry.13

19-4.14

19-4. I'm just15 finding it in the book. Oh, here it is,16 Section 19-4. Got it.17 The $580,000 in total18 consolidation of OEO, which includes both19 Class 100 and Class 200, those are costs20 we are -- as you know, Chairwoman, we21 are -- the Office of Economic Opportunity22 is coming into the Department of23 Commerce. Now we are in the process of24 consolidating the staffing function into25 52 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 Commerce.2 Those funds are paying for --3 there's -- I think it's basic -- it's4 essentially sort of administrative costs.5 I mean, the overall OEO funding has6 actually been reduced over time in terms7 of the consolidation in terms of -- let8 me just point out.9 If you look at the chart in my10 testimony, it shows the... the original11 funding let me just go through just to12 show you quickly 'cause I think the13 chart -- that's why we tried to put this14 in a chart that would be helpful.15 In '09, the General Fund for16 the Office of Economic Opportunity was17 about $1 million and had about 18 staff18 and one vacancy. With the rebalancing,19 that number went to 842,748, which is 1620 staff. And the Office of Economic21 Opportunity in the '10 budget -- and,22 again, this is just for staffing23 levels -- would be $772,468 which is 1524 staff.25 53 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1

We're2 having a little difficulty in trying to3 figure this out.4

This is the5 staffing cost that was transferred to us6 estimated at mid-year of last year. And7 that has since, obviously then, been --8 that's the number that comes over to the9 Commerce Department in terms of staffing10 for our budget.11

Council President,12 Sade Olanipekun-Lewis. May I provide a13 little clarity?14 You were requesting the15 $530,000 on .16

Right.17

Okay. That18 $530,000 represented what was believed to19 be the staffing costs for OEO. We've20 estimated that the true staffing costs21 for the half-year was going to be22 something a little bit less than. And23 then we annualized that, which is where24 you have th 842 on the chart in the25 54 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 testimony, at 842,748.2 What we're trying to show in3 the chart is the full year of staff costs4 for OEO in FY '09, the rebalancing, and5 what we're projecting in FY '10, although6 the amount that was transferred to7 Commerce is an amount that's less than8 the annualized staffing cost as a result9 of it happening at mid-year.10 So those 530,000 -- the11 501,000, excuse me, that represents the12 Class 100 transfer was an estimated cost13 that was transferred to Commerce to cover14 staffing costs for OEO.15

You16 know, it's got me a little confused, and17 it doesn't take much to confuse me these18 days.19

No, it's the20 budget -- it's the --21

In22 FY '09, you had a staff of 16, with no23 vacancies, and the General Fund amount24 was 842,000, okay?25 55 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1

Mm-hmm.2

For3 '10, there's one less employee, and we4 have a staff of 15.5

Mm-hmm.6

That's right.7

With8 772,000.9

Yes.10

And I11 just don't understand that.12

Well, the13 reduction -- so, in terms of the number14 of the reduction, it goes from -- so, as15 you said, in '09, with the rebalancing,16 you had 842,000.17 Within '10 what we're18 projecting, what is in the budget, is19 772,000. So it reduces by one staff.20 There are also -- there are21 some costs in there of different, you22 know, different positions that have had,23 you know, step increases over time.24 There's an overall adjustment so that25 56 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 that number nets out. It is less and it2 does reflect a reduction of the, you3 know, 25, you know, close to $70,000.4 So that's a staff -- you know,5 it's a loss of a staff position. It's a6 staff position.7 And there's a little bit of an8 add back in. At the end of the day, it's9 $70,000 of the reduction.10

All11 right, thank you.12 On -4, you're requesting13 an increase of $751,000 in Class 100 in14 the Community Development Fund. Is this15 request for new hires or to transfer16 existing employees?17

Yeah, it's --18 it's -- it is a combination of both. The19 answer to it -- again I'd like to -- the20 way we tried to make some sense of21 this -- and I say that because we22 recognize that our budget is a bit23 confusing --24 COUNCIL PRESIDENT VERNA:25 57 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 Complex.2

-- because there3 are so many sources. And, in fact, when4 we went through this budget, you have to5 go through and say, Some are community6 development sources, some are General7 Fund sources, some are other sources --8

Right.9

-- hotel tax.10 Commerce has always had this myriad of --11 let me just refer, 'cause I think it will12 be helpful back to the chart, which we13 tried to do in our testimony to help make14 this as clear as possible.15 And just, Chairwoman, what I16 wanted to do -- the reason we did this17 chart, which may be a bit unusual in18 testimony --19 COUNCIL PRESIDENT VERNA:20 Mm-hmm.21

-- is to22 recognize, when you go through the23 budget, as you're doing, the line by24 line --25 58 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1

Right.2

You have to kind3 of put together and say, What is the4 picture of what Commerce is? So here's5 the story in a nutshell.6 If you see on the chart, FY '097 rebalancing, CDBG goes from Community8 Development Block Grant, goes from9 287,245; and then in '10, 1,038,416.10 That's the difference you're talking11 about is, what is that increase and how12 is it reflected in our budget?13 At the end, because we are14 doing consolidations here, at the end of15 the day, we will have 50 positions in16 Commerce that will be funded from General17 Fund, Community Block Grant, or other.18 So you see that it's, at the end, a net19 increase of 1.20 So the answer to your question21 is: There may be some new hires in the22 consolidation, there may be some23 reductions in the consolidation, but the24 net of the addition of the money is not25 59 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 all new staff, because what's happening2 is, as you can see in the chart, Block3 Grant dollars go up, but other sources4 are reduced.5 And that's the balancing.6 Essentially, Block Grant money will be7 paid for different staffing that are8 Block Grant-eligible.9

Thank10 you.11 I have one last question.12 There may be more, and I see that a13 number of Councilmembers want to be14 recognized.15 However, on -5, you show16 an increase of $5,250,000 in Classes 30017 and 400 for Environmental Initiatives.18 Can you explain what this is and where19 these funds are budgeted?20

I believe...21

What page? I'm22 sorry.23

19-5.24

That's Aviation.25 60 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1

I'm just looking,2 Councilwoman, I'm sorry. It may be in --3 I'm -- I'm -- it may be in Aviation.4 I'm just checking 'cause in my5 Commerce budget detail, I don't have6 that, which means I may have taken that7 out because Aviation was going to testify8 to that.9 Let me come back to that. I'm10 happy to -- if you have it, I'm happy to11 look at it.12 Yeah, Councilmember, this is in13 Aviation, which will be testifying later.14 It used to be within Commerce. Aviation15 is no longer within Commerce anymore.16

Okay.17 The Chair recognizes Councilman Goode.18

Thank you,19 Madam President.20 Good morning, Mr. Altman.21

Good morning.22

I actually23 have questions for the Office of Economic24 Opportunity, but before they come25 61 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 forward, could you give me a brief update2 on the Loan Guarantee Program and the new3 Job Creation Tax Credit?4

Yes. Thank you,5 Councilmember.6 On the Loan Guarantee Program,7 as you know, we are very happy to report8 progress on that. As you know, thanks to9 the legislation that you sponsored and10 your, I think, vigilance in seeing that11 program get up and running last week, we12 announced with you and with two banks in13 Philadelphia, Valley Green and United,14 that there will be a launch of that15 program.16 And with the Industrial17 Development Corporation, we'll be18 investing about a million dollars of its19 funds in that program, which we think20 will leverage dollar-for-dollar21 small-business lending. The two banks22 were doing that as a demonstration23 project to be able to provide access to24 capital to small businesses.25 62 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 So what this will allow -- and2 we think this is a really exciting3 initiative -- is banks to take a bit more4 risk to reach a group of businesses in5 our neighborhoods that may have been on6 the margin, that need a little bit more7 assistance, but are viable businesses,8 and to reach them. And we hope that,9 should that be successful, we'll be able10 to expand that.11 So I do acknowledge that you12 were -- a year ago, that was one of the13 items you put on our agenda, and we're14 very happy that it's worked out. We15 would obviously love the larger banks to16 participate, and we hope by demonstrating17 success with the smaller banks that it18 will build momentum.19 In terms of the Job Creation20 Tax Credit, the Finance Office has just21 completed -- they had committed to22 complete their analysis of the current23 program. They have had the Wharton24 School, through Robert Inman, doing an25 63 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 analysis of actual users of the program2 to learn about where the defects are,3 where it has been effective, and how many4 jobs really have been created as a result5 of the program, sort of the "but-for"6 test. And they have literally just7 completed that.8 And we would like to sit down9 with you and go over it. I think they10 just delivered the results last week. I11 think it will be a foundation for us12 to -- at the hearing that you had on this13 and your proposed modifications to it,14 for us to sit down and, I think, design a15 more effective program within the next16 two to three weeks.17

Okay. I'd18 like to do that as soon as possible.19

Yeah.20

In terms of21 the Office of Economic Opportunity, I22 have a question about departmental23 goal-setting. I don't know who would24 want to take that question.25 64 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1

I'll take it.2

Okay.3 During the course of budget hearings for4 each department, there's been an issue,5 which, I'm sure, Councilwoman Brown is6 going to follow up on with regard to7 departmental goal-setting, but one of the8 original problems we had when we did the9 Charter change and called for an annual10 disparity study and then participating11 goals on an annual basis was that the12 first set of annual participation goals13 that were set were not actually based14 upon the disparity study, and that was an15 issue with how MBEC set participation16 goals.17 We resolved that issue18 somewhat, and we actually asked the19 consultant who conducted the disparity20 study to make recommendations on21 participation goals, which happened in22 terms of the overall goals.23 But the issue is, the24 participation goals set on an annual25 65 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 basis per the Charter mandate, do they2 actually correspond to the departmental3 goal- setting? because they don't seem4 to.5

Well, we -- my name6 is Kevin Dow. I'm the Deputy Commerce7 Director for Neighborhood and Business8 Services.9 And the disparity goals that10 you're referring to, an eConsult study,11 and whether or not they line up to the12 Charter; is that what your question is?13

Whether the14 overall disparity goals set for15 disadvantaged businesses, minority16 business, for women businesses or City17 goals, whether they actually line up and18 correspond to departmental goal-setting.19

Mm-hmm, mm-hmm. The20 candid answer is that we have not done a21 good job on that in the years past. And22 for '08 into '09 for this current year,23 we and MBEC, now OEO, established those24 goals based on historical information and25 66 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 attainment levels.2 So we took the '08 numbers into3 '09, and that's the goals that we have4 established for that year.5

So the6 departmental goal-setting was simply7 based upon what happened before, and they8 were not necessarily accurate.9

Well, the accuracy10 was reflected in the Fiscal Year '0811 numbers, so I would say that there was12 conversations that took place, and MBEC13 worked with those departments in '08. We14 did not do that going into '09. And so,15 what we took was the numbers from '08 to16 '09.17 So I would say that the18 accuracy that was there for '08 was what19 we have.20

Let me give21 you a glaring example of it.22 Under your departmental23 testimony, it says that the Commerce24 Department itself did zero percent25 67 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 because it did no contracting; is that2 true?3

Which department?4

Commerce.5

The Commerce6 Department.7

Oh, Commerce. Yes,8 I'm sorry, I didn't hear you.9 I'm looking for my chart here.10 Yes, that is correct. And the reason why11 we had zero participation --12 (Timer bell rings.)13

-- was because we14 track only for-profit contracts and --15

But what16 were the goals --17

And --18

But what19 were to goals set for the Commerce20 Department?21

42.22

42, 42 percent.23

So how can24 the goals be set for 42 percent and then25 68 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 there be zero percent participation?2

Because in previous3 years -- because in '08 and previous4 years '07 and further back, we had levels5 of participation at that level. And so,6 it was carried forward because there was7 no strong conversation between8 departments and MBEC in this year, and so9 we just carried it forward.10

I'll come11 back. I don't believe you've ever12 achieved 42 percent. I don't believe a13 42 percent goal was ever real, and this14 is a very serious issue with regard to15 departmental goal-setting.16

Sure, sure.17

Okay. Thank18 you.19 Thank you, Madam Chair.20 COUNCIL PRESIDENT VERNA:21 You're welcome.22 The Chair recognizes Councilman23 Rizzo.24

Thank you,25 69 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 Madam Chair.2 Good morning. I'd like to get3 started by letting you know how much I4 appreciate in the last year the numerous5 occasions I've had to interact with your6 team, with your organization. It's been7 really a good experience, they're very8 quick to respond, and so I just wanted9 you to know that.10 Also, you alluded to the Penn's11 Landing Corporation, the new organization12 down there. Similarly, I've had a really13 good experience with Joe Brooks and the14 people down there. So anytime there's15 issues in the near community, problems16 that exist with concerts, et cetera, that17 organization has also been very18 responsive.19 The couple of questions that I20 have is, do we have an inventory -- based21 on our financial condition right now, do22 we have an inventory of available land,23 excluding Fairmount Park land, that we24 should really start to get serious and25 70 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 dispose of to fill up the General Fund2 with some of that money?3 Do we know -- do we have a list4 of all of this real estate that the City5 has clear title to?6 Because I've had so many people7 tell me that they have tried to buy the8 little lot next door to them that is9 owned by the City. We're not -- in this10 day and age, I don't think we should be11 investors of real estate. And so, where12 it's appropriate, where it fits into the13 community design, I think we should start14 putting some of this stuff up for sale.15

Yeah. And the16 answer, Councilmember, is that that is17 coming together. There have been --18 there are number of different sources --19 I guess two really principal sources of20 where land is held -- I mean -- let me21 say three.22 I mean, one is the RDA clearly.23 The second is Public Property, and then24 PIDC has some industrial parcels25 71 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 remaining.2 We are -- we do have a merged3 list now of those properties that's being4 worked on between RDA and Public5 Property. The question of clear title6 may be always a little more complicated7 as we go through that list to see what8 other liens or anything's on that, but I9 think we're getting a good handle.10 I couldn't give you that number11 today of how many parcels, but I could12 get back to you and tell you.13

I think14 that's an important question.15

Yeah.16

Because many17 people, especially people trying to buy18 some land in their neighborhood, the19 prices have gotten so expensive that20 they're backing away from it, and I think21 that we've got to get real, got to get22 realistic on what some of this is worth,23 because I'd rather have someone buy it24 that's going to protect it, take care of25 72 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 it, develop it maybe some time in the2 future.3 But some of the numbers that4 people are telling me that we're asking5 for this property -- I guess RDA -- it's6 out of reach. And guess what? It just7 becomes another dirty piece of property8 in the community because many of those9 folks have basically given up.10

Understood, yes.11 I agree.12

Let me see.13 And I did say excluding Fairmount Park;14 I'm not in favor of starting to --15

Yeah, 9,000 acres,16 I don't think we'll probably want to17 touch that.18

Realistic,19 there has been some noncontiguous land20 that the Fairmount Park has sold in21 recent years, that the Fairmount Park22 said it doesn't serve us any use, because23 it's not connected to our acreage. And24 they have on occasion, I understand,25 73 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 disposed of some land.2 But how can we get a real feel3 for what we have? Are you able4 eventually to -- and, again, I don't want5 to burden you with a lot of requests that6 take a lot of time, but I think it's7 important to know what is available8 because we, as members of City Council,9 run into people all the time that are10 interested, but they feel as though it's11 really a tough approach --12

I agree.13

-- trying to14 buy something that they understand that15 the City of Philadelphia owns.16

We can make the --17 it is a bit of a work in progress, but18 are -- we do have a consolidated list of19 public property and RDA, and RDA is sort20 of leading the charge and putting21 together a land disposition policy and22 looking at all of our vacant property23 right now but -- so we'd be happy to -- I24 can provide you with what we have.25 74 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1

I think it2 would be interesting.3

Yeah.4

Point of5 information.6

The7 Chair recognizes Councilman Green for a8 point of information.9

Thank you,10 Madam Chair.11 I guess it's still "good12 morning," Mr. Altman.13 If you could please provide to14 the Chair just a data merge of all of the15 properties that you say that you have now16 compiled in one list with the BRT17 full-value estimates of those properties.18 We've asked many times -- you19 know, a question that's been asked of20 every department that's sort of under21 your jurisdiction that's been here is:22 What are these values worth? what are the23 properties worth? You know, let's start24 selling them, let's see what they're25 75 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 worth.2 And the answer we've gotten is,3 "We don't know what they're worth. We4 don't do" --5

Right.6

Basically,7 we haven't done appraisals on all 5500.8

That's right.9

But, lucky10 for us, the BRT just did, and they have11 an estimate of full value -- of what they12 would be worth at full value.13 And so, if we could get that14 data merge to the Chair as quickly as15 possible. I'm sure the Department of16 Technology can handle it; if they can't,17 I'm happy to consult.18

Thank you,19 Madam Chair.20 So, again, thank you. You have21 a lot on your plate, and I appreciate22 always the relationship my office has23 with yours.24

Thank you.25 76 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1

Thank you.2

Thank3 you.4 The Chair recognizes Councilman5 Jones.6

Thank you,7 Madam President.8 And good -- is it still9 morning? Good morning.10 A couple of questions. One,11 what is the current CDBG allocation to12 the City of Philadelphia?13

The total?14

Yes.15

I don't have the16 exact number. I want to say it's...17

And Part 218 to that question -- because I've learned19 how to work these questions and not wait20 for your answers but keep asking21 questions.22 The Part 2 of that is: What23 percentage of that CDBG allocation goes24 to economic development?25 77 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1

Yeah, I would have2 to get you the precise numbers. I want3 to say it's about 60-ish million dollars4 allocation per year and per the5 consolidated plan. And I'll get you a6 breakdown of that.7

And8 historically, it's been about 79 percent --10

Yeah.11

-- dedicated12 out of that total to economic13 development. So if that's wrong correct14 me, but that's been the historical norm.15 I want to thank you, first of16 all, because I wrote questions to you as17 follow-ups last year, and I actually did18 get responses to them, which is a good19 thing, because it makes these sessions go20 much better.21 And in one of the responses, I22 want to put on the record is that out23 of -- I asked a question of how many24 recognized commercial corridors that were25 78 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 in the City of Philadelphia, and the2 answer, according to the Planning3 Commission, is 265, for which about4 $5 billion in tax revenue or economic5 development revenue in general is6 generated, of which that total, 187 of7 those corridors are basically8 neighborhood corridors, which leads me to9 my question.10 What is our strategy for11 neighborhood economic development in12 coordination with EOC? And I want to13 kind of get a sense of where we're going14 on the record 'cause I kind of have a15 sense of it, but I want to hear it on the16 record, I want to hear the rationale.17 Because all of my colleagues18 here, including the at-large ones,19 represent these commercial corridors.20 And it's important to us. We get more21 comments and criticisms and concerns22 about neighborhood corridors, although we23 are responsible for the entire city, but24 we get more responses to that.25 79 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 So I want to know what the2 strategy basically is to deal with those3 issues.4

Sure. Thank you,5 Councilmember.6 Let me just give you not a very7 long answer 'cause we've had many8 discussions, but --9

Your answer10 can take as long as it wants.11

Oh, okay.12 First of all, let me say that13 one of the things that we are very much14 looking forward to over the next, I would15 say, six or seven months is that we still16 have remaining and allocated -- I want to17 say of the Cultural and Commercial18 Corridor bond money, probably over19 $30-some million that will be going out20 to commercial corridors throughout the21 City to complete that bond issue and22 those are all streetscape improvements,23 façade improvements, you know, working24 with the Councilmembers in each of their25 80 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 districts.2 And, you know, we've sat down3 over the past month to go through where4 we are. And I think we feel pretty5 confident that we're on track. Those6 have to be spent pursuant to the bond7 requirements, and I think we're on track8 to do that in large part.9 So I would say that over the10 next -- as I said, you know, that's a11 short term in terms of where a lot of our12 focus and energy is on the commercial13 corridors is to make sure that those14 funds are spent, they're spent well on15 those projects, and that those dollars16 are hitting the street.17 And we're working, as you know,18 with community development organizations19 everywhere, from Girard Avenue to Ogontz20 to Frankford to Lansdowne across the21 City.22 In a bigger-picture sense, I23 mean, what we're trying to do, in looking24 at where Commerce is going and in25 81 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 bringing together in Commerce different2 elements of what we think really promotes3 neighborhood economic development, and,4 obviously then, commercial corridors.5 So Commerce, the Office of6 Economic Opportunity and PCDC, the7 Commercial Development Corporation, we8 see as really three very critical9 entities. And the coming together of10 those entities, what we believe it will11 allow us to do is to have a very12 integrated approach to neighborhood13 economic development.14 So what do I mean be that? It15 means that we want to move with a couple16 of things. One, that it's clear that17 Commerce would be -- I don't want to --18 "one-stop shop" is so overused, but a19 point of contact where you could say, if20 I'm interested in small business21 development in the City, who do I call?22 Councilmember Clarke has asked this in23 some of our hearings before.24 There are lofts organizations25 82 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 in the City, it's been very fragmented2 for lots of different reasons. Without3 anything negative about any organization,4 who do I call? So the point of entry5 and, this past year, bringing Kevin Dow6 on board to be that single point of7 contact.8 Now, once you're in the system,9 what are we trying to do? One, we want10 to connect contracting and opportunities.11 So having the Office of Economic12 Opportunity be not only a --13 (Timer bell rings.)14

-- regulatory15 body, where, clearly, you have issues,16 which I know we're going to discuss, but17 --18

Uh, hold --19

You said I could20 take as long as I wanted but --21

No, no, you22 could take as long as you want.23

I'll just take24 another minutes.25 83 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1

Charlie2 McPherson is wicked with that bell, and I3 just wanted to have you, in your answer,4 speak specifically to a growth process --5

Yes.6

-- of a firm7 that comes in in one form in PCDC. How8 do they mature, what kind of TA, what9 kind of contract opportunities, a10 holistic treatment, if you would --11

Right.12

-- of a13 small business.14

Right.15

-- and how16 are they going to receive that --17

Sure.18

-- is, I19 guess, kind of my --20 (Indiscernible; parties talking21 over each other.)22

I'll finish this23 really quickly just so everyone has a24 picture 'cause the answer is reflected in25 84 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 what we're trying to do in this budget,2 which is to say, Okay, you have basically3 these three legs. You've got the4 one-stop, you know, Commerce. We have5 OEO, as part of Commerce, which we want6 to move to connecting contracting7 opportunities, supporting small8 businesses in those contracting9 opportunities, and clearly, which is the10 discussion we're going to have, being11 better about setting goals and targets12 and being aggressive and having a system13 that has had many problems in the past,14 that we want to fix.15 But the goal by having it in16 Commerce is not just how we say, What is17 your goal? X-percent, but how do we help18 you get there?19 So the technical assistance and20 the support, and that's where also the21 PCDC comes in terms of integration with22 Commerce 'cause the small-business23 technical assistance helping you, whether24 it's how to grow your business, how to25 85 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 take advantage of the contracting2 opportunity.3 So all those services could be4 available in one place for a small5 business in the City. And so, if you're6 a small business that comes in the door7 and you say, "I want to grow," we would8 then be able to offer you, I would say, a9 set of services okay?10 So things like what11 Councilmember Goode mentioned before:12 What are the loan products that we might13 have available? Do we need to refer them14 for the Small Business Loan Guarantee15 Program? Okay, we have a place to go,16 PIDC and two banks. Maybe that's a17 possibility.18 Do I actually have financing19 lined up but I'm missing a gap? We have20 a gap financing product, which we put21 out, and we hope to do another round.22 Do I need help with licenses,23 getting through L&I? Okay, the business24 team, under Kevin, helps you work through25 86 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 that process, get you to L&I or Planning2 or whatever it may be, to help you grow.3 Or I'm looking for4 opportunities, contracting opportunities.5 Great, we have the Office of Economic6 Opportunity, here's what we believe the7 contracting opportunities are in the next8 year, here's how you can access to it.9 If it's an issue of10 certification, if it's an issue of11 technical assistance, an issue of growth,12 we can help them.13 So the idea is, whether it's14 help in financial products, whether it's15 help with technical assistance, whether16 it's help with permitting and regulations17 or access to capital and access to18 opportunities, there's a place where you19 enter the system and we help you in20 whatever your needs are.21 And that's, at the end of the22 day, what we're trying to achieve by23 taking the different entities and pulling24 us all together into one operating25 87 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 function.2

I can see3 you're trying to break down silos that4 may have traditionally been there. The5 key of it is how we track that.6 And are you prepared to say7 today that -- I will hold you accountable8 tomorrow -- that we're going to increase9 productivity?10

Yes.11

Are you12 prepared to --13

Yes.14

By how much?15

I'm looking at16 Kevin Dow, because I, then, of course,17 hold him accountable and you hold me18 accountable.19 (Laughter.)20

We do think we can21 increase efficiency -- "efficiency" is22 not the right term. Volume of the23 activity. We hope that we can get24 through another 15 to 20 percent in25 88 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 volume in terms of increasing, you know,2 small-business activity. I can't say --3 you know, 'cause many businesses close,4 many businesses open, but I think in5 terms of the overall, you know, volume of6 activity, of working with small7 businesses, I think we can ramp up that8 number, and we're prepared to do that.9

All right.10 I'm going to quantify that with this:11 That you will provide to the Chair, the12 President, and members of Council what we13 did by way of gross net volume of PIDC,14 PCDC, what our contract attainment was15 for MBEC -- EOC, and then be able to say16 that this time next year, quantifiable,17 we will have 15 to 20 percent more18 overall?19

That's our hope.20

Is that a21 "yes"?22

That's our hope.23

Stenographer24 , underline that, please.25 89 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1

That's our hope.2

Let me help my boss3 and clarify that it's over a two-year4 period 'cause we realize that we have to5 ramp up, we have to get the structure in6 place.7

That's true.8

And then over that --9 from this point on, which would be 7-1 to10 two years, we would be able to achieve11 that goal, so it's not in one, absolute12 one year; it's over a two-year period.13

So we should14 see, on average, a 7 percent increase15 next year to get to the 15 to 20.16

Well, I see -- I17 look at it this way, which is that in the18 next year, we have a lot of work to do19 organizationally. I mean, to -- in20 fairness, I think that, you know, there's21 work of integrating these organizations22 and creating the system.23 We're doing a lot of things24 right now. We're creating a website for25 90 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 business. We're consolidating functions.2 Yes, we would love to do that,3 but I think Kevin is right that we see4 that the next year is a ramping-up, and5 the following year, you'll see a real6 increase.7

The bottom8 line for me -- and I'll pass the mic --9 is that I understand that the Center City10 skyline is important, but there is more11 constituent involvement in my commercial12 corridors. And I never want to see the13 tail wag the dog, if you would, by way of14 that balance that has to be maintained by15 your office and then through the various16 support agencies that do that.17 And each year, I'm going to18 look to that kind of growth from a small-19 business perspective, because that's20 who's really paying the bucket of taxes21 for America and for the city in22 particular.23

And I would just24 comment on that --25 91 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1

Thank you,2 Madam Chair. I saw you getting ready to3 tell me "enough."4

I5 was.6 (Laughter.)7

I'm8 beginning to anticipate.9 COUNCIL PRESIDENT VERNA:10 You're reading my mind now, huh?11 The Chair recognizes Councilman12 Green.13

Thank you,14 Madam Chair.15 My questions, Mr. Altman,16 should not come as a surprise to you. If17 you could -- I've provided many of them18 in advance so that we could try to get19 some answers.20 Could you please provide21 details, including class amount and22 budget detail, in which the savings23 appear about -- savings that will follow24 from bringing PCDC functions within the25 92 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 Commerce Department and PIDC?2

You -- I'm sorry,3 Councilmember. You would like us to4 submit that, or do you want me to answer5 --6

Well, do you7 have -- I mean, if you --8

I can get back to9 you, I can provide that.10

Okay. The11 key question related to, I think, the12 Council President's questions about13 savings and other things, and if you look14 at the chart in your testimony, and you15 go down 14 positions and that the16 spending only goes down by $350,000.17 So basically, if you look at18 Class 100 salary spending and staffing19 levels for the balance of FY '09 and20 through FY '10, can you provide the Chair21 a detailed breakdown of what the Commerce22 Department actually expects to spend in23 Class 100 spending only -- that is, only24 line 1 on of the budget detail in25 93 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 FY '09.2 And descriptions of any3 positions that are currently vacant in4 the Department, the number of positions5 the department plans to have filled by6 the end of FY '09, and the projected7 Class 100 salary only spend for FY '098 based on current staffing levels as of9 May 1, 2009.10 And if you don't have that, we11 have that in writing for you.12

I'd be happy to13 (indiscernible).14

Okay. On15 of the budget detail for the16 Commerce Department, it indicates 2217 people in the Department, 11 on the18 General Fund, and 11 on the Community19 Development Fund. Your written testimony20 indicates that the requested FY '1021 appropriations will fund a total of 6622 positions.23 And when we met with you the24 week before last, I think you said that25 94 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 Commerce had approximately 42 staff2 members, with 19 from the General Fund.3 So I'm still trying to get a handle on4 how much staff Commerce has, their job5 duties and funding sources for their6 salaries.7 And I understand that this has8 to do with inherited staffing setups,9 reorganizations, et cetera, but for the10 sake of clarity, if you could provide a11 written chart, including:12 All Commerce Department staff13 and listings for each one, job title, job14 duties, departmental budgets funded from,15 with the cite to the section and page in16 the budget detail from which each staff17 person appears;18 For any staff not included in19 Commerce's budget, an explanation of the20 reason for inclusion on another21 department's budget;22 And whether the Administration23 plans to move the staff person to24 Commissioner's budget in FY '11, assuming25 95 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 it's not there.2

Yes. We'd be3 happy to provide that.4 By the way, Councilmember, for5 clarification, I believe that what the6 budget shows are 33 positions. If you7 look -- at least if I look at the budget8 detail, it has 19 under Economic9 Development General, which is Section 19;10 it would be .11 And then I'm just looking to12 find the other number. Hold on one13 second. And under -- on , under14 the Community Development Fund, it shows15 another 14.16 So, anyway, but -- so it17 still -- it begs the same question, I18 understand.19

Yeah. I --20

There are 33. So21 when I go back to our chart, our22 testimony, it says 66 --23

Right.24

And I think 33 are25 96 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 shown there are, 33. And, as you say,2 historically because they've either been3 on Managing Director's or Mayor's or4 PIDC. And we can give that you.5

Great.6 So I've asked the Mayor's7 Office this question, but I'll ask you as8 well 'cause I think some people may be9 coming to you. Could you describe what's10 happening to the staff previously11 assigned to NTI?12

Yeah.13

And whether14 or not they're staying on the payroll?15

Yes.16

What budget17 and salary positions are included in the18 FY '10 budget?19

Yes. The -- hold20 on one second here.21 The -- let me go through the22 numbers -- some -- the numbers, 'cause,23 again, it's not reflected in the detail,24 but let me give you the breakdown.25 97 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1

And2 including -- can you point to the line3 item where their salaries are reflected?4

It's -- they were5 not in our budget; those had been carried6 in the Mayor's Office budget. Those now,7 as part of the new sources, that are8 coming together between Community9 Development Block Grant and General Fund10 and Revenues, some of those NTI staff11 have come off of what have been the12 Mayor's Office budget and onto our13 budget.14 So as of FY '10, there are15 about eleven staff that remain. Seven of16 what had been called "NTI staff" have17 been laid off, three resigned, and one18 was transferred, actually took a position19 at the Zoning Code Commission, as you20 know, so that leaves now eleven staff who21 now come onto the Commerce payroll, what22 had been NTI.23 And, by the way, I just want to24 say for the record that, you know, NTI25 98 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 also -- what had been called "NTI staff,"2 many of those staff had been in Commerce3 under other programs.4 (Timer bell rings.)5

And then when NTI6 came on, we called it "NTI staff," but,7 really, many of them are performing core8 Commerce functions. So in NTI, many of9 those people are doing commercial10 corridor work. So many of the people in11 the Neighborhood Commercial Corridor unit12 actually had, at one time, been called13 "NTI."14 So that's --15

So, in your16 response, if you don't have it now, just17 to close a loop on this one question, if18 you could point to the line item in the19 budget where their salaries are reflected20 and then provide a job description21 post-NTI job duties.22

It's not --23 Councilman, it's not reflected in any one24 place. So some of them are reflected25 99 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 under the Community Development funding2 that I just outlined of the 14 positions,3 some are reflected in the General Fund4 funding, some are reflected in other5 sources.6

Well, if you7 could just --8

So there's no one9 place, but I could give you --10

Point to all11 lines --12

I mean, it's easy13 enough to do a chart and show where the14 sources of each position are.15

Okay, thank16 you.17

Right.18

Thank19 you.20 The Chair recognizes21 Councilwoman Blackwell.22

Thank23 you, Madam President.24 I wanted to talk a little bit25 100 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 about and PCDC. I know we talked2 a little bit about it, but it's still3 been on my mind. And can you tell us how4 much money we save for making this5 change, how much money it saves in the6 budget?7

It's... It's --8 it's about -- and I'm looking to show the9 where -- the line item where this would10 actually -- I don't think it will11 really -- I'm just looking to see where12 the line item is, Councilmember.13

Thank14 you.15

Hold on. Let me16 just turn to it.17

Thank18 you.19

Yeah. I mean, I20 guess the closest number I could give21 you -- and I need to be honest, it would22 really be a question of not just of our23 office 'cause this really goes to an24 overall reallocation within the overall25 101 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 budget. So it's really more of a2 question to the Budget Office.3 But I think at the end, on Page4 65, Section 19, if you see the number5 there under Class 100, A, it goes from --6 you'll see estimated obligations. The7 increase or decrease is about 751,000.8 Now, whether all of that is captured in9 the General Fund, again, we'd have to10 check with the budget.11 But that's the increase in the12 amount of dollars -- it's the increase in13 Community Development Block Grant dollars14 that would be used within Commerce.15

Yeah,16 I thought it was about half of that.17 And can you explain to us, who18 use PCDC a lot, what this -- how would19 this department look, what would it be20 like, and what would the change be like?21

Yes.22

And23 how will our constituents access these24 services?25 102 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1

Yes.2 Councilmember, as I was saying before,3 what they would see is that the Commerce4 Department would be assuming -- would be5 an integration into Commerce. We would6 be assuming the majority of those7 activities. So that's the process we're8 going through right now in discussions9 with PCDC.10 Your constituents would see11 that it would -- if you -- if someone12 were to ask you, Where do I go? you would13 say, for commercial corridors, for small14 business, for assistance, you would send15 them to the Department of Commerce, and16 that's where we would provide that17 activity. And we would still be18 providing those services to the19 neighborhoods.20 We actually hope that this will21 increase efficiency and, as Councilmember22 Jones wants to see the increase in23 volume, that we'll be able to give them a24 broader access to services through the25 103 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 integration.2

I know3 I said it then, but we are concerned. I4 know your organization's been around a5 very long time, some 35 years, but we've6 finally gotten to the place where we feel7 that we have the ability to refer people,8 minority contractors and such, who don't9 know how to get themselves in order. A10 lot of times people need advice on --11 even though they have to prepare their12 paperwork, they need -- they need a13 conduit, like PCDC has been, between14 itself and PIDC, 'cause a lot of us have15 felt PIDC has been a little bit further16 along for some of these small businessmen17 who just don't know what to do, don't18 know how to prepare, and need somebody to19 just work with them on really a beginning20 level.21

Mm-hmm, yes. We22 don't intend to -- there -- that service23 will remain. I mean, there would be not24 any interruption.25 104 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 What we're trying to do here is2 to actually enhance those services. So,3 as an example, to help the businesses4 that you're talking about, the technical5 assistance with PCDC has provided. We6 would continue to provide that.7 We would also be expanding that8 by having the Office of Economic9 Opportunity. That would also give access10 in one place for contracting and other11 access to opportunities.12 So we're trying to -- actually,13 Councilwoman, our goal here is to create14 this as simple as possible and to provide15 those services.16

Is it17 -- do we have to do it this year? I18 mean, couldn't we have some interim19 period before -- I assume that you won't20 be ready July 1.21 (Timer bell rings.)22

Could23 not we have some interim period for this24 to happen?25 105 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1

I think we2 believe, Councilmember, the best way to3 do it is to do it now and to do it all4 together.5 We don't think that it'll -- I6 mean, there -- we think that that's7 achievable. We think that there won't be8 a disruption in services by doing that.9 And we, in fact, think that that will10 create a lot of -- just a lot of clarity11 immediately, and that this is a good time12 to make those changes.13 And, Kevin, if you have14 anything to add.15

Well,16 finally, if we couldn't get a year leave17 time, could you provide to the Chair a18 summary of what this new program would19 look like?20

Oh, absolutely,21 absolutely.22

Thank23 you. Thank you.24

Thank you,25 106 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 Councilwoman Blackwell.2 I was going to follow up on3 that with the same question. What -- I'm4 interested too in the reorganizational5 structure of PCDC. What will their6 charge be, and then how will they fit7 into the PIDC structure?8 And then how do you split half9 between you and Commerce and PIDC? I10 mean, how does that all work?11

It's -- let me12 explain, 'cause I think it's a very good13 question.14 Most of -- if you think about15 the functions, you have three functions,16 PCDC: Commercial corridors, technical17 assistance, and lending, just in general18 terms.19 The -- the commercial corridors20 and technical assistance would come into21 the Commerce Department so that there is22 one place, as we said, where all23 commercial corridor assistance happens,24 where all technical assistance for small25 107 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 businesses happens, where all access to2 opportunities and equal opportunity can3 happen.4 Lending would -- because5 Commerce does not do lending, we do it6 through third parties, the lending7 function would be a part of what PIDC8 would do. It would be a specific program9 within PIDC for that lending.10 So it would probably have --11 and we're just in discussions now and12 thinking about it -- maybe a specific13 subsidiary board within it just focused14 on the small-business lending. PIDC also15 has some small-business lending programs.16 So there would be a whole,17 again, range of loan products, all of18 which could go out on the street. They19 have the Emerging Loan Program, there'd20 be the Small-Business Lending Program.21 So there would be -- lending would be22 there. And all commercial corridor23 technical assistance, business assistance24 would all be in Commerce.25 108 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 But you would come into2 Commerce -- let's say, for example,3 you're small business and, say, you know,4 you'd sit down with us. And as I said5 before, we would say, you know, What are6 your needs? And they may sit down with7 us and say, My need is, I need loans to8 help me with operating capital or working9 capital. Great. We would refer them10 over, here's the place to go, go to PIDC,11 and there's a small business group there12 that could make those loans.13 If they need technical14 assistance on the corridors, we'd provide15 that to them, as I said.16 So there would be a point of17 access, and I think it would be a very18 clear system.19

Well,20 where will the current -- how many staff21 members are left with the current PCDC22 department?23

Well, there --24 we're -- I mean we're working through25 109 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 those numbers right now because a certain2 number are going to come -- you know,3 we're looking at how many would come over4 to the Commerce Department. And the5 Lending Unit's a smaller group that would6 be a part of PIDC.7 Again, we're literally having8 these discussion right now to work9 through what the numbers look like.10

So will it11 still be PCDC at the end of the day, or12 would it be a combination -- something --13 would they be all employees, those who go14 to PIDC, employed with PIDC. Those who15 are PCDC work in the Commerce Department.16

That's right.17

They're18 the Commerce Department.19

That's right.20

So PCDC,21 as it currently exists, will not exist.22

That's right.23

As it24 currently exists?25 110 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1

As it currently2 exists, that's right.3

Okay.4 Now, would PCDC have a board? Will that5 board be eliminated?6

I think the whole7 -- there could be a -- yeah, the answer8 is, to be straight, yes. There could be9 a new board with members of what had been10 PCDC constituted to oversee this11 small-business lending function. As you12 know, PIDC has many subsidiary boards, so13 it still could have -- it probably would14 have a separate -- a board under it15 focused on small-business lending.16

PIDC17 would.18

Potentially.19 That's what we're exploring now.20

Point of21 information.22

But we're looking23 at that now.24

Yes,25 111 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 Councilman.2

Thank you,3 Madam Chair.4 Having some small recollection5 of how that works, is that it is a6 independent entity, anyway. I mean, the7 board -- even though it is a quasi-8 governmental entity, it is a 501(c)(3) or9 thereabouts entity.10

Right.11

Private,12 nonprofit. It has to exist for a couple13 of reasons going forward.14 One, they have some outstanding15 contracts probably that they have as a16 entity, that they have to fulfill under17 RFPs and other things like that.18 There are some outstanding loan19 obligations that I would imagine have to20 be fulfilled and monitored and21 collections being done on that. So the22 entity a legal entity will have to exist.23 Now, I would also -- and I'm24 not try to micromanage the Commerce25 112 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 Department -- think that you also have2 some flexibility there that you do not3 have under a city administration.4 Knowing where funds come from for5 organizations similar to that, some RFPs6 and sources of fund from the federal or7 state government strictly prohibit the8 use of it by a municipality. So you have9 to have a PIDC, PCDC kind of entity to be10 a conduit for money that we are eligible11 for as a municipality.12 So under some kind of13 configuration, you're going to, for some14 time, have to have a PCDC.15

Yeah.16

Point of17 information.18

Point of19 information, Mr. Goode.20

Having some21 experiences also --22 (Laughter.)23

I have had24 some.25 113 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1

Just to2 complement what my colleague said, it3 started out as the Model Cities4 Development Corporation, had an Urban and5 Local Development Corporation title at6 some point, merged into a PCDC/Urban7 Local Development Corporation title, has8 had other subsidiaries, including9 Minority Venture Partners at one point.10 And so, it's not hard to11 reconfigure. And, essentially, you have12 to keep some of those original pieces in13 place.14 I think it's probably also some15 UDAG money and Urban Development16 Assistance Grant money that dates back17 years that has to be configured into18 whatever organization.19 So it never really disappears20 at all.21

Yeah. So the entity22 itself, as it's currently structured as a23 legal entity, can stay the same. We just24 might redirect its activities in a25 114 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 different way so that we could maintain2 funding programs that have contractual3 relationships that come in, and we can4 still attach to those, we can still have5 an opportunity to go out after additional6 monies through a RFP process.7 If there's additional grants or8 whatever, that a separate organization9 separate from the City can do, we will10 still have that ability.11

Point12 of information.13

Point of14 information.15

How16 many employees are there now in that17 department?18

At...?19

At20 PCDC.21

I believe there's 28,22 27, 28.23

Well,24 if we have 28 now and you haven't25 115 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 configured what the new department will2 look like, how can we be ready? How can3 we be ready July 1 if we haven't worked4 on where they'll be and exactly who's5 doing what?6

We --7

In8 other words, we want to make sure that9 these people are protected as well.10

We are working11 very much on that and with the July 112 date so that we can work through all of13 that in terms of personnel skills and how14 that sorts out. So we are very aware of15 that.16

Would17 you likewise submit that information to18 the Chair so we can follow up?19

As we're doing it.20

Yes. As we move21 forward, we will keep the Council22 informed about those processes.23

Thank24 you.25 116 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1

How much2 does this organization save the City?3

That was the4 number I went through before,5 Councilmember. I don't know -- what I6 said is that if you -- I was pointing out7 the line items. I think it was where the number -- and, again, I just9 want to preface this.10 The number that's in the book11 is 751,000. How much of that is saved to12 the City, again that's not just -- this13 is just within Commerce; in other words,14 what the Block Grant dollars would15 potentially save but whether that's16 reflected in the overall General Fund and17 overall budget is something you'd have to18 ask the Budget Office.19 In other words, that's how much20 is returned, but some of that may have21 been needed for other services or22 functions that are outside of Commerce.23 So I don't know the net number, which is,24 I think, what you're asking.25 117 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1

So that's2 the question that Councilwoman Blackwell3 asked; I didn't.4

Yes.5

Okay. Has6 the strategic plan for the Office of7 Economic Development been presented yet?8

For the Office of9 --10

Of11 Economic Opportunity.12

Opportunity, oh,13 okay.14

No, it has not.15

When do16 you plan to have that plan prepared?17

We anticipate18 presenting a final draft to the Mayor by19 the fiscal year end, by June 30th.20

Okay. It21 was supposed to have been done January of22 '09?23

Unfortunately, we24 were unable that done. We were waiting25 118 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 for the MACCID recommendations, the2 Mayor's Advisory Commission on3 Construction Industry Diversity, which4 came out in mid-March, and so, we're5 taking those into consideration and we'll6 deliver the plan that will take those7 recommendations into consideration by the8 end of the fiscal year.9

Councilman10 Goode asked about the, um... Well, I11 can't remember what he asked about, but12 let me ask you a question.13

Participation goals.14 And I think I got an answer to --15

Yeah, but16 I'm interested in who in the City -- you17 know, we have given -- we have cut18 business privilege tax and wage tax19 because the ultimate goal is to keep20 businesses in the City and/or attract21 businesses.22 And who has done a study to see23 what impact our lowering of these taxes24 have had on the City? Has it been a plus25 119 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 or a minus or a status quo?2

In terms of the --3 of an economic impact of the tax, what4 the taxes have resulted in?5

Mm-hmm.6

The lowering of7 taxes?8

Mm-hmm.9

I don't have those10 here. There have been a number of11 studies. I think probably Steve Agostini12 testified to these before.13 But there has been Wharton14 studies. I believe Bob Inman had done15 some studies of this. I don't have the16 numbers off the top of my head, but it17 showed what the reduction he believes18 correlated to in terms of jobs.19 And we can get that to you; I20 just don't have that it in front of me.21

Do we know22 how many jobs have been created as a23 result -- additional jobs created as a24 result of what --25 120 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1

We can --2

Yes.3 Point of information.4

Maybe you5 could show how many jobs have been saved,6 not necessarily created.7

That's right.8

And I9 believe the number -- I don't want to10 guess at it, but I think the number may11 have been over 100,000 jobs saved since12 we started cutting the business and wage13 tax.14 But the number -- it's not15 jobs -- a jobs-creation number; it's16 actually jobs saved.17

Right.18

Jobs that19 would have otherwise been lost.20

Okay.21 Thank you. And that's the question you22 asked too, earlier, right?23 Okay. Let me just recognize24 some other people here, and I'll come25 121 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 back.2 The Chair recognizes Councilman3 Clarke.4

Thank you,5 Madam Chair.6 Good morning.7

Good morning.8

Let me ask9 you a question about if you can give me10 briefly the status of the City's two --11 at this point still proposed -- casinos12 proposed casinos. And if you can kind of13 summarize it 'cause I have a follow-up14 question that's budget-related.15

Okay.16

So,17 Mr. Agostino, you may want to be ready to18 come up.19

The status is as20 follows: Let's start with SugarHouse.21 The SugarHouse casino on the north22 Delaware, there is -- we have been23 working with them on their permits and24 approvals. They were actually issued a25 122 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 foundation permit, I believe, over a2 month ago.3 They are before the Gaming4 Board this week; I believe the hearing is5 this Wednesday, in Philadelphia, for the6 extension of their permit, which had7 expired. We're working with them and8 have submitted a letter in support of9 that.10 And they will be -- there's11 legislation before the Council that the12 Council will be considering, but in terms13 of their plan of development, they need14 to modify their plan of development to15 reflect their -- some of the changes they16 made to their design.17 But we anticipate and what the18 schedule is bringing that forward to the19 Planning Commission, and hopefully that20 will be concluded by June.21

That's the22 interim facility.23

That's the interim24 facility, which they project they would25 123 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 like to open essentially a year from2 today, if all goes well. And that's,3 again, their projected schedule.4 That interim facility is about5 1700 slots and -- and is actually a6 permanent facility, and then ultimately7 would expand to 3,000 slots.8

Right.9

And then there10 would be a Phase II. So that's11 SugarHouse.12 Foxwoods, they are -- as you13 know, they are looking at the Strawbridge14 site at 801 Market. Similarly, there is15 legislation before Council. They would16 like to be on a similar timeframe in17 terms of approval of their plan of18 development also by June, and we're19 working with them on that.20 They need Gaming Board approval21 for relocation of their license from the22 South Philadelphia site to the Center23 City site, and they have to apply for24 that, and I believe they anticipate that25 124 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 anticipate that in May or June; I'm not2 sure of the actual date, I'd have to3 check with them.4 But we're working, again, very5 closely with them on a plan of6 development for approval.7