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
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
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
So we should9 anticipate from your shop a concert10 series? Or are we going to have to cut11 that?12
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,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
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
Yeah, the16 Office of Arts and Culture and the17 Creative Economy, are you all located in18 the same facility?19
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
-- 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
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
-- 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
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
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
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
Nothing from the8 General Fund. At the moment, we're9 paying a retainer of about $5,000 through10 the Marathon.11
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
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
Point13 of information, please.14 Does the General Fund15 contribute anything for the Fund for16 Philadelphia?17
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
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
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
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
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
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,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
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
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. 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
I think,24 through your testimony, we found at least25 36 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1 $84,000.2
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
Thank15 you.16 The Chair recognizes Councilman17 Jones.18
Just a point19 of information. How many events did you20 have last year?21
Have you had24 any major --25 37 5/4/09 COMM. OF THE WHOLE - FISCAL '10 BUDGET1
I think we9 produced them very well and most people10 were satisfied.11
Are14 there any other questions from members of15 the committee?16 (No further questions.)17
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 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. 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
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
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
For3 '10, there's one less employee, and we4 have a staff of 15.5
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
-- 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
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
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
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
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
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