Committee Hearing, May 4, 2009

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