We can wait for the operating. I don't have a particular problem 140 2/9/99 WHOLE COMM. - Budget Hearings with that.
Thank you. The Chair recognizes Councilman Rizzo.
Yeah, to follow up on a subject that Councilman O'Neill's discussing, I'd like to ask about this PEGA system -- Project Enterprise Government Application System. I understand that we're developing a system from scratch or possibly that being software at a cost of three quarters of a million dollars. I'd like to know if so and we're developing this program, are we licensing it? Or why are we developing a program if there's something out there? I mean, this costs three quarters of a million dollars.
Councilman Rizzo, we went through a multi-, multi-month make-vs.-buy analysis where we looked at all of the software systems that are available on the marketplace, and did demos of them and had cost estimates done to see if they fit the needs of the City. And, in fact, what we decided was to actually do a "make situation" based on the Microsoft Office projects -- excuse me, the Microsoft family of products. 141 2/9/99 WHOLE COMM. - Budget Hearings And we're going to be changing our Paradox data base that the City has used for the last, I don't know, eight, ten years, converting it into an access data base, and we're going to be doing integration using the Microsoft Project products to actually incorporate a complete hand-in-glove relationship between the budget management and the project management.
Well, if we're developing something, are we possibly going to make some money from developing this product? Are we going to license it or are we going try to sell it to other municipalities and cities? Currently, we put a lot of effort beyond this 750,000 into this project, so is this going to benefit us and other places and make some money on this thing?
I think that's a good suggestion. My understanding is that there's some fairly tough restrictions on how the City can charge for products like this that it develops beyond recouping its own costs, but we can --
Just recoup our own cost. 142 2/9/99 WHOLE COMM. - Budget Hearings
Right. We can explore that with the Law Department, and I think that's a good suggestion.
Okay. Now, I have a question to Dean Kaplan. It's in reference to Fleet Management. I really try to read this stuff, and I don't want to use the word "confused," but sometimes I scratch my head. Who does Fleet Management report to?
The Fleet Management office is run by Deputy Managing Director Riley Harrison, and he reports to the Deputy Mayor for Management and Productivity, Linda Berkowitz.
Why isn't Fleet Management part of the Operating Department since they support all of the operating departments? Why isn't the Managing Director have oversight of Fleet Management?
When the original executive order was drafted for Fleet Management -- and this predates my taking this position so I'm not familiar with all of the details, but it was originally a Management and Productivity initiative of the Administration, so it was placed 143 2/9/99 WHOLE COMM. - Budget Hearings under the Management and Productivity umbrella. The executive order does provide for the eventual return of Fleet Management to the Managing Director's supervision.
The reason I bring this up is the that it seems as though monies that support the fleet are just spread all over the place. I see a million dollars for a new fire boat in Fleet Management's budget. Then -- a department near and dear to you -- I go and see $6.5 million for vehicles in the Water Department. I find out that when we go to get a City vehicle washed, that it's being charged to the department that operates that operating department. Has anybody ever thought of bringing all this back into Fleet Management so that there's some semblance of order? It just doesn't make any sense to me that we have a Fleet Management department that's responsible for all of the vehicles and all of the operating departments, and then the operating departments don't have any -- well, they do have input, but it appears that the Managing Director doesn't have 144 2/9/99 WHOLE COMM. - Budget Hearings any responsibility of Fleet Management.
A couple of different issues. In general, fleet monies are appropriated to Fleet in the Operating Budget, with the one exception you mentioned, which I'll address in a second. What happens is that when you go back and look in the Operating Budget, you'll see that the Fleet Management has an appropriation in several different funds, so that won't see it in the Capital so much, but in the Operating, you'll see Fleet Management. And under that, they have a Water Fund appropriation and an Aviation Fund appropriation because, obviously, those, for a variety of reasons from an accounting point of view, it's more sensible for us to appropriate the Water and Aviation and other fund expenses to Fleet directly from those funds. So the reason you'll see different departments listed that way in Operating is for that reason. The specific case you mentioned in Operating about car washing is one that you had raised last year, and we did change in this year's budget, in the proposed 2000 Budget, all of the 145 2/9/99 WHOLE COMM. - Budget Hearings car-washing expenses are in Fleet Management. On the Capital side, the reason you see a difference is that due to a quirk in the way that the Water Department's vehicle purchases are charged to their suburban wholesale customers. It is to the great advantage of the City for the Water Department to purchase vehicles with -- with using the Capital Budget and using debt that approximates the life span of the vehicle so that you would issue a five-year bond for a vehicle that was going to last five years -- although most of them last longer. And I'd be -- that's a fairly -- it's a fairly lengthy discussion which I'd be happy to go over in more detail whenever that's appropriate. In the Capital Budget, most of the Fleet expenditures are in Fleet. The Water vehicles are in Water. The Aviation vehicles, again, because of the quirks of accounting and how they receive their funding from the airlines, their vehicles are in the Operating Budget in Aviation appropriation to fleet. So the fleet is in different pieces and mostly for accounting reasons, but if you ask 146 2/9/99 WHOLE COMM. - Budget Hearings Fleet what their budget is, they'll say, We have X-number of dollars in Water capital, Water Operating, General Fund Operating. I mean, they're coming from different places, but it is an integrated budget, which is not unlike a number of other departments.
Does the Water Department have automotive engineers and people within the Water Department that oversee the fleet? Of we combined and gave Fleet Management the responsibility that we could save some money in consolidating that effort? Because, Dean Kaplan, knowing you, you could probably figure a way to do these accounting things and maintain that -- and have Fleet Management be that responsible agency.
Yes. The Office of Fleet Management does have the overall responsibility for all of those various vehicles regardless of what department they're in. Most of the departments -- in the case of Water, obviously, it's been a couple years, but I believe Water has almost always maintained an in-house, a senior manager who is responsible for being the liaison 147 2/9/99 WHOLE COMM. - Budget Hearings senior with Fleet Management, making sure that the daily needs of the water vehicles are communicated and that problems are resolved, that sort of work. In the Water's case, he was the head of the Water fleet when it was in Water, so he's a fairly experienced person who knows the Fleet Management people quite well.
That's what a fire boat costs. The City's three fire boats are all quite, quite old, and we looked at this in some detail, and perhaps the Fire Commissioner, who's very articulate on the subject, would like to come in briefly. But --
The critical issue for us is to be able to cover both rivers. Obviously, if we have one boat up in Torresdale and one boat on the Schuykill, it's a long way to get to the middle if there's an incident on Penn's Landing.
I was just trying to use that as a comparison with the Water 148 2/9/99 WHOLE COMM. - Budget Hearings Department.
Right, right. That seems to be -- and, again, Fleet Management, in this case, along with Fire, has priced fire boats. I believe New York bought a few recently, and we had some. Although they're a special order, there are similar cities that have bought some in the last couple years so we think that's a reasonable number.
The Police Department's starting to rub off on the Fire Department. Everything's coming from New York.
Thank you. At this time the committee, will recess for about 15 minutes at the request of the stenographer. So we will be back here at 12:30. Thank you. (Short break taken.) (Proceedings resume at 12:35.)
We will now resume our hearings. The Chair recognizes Councilman Nutter. 149 2/9/99 WHOLE COMM. - Budget Hearings
Thank you, Madame Chair. Just for the record, one, Mr. Kaplan, if you check the budget testimony of Monday, February 23, 1998, on Pages 1079, continuing to 1080, you'll find a discussion about the 21st Ward Ice Rink and the Wynnefield Recreation Center. I'd be glad to share the notes with you later on. Miss Kaplan, can you get for us in a slightly different format a list of all of the various budget projects that are listed either in this document, the Fiscal Year Capital Budget, or this document, the 2000-2005 Capital Program? Can you list those out in a slightly different format by project by Councilmatic district? In other words, can you tell me all the ones in the 4th, what they are, the dollars amount, what department they go with, and then the other 9 districts?
Okay. Presently they're in by department, and then you tell us what district they're in.
I'd like to see them by district, by project, by dollar amount, and then a total that goes with all of those Councilmatic districts.
There are certain ones that are not allocated, you know, that are not really --
I understand. Why don't you -- that's usually the category, the 99 in book; why don't you put all the 99s together, list them as to what they are.
Oh, oh, the code for the ones that are not in anybody's district, okay. 151 2/9/99 WHOLE COMM. - Budget Hearings
Yeah, yeah. The citywide ones are usually listed as Council District 99?
Okay, so you just put all those together separately, okay?
I do want to note for the record that, of course, by producing the citation, you have vindicated my original confidence that I was certain that it was true and we would be able to -- and that you would be able to find citation quickly.
Okay, I'll take that. Thank you. What I'd like to talk about in this round is actually a continuation of yesterday's discussion with Miss Bittenbender. And that discussion had to do with project management, not only the CPO, but the other departments that manage projects. Now, Miss Bittenbender, can you refresh my memory for the record? What departments are you responsible for managing projects? Or, in the 152 2/9/99 WHOLE COMM. - Budget Hearings alternative, what departments are you not responsible for?
Certainly. It's probably easier to tell you what I don't manage, for starters. We do not manage Recreation, Streets, Water, Aviation, Commerce, or Energy. We manage or represent different client agencies: 10 Police, Fire, Health, Human Services, OESS, 11 Prisons, Courts, Fleet Management. And then we 12 also do a whole series of operating projects as 13 well. And, as I had said in the testimony, we manage the projects for Center City leases. Oh, and I'm forgetting Fairmount Park, the Art Museum, and the Zoo recently. We took them over with the Fairmount Park group in July of this year, so they're relatively new projects for us.
Okay. Now, your testimony on , you make mention of the average conformance duration for professional services contracts. You said that prior studies indicated that it previously took 387 days.
That's correct. 153 2/9/99 WHOLE COMM. - Budget Hearings
And now, with CPO, it averages 33 days. That's an over 90 percent drop.
How is that possible? MS. BITTENBENDER? We re-engineered the entire system. And not to be too wordy, but it actually started with the budget call process where we put together project profiles for each of the project we would recommend to you. That included full-scope schedules, and we've hired people to do cost estimates. Once they're passed through Council, we have an RFP system that we do in the spring, where we put out a wholesale of all of our projects at the same time, utilizing a new RFP that we constructed, and we do a major prebid meeting to all of our professional services consultants. During that time period, we issue to them all of our provider agreements and discuss with them all of the issues of risk management and ask their lawyers to look at these contracts prior to them submitting to us their proposals. 154 2/9/99 WHOLE COMM. - Budget Hearings Same thing, you know, with tax I.D. numbers, ACIS numbers, so that we get all of the that business out of the way first.
And then we put together a very aggressive schedule and put together as well a valuation committee that's comprised of many City departments to evaluate them. The Law Department has also partnered with us, and we have our own attorney and legal assistant that work with us very early on in the process. And because we've partnered with them as well as with the folks from ACIS, we've been able to execute contracts prior to the fiscal year.
All right. Your testimony also indicates that in FY '96, capital project duration was an average of 938 days -- that sounds like it's going on about two and a half years -- down to an FY '99 average of 477 days, which sounds like about 15 months.
And now you're trying to get it down to within the year that the 155 2/9/99 WHOLE COMM. - Budget Hearings project is funded. And so is your testimony now that a project that is technically funded as of July 1 of whatever fiscal year, you expect it, unless it's some incredible project, to be done by June 30th of the following year?
It's very aggressive, but let me step back by saying that 80 percent of our projects are $500,000 or less, and that does not account for the large One Parkway's or the new police districts, etc.
I think it's something that we have set the limits very high for, Councilman Nutter. And I think that it's probably achievable on a certain percentage of our projects. But it's a goal and a mission that we have put together with our staff in order to expedite the design phase, which we have streamlined it. And what helps us there is the fact that since we're able to conform our contracts to the start of the fiscal year, July 1s, we start that design process.
Why are you able to 156 2/9/99 WHOLE COMM. - Budget Hearings do that?
Because we actually have them under contract, our professionals, and we're able to pay them within 30 days of the 1st.
Do the operating departments have the same ability to do that?
Um, if they were to put in a plan, to do that -- I don't know their business or what type of contracts that they're putting out, but for us, for architecture and engineering services, we're able to do it.
Why isn't everyone following the same process and procedure?
I think for us, because the dollars become available July 1st, we know that our major pot of money is available then.
Everyone's dollars become available July 1st, don't they?
Well, operating dollars, yes, but I think it also depends on the term of the contract. We made it a priority to start for July 1st, but I'm not familiar enough with other operating departments and how they 157 2/9/99 WHOLE COMM. - Budget Hearings operate to be able to answer that question for them.
Now, you remember the conversation we had yesterday about contractors who are very good at the bidding process and end up with numerous contracts with the City, and that at times, their work can be affected by the amount of work that they have. They may actually be good contractors, but they only have so much in the way of financial resources to be able to buy materials and equipment or they only have so many personnel who can work on any one job at one point in time. Now, we had some discussion about that yesterday, and you were trying to explain to us -- although yesterday was kind of not your day and today is, you were trying to explain to us how that process works, what you do by way of disqualifying people either before they get work or during the course of that contractor having the job. I think I asked yesterday for a list yesterday of people who had been disqualified in the past year, or I may have asked for the past 158 2/9/99 WHOLE COMM. - Budget Hearings three years. Do you have any material that --
I do. I have some preliminary numbers. You should know that we don't track this information on a data base -- neither ourselves and I don't believe the Procurement Department does either. But I had one of our staff people go through the records last night and quickly put together some numbers for you. In Fiscal Year '98, we disqualified 42 2 bidders. And to date, in Fiscal Year '99, we have qualified 21 bidders. Now, the information is incomplete in regards that I don't have their names today for you. But the other thing is that qualified bidders have the opportunity, as we talked about yesterday, to have a hearing in front of the Procurement Commissioner. Any number of the 42 from Fiscal Year '98 the or from '99 could have 21 had a hearing with the Commissioner and been reinstated and eligible bid. So those numbers aren't completely accurate yet, but it will give you an idea of how many times contractors from Capital Program Office 159 2/9/99 WHOLE COMM. - Budget Hearings projects have been disqualified.
So the 42 are only the contractors that you work with in CPO.
Do you know what some of the general reasons are for their disqualification?
Well, I also took a look at the form that we use. And we do ask them for a listing of projects that they are currently working on and the dollar and the size.
Just City projects, or do you also ask them about private projects they may be working on?
So it basically is on our opinion about their availability of resources. But it could also be past performance. And one of the things that was difficult to try to answer for you yesterday is that the easiest mechanism for us to disqualify is based on performance. The reason being is that 160 2/9/99 WHOLE COMM. - Budget Hearings it's something we can easily document and present to the hearings of the Procurement Commissioner. And it is also an area within our department. Recognize that we're young, we've been with the City since August of 1996, and we took on the professional services side first and feel that we've been fairly successful.
Well, let me just finish by saying the Public Works side is much more difficult because we don't have as much leeway in Public Works because of the things that guide us or bind us, such as the Separations Act, etc.
There are many more restrictions in the way that public dollars are bid for construction. And there is an act called the "Separations Act" that was written, I believe, in 1921, which basically stipulates that any publicly-funded construction project over $4,000 must be publicly bid and must be bid and awarded 161 2/9/99 WHOLE COMM. - Budget Hearings to the lowest responsible contractor, but also that we must utilize a system called "multiple primes." And the private sector does not need to comply with multiple primes.
That basically means that each prime or construction trade holds a separate contract with that owner. In the private sector, they would bid a project to a GC. The GC would then sub to electrical and mechanical and plumbing. In public dollars -- and there are very few states that have not overturned this, and Pennsylvania is one of them.
1921. And the limit is $4,000. We're one of the few states that have not, in fact, overturned this act. It's a very 162 2/9/99 WHOLE COMM. - Budget Hearings difficult act from an owner's position to manage construction projects because if your GC in any way delays a project, the other primes on the job, because they're not directly contracted to them, have the ability to scream"schedule delay." And the only person that's, therefore, responsible for paying for those construction delays is the owner themselves. So there's a --
The City of Philadelphia, correct. And I'm bringing up this issue, again, not to bore everyone, but we have much less control on Public Works. And in order to re-engineer that process, it's going to take a team of the Procurement Department, the Law Department, and the rest of us who actually manage those projects.
Well, in your young opinion, do you think that this is something that needs to be changed?
Okay. Are you aware of any efforts to make such a change?
Yeah, there have been single efforts. And I will tell you that we do work very closely with Procurement and Law and have had multiple discussions in the time that I've been here. I was beginning to tell you a little bit yesterday about the fact that there's an effort underway to put together a procedure for debarment. I think the operating departments and my fellow commissioners really need to get together and discuss a better system of management or disqualification. And you hit on a very good point.
Now, when someone is disqualified, does it mean that they're just disqualified for that particular bid?
Would that contractor on any given day have bids into Recreation, Streets Department, Fairmount Park, some other department or agency, and on that day be disqualified from a Recreation bid but be 164 2/9/99 WHOLE COMM. - Budget Hearings qualified for a Fairmount Park bid?
Well, how can you be qualified for one and unqualified for another?
It depends on the operating department who was putting out that bid, on their past performance, history with that contractor. In Fiscal Year '98, of the 42 that we disqualified, 10 were to one contractor. So each time that person attempted to bid on a job, we would disqualify them and have a hearing in front of the Procurement Commissioner.
And when you "that contractor," are you talking about that particular operating department?
A singular -- well, it's our department but a singular contractor.
Will disbarment 165 2/9/99 WHOLE COMM. - Budget Hearings result in someone not being able to bid for a certain amount of time?
And what happens if someone's in the middle of a project and they are not performing or they're not in compliance or their work is shoddy or they have a general slowdown because they literally have too much work and they're causing overall delays in one project or multiple projects because they can't get their act together? What do we do?
If it's an unresponsive contractor, we default them. And we do default, but only on extreme basises (sic).
I don't have that number for you, but our staff are putting that together for the rest of the members or will be providing it to you. 166 2/9/99 WHOLE COMM. - Budget Hearings
Okay. And then what happens to the project if the contractor's defaulted?
Their bonding company must step in and provide a contractor who completes the work.
Oh, yes. All of that is discussed and stipulated up front.
Does defaulting result in the project -- defaulting on one contractor then causing the bonding company to come in with another, does that generally result in the project getting completed relatively on time, or does that tremendously delay the completion of the project?
No. And it's one of the reasons that many of the departments -- and ourselves included -- don't like the defaulting process because it does, in fact, delay the process.
It does delay the 167 2/9/99 WHOLE COMM. - Budget Hearings process.
Okay. Is that a part of the current discussion about how to fix that as well? I mean, why can't we have someone step in immediately and take care of whatever needs to be taken care of?
Is the Procurement Commissioner here? Lou, can you help me out with some of the regulations? (Louis Applebaum comes forward.) COMMISSIONER APPLEBAUM: Louis Applebaum, Procurement Commissioner. And you were doing quite well. (Laughter.)
Thank you. COMMISSIONER APPLEBAUM: Councilman, what was the last question?
We're talking about the defaulting. And is there any way to be able to include the process. . . COMMISSIONER APPLEBAUM: There's been a lot of discussion about prequalification and defaulting etc. and etc. Would you like me to run down how the 168 2/9/99 WHOLE COMM. - Budget Hearings process works? This is all part of the Title of the Procurement Department and the City of Philadelphia Code and a prequalification program that's been in place for every Public Works contractor who wants to bid on a Public Works project must first prepare a questionnaire that goes into quite a lot of depth of the current jobs that they're working on, jobs that they have completed, their financial statement, background, history, all kinds of questions about legal violations etc. and etc. Before they can bid, they must submit this document to the operating department who is responsible for the particular project. As we stated before, many of these go to the Capital Programs Office, some go to Recreation and the other departments who aren't under their control. The departments then review the documents and make a determination as to prequalify or not prequalify. If they make the determination not to prequalify a vendor, we are notified. The Procurement Department gets a list of all vendors on a particular project who are prequalified and 169 2/9/99 WHOLE COMM. - Budget Hearings those who are not. The ones who are not receive a letter from us telling them that they are not prequalified to bid on job number 1, 2, 3, 4, and we tell them the reasons. We then tell them they have 48 hours to notify the Procurement Department if they would be interested in having a hearing, a formal hearing with attorneys, or an informal hearing without attorneys. And if they elect to have a hearing, we, the Procurement Department, give them a hearing. And the hearing is -- the rules and regulations, as I mentioned before, are in Chapter 15 17-100 of the Philadelphia Code.
Right. COMMISSIONER APPLEBAUM: And the hearing is conducted in front of a three-member panel. The three-member panel consists of the Procurement Commissioner and two management-level employees of the City of Philadelphia. The operating departments are represented by the City Solicitor's Office, and the Procurement Department is also represented by the City Solicitor's Office, different attorneys. 170 2/9/99 WHOLE COMM. - Budget Hearings At the day of the hearing, the parties convene. The City operating department indicates to the panel in this open hearing the reasons for not qualifying that bidder for that project. They present their evidence, photographs, documentation. They'll bring in other departments who might give evidence as to why they feel that contractor should not be prequalified. The contractor is then given his opportunity to respond, present his evidence. And during this hearing, the three-member panel question the vendors, we question the City. And at the end of the day, after the hearing is completed, the three-member panel then meets privately, and we either agree with the operating department and do not allow the vendor to bid, or we come to the conclusion that the operating departments are incorrect, and the vendor should be allowed to bid. And when we then make that determination, we notify the vendor, and they might bid or they might not bid. So that is the total process that happens for every bid, every Public Works project.
So does that mean 171 2/9/99 WHOLE COMM. - Budget Hearings when Miss Bittenbender tells me that in FY '98, there were 42 companies that were disqualified out of the CPO process, does that mean that you had 42 hearings for those companies and then there were a whole host of other hearings for people who may have been disqualified by Recreation or Fairmount Park or other departments? COMMISSIONER APPLEBAUM: Correct. Of the 42 that were disqualified, I don't believe that every one requested hearing. So maybe 10 requested hearings. But in addition to the 42 who were not qualified, there are a lot more for other projects by other departments who also were not qualified.
Okay. Can you get us a complete list of all of those that you're aware of, including the 42 last year? COMMISSIONER APPLEBAUM: Based on yesterday's hearings, the Procurement Department received a notification this morning, and we are putting together a complete list of three years of all of the vendors who were disqualified, the vendors who requested hearings, and the results of those hearings. So we are gathering that 172 2/9/99 WHOLE COMM. - Budget Hearings information for you.
I mean the goal here is, one, certainly not to try to figure out mean and nasty ways to deny people work. I mean, if people want to bid on City of Philadelphia work, hopefully, they'll do a good, job life goes on. My concern, and I'm going through one of those experiences right now, is where someone clearly is under-performing, may be stretched too thin. We're in the middle of a project, and so you're left with the dilemma of, do we try to hold their hand and baby them along and push them and shove them and encourage them to do what they're supposed to do? Or do you just drop them and take the risk of trying to have someone step in and fill their shoes and what are the legal ramifications of all that and what is the time ramification of making that decision? Or do you just put up with some of the crap that we deal with, with some of these contractors? COMMISSIONER APPLEBAUM: Councilman, it is our preference not to default them and have to 173 2/9/99 WHOLE COMM. - Budget Hearings resort to dealing with bonding companies.
Why? COMMISSIONER APPLEBAUM: Because when we do that, no one wins. It's a time-consuming process, lawyers are brought in. There's an awful lot of time that is wasted rather than get the project done. So I have found that that's not a viable, good solution to the problem.
When a person wins a bid, are they given a date certain, you know, barring a tornado, act of God, or something like that when the project has to be done? COMMISSIONER APPLEBAUM: The specifications all indicate the time that it should take to compete the job.
And what's the penalty for not meeting the requirement? COMMISSIONER APPLEBAUM: As I know of, there are no specific penalties in most of the contracts. Some of them may have liquidated damages, but that's not the normal that I know of.
Is it the experience in maybe the private sector that a 174 2/9/99 WHOLE COMM. - Budget Hearings person is given a job to do, somebody's trying to, you know, open a building, they've got tenants that need to move in by "XYZ" date. Is there some experience out there where if you're not done by a certain date, it starts to cost you money?
It's called "liquidated damages." COMMISSIONER APPLEBAUM: That's liquidated damages. As I said, we -- in some contracts we have -- and in most, I don't believe we do it. You might have read in some contracts there's liquidated damages for failure to perform by a date. There's also bonuses.
Right. COMMISSIONER APPLEBAUM: Where if you quickly, you get a bonus. If you remember, I think the Schuykill Expressway had that.
Right, and One Parkway also had them. COMMISSIONER APPLEBAUM: And at one point, Parkway had that too. So in some cases, we do have --
Is the Schuykill Expressway finished? 175 2/9/99 WHOLE COMM. - Budget Hearings COMMISSIONER APPLEBAUM: Excuse me?
Is the Schuykill Expressway finished? COMMISSIONER APPLEBAUM: I -- I don't know.
Just a joke, Commissioner. COMMISSIONER APPLEBAUM: I think it is.
But why don't we have performance either incentives or damages for nonperformance on the bulk of our contracts? COMMISSIONER APPLEBAUM: I would agree that that would be a good idea to include in some of the specifications. We have not made that a definite policy. This is one area that we could.
Are we legally prevented from doing that? COMMISSIONER APPLEBAUM: Not that I know of, no. 21
Okay. Is it something that you're going to look into? COMMISSIONER APPLEBAUM: We certainly could, yes. That's one of the items that --
Do you think we 176 2/9/99 WHOLE COMM. - Budget Hearings could get better compliance from people if there was some economic penalty for nonperformance or by missing a deadline? COMMISSIONER APPLEBAUM: I believe there would be some minor improvements. But I think the key to the success is to select and prequalify good vendors, which -- realize, a vendor wants to get the job done 'cause that's when he gets paid.
Well, I personally want to -- COMMISSIONER APPLEBAUM: And the key to his success is doing a good job up front and getting the right vendors, prequalifying the right vendors and looking at vendors who have a bad track record or who have too much work at the time and not qualify them. Now, it's interesting, we had just established a new program for the Water Department. The Water Department, we had have that open six or seven at a time, lettings for water and sewer jobs. The industry out there is a small number of vendors who bid on those. The problem 177 2/9/99 WHOLE COMM. - Budget Hearings has been that some of the vendors would come in and they'd bid on a lot of them and they'd be awarded too many at one time and they got into trouble.
Right. COMMISSIONER APPLEBAUM: We have now established a brand-new program that's starting as we speak whereby we will have one day where we're going to have six bid openings -- they call them "a letting" -- six water and sewer bid openings at one time. The envelopes from the contractors for each bid are put on a table. The first envelope, the first job is opened. The numbers are read off. If a company wins that bid, he may decide and determine that he wants to withdraw his envelopes from the next group of bids so that he can never use the complaint that "I ended up winning too many and I can't do them all." So this is --
Well, why would someone do that? COMMISSIONER APPLEBAUM: Well, they would do that because they put the envelopes in, 178 2/9/99 WHOLE COMM. - Budget Hearings not knowing which they might win.
Right. COMMISSIONER APPLEBAUM: So they put one in for each job.
No, I understand that, but why would they withdraw from the rest of the ones down the line? COMMISSIONER APPLEBAUM: Because they do not have the workforce, the manpower or the finances to do all six. So they win one, they might withdraw from the next. So they might win one, don't do anything, win the second, and then come to the conclusion that they should withdraw from the others. Now, what this is doing is giving the Water Department and the Procurement Department the ammunition that a water-and-sewer vendor cannot complain that they received too many jobs at one time and, therefore, delay their jobs. That should not happen under this new process.
Okay. COMMISSIONER APPLEBAUM: We also have started another interesting item, a debarment process. Up to now in the City of Philadelphia, 179 2/9/99 WHOLE COMM. - Budget Hearings we have not had a formal debarment process. We just completed that program. It's going to be advertised, I think theory going to have hearings -- not City Council hearings, but public hearings. So there will be a process in place, that vendors -- Public Works and others -- who are poor performers, for whatever reason, will be first suspended for X-number of days and then can be debarred for up to three years or five years, I'm not sure, from ever bidding on any kind of City of Philadelphia project. So we are trying to do two things at one time: we want to increase the playing field to get more people -- so we have more competitive prices; but at the same time, we're trying to let the vending community know that they're not going to get away with murder, as they have in the past.
You're getting tough here, Lou, at the end of the -- COMMISSIONER APPLEBAUM: I'll give you one great story that we just came into, and I'm not going to mention the name of the economy.
Please don't. COMMISSIONER APPLEBAUM: But there's a 180 2/9/99 WHOLE COMM. - Budget Hearings company that does repair services for us, and they repair products. And part of the bid is to charge us per pound for material that goes into completing the product. And we had been receiving invoices from this company. They would take a product and would charge us for 100 pounds of material to fix it. We then went -- or the Operating Department went to the catalog and found if you bought this product brand new, what weighs, and it weighs about pounds, and they're charging us for 100 13 pounds of material to fix it, to go into it, so -- 14
It shows you that 15 more is always better. 16 COMMISSIONER APPLEBAUM: So, you know, 17 it's a constant battle, and we try our very best 18 to service, supplies and equipment, and Public 19 Works contractors who are -- 20
Can you, Lou, in conjunction with Miss Bittenbender and the various representatives from the Law Department, put together a piece for us on this particular issue? COMMISSIONER APPLEBAUM: On the debarment issue? 181 2/9/99 WHOLE COMM. - Budget Hearings
Debarment, disqualification, legal ramifications of what happens when you do any of these various processes. I'd like to know what the City Administration directly plans to do vis-a-vis the State about the 1921 statute and the $4,000 limit. And, lastly, the date certain for completion, and penalties for lack of completion of projects, as well as a date certain by which the project's supposed to be done. I am intrigued by the processes, as laid out by Miss Bittenbender, which seems to have her projects starting, or some part of the projects starting literally in the previous fiscal year, anticipating the receipt of dollars come July 1 of the next fiscal year and things kind of hitting the ground running, and whether or not that particular process can be expanded throughout the rest of the government. I mean I guess I'm now concerned that we have one part of the government doing projects and procurement of services in one way, and everybody else either doing them another way or their own way or the way they've always done 182 2/9/99 WHOLE COMM. - Budget Hearings them. I won't make a judgment as to whose is better than whose, but it just seems to me that it makes a lot more sense that everybody's doing the same thing and, hopefully, it's improving the system. COMMISSIONER APPLEBAUM: We will try our very best. That was a lot.
It's a lot of stuff. I'm glad you came over today, Lou. COMMISSIONER APPLEBAUM: We have attorneys here today from the Law Department who will help us and we can put that together. I think what you were talking about is a process that is used with professional service projects.
Right. COMMISSIONER APPLEBAUM: That expedited method that they have which --
It has a lot to do with the design. COMMISSIONER APPLEBAUM: Right, and that has a lot to do with the ACIS program that's new, that's just been implemented the last few years, and that helps that.
Okay, all right. 183 2/9/99 WHOLE COMM. - Budget Hearings COMMISSIONER APPLEBAUM: We'll try our best to get back to you on most of that.
Thank you. It will go to the Chair and then get out to us.
I see that we're spending approximately $167 million in capital funding in FY 2000 on the airport expansion. The last time the airport had an expansion, many of the neighboring businesses had to be relocated. Is this the case in this expansion? Would that hold true here? Has this proposal gone to the Eastwick PAC, do you know?
I don't know. I don't think that this is going to require that kind of 184 2/9/99 WHOLE COMM. - Budget Hearings relocation. There was an environmental impact process that went on, but perhaps someone else would like to comment from the airport.
Do we have somewhere here from the airport? (Charles Isdell comes forward.)
Good afternoon, President Verna. I'm Charles Isdell, the acting Director of Aviation. And there are no relocations of any businesses planned as part of the expansion program described in the budget today.
Well, I think there are -- there are a number of different projects included in the appropriation, and each one of them will have an environmental impact study done before the transactions are completed. And I didn't want to forget to respond to your question about the Eastwick PAC. We've contacted Eastwick PAC recently, and we will be attending their upcoming meetings in keeping them 185 2/9/99 WHOLE COMM. - Budget Hearings abreast of the impact of our upcoming projects both in terms of noise and traffic and any other impact, which we hope some of which will be positive certainly for the community, and we certainly will do that aggressively and proactively.
When do you anticipate that this work will start?
Well, the biggest projects, of course, are scheduled to start in April of this year our two new terminal buildings. And they will probably -- the total package will probably take two to three years.
Line item 39, I note that we are spending $1.8 million in FY 2000 on site acquisition for the Avenue of the Arts South. What sites are you anticipating acquiring, and what uses are you anticipating for these sites?
Part of this, I think is that the City had made a certain commitment toward 186 2/9/99 WHOLE COMM. - Budget Hearings the purchase of the site that was acquired for the Orchestra Hall for Art PAC, and we did not have enough money from previous capital allocation to pay for that. So part of it is going to that. There is also another portion of it that is going to a site at Broad and South that is going to be used for elderly housing. I think it's kind of the second phase of --
Is that on the south side or the east side or west side?
It's on the northeast corner of Broad and South. I think it's the second phase of a project for the Sons of Italy, that it will be elderly housing or some form of elderly housing or it may be market-rate housing or subsidized housing. And through PIDC the site is to be acquired now. I believe that money will be paid back if this project goes ahead. If the project doesn't go ahead, it was deemed that it would be a good idea for us to control this site anyway for the Avenue of the Arts and to be able to either resell it at a later point to another developer or use it for some arts project that we might need it 187 2/9/99 WHOLE COMM. - Budget Hearings for at sometime in the future.
The First Judicial District. I note that once again on of the Five-Year Plan, the City has refused to budget money for the courts system in the hopes that the State legislature would fulfill their obligation to fund the courts pursuant to the decision of the State Supreme Court. Since we have refused to put their operating budget into the plan, why are we spending money on the capital improvements?
That's an excellent question. There are two reasons: one is that regardless of the fate of the debate between the State and the City and the other counties over court funding, we will own the Family Court building, which is the largest single project funded in that line.
And eventually, would the State take over that building?
Well, that would be the second part of my response, which is that most of the proposals we've seen for State court funding, 188 2/9/99 WHOLE COMM. - Budget Hearings because the variety of different arrangements that there are in different counties for housing the courts, in most counties, the courts are either in a county building, or the counties have traditionally provided some sort of location for the venue for their offices and courtrooms. It's been assumed in most cases that all the State might choose to -- the eventual deal might have all the State reimbursing the counties for essentially a rental payment for those facilities, that in most cases, the courts would stay in buildings they're in now, at least in the short term. For example, here, with the construction of the CJC, we're taking about -- I've forgotten the exact number but it's somewhere around a $150 million facility. For the criminal justice part of our courts, we have the courts in this building, we have the courts in that building. All of those are owned by the City. Obviously, we could sell the State the criminal courts building, but we wouldn't sell them the portion of City Hall that they occupy. So the assumption has been, for 189 2/9/99 WHOLE COMM. - Budget Hearings purposes of the budget, that if there were a court funding plan, that we would probably be reimbursed for providing office space for them in all the various locations. And that, therefore, on top of the fact that we own the building and it needs renovation, that whatever happens with court funding, we will need to have a modern court facility for Family Court anyhow.
On of the Five-Year Plan, it states that L&I housing inspectors have been retrained on stricter enforcement provisions in the new Property Maintenance Code. Can you be a little more specific about these new provisions? I note that last year we added ten housing inspectors, and the amount of inspections really declined. Can you give us an account of why that happened?
I think that question would best be answered from someone from L&I -- do we have a -- I think because they don't have a large capital budget --
Is someone here from L&I, please? 190 2/9/99 WHOLE COMM. - Budget Hearings
However, that would be a legitimate, I think, question for their operating budget since the housing inspectors are funded from the Operating Budget and the responsibilities they fulfill are Operating Budget responsibilities. So we'll make note of the question and have them come prepared to the hearing to answer that.
Okay. The Chair at this time recognizes Councilman Ortiz.
Thank you, Madame Chair. Miss Bittenbender, on of your testimony, you say that they consistently maintain the anti-discrimination policy by increasing the percentage of minority business participation. Do you have a list of those companies? And if you could do that, could you make that available to the President of -- in terms of professional services?
And the criteria in terms of professionals that you use for selection of bidders and so on? 191 2/9/99 WHOLE COMM. - Budget Hearings