And they've been kept informed, all of these groups, about what's been happening?
Well, let me put this in context. We're talking now about a year to 18 months ago. This is the big PUC process, 60 different parties -- low-income, community 58 6/7/99 LAW & GOV'T - Res. 990388 advocates, State utilities, and municipalities. And as a part of that process, they broke into various working groups. There was a separate working group for municipals, of which there were only two -- PGW and one other very small borough utility. And in that working group, all the problems that Councilwoman Tasco has raised now, plus, you know, 50 other ones that were raised by all of the different City people, were put on the table. And we talked about that with the other people from the different parts of the state that came in there. And I think there was an agreement there that the City's problems were unique, we were not the same as the jurisdiction of utilities. And I don't think we succeeded in persuading people that we should ultimately be treated differently as far as competition was concerned, but I think we did do a good job of convincing them that they could --
We didn't persuade our State representatives from Philadelphia that we shouldn't be a part of that. I think the rest of the people understood that, don't you agree? 59 6/7/99 LAW & GOV'T - Res. 990388
Well, I think that the governor's office was not supportive of our position. I think that the House --
Well, that would be clear. The governor doesn't even pretend to speak for ordinary people. He is interested, as he's made very clear, in business and only in business. So why would you expect to convince him?
Sometimes I have this very high and un -- ridiculously overinflated idea of my persuasiveness, but I did not succeed in that case.
Let me just finish, though, just to make sure we got the time line straight. That process ended in a deadlock -- not with Philadelphia, but between other parts of the interest group. And the whole legislation got 60 6/7/99 LAW & GOV'T - Res. 990388 stuck on whether the State would repeal the gross-receipts tax. And it really died at that point. When it came back, the rest of the state -- the other utilities -- had reached some type of resolution on their issues, other than this tax issue. And when the tax issue was resolved, they were ready to go. And so the bill was introduced without the City in it because the City's issues really hadn't been addressed. I don't think there'd been a determination that the City would never be addressed -- it was just that we were not at that point, ready to go, and they hadn't addressed our issues, and so that's what happened. Then once got into the legislative process now as opposed to the PUC process, then there was an impetus to bring PGW in.
When was that? Could you give us some idea of the time?
Yeah. It was really this year, it was in the winter of this year.
You mean back in January? 61 6/7/99 LAW & GOV'T - Res. 990388
Yes. Because we submitted -- our working group, our City working group submitted extensive lists of problems with the legislation in March.
Well, since that time, since, say, last December, January, February of this year, what meetings have taken place between the City and the Philadelphia delegation in the House and in the Senate?
Well, who would know that? Because it would seem to me that once the legislation was introduced that did not deal with Philadelphia's issues, that it was clear that there was a problem at hand. Was that the time at which they indicated they were going to include Philadelphia in the process of deregulation?
Yes. Maybe I was unclear in my answer before. 62 6/7/99 LAW & GOV'T - Res. 990388 I don't know of any briefing of the delegation as a, you know, get together and sit down and talk with the whole delegation. If there has been one, I didn't participate in that.
Well, you know, it's like A-B-C. And I don't understand it. Anybody who knows anything about politics, if a problem comes that's going to affect the constituencies of the Philadelphia representatives, then you bring those folks together and say, Do you know that this problem exists? And we've got to mobilize to find a way to defeat it because we think it's harmful. Now, that apparently has never been done. Instead, what's been assumed is that Governor Ridge and his party, I assume -- you know, I don't know how they're counting the votes. But it's assumed that Governor Ridge and the dominant party, apparently, has the votes to pass this no matter how it affects Philadelphians. And that's something that I don't believe. I believe that if the constituents of the City and State representatives and State 63 6/7/99 LAW & GOV'T - Res. 990388 senators know about this problem, they will take the necessary action so that no Philadelphia representative at the Senate level or the House of Representatives level will in any way support this legislation. And if that happens, there won't be any such bill endangering Philadelphia senior citizens, low-income customers, and everything else that goes along with it. And I just fail to -- this is why it seems to those of us that have some knowledge of how a political process works interpret the Mayor's failure to act, failure to mobilize people is tantamount to going along with the Governor's ideas. And we're wondering, why is he doing that? We dismiss future political ambitions because we certainly hope that's not been in the Mayor's thoughts because he's the Mayor of the City until the end of this year. So we hope that his first thought is what's important to Philadelphia. I just don't understand why once it became clear, why the Mayor didn't immediately call all the State senators and representatives representing Philadelphia together and said, We 64 6/7/99 LAW & GOV'T - Res. 990388 face a really problem here. And I think it would have been done on a bipartisan basis. Had that been done, you wouldn't have to spend all this time, Mr. Dworetsky. I'm not trying to make you lose fees, but I think even you would be willing to lose your legal fees if we could save self-government for Philadelphia. I'd like to see you be spending your time preparing the City's legal position, if that ever became necessary, in defense of the Home Rule Charter.
Well, as you point out, there clearly are implications for the Charter. The statute does repeal portions of the Charter, and it is the first time that I've seen State legislation do that. I mean, I think you understand, you know, my role in this has been to try to make sure that if a bill is passed, that it contains provisions that are protective of the -- that address the major problems that the working group identified and --
Well, the reason we asked the Mayor to appear is, we understand that both of you, you know, don't make the policies, 65 6/7/99 LAW & GOV'T - Res. 990388 that only the Mayor makes the policies on behalf of the City administration. And the reason we wanted the Mayor here was so that we didn't have to raise these issues with you because each of you is very limited in your ability to answer, because only the Mayor has the ability to change a policy or to explain what his policy is. And it's kind of shocking to me to see that the Mayor has chosen to ignore Philadelphians by not coming here. He didn't do that Friday when he was interested in something that we strongly favor, and I think Council probably unanimously favors the gun control legislation. But he was here to help rally Philadelphians. I'm just wondering why he isn't here to help rally Philadelphians in this case to save their Home Rule Charter, you know, to save the rights that we have built up. Obviously, at the State level, rural people who have no knowledge of Philadelphia's problems may have a different approach, you know, to how Philadelphia ought to deal with this problem. It's always easy to do it from a distance. But if you're living in a situation, I 66 6/7/99 LAW & GOV'T - Res. 990388 have trouble believing that the rural legislators are going to vote to have Philadelphians freeze this coming winter or the winter that follows. Well, look, I think it's time that -- could both of you remain here on behalf of --
I haven't finished yet. I support Councilman Cohen in that an attack on the Home Rule Charter seems to me would have been the answer to address that issue. I mean, you start today with attacking the Charter or removing your powers and then some other move comes down the line. So I have to go on record to question the sincerity of the Mayor. Yes, he did send a letter. That is, you know, you can wink and nod and do what you have to do but, on the other hand, be supportive of what's going on. For the record, also, Councilman Cohen, we have had for the last two or three years the whole discussion of governance around the 67 6/7/99 LAW & GOV'T - Res. 990388 Philadelphia Gas Works and the role of the Gas Commission. And sometimes there has not been a lot of pleasure with the Commission in terms of some of the decisions we have made or have not made. And there may be some support to remove the Gas Commission and use this as a way to get rid of the Commission because we do provide oversight of PGW. So that was just an editorial comment there.
Councilwoman Tasco, wasn't there recent action in which the Mayor asserted himself to dismiss a member of the Gas Commission?
He did that too. And there have been many discussions around governance relative to the Gas Commission and the role of the Gas Commission that plays with PGW. We were criticized for micro-managing and we were told not to micro-manage until we got new management in. New management came in and we let them manage, so now we're criticized for not micro-managing. So, I mean, you're dammed if you do, you're dammed if you don't. 68 6/7/99 LAW & GOV'T - Res. 990388 But in any case, there are some people who are unhappy with the Gas Commission. Let me just ask you a question, Mr. Dworetsky. What role have you played in this whole issue of deregulation and the amendments? And how long have you been involved? And when did you begin to work on the amendments relative to the whole issue the deregulation?
There was a -- we got -- when we first got the first draft amendments that were drafted in the House Republican caucus, it was, I think, in February. And what I did was, we have this working group that we mentioned before of 14 or 15 people, and we had a big meeting in my office and we put together a list of the major problems that we could all identify with respect -- with respect to the amendments as they were done. And we sent off that list to the State in the middle of March. And from the middle of March, I have been getting -- I got a response from the State with respect to those amendments, and I have drafted language that dealt with particular points in that, and circulated it to 69 6/7/99 LAW & GOV'T - Res. 990388 the working group. So it's been in that time frame.
Let me ask you this question. When you saw the amendments presented in the way that they were to attack the Home Rule Charter, as former City Solicitor, did your red flag go up to say to the Mayor, We should address this issue rather than trying to help the legislators draft the amendment to take away the power of the City to oversee the PGW?
Well, Councilwoman, I mean, if you're asking me whether I like these amendments and whether I support the amendments and whether I thought the amendments were a good idea from the beginning, the answer is, I don't. And I think that that's been very clear.
Well, what would you advise the Mayor to do if you were City Solicitor around this issue? To go along with it and help them take away the power of the Gas Commission and the power of City Council? Or would you fight the process of taking away -- attacking the Home Rule Charter?
Well, I think the 70 6/7/99 LAW & GOV'T - Res. 990388 issue about fighting this legislation from a legal perspective, through litigation, doesn't even come up until the legislation is passed. In the meantime, I think -- and I would have told the Mayor when I was City Solicitor, and I think it's the responsible position is that if there's any chance to make sure that legislation which is passed does not include language which causes either a technical default or a fact default on the bonds, we should try to do that. I think that's the responsible thing to do. I know it's not -- that doesn't mean that the legislation is supported.
Well, that depends on the circumstance. If the Mayor were at the same time leading a fight against this and taking these steps that you're talking about, that might be one thing. But the record is clear that all the Mayor is doing is saying to the leadership that wants this new legislation, This is the way to do it and to minimize the damage to Philadelphia. And many people, we are told on very good authority, many people assume that that means 71 6/7/99 LAW & GOV'T - Res. 990388 that the Mayor supports this legislation. I am told that the common opinion among Republicans in the House and the Senate is that the Democrats are also on board; therefore, you Republicans ought to be on board, because the Democrats in Philadelphia support this legislation. That is common knowledge throughout Harrisburg you won't find any responsible political analyst there concluding differently. What you're talking about is a very sophisticated legal defense which, under certain circumstances, is appropriate. But in this case, it has all the earmarks of, We accept the inevitable, therefore just put in this language so we can protect Philadelphia's investors. Forget about the senior citizens, forget about the low-income people 'cause they don't really count. It's only people that have money to invest that really count. And that's the message that's gone forth throughout the State. And if that's not the message the Mayor wants to be circulating, then I think the Mayor's got to come out and make mighty clear that he's against this legislation and that he will fight it 72 6/7/99 LAW & GOV'T - Res. 990388 to the very end. And if he does that, he will mobilize all of the representatives in the Senate and House, irrespective of party. Because I cannot believe for a moment that any representative at the State House or the State Senate would support this legislation 'cause every one of them have large numbers of senior citizens and large numbers of low-income constituents right in their own district. But they're all just going along because they think the Mayor wants us to go along and he's going to protect us, he's going to tell us that, Gee, there was never any chance of defeating this. And, of course, the Mayor knows better than that. The Mayor's a pretty good politician, and he knows had he wanted to, he could have killed this a long time ago. (Applause.)
And now that he's let it go this far, it's urgent now because he's the one that's going to be held accountable if this bill passes. And you know the silence from the two candidates for mayor is deafening. I haven't 73 6/7/99 LAW & GOV'T - Res. 990388 heard a word in protest from either the Democrat nominee, who was nominated three weeks ago, or from the Republican nominee, who officially was nominated three weeks ago. It seems to me they both ought to be out in front together with this Mayor leading the parade. They joined him when the Mayor led the fight against the retirement benefits. Sam Katz and John Street sent him letters saying to the Mayor, We support your being tough and not giving increases to the retirees. It certainly seems to me that they owe everybody in Philadelphia the responsibility to support the Mayor and to lead the fight against this bill becoming law. And if the Mayor refuses to do it, certainly the two candidates ought to do it on their own. (Applause.)
We talked earlier about the creation of a new authority. Is that a part of the new proposed amendments? 74 6/7/99 LAW & GOV'T - Res. 990388
It doesn't create a new authority, but it would give the City the power to create an authority, a municipal authority.
It's pretty flexible. It could be either gas supply or gas distribution. The current Municipal Authorities Act, which gives Council the power to create authorities, doesn't include gas. So this would, in essence, give you that authority with respect to a gas utility as well.
Would the authority have a budgetary oversight of PGW?
The details of how an authority would get the assets, none of that is dealt within the statute and how the authority would deal with budgetary matters. It's just an option that is given under the last draft of the amendments for the City to create an authority for that purpose, if the City desired to do so.
In this new 75 6/7/99 LAW & GOV'T - Res. 990388 legislation.
The City does, okay. So who would oversee the budget of PGW?
Well, under the current structure, obviously, it's the Gas Commission.
But the Gas Commission's going to be abolished. Let's look at the future. Who's going to have budgetary oversight?
Well, it could easily come back to City Council, and it could be done through Council as you do other departments. And you could provide separately by, you know, the new version of the governance.
Is there any reason to abolish the Gas Commission in this new legislation?
Is there a reason to? Well, I guess if you accept the premise that you're going to substitute a different regulator, there is reason.
Well, the City isn't much of a regulator, is it? Didn't the newspapers 76 6/7/99 LAW & GOV'T - Res. 990388 report recently about a million and a half dollars being spent on a homeless shelter with no 4 supervision as to the expenditures, no way at all of finding out what happened to that million and a half dollars? That's the City's oversight, you know, that part of the City directly under the authority of the Mayor. Incidently, let me note for the record the presence of Councilman Frank DiCicco. So I don't know when you say the City will have authority, it doesn't -- I mean, the fact that the City has authority doesn't mean anything. The City lets money be spent without checking on anything.
No, I don't think that's right. All I mean is that the governance of PGW is not addressed in the statute. That's been an issue for the City a long time, and it remains an issue for the City. And that's done through the different components of City government -- through City Council, through the executive branch. And there's no reason to think that that's going to be obviated by the statute. I 77 6/7/99 LAW & GOV'T - Res. 990388 mean, this statute makes it probably more important that the City determine how it wants to govern PGW.
But it's taking away the power from the City. It's saying in certain areas, You're not going to be able to do anything because you're going to be subject to the same rules that private utilities are under the PUC; therefore, out goes the senior-citizen discount, out goes the low-income discount, out goes a whole series of regulations with respect to gas shutoffs.
And if you have an outside agency suddenly deciding whether certain expenditures are appropriate or not, how can you say the City maintains the authority when these important areas are being taken away from City control and being turned over to the State?
Well, I think there are two different components that we're talking about. One is governance and one is regulation. And there are areas, you're quite right, there are 78 6/7/99 LAW & GOV'T - Res. 990388 areas where they get very close. And there are some times -- and Councilwoman Tasco would agree with me on this, there are areas where it's hard to tell when your regulatory arm is really your governance arm or vice versa. But in many areas, the governance is a separate thing than regulation, and governance remains with the City, and the City's policy decisions with respect to many matters that PGW currently has will continue in the future.
The only group that's confused about governance and the regulatory body has been this group sitting at this table. The ability to regulate and to manage, and with the Commission's authority to oversee the budget process, it helps to keep the rates from going up. I mean, you put the rate process in Harrisburg and you have the governance issue over here someplace, who manages the company in terms of their ability to manage their own expenditures? 'Cause we've had some problems with some initiatives that have been brought before the Commission that have not been well-thought 79 6/7/99 LAW & GOV'T - Res. 990388 through. And because we raised that issue, we have saved the ratepayers money because we stopped it at the door instead of allowing it to go through and then coming back and saying, Oh, that wasn't a good idea, let's raise the rates and let the ratepayer pay for this, 'cause the City's certainly not going to pick it up. So only the confusion has come about because there are some people who don't particularly like the way the Commission has had oversight, budgetary oversight and thorough budgetary oversight by some competent staff, which raise some very crucial issues. And that's why this Gas Commission is being recommended to be abolished, but it doesn't have to be abolished.
Mr. Dworetsky, why are we doing the dirty work for those who want to take away rights from citizens? (Applause.)
Why are we providing an excuse for Representative Perzel and Senator Salvatore to say later, Oh, they thought this is what the City of Philadelphia wanted. You know, this legislation, we work with the City of 80 6/7/99 LAW & GOV'T - Res. 990388 Philadelphia all the time. For a year and a half, they've been meeting with our committee, they gave us the language that they wanted inserted. They didn't give us any language that said the rights of senior citizens shall be protected and that the PUC, if it takes jurisdiction, will have to honor the commitment made to our senior citizens. You didn't give them any language to protect the low-income people, did you? You gave 'em language to protect the investors 'cause that's all Philadelphia was interested in. (Applause.)
Why do you want to give them that cover? If Perzel and Salvatore and anybody else want to take away the rights of people, let them come out and proclaim it, and let the people respond to that. But you're permitting a stealth attack on the rights of the people. And that's why the people are suspicious as to the role of the Mayor and what the Mayor's policy really is. They believe the Mayor supports this bill that's in Harrisburg, despite his statement on the record in 81 6/7/99 LAW & GOV'T - Res. 990388 opposition.
Well, as I've said now a couple times, what I have tried to do is to make sure that the legislation, if it's passed, is protective of the bonds and deals with the other issues identified by all the constituencies.
Why aren't you interested in the rights of the senior citizens and the low-income customers?
I think you misunderstand the positions that we took from the very beginning of this process. We not only said that the decisions about senior citizens and low-income should be local decisions; we said that all the decisions concerning how PGW should be operated in the future should be determined locally. That's been our position. We had a full draft chapter of the bill.
Then why didn't you include that kind of language into the bill? When did you tell them that together with the investors, these are the other interests that have to be protected from possible PUC change?
All those discussions 82 6/7/99 LAW & GOV'T - Res. 990388 happened. I mean, you're --
But you didn't put it in the language, did you? saying that this bears the imprimatur of the Mayor's approval? The Mayor says any bill has to contain this. As well as the protection of the rights of investors, it has to protect the other interests. Why didn't you give them language which protection the Gas Commission as the continuing authority? Why do we have to create another body when we have a Gas Commission with complete representation -- two members of City Council, two members from the Mayor's Office, and the City Controller appoints the fifth member. It seems to me that's fully representative. And this comes from me. I don't always agree with the Gas Commission. I filled Councilwoman's ears on a number of occasions with complaints about their decisions. But that's the best form of representation that I know that we could have. You have the legislative body involved, you have the Mayor, and you have the City Controller. They're the top officials of the City. That's where there ought to be 83 6/7/99 LAW & GOV'T - Res. 990388 responsibility. So why didn't you include that the Gas Commission will remain the regulatory --
I suggested that in the legislation from the very beginning that the City, in --
-- the current structure and that the City be able to legislate for what senior citizen program there would be, what low-income program there would be.
They have that language, they had a full chapter that was designed to create local control over the PGW deregulation and a local determination of whether there would be. I can't tell you they didn't -- it's not that they didn't get the language. The question is whether they are amenable to the language. I've negotiated into the statute those provisions which there was room to negotiate. Is that perfect? No, it's not 84 6/7/99 LAW & GOV'T - Res. 990388 perfect. Is the statute something that we like? No, it's not something that we like. Is it better than what it was? You bet it's better.
Well, I haven't heard a public statement by the Mayor saying that unless this bill contains full protection for senior citizens, for low-income customers of the Gas Works, and protects on the stoppages of service, that unless it contains those protections in addition to investor protections, this City will oppose this legislation in every form and everywhere, and calls upon all of its representatives to vote no on this bill. Why doesn't the Mayor say that if that's his position? (Applause.)
Well, I think you're asking a rhetorical question. You have said several times that you think the Mayor should be out in front in terms of the legislative initiative.
You said that. I can't speak for the Mayor on that. 85 6/7/99 LAW & GOV'T - Res. 990388
Well, I understand that you can't speak for the Mayor, and the Mayor apparently doesn't want to speak for himself because, apparently, he's not willing to make these statements. What has been known in Harrisburg is that the Mayor is willing to live with this bill 9 if it contains investors protection, and you can forget the rest. Whatever we've given you, we've given you for the record. So our witnesses can tell that to City Council when they raise questions.
I don't think that that's true. I think it's been quite clear that the City's position has been opposed to this legislation from the beginning. And the amendments we opposed, and the question is whether the amendments, undrafted, without any improvement, that we should fight over those and we should try to get them better. And the decision was made to improve those amendments. And I think that whatever the amendments today, they are much better than when they started. 86 6/7/99 LAW & GOV'T - Res. 990388
Well, not so far as the senior citizens rights are threatened, not so far as those who benefit from the times when the gas cannot be shut off, not so far as the low-income customers. They're not benefitted, and I don't think the citizenry in Philadelphia in general is benefitted because all I think that's going to happen is the rates are going to skyrocket, just as they do with cable TV, just as they're doing in the telephone business. As soon as you put private enterprise in, the need for profit-making takes precedence over the need for services to people. And that's what's going to be happening here. Unless there are any other questions of these witnesses, I would like to call Mr. Kimmerle of the Gas Commission. But I would like to ask Mr. Dworetsky and Mr. Hayllar to stay in case questions come up and there are differences of opinion. (Mr. Kimmerle comes forward.)
Thank you, Mr. Kimmerle. Would you identify yourself, sir, for the record. 87 6/7/99 LAW & GOV'T - Res. 990388
And could I ask you, because I think we've had probably a more extensive discussion of many of the aspects, I'd like to ask you to summarize and to state any differences that you feel are important for this committee to have.
Thank you. You'll recall that I testified before the Council.
The Chair notes the presence of Councilman Clarke, Councilman Darryl Clarke. Or Councilman Clarke. There's only one Councilman Clarke. There's a Councilwoman Clark, but they spell their names differently, right?
Thank you. Instead of going on, I'll trying to work from memory. I don't have the current statements. But essentially, there is --
Bring your 88 6/7/99 LAW & GOV'T - Res. 990388 microphone closer to you, as close as you see it is to me so that everybody in the audience can hear as well as members of the committee.
Essentially the legislation moving through Harrisburg will be composed of --
And, Mr. Kimmerle, the microphone belongs right in front of you, not to the side.
Okay. Essentially, the legislation that's moving through Harrisburg today consists of what I call the "core legislation," which is the legislation designed to provide, quote/unquote, customer choice to all gas consumers in the State of Pennsylvania. And I'm also aware that there is language circulating that would amend the legislation to bring the City of Philadelphia under the terms of the core legislation, and at the same time, have fundamental changes on the regulatory structure of 89 6/7/99 LAW & GOV'T - Res. 990388 the Philadelphia Gas Works. The core legislation would essentially, what they call, "unbundle" the distribution systems in Pennsylvania. It would allow gas marketers to enter the market for the first time, and it would continue the monopoly status of the pipe companies, or PGW or PECO, to deliver gas within their service territories. There are some weaknesses in the core legislation from the consumer's perspective. It does a couple of things. First, with PUC approval, gas distribution companies would be allowed to exit the regulated gas sales market. That's an important component because no one has been able to demonstrate within the collaborative process -- and in fact, I've asked the PUC on numerous occasions, Has anyone reviewed the economic impact of this legislation? The result is no, there has been no analysis of the legislation. The testimony that we received in '97 said that gas rates could be reduced by as much as 20 percent net of the gross receipts tax. The testimony is now silent. And when the PUC and 90 6/7/99 LAW & GOV'T - Res. 990388 others are asked, why is the legislation being moved forward? it's to provide customers choice. It's not to provide reduced gas prices 'cause there's no basis for that argument. And in fact, it's likely the that gas prices will go up in the state of Pennsylvania as a result of legislation. There are also some sleeper pieces in the core legislation. To the extent that a utility continues to provide gas service, the legislation provides a new option that hasn't been available in the state before, and that's to provide monthly adjustments to gas costs. And in the case of the amendment that's been drafted to deal with the Philadelphia Gas Works, not only is there provision for providing a monthly gas cost adjustment, but there's also a provision for a monthly non-gas cost adjustment -- without review; it is reviewed at a later date. This comes to the core of costs in the City for gas. The Philadelphia Gas Commission this year turned down PGW's requests for a monthly gas cost adjustment on the basis that it would expose the consumers to a very volatile gas market, 91 6/7/99 LAW & GOV'T - Res. 990388 particularly during periods of dislocation. As an energy professional, I've lived through two significant dislocations in the oil market. I think, sir, you'll remember the gas lines in the early '70s, and you'll remember the dislocation that happened in the international energy gas markets in the '80s. This volatility will now be pushed through to gas customers on a monthly basis. Just like now when you go to the gasoline pump, you pay today's price; that same thing is going to happen to residential customers. The other core piece of the legislation that will have an impact on the PGW and the ratepayers in Philadelphia is the concept of a provider of last resort. The provider of last resort in the core legislation is designed to provide gas service to those customers who a gas marketer chooses not to serve, a customer who chooses not to be provided by a marketer, or third, in the event that a gas marketer defaults on its obligation to deliver gas. Now, if you look at that population, who are the people that the gas marketers are not 92 6/7/99 LAW & GOV'T - Res. 990388 going to go after aggressively? I would assume that if I was in that business, I am not going to provide competitive rates to people who have troubled credit histories.
To the extent that -- so the other group is a situation where a gas marketer fails to make delivery. And why would that happen? I've been in the energy business now for over years, 10 and I have seen marketing organizations declare 11 bankruptcy so that because they could not meet 12 their obligations to deliver energy during periods 13 of dislocation in energy markets. 14 Under the core legislation, the 15 provider of last resort would have to step into 16 the market with no notice at all, secure gas at 17 the market price, and deliver it to PGW 18 customers. The provider of lasts resort 19 obligation is almost impossible to plan for 20 because the real impact comes from dislocations in the energy market. As a result, we're going to have people bundled into a group of customers served by a provider of last resort. And that group of customers are probably going to have substantially 93 6/7/99 LAW & GOV'T - Res. 990388 above-market costs for their natural gas commodity. Let me move on.
Well, Mr. Kimmerle, I'm not sure I understand what it is that you're saying, and I --
What I am saying is that the core legislation is going to result in an increased cost in gas to a significant portion of the Philadelphia population, bottom line.
Because if there is choice, the aggressive market is not going to serve portions of the population.
The provider of resort does not have a right to refuse, and that's why the provider of last resort will be the expensive provider of gas service in the City.
That's right. They're 94 6/7/99 LAW & GOV'T - Res. 990388 in business, they're just like the grocery store. They can --
But I thought a utility had a responsibility that -- oh, I guess that's when the utility has a monopoly.
That's when it's a regulated business. But the gas marketer is not a regulated business.
So they will have no 11 responsibility to provide gas to people of low income.
They will have an obligation, as established by the PUC. The question comes down to, how far will the PUC go in structuring an obligation to serve all customers? I know in the private sector, you can design your marketing campaigns and your advertising campaigns to target customers. During the Hawes administration of PGW, there was a plan to mine the PGW customer base to identify those customers most likely to buy selected products. The gas marketer is going to mine the City of Philadelphia and identify those customers who they want to choose, and they will 95 6/7/99 LAW & GOV'T - Res. 990388 design the marketing programs to target those customers.
To target, for example, industrial and commercial users 'cause they're the highest volume users?
I believe that we've already seen the testimony from Connectiv Energy, who was testifying on the part of Green Mountain Energy and Shell Oil, that they would not participate in the unbundled market in Pennsylvania because the legislation itself is poorly drafted and does not allow them to make a return on the residential customer.
Well, that's a -- would I be wrong if I said it sounds to me like this opens the door to companies taking the cream of the crop and leaving the City with the burden of serving the customers that have economic problems?
I believe that's true. I also believe that it's deceptive to say that the senior-citizen discount would continue under the proposed legislation. The purpose of the legislation is to provide customers choice. 96 6/7/99 LAW & GOV'T - Res. 990388 At the present time, the way the senior-citizen discount is structured, a senior citizen receives a percent discount off all of 5 the charges of PGW. To the extent that a senior 6 citizen takes advantage of a price being offered 7 from a marketer, only the transportation portion 8 of the PGW rate would be discounted. The gas 9 component of their bill would not. 10 As a rule of thumb, we assume that 11 about 50 percent of a customer's bill is for the 12 commodity of gas and about 50 percent is for the 13 commodity of transportation. So that even the 14 assumption that the senior-citizen discount would 15 continue is a fallacy. 16 And at the risk of going beyond reason 17 on this testimony, the legislation also provides 18 that if competition doesn't develop in a market 19 within five years, that the PUC will reconvene a 20 collaborative to figure out ways to make competition work. What's happened in the Canadian experience and is happening in other parts of the country is that the utilities have been somewhat more effective in maintaining their market share. 97 6/7/99 LAW & GOV'T - Res. 990388 And now, the thrust in Canada is how do we drive the utility out of the gas business altogether? This goes to the very core of the senior-citizen discount because to the extent that five years from now, the market's determined not to be competitive, the PUC could regulate PGW as the regulated entity out of the gas sales business altogether. And even those senior citizens who are grandfathered would lose their discount on the commodity gas.
Well, thank. You you've given much added weight to the threat of the senior citizens' discount. You're saying basically that they would lose half of their discount because only a portion of it would be covered by the senior citizen's discounts. That's for those that the legislation contemplates grandfathering in. Other newly senior citizens -- we hope they live and get to become senior citizens -- they would not get it after the year 2003?
No, they would get it after the year 2003, but five years after the effective date of the legislation. 98 6/7/99 LAW & GOV'T - Res. 990388
But new people who become senior citizens after that date.
No, the new people would not be -- under my understanding of the last draft I read, new people would not be eligible for the discount.
What we're also saying is that those people who are eligible for the discount and grandfathered in could very well lose their discount over time because of further review that competition didn't develop in the Philadelphia market.
Okay. Thank you. Are there any questions of Mr. Kimmerle from any members of the committee? (No questions.)
If not, thank you very much. I'm going to ask you, is there anything else you wanted to add?
I've been sitting in the collaborative process since the beginning. In 99 6/7/99 LAW & GOV'T - Res. 990388 fact, Councilwoman Tasco testified as early as 1997 on this piece of legislation. In an earlier life, I was employed by Conrail, and the corporation made a decision that deregulation of the rail industry would be in the best interests of the company. And as part of that effort, we mobilized all of the employees, we mobilized all of the management to do a grass-roots lobbying campaign of the legislators in Washington. At the same time, management of the company was aggressively lobbying in Washington to promote deregulation of the rail industry. I have been involved in other lobbying campaigns, both on the part of the National Coal Association, and more recently, on the part of the National Association of Utility Regulatory Commissioners. And in each case, there has been developed a strategy as to how to accomplish the goals of the organization. First, there is a definition of what was the goal; the second was, how then do we accomplish our goals. I've been very frustrated as a member of the City's collaborative with respect to 100 6/7/99 LAW & GOV'T - Res. 990388 unbundling. It seems to me from the very beginning of the process that the strategy has been to develop the best deal we can for the City under the terms of the legislation. The City began drafting language that ultimately appears in this legislation early on in the process, far -- when you're in the municipal section, language was drafted and circulated amongst the participants in the municipal section. We initiated meetings with the Governor's staff. At that time, we were drafting language and circulating it that would protect the bondholders. But we didn't see and we haven't seen a strong concerted effort to develop a strategy for defeating the amendment. As recently as last week, I had the opportunity to meet with a number of State legislators, and they were surprised to learn that the legislation was even moving. I had an opportunity to talk to some of the others, and we were saying that based upon the work of Mr. Dworetsky and Mr. Hayllar in Harrisburg, they assumed that the City was behind the legislation. I asked them about the letter from the Mayor. 101 6/7/99 LAW & GOV'T - Res. 990388 They said the letter from the Mayor -- that's dated. We haven't seen any opposition to this legislation or to the amendment of the legislation from the City. They're working under the assumption that based upon the silence in the City, that the City is in agreement with the forms of the legislation. Thank you.
Thank you very much, Mr. Kimmerle. The observations you have made are in conformity with what my independent survey of what's going on in Harrisburg reports. Councilman Ortiz?
I think it's very clear that no strategy for defeating the amendment was ever structured. I think the strategy was to make the amendment as palatable as possible, but not to defeat it as such.
Let me add to that. It took me close to four years to understand the nuances of the governance of PGW. I had to ask myself for three years who I worked for. Ultimately, I found out I'm an employee of PGW, I 102 6/7/99 LAW & GOV'T - Res. 990388 think. But I've seen the strategy in Harrisburg to be something along the lines of Atila the Hun being at the gate, and we have a beautiful city. And the decision's been made that instead of putting the City at risk, we'll give Atila a road map as how to enter the City with the least amount of damage. Thank you.
Well, that's what we're fearful but the way to change it is to bring about a change in the Mayor's policy, and we're hoping the Mayor will respond to that. And if he doesn't, I think that initiative will be taken by members of City Council to bring about that change. I think it's absolutely urgent that the constituencies of the different representatives and the different senators representing Philadelphia be informed as to what may be happening, and that they find out from their representatives and the senators what their position is. I don't think the senators and representatives should have the protective 103 6/7/99 LAW & GOV'T - Res. 990388 covering of saying, well, they never understood what this legislation was about, and had they understood it, they would have been opposed to it. I'm fearful that the City's policy is giving credence to the statements to be made at a later time by the representatives and senators that we thought Philadelphia supported this, we never knew it, you know, created any kind of problems for anybody, or we would have been against it. And I think we've got to shatter that kind of story and make sure that the elected representatives are held responsible for their actions. We thank you for your statement. Any questions? (No questions.)
I see no questions from members of the committee. We thank you very much and I also ask you to remain just for -- I think the remainder of the testimony is going to be very brief. But I'd like to ask you as I've asked Mr. Dworetsky and Mr. Hayllar to remain just in case some questions 104 6/7/99 LAW & GOV'T - Res. 990388 came up. Mr. Given, I understand that as President of the Union, you may have anybody else come up with you if you wish to. (Joe Given comes forward.)
And there's a representative, I think, of TAG that's going to -- are you with Mr. Givens? Then you can please sit with him. Very good, sir.
My name's Joe Given, G-I-V-E-N, President of the Gas Works Employees Union, Local 686 (SEIU). I don't have a prepared statement, and I wasn't going to make any statement. But after listening to the testimony, I think I've got to clarify both the union and labor's position on this bill. We were part of the task force for the last year and a half out in Harrisburg. We testified as early as 1997 for Tedyffrin Township, 105 6/7/99 LAW & GOV'T - Res. 990388 Chester County, on this issue. Our position has always been that we were against deregulation. Our position is now that we're against deregulation, and we're also against these amendments for putting us under the PUC. Labor put together a group of labor leaders through the AFL-CIO in Harrisburg to attend these meetings. This bill, Senate Bill 10 601, as you know, we are not in the bill -- meaning PGW. This bill, I believe, is on the floor today in Harrisburg. The bill will go back to the House and I believe the bill number we were talking about before was 937. And as you know now, State Senator Salvatore and Representative Perzel have an amendment to this bill. This amendment to this bill stinks, to put it in plain words. This is nothing more than what they did with electric deregulation where they snuck the electric deregulation in in the middle of the night on the back of the Taxi Cab Medallion Bill. We've been out there for two years, labor, a coalition of people from the city, have gone to these meetings, and we came away just as 106 6/7/99 LAW & GOV'T - Res. 990388 recently as three weeks ago that we were not a part of this bill, and then that's when this amendment came up. Labor's big concern was that there was no protection for the workers. There was no 7 protection that if a company came in and started merging or if somebody came in and bought another company, there was no protection for the people as far as if they would be laid off, or workers' right as far as who would do the work. There was a lot of safety concerns. They were the two main issues that labor had. When this bill came out of the Senate, the issues weren't this. So they have their own amendment that they're trying to introduce for workers' protection. Through the whole process of all of our testimony, like I said, I think that the way they're dealing with this now, they're trying to pull us in in the last two weeks, right before they go on a summer session. And I'm kind of confused, I think, like you are as to where the City stands on this. We get mixed signals from PGW, from the administration of the Mayor, and even out of Harrisburg, as you've said, because 107 6/7/99 LAW & GOV'T - Res. 990388 we're under the understanding also that there might be some Democrats jumping on this. But all the people that we talked to out in Harrisburg, the PUC, the State legislators, they don't really care if we're in this bill or not. But there is a concern that if it's coming from Perzel's office, they will vote with him because he is from the Philadelphia area. And I think a clear message has to come out of Philadelphia here, where are we on this bill? Are we for it or are we against it? Like I says, Gas Workers Local 686 has always been against this bill, from the beginning. We feel that there is nothing in this bill that protects the workers, there's nothing that protects the senior citizens, there's nothing that protects the rates. There's no savings in this. Last week, in the Wall Street Journal -- and I have a copy of it here today -- they had a situation to where what electric deregulation has done and how the salaries of the people have escalated, and they give names. And I could share that with you later. I don't want to bother you by reading it all. And how much money these 108 6/7/99 LAW & GOV'T - Res. 990388 corporate have made on the back of deregulation, on the back of the workers, on the back of the ratepayers. And like I said in the beginning, this bill stinks. Thank you.
I think your concerns are well-placed. Because, as I understand it, probably if we go by tradition, the first thing a new company would do -- and incidently, I think all of this is preliminary to finally readying PGW for sale to some private company in order to convert it into a profit-making company rather than a public service company that serves the people of Philadelphia. And I think your concerns are true 'cause in all of those cases, the efforts have been made by new employers to get rid of the 109 6/7/99 LAW & GOV'T - Res. 990388 workforce, terminate all contracts that exist, and treat everybody as brand-new employees. So I think your worries and concerns are well-placed. And we thank you for appearing here today.
I have note of a further witness from TAG. (Dennis Pollard comes forward.)
Thank you, Mr. Chairman. I'm Dennis Pollard, and I'd like to move admission of my entire prepared written statement -- I don't want to read it -- in its entirety. But I have four main arguments to make for you.
Very good. The full statement will be admitted into the record.
The first statement -- and, again, I analyzed the public policy and legislation for Tenants Action Group. The first statement is this. The Public Utility Commission of Pennsylvania lacks the staff and the ability to properly and completely review the Philadelphia Gas Works. The Pennsylvania Public Utilities Commission, or the 110 6/7/99 LAW & GOV'T - Res. 990388 PUC, deals with for-profit, private utilities. It's been said again and again, and it needs repeating that the Philadelphia Gas Commission is the only authority with the knowledge, the staff, and the understanding to review. And one reason for this is quite simple. For-profit private, utilities have extensive reports and filings which are sent to the Securities and Exchange Commission. So in other words, the work is already done with respect to going over budgets and making sure the companies are operating properly. This is not so with respect to our Philadelphia Gas Commission. They take the time, and it's an arduous amount of work, to review the necessary documentation. Second is that the PUC is not a super board of directors. And by that, what I mean is that the PUC does not and the PUC will not closely review what the Philadelphia Gas Works does. It doesn't have the time, it doesn't have the experience, which is one reason why it's proper in that this body should continue to push for local control. 111 6/7/99 LAW & GOV'T - Res. 990388 The only way, as I see it, that the PUC can regulate the Gas Works, as it does with its private utilities, is to reduce the profit margin. Well, companies that are not for profit, companies like the Philadelphia Gas Works do not look towards their profit margin as the main entity of making money, so the PUC cannot reduce the profit margin -- that is, reduce the amount of revenue and dividends that would go to stockholders. The only alternative by not granting PGW rate increases will be, in effect, to penalize residents and tenants of the City of Philadelphia. As has already been stated, the Philadelphia Gas Commission has not allowed the Gas Works to increase its rates. And at the same time, customer rates have remained low. If the PUC, in turn, regulates the Gas Works, and by the same token, does not hypothetically allow Philadelphia Gas Works to increase rates, what the Gas Works can then do is pass on any costs to the consumer, to the residents and tenants of Philadelphia. The Gas Commission is the buffer that keeps the Gas Works from arbitrarily raising its rates without 112 6/7/99 LAW & GOV'T - Res. 990388 impacting the citizens and residents of Philadelphia. The third item is the senior-citizen discount. And as someone who used to practice law, let me state that the wording of this is quite important. Yes, the Perzel amendment does not literally end the current senior-citizen discount, but it does phase it out over time. Currently, as the amendment reads, current senior citizens who are currently receiving the discount will continue to do so. However, those who become senior citizens after the legislation takes effect will not be eligible for the discount. Also, those current senior citizens who have, for whatever reason, not applied for the discount but later find that they need it will not be eligible. And the last item is simply that whatever difficulty that TAG or any other organizations may have had with the Gas Commission in the past, it remains true that the best, most capable, most qualified entity to supervise the Gas Works is the Gas Commission. And it's for one simple reason -- local control, accountability. 113 6/7/99 LAW & GOV'T - Res. 990388 If for, whatever reason, the Gas Commission were to sleep on its job, the Mayor is subject to recall or reelection in the future, members of the City Council who sit on the Gas Commission are subject to recall and reelection.
But if control goes to the Gas Utilities Commission, the citizens of Philadelphia, the residents of Philadelphia no longer have the ability to remove an entity or an individual who is not acting in the best interests of the City of Philadelphia. I will take your questions if you have any.
Well, we thank you very much, Mr. Pollard, for your statement. We're hoping, we've hoping that as a result of this hearing and the general reawakening of the people of Philadelphia to a knowledge about this threat to their interests, that the Mayor will begin to act in conformity with the statement of opposition. This committee is prepared to cooperate with the Mayor in every way, we're prepared to join him in a press conference, we're prepared to go with him to go to Harrisburg, to do 114 6/7/99 LAW & GOV'T - Res. 990388 lobbying, we're prepared to join with him and appeal to all the people of Philadelphia. Out of respect for his office, we believe he is the one that ought to take the initiative, and we will prepared to cooperate with him. But we think the danger is great and imminent, and we think the Mayor ought to be out in front, and we're willing to have him assume the leadership, which we think rightfully belongs to him, to lead this fight on behalf of all Philadelphians. And your analysis, I think, is very sound, and we thank you for its presentation today.
We'd like you to come forward, and you've heard the testimony, and I believe you were here when we had the emergency 115 6/7/99 LAW & GOV'T - Res. 990388 meeting on Wednesday. We'd be pleased to hear any final comments from you.
Just to be very brief, the conversations this morning, thus far, have been sort of the political objective.
The conversations this morning have gone to the political aspects of this problem. I think there is a mechanical problem as well, and that is that these transitions are not going to be without costs to PGW. This is an organization that is in not great shape financially and organizationally. It has undergone a lot of trauma. This legislation is asking the City and PGW and the customers to spend money they don't have, that they are putting at risk the implementation of major initiatives because what this legislation requires is a lot of activity on the part of the senior management team, on the part of the entire organization. They will undergo a major management audit. This is not a simple process, particularly in an organization in 116 6/7/99 LAW & GOV'T - Res. 990388 the condition in which PGW finds itself right now. Moreover, there are restraints on the company in terms of rate caps, in terms of inability to change tariffs that impose a level of inflexibility that PGW shouldn't be under, I feel, in the next to months. There should be the 8 flexibility to answer tactical issues that will 9 come up and that this company has historically had 10 to address over the last four or five years. 11 So I would simply raise another 12 concern, and that is for the organization and its 13 ability to implement this change in a manner that 14 I think would be successful and would put an 15 enormous burden on everybody throughout the 16 organization -- senior management and personnel. 17
My only comment, 18 Mr. Knudsen, would be that I don't see that this 19 change could ever be successful if we consider as 20 a barometer of change the interests of 21 Philadelphia citizens. I just don't see any 22 possibility of movement to the PUC as being 23 positive. I see it has being harmful. 24
And we're pleased to 117 6/7/99 LAW & GOV'T - Res. 990388 have you mention these items -- they're very specific and they're very important for everybody to consider.
Thank you very much. Are there any other people who wish to be heard today? Come forward, please, and identify yourself. (Jean Boon comes forward.)
Good morning. I'm Jean Boon, the secretary of the Action Alliance of Senior Citizens.
Many of our members wanted to be here today but they were advised on the radio by the City Health Department to stay home because of the heat. In fact, our President would have liked to have been here. Action Alliance of Senior Citizens is calling on all Philadelphia members of the General Assembly to oppose legislation to be considered this week in Harrisburg to open the Pennsylvania natural gas market to deregulation. Action Alliance has been, and still is, conducting a 118 6/7/99 LAW & GOV'T - Res. 990388 postcard drive. We've sent out thousands of postcards to the State legislators telling them we do not want to put PGW under the PUC. So if they say they don't know anything about it, that isn't correct. They have all received -- and especially Mr. Perzel. We want the authority for gas to continue to be under the local control. We have more than a thousand signatures from Mr. Perzel and Salvatore's districts against losing control of PGW. When we wanted to meet with Mr. Perzel, he would not see us. Until we had a huge rally outside, he finally agreed to see a few people. Unlike electric deregulation, Pennsylvania ratepayers have little to gain with natural gas deregulation and much to lose in the long run, said our president, George DePasquale. This is a 120,000-member organization, when we count the actual members and all their families. Action Alliance is a 26-year-old membership organization with 220 affiliated senior clubs, and they may have from 50 to 100 or more members in each one of those clubs. It is clear now that we have to wait 119 6/7/99 LAW & GOV'T - Res. 990388 until we can assess the impact of electric deregulation on consumers before we go into natural gas deregulation. There are still a lot of questions to be answered about how the Public Utility Commission has handled the consumer education part of the deregulation in the electricity industry. There is no need to rush into natural gas at this point. And as an aside, I would say that I imagine everyone present here today knows that only a third and then only two-thirds of the ratepayers were to be admitted to electric deregulation, but that was terribly undersubscribed because the so-called education program that PECO was awarded the right to do was a disinformation campaign. So people, even if they could have received better rates, many of them remained unaware of it and were given the impression, "We have always been here for you," said PECO, "we are safe," and many people were afraid to turn their purchasing over to another company. What will we have when it's gas deregulation and they're told they have to look 120 6/7/99 LAW & GOV'T - Res. 990388 for another company? How many explosions will we have in Philadelphia? Senior citizens and other consumers are particularly concerned about the dismantling of programs that help people on fixed incomes and the poor pay for their gas bills. Mr. DePasquale continues that this current legislation might be amended to include the Philadelphia Gas Works. If that happens, it is very likely that the 11 percent senior discount will disappear, and other 12 programs to help the poor will also disappear. 13 And we heard that. 14 And today Mr. Kimmerle told us what I 15 was not aware of -- I'm not sure others are aware 16 of -- cherry picking. This is what we see when 17 the banks close. First Union came in against our 18 hopes and closed banks. And when the neighborhood 19 has no banks, where do people cash their checks? 20 At the check-cashing store, which takes a usurious rate, and this is what would be happening with gas. If you are low-income, have a bad record of payment, you will not be chosen, you will not be the chosen few to get the rate discount. You will have to be told to go to that other place, 121 6/7/99 LAW & GOV'T - Res. 990388 analogous to the check-cashing store, which is the Gas Works of last resort, and they may put their rates wherever.
It's the same as a person who needs automobile insurance, if they have an accident, their rate goes up. And if they try to get another place, they have to have a scheduled rate, a higher rate. That's no way to treat people. They're asking every member of the General Assembly to consider postponing any consideration of natural gas deregulation until we can actually answer all of the these questions. Thank you very much. )
Thank you very much. We're sorry Mr. DePasquale was not here. We wish him well.
And tell the senior citizens it may well be time for action quickly and strongly.
And if I may, Mr. Cohen, I would really like to thank you very much for all your efforts on our behalf over many years. 122 6/7/99 LAW & GOV'T - Res. 990388
Thank you, thank you. Mr. Hayllar, I wonder if would will come to the table. Councilman Rizzo has brought up a matter that the committee would like clarification on. We understand or we hear reports that there may be a contract search -- a search for a new management of PGW?
Could you bring us up to date. We understood there was an RFP out.
No. An RFP will be going out either this afternoon or tomorrow, dealing with the management of PGW's assets and gas supply. It was brought to our attention sometime ago, and after a series of about 15 meetings with other companies, including other utilities that many of us participated in, we determined that it was -- it is in the public's best interest to determine if there could be savings that could be derived by having a third party manage or assets and our gas simply. In theory, a company that is managing the gas supply for a variety of utilities would be 123 6/7/99 LAW & GOV'T - Res. 990388 sharing the peak days -- in other words, the day where the demand for gas was at its absolute maximum and, therefore, you could purchase more economically. We want to test that with an RFP which has been prepared, and it's been circulated, I think, about two weeks ago for comment. We've finished the compilation of the comments. That will go out today or tomorrow.
The Gas Commission -- the Chairwoman has been a participant. We have circulated drafts of it. Ultimately, if it's a contract, it would come before City Council. As we've said earlier, our goal is to, if we believe that there is a substantial value to the ratepayers, we would like to have this before Council this fall.
Are any questions from any members of the committee? (No questions.) 124 6/7/99 LAW & GOV'T - Res. 990388
If not, thank you very much. And I want to express appreciation to you and to Mr. Dworetsky for your patience, and we hope your influence will go in the same direction that was indicated here say, and that you will be urging within your powers that the Mayor lead this campaign.
Thank you very much. The committee will -- you know, has made the offer to cooperate with the Mayor to a press conference or to a delegation to Harrisburg and to work with him in any way to mobilize the public because of the imminence of action by the State legislature. This committee is going to stand in recess until tomorrow, at 12 o'clock. And at 11 o'clock, there's a Committee of the Whole, and the Committee on Law and Government will convene immediately at the end of that meeting and no 22 later that 12 o'clock tomorrow to consider what the situation is and what action needs to be taken. We hope that you will communicate with 125 6/7/99 LAW & GOV'T - Res. 990388 the Mayor. We would hope to hear from the Mayor by noon tomorrow with respect to what action he thinks is desirable to take. Thank you very much. We stand in recess until o'clock tomorrow. 7 (Adjourned at 12:39 p.m.) 8 - - - 9 10 11 12 126 C E R T I F I C A T E I HEREBY CERTIFY that the foregoing proceedings of the Council of the City of Philadelphia of Monday, June 7, 1999, were reported fully and accurately by me, and that this is a correct transcript of same. RE: COUNCIL COMMITTEE ON LAW AND GOVERNMENT RESOLUTION NO. 990388 __________________________________, JOSEPHINE CARDILLO, Registered Professional Reporter