Yes, it shows the -- no. 17 It's in a binder that was circulated to Councilmembers last week.
My staff member says she has it. Why don't we check it back.
I just wanted to -- 'cause, again, that's such an important program. I just wanted to make sure -- 80 COMM. ON FINANCE - BILL NO. 980228
-- at this stage that production is really -- nor repairs are really moving ahead on schedule .
The numbers are down because of this change from Tier I to Tier II. Rather than visiting the same house twice and counting it as two units, because we fixed the heater and then we got a call about the roof, PHDC is going once. So it means, in that case, the production drops by half, but the value of the program as increased, as a result.
Are there any other questions? The Chair recognizes Councilman Nutter.
Thank you, Councilwoman. Mr. Kromer, let's go back for a moment to pages 220 and 221. And I see that Mr. Eisenstat has returned. In the program delivery category, it 81 COMM. ON FINANCE - BILL NO. 980228 appears that the Redevelopment Authority gets $8.6 million, is that correct?
Proposing a reduction to approximately $8.3 million in the Year 24, that's right.
That's 8-3-8-0, right? And in the general administration category, it is -- it looks like a total of 2.870?
That number is hard to estimate on any given year. It depends on the nature of the other work that the Authority has in general from an administrative -- from an administrative standpoint, I would explain that 82 COMM. ON FINANCE - BILL NO. 980228 generally for calculations, this represents somewhere around 80 percent of the Authority's budget.
This is a difficult -- this is a difficult question to answer. Let me explain what some of our other sources of revenues are and then explain that they are somewhat -- they change from year to year. And depending on the amount of work within a given year, you won't know that until the work is completed. In general, I would say that this is about 80 percent of the Authority's core work.
8-0. There's a series of other functions that the Authority undertakes on behalf of the City, and those are billed back directly on other funding contracts and agreements. 83 COMM. ON FINANCE - BILL NO. 980228 In addition, some of the CDBG administrative dollars are, in fact, used to pay for the administration of those other activities that are not reflected in the plan. And the examples of those would primarily go to the administration of the various site improvement activities utilizing City capital dollars.
All right, but the totals, for this discussion, are $11,250,000. 11 And you're saying that that represent about 80 percent of your budget.
I'm not too sure how you're -- when you take the two numbers and add them up, that's correct. And I do appreciate it that --
I was very good in fundamental addition but I got 8.38 and 2.870.
And you're saying that's about 80 percent of your total budget?
In any given year, it 84 COMM. ON FINANCE - BILL NO. 980228 could be as high as 80 to 90 percent. I don't have that number today because that number fluctuates based on what other work is taken.
All right. But with that in mind, I mean, your total budget is somewhere in the -- maybe 13, 14, it could be as high as $15 million, but the bulk of the -- the overwhelming majority of your funding comes right out of this book.
We submitted an annual budget to the Office of Housing and Community Development for a funding of everything and -- I don't know if -- I mean, we don't submit an annual budget to City Council; we submit an annual budget, as the primary funding agency, to OHCD. Our contract, prepared by the Law Department, is reviewed by numerous City officials, both in OHCD and in the Law Department, which includes our budget. I'd be happy to share with you a line-by-line budget of the Authority. 85 COMM. ON FINANCE - BILL NO. 980228
I mean, given the level of funding that comes out of this, it would seem to me that it would be most helpful.
Given the amount of contact that we have with the Redevelopment Authority, your budget should be a part of this budget, and not just two lines.
I'd be happy to forward you the budget detail and the process and the nature of the contracts that create the budget.
All right. It appears on , there's an item here, $300,000 in CDBG is being money used to maintain RDA-owned sites. Can you explain that, please?
Yes. The Department of Housing and Urban Development requires the City to show that it's taking responsibility for land that was acquired with HUD funding in the past but has not yet been conveyed. And that land includes some parcels that were acquired during the 1990s, but also a 86 COMM. ON FINANCE - BILL NO. 980228 substantial number of parcels that were acquired during the 1970s and possibly earlier that were associated with urban renewal plans were never funded by the federal government, and we are required to use a portion of our block grant funding for maintaining those parcels.
If I could further explain, that's a line item that is generally known, or has been known over the years, but has euphemistically been changed, but was previously known as "Urban Renewal Liability." That number was originally, in the early 1990s, at about $750,000 a year. Those dollars primarily, as John explained, but I could explain in further detail, go to the upkeep, maintenance and demolition of properties that were primarily acquired in the Redevelopment Authority's inventory as far back as the 1960s. It, for example, pays for the maintenance staff to provide the cleaning and upkeep of properties in Eastwick during the summertime, something we could spend four or five times more on, as well as the emergency demolition and other demolition of RDA-owned properties that 87 COMM. ON FINANCE - BILL NO. 980228 have been in inventory for a substantial number of years.
Tell me about, on , this item number 3, acquisition, It's $2 million in acquisition funds available. Is this for Citywide use?
Yes. And this is primarily for the rental and sales housing development ventures that had been funded in the past years and are to be funded in the Year 24. The primary acquisition area is the Cecil B. Moore area, and a lot of this acquisition is associated with the Home Ownership Zone activities going on there. However, to the extent that we have tax credit rental ventures and sales housing development ventures going on in other parts of the City, the acquisition expense would come from this line item. In addition, where we have a commitment to a specific program -- Philadelphia Neighborhood Housing Services for example -- any eminent domain activity required to support that program would come from this line item. 88 COMM. ON FINANCE - BILL NO. 980228
And lastly in this area, how much money is available for Act 94 and other condemnation procedures?
The funding for Act 94 and other condemnation would come from this line item.
Well, given the level of acquisition requests that you must get -- I know a fair number of them come directly from my office, and I figure other people are doing a 14 few things around here -- you can't be getting 15 ready to tell us that $2 million is enough. 16
Not at all, not at all. Again, it's a problem of resources. It would be great to have more funding for acquisition. Eminent domain costs a lot, and it requires money to be paid for the fair-market value of the properties, and it requires a level of staffing to manage the details of this process, which takes a couple of dozen steps.
Here we go back to those administrative costs again. 89 COMM. ON FINANCE - BILL NO. 980228
Absolutely. And that's the crux of the matter. Let me say, though, in 1992, I could not have sat here and looked you in the eye and talked with you seriously about eminent domain. You could not be serious about Redevelopment Authority and eminent domain. I mean, it could not be done predictably. Now the Authority routinely requires and disposes of well over a thousand properties a year. And so that capacity has increased very substantially. If we had more resources, the Authority has the capacity to do a lot more. But we're constrained.
Well, since you're pursuing these dollars in the 108 program, have you -- and we had a Section 108 discussion a little earlier -- have you tried to seek more funding from that particular source?
We could use 108 dollars. But as a practical matter, we've simply funded the development costs, the development subsidy funding through 108 freeing up more money for the 90 COMM. ON FINANCE - BILL NO. 980228 acquisition line item. So it's a -- we come up against the same problem.
Lastly, I think about two years ago, possibly in a Finance Committee hearing or in some subsequent hearings, Mr. Kromer and Mr. Eisenstat, you were at the table and had made various commitments regarding acquisition disposition process -- legal issues, charts, the bodies, who does what, how it gets done, what we are required to do and the like. And if my memory serves me correctly, I think we've received some information, certainly nowhere near all the information that had been requested at that time. And I think we're at least two years old in those requests. Now, I guess I would just have to say to you directly, one, I would like the information. But, two, if you're not going to provide it all or if we're not going to have a full detail discussion about it, either in a public hearing or in some private hearing, I'd rather appreciate it if you'd just tell us that 91 COMM. ON FINANCE - BILL NO. 980228 you're not going to do it or you can't do it, rather than continue to play this game.
I recall that at last year's hearing, a number of questions were raised and a number of requests were made for information. And I believe that we've supplied all the information that was requested, and I don't know of an instance in which we did not do that.
Well, we can have some further discussion of that off the record. I don't think we have all the information.
We'd be glad to follow up. To my knowledge, Councilman Nutter, we have followed up on every request by Council.
Nor do I think it was supplied in the fashion that it was requested, but we can discuss that later.
Mr. Hankowsky, would you please approach the witness table. (Mr. Hankowsky comes forward.)
Gentlemen, you 92 COMM. ON FINANCE - BILL NO. 980228 will stay with us the remainder of the day?
Thank you, Madame Chair. Mr. Hankowsky, you, I think, were here for the discussion about the use and the public policy issues around HUD 108 loans, TIFs, and the prospect of the latest thing out of the Ridge administration, the Keystone Opportunity Zones. And in an exchange between myself and Mr. Mullin, we had some discussion about how these programs and incentives get used, what the longer-term impact is beyond any particular administration but their aggressive present use and what that mean for the long-term future of the City. One, do you have any particular perspective on that? Two, are you, as usually the prime mover of many of those programs and projects, I think you'll be coming back to us soon to talk about some more of them. Is there any work going 93 COMM. ON FINANCE - BILL NO. 980228 on in this regard in terms of developing policy and looking at or better monitoring how we utilize these programs?
I will actually first apologize. I actually was not physically present during the question and responses that Steve Mullin gave you. I stepped out for a short meeting and came back.
Well, why don't we get Mr. Mullin back, and we'll do it again.
Sorry. I think have the gist of it. And if I don't, you'll, as always, correct me. I think on the 108 side, we've got basically two -- and I'm now talking about the economic development side. Mr. Kromer, I think, spoke about how 108's been used on the housing side. But on the economic development side, we basically have two pools of funds that we use. 94 COMM. ON FINANCE - BILL NO. 980228 One, in fact, is called "the pool," which we established a couple years back whereby we remain the only city in the country that HUD has been comfortable enough to give the capacity to do what is called "delegated underwriting," such that we actually draw the dollars down, have them in place, can underwrite a loan, and loan it to a company, and don't have to go through what is an unpredictable process with HUD in terms of how long they're going to take to approve a particular transaction. The pool has guidelines. And, again, not to let -- I think, in past hearings on the community development budget -- in the last several years, we have talked a little bit about that. And I think maybe in the initial year, we did the pools, shared them, and I'm happy to provide further copies or update. Councilman, I'm also happy to provide you -- I think recently I provided you some information on exactly the status of the pool. But it, basically, a program that deals with fixed-asset financing, certain kinds of clients with certain kinds of projects, and 95 COMM. ON FINANCE - BILL NO. 980228 certain loan amounts and certain underwriting criteria. In terms of how do we decide we're using it in transaction A versus transaction B, at the current time, PIDC administers in some way -- because the notion of how we administer loan programs varies by the program -- separate loan 9 programs. I wish it weren't that case, but the 10 feds have programs, the State has programs, the 11 (unintelligible) had a program, so we try to make 12 sure we get everything the City has a right to go 13 after. 14 So we generally, when a client comes 15 in, look at what they're trying to do versus the 16 kinds of programs that are available, and match 17 the need with the resources from the client 18 perspective as well as from our perspective. 19 What I mean by "from our perspective" 20 is that there are instances where we don't have 21 very much of one kind of money, or we try to 22 maximize the use of State money, for example. 23 So for the fourth year in a row, Philadelphia, through PIDC, did more Pennsylvania Industrial Development Authority loans than any 96 COMM. ON FINANCE - BILL NO. 980228 other county in the Commonwealth, and we want to make it a fifth year in a row. So the more money we bring down the turnpike, we think, the better. So we try to do that first and look at what I would tend to call "our own resources," local resources last, so that we try to maximize bringing in dollars. That's how the pool work. The second way we use the 108s is what we call "stand-alones." These are transactions we apply to HUD one at a time. They are transactions that one, break the 5 million per transaction limit of the pool. So by their very nature, we can't do them out of the pool. There are projects that would not meet the pool standards of underwriting. What I mean by that is the pool, for example, you have to basically be an established business. If you're developing a new hotel, it doesn't count in our delegated underwriting. We need to show HUD that project before we can do it. So in one case, we're on the stand-alone basis by the nature of the pool rules. Why do we use the 108? Basically, the 108's there and the TIF's there. We're part of 97 COMM. ON FINANCE - BILL NO. 980228 the overall policy of developing at least 2,000 more hotel rooms by the year 2000, a policy that the City Administration wanted to do. We've talked about this in the past too, and we went off on a journey to try to make that happen and see what resources we could bring to bear to make that happen.
I hate to interrupt you. And having nothing to do with the decision to go after 2,000 more hotel rooms, because that decision was made, and fine. Can you tell me about any other meetings, discussions or decisions where so definite a target was made about doing anything else for any other type of business or industry?
'Cause a clear decision was made for whatever reason that we have to have more hotels, we've got to have 2,000 more hotel rooms. And the only way to have 2,000 more hotel rooms is to build 5 to 10 new hotels. 98 COMM. ON FINANCE - BILL NO. 980228
Right? Other than, I guess, most recently the Kvaerner deal at the ship yard.
Tell me about another type of process where we have said we have to have eight to ten more of X, because that's what we want, and we're going to break down every possible barrier or jump through every possible hoop to have that.
Right. I don't want to say I can't think of another, because it would -- it might -- if I spent long enough, I might. But, as you mentioned, the Kvaerner transaction. But before it was called Kvaerner, the that we were going to have a closed ship yard and we were going to go out and search the world and find somebody to try to build, you know, hopefully, try to build ships in Philadelphia, you know, that was an enunciated goal from basically 1992 on. There have been other situations where 99 COMM. ON FINANCE - BILL NO. 980228 the public has said, We want to develop an area or whatever. I think the family entertainment project at Penns Landing where, again, we want to get somebody to do a project that looks like this and go off and try to find somebody to do it is an example. The counter -- to some extent, the other side of it is when we're dealing -- in the majority of instances, we're -- we're dealing with companies making decisions about what they want to do; and us then working to make that decision happen in Philadelphia. I'm not sure we could have said we want -- this is just to use an example that is relevant to the question. You know, we want to build bank operation centers. I mean, if no bank wants to build one, I'm not sure we can induce it. But then to the degree PNC said we want to build one, we want to have it happen here. So that it's -- and so we have been -- and so we try to position ourselves, whether it be by having industrial parks available so that we can respond to somebody that needs a site, whether it's by having financing tools available so that 100 COMM. ON FINANCE - BILL NO. 980228 we can respond to the financing needs companies have, and then be in a position to corral, lasso that economic activity in Philadelphia. I think that the hotel example is one where, because of the Convention Center and because we sort of created a base of business, a base of justification to go after it. And either you're going build a convention hotel next to the Convention Center or you're not. I mean, you're not going to build it in King of Prussia. That was a situation where we wanted to build on an opportunity that we had previously -- meaning when we had voted to do the Convention Center -- previously decided to do and build off of it. But I agree with you. I mean, understand what's implicit in question.
Right, if there aren't any other examples, we don't have to search the universe.
Earlier discussion 101 COMM. ON FINANCE - BILL NO. 980228 and talk about TIFs and Keystone zones.
Which have been either of the hotel deals; or, going back to your question, the ship yard transaction.
We are also now looking at, and are anticipated, a couple of community-based stand-alones in areas where between ourselves and the community and others, there's been a decision, let's try to make something happen at Cecil B. Moore Avenue. Or hopefully soon now, thanks to your intervention, we might actually be looking at doing one in West Parkside on a stand-alone. On the TIF question -- and, again, correctly so, as you've asked in the past, we have used the TIF mechanism, one, against this hotel policy; and, two, in a couple of specific 102 COMM. ON FINANCE - BILL NO. 980228 instances where we're trying -- where we had PNC or SmithKline Kvaerner, and then, of course, we have a couple that will be before Council later this month. But the question of what is our -- when will we use TIFs and when will we not. There is not a firm written policy that answers that. I mean, we're responding to large projects. And I've thought some, but I'm not going to tell you we've moved far on this, that we probably do need to do that because it becomes a tool that, you know, to be blunt, once the developers see it, they say, Give me one of those, and we've been saying no a lot.
I mean, I don't want you to think we say yes all the time. We say no 19 clearly more than say yes, to date. But I think, out of fairness to everybody, people -- if would be helpful if there was sort of the what are the rules of the game.
I mean, maybe we'd get less calls, and they'd know that we'd say no if 103 COMM. ON FINANCE - BILL NO. 980228 they called. On the opportunity zone question, Keystone Opportunity Zones, as I said, I was -- unfortunately, I had to step out and didn't hear Mr. Mullin's response, so I hope I'm being consistent. But the legislation's out there. My understanding, as of this morning, is that, you know, this legislature, they'll wrap it up when come back in June, that Philadelphia has every intent to pursue the program, that work has begun to think about what kinds of sites and what kinds of areas, presuming the bill will look generally the way it's moving through the legislature, it might make sense. And I believe, in fact, the Mayor's interested in a meeting shortly with Council to just begin a discussion about, okay, here's the current thought process, let's talk about it as we work spring through summer into fall, when currently (unintelligible), applications are due.
And just briefly, is it my understanding that in these new Keystone Zones, the business would be exempt from virtually 104 COMM. ON FINANCE - BILL NO. 980228 all taxes? I mean, what's exempt?
Again, subject to final passage, these zones are modeled, cloned from a program that exists in the state of Michigan labeled "Renaissance Zones." The legislature -- well, the Governor, he proposed the legislation -- is proposing zones. There will be Statewide, and then there 10 could be subzones within a zone where there would 11 be no State corporate taxes, no City business 12 taxes -- or municipal, obviously -- no real estate taxes, and there would be no income or wage or local income taxes, wage tax, for residents of the zone, not employees of the zone. I mean, it would be like a suburbanite, you know, the indice (sic) of paying an income or wage tax is residence, not where you work.
But basically the company would be, that's right, would not pay any of those company-related taxes -- real estate, State or local business -- for, I think it's twelve years. I believe it's ten or twelve years would be the length of the zone. That's right, 105 COMM. ON FINANCE - BILL NO. 980228 that's the proposal.
And is there any requirement based on current legislation that the company stay in the zone for any amount of time?
Those kinds of questions are a little bit unclear at the moment, answers to those questions. The legislation presumes the promulgation of rules and regulations by the Department of Community and Economic Development, in Harrisburg, which I have to answer some of those questions. What happens about staying, what happens when an existing business moves from someplace else in the Commonwealth in?
Oh, I'm making it simply -- yeah, any -- including within the locality?
And so there's -- the 106 COMM. ON FINANCE - BILL NO. 980228 discussion is that there would be requirements that you,, quote/unquote,, create blank-percent new jobs, blank-percent new investment. But a lot of that, as I best understand it, is to be further refined in the regulations. But it will raise many of the, quote/unquote, classic economic development questions, policy questions.
Well -- this will be my last thing, Madame Chair. I thought in your initial explanation of this that legislation is soon to be passed. Did I understand you to say that the Mayor plans to have some discussion about this prior to application or --
No, no, no. I think he wants to engage this body and others but clearly before application.
Okay. Well, I would only ask -- I mean, I'm sure that that will happen, but I'd like to ask you and the Commerce Director, as you obviously better understand this 107 COMM. ON FINANCE - BILL NO. 980228 than at least myself, I'd like somebody to write down some kind of an analysis on paper on this that explains what someone believes are the true benefits to the City of Philadelphia to be engaged in this. I mean, I just -- I mean, what do we ultimately get out of it? I understand that the business is to come here and, I guess, people get jobs, but I really would like to see some kind of cost benefit analysis .
And a public policy analysis of why we think we should proceed down this path.
Right. And my understanding is that, in fact, that analogous dialogue is, in part, happening in the legislature.
Thank you. 108 COMM. ON FINANCE - BILL NO. 980228 Are there any other questions to ask, Mr. Hankowsky?
Mr. Hankowsky, you have frequent communication with corporations of all kinds in the City in connection with your work?
And you sort of have a series of responsibilities to the City to try to bring businesses here fundamentally in order to increase the job availabilities to Philadelphia residents?
I'm intrigued. Do you get into situations like this. Rohm and Haas, a great Philadelphian institution, many jobs in the Philadelphia area, also has plants near Philadelphia, as well as, I guess, throughout the world.
Just outside the City limits. And it's been there for quite some time, a very important part of their operation. And in addition to the great chemical things they do and, you know, the development of all kinds of paints of very special initiative --
-- they have to have the place cleaned doing what those -- a number of us have despaired many times, they kind of privatized that work many years ago, before labor organizations and people general understood it. And the company they hired to do the cleaning and the custodial work is another great Philadelphia institution, Aramark.
And the company employed -- and what Rohm and Haas did, was they contracted with Aramark for the cleaning services. And we liked it a lot because they employed 32 people, all of whom were 110 COMM. ON FINANCE - BILL NO. 980228 Philadelphians. Overwhelmingly, they were minority, heavily Latino, a few Black employees, but heavily Latino employees. The three-year contract expired in December of 1997. It was two big Philadelphia institutions, you know, providing Philadelphia jobs. Suddenly, Rohm and Haas decided to put the new contract out to bid, and they decided the lowest bidder wasn't, for some reason, acceptable. But the second-lowest bidder was a South Jersey company employing people in South Jersey. And Rohm and Haas figured out they'd save $300,000 by switching from Aramark, a Philadelphia institution employing Philadelphians, to the South Philadelphia Jersey company employing minimum-wage people. In fact, the wage rate was cut by $4 an hour, and all health benefits were lost. The Aramark workers were represented by a union, national, that has a big Philadelphia presence. It represents our Gas Works union, it represents the custodial and maintenance employees 111 COMM. ON FINANCE - BILL NO. 980228 at the School District, and it also represented janitors in our main offices in Philadelphia, and also, this union, represented the workers whose employer technically was Aramark, although the only work they did was at the Rohm and Haas Bristol plant. So in one fell swoop, Philadelphia got 32 more unemployed families, very few of whom have been able to get jobs yet because the, you know, job availability for custodial workers is much more limited than for technical or professional workers. Now, wouldn't your department have a real role to play in that, to try to bring about a change? The contract, incidently -- and I understand these are contracts in the field of janitorial and custodial services -- always seems to provide a 30-day cancellation notice; either party can serve notice, no reason has to be given. I attended a stockholders meeting on Monday morning, here in Philadelphia, of Rohm and Haas, their annual meeting, to speak on behalf -- and my plea was a simple one: 112 COMM. ON FINANCE - BILL NO. 980228 You have saved $300,000 for the company, but I suspect it's going to cost the City of Philadelphia, you know, maybe times, many 5 times to deal with 32 increased unemployed 6 Philadelphians. 7 Now, wouldn't it be within the scope of 8 your concerns to deal with companies? We have 9 certain problems in trying to pass ordinances that 10 say the City of Philadelphia should only hire 11 Philadelphians in many areas in dealing with 12 companies, but the company could adopt such a 13 policy. I mean, they're not a government and they 14 have greater freedom. 15 But doesn't that one act of eliminating 16 those 32 jobs has probably, whatever gains your 17 department, the Commerce Department, feels they 18 may have made over the last five years, that one 19 act of taking business away from the Philadelphia 20 corporation Aramark and putting 32 low-income minority workers -- eliminating them from employment. Somehow we're going to have to pick up, you know, the health benefits. We're not going to let them starve so we're going to pick up all kinds of expenses. 113 COMM. ON FINANCE - BILL NO. 980228 Don't want you think that would be within the realm of the work you do? That's the reason I wanted to know about your relations with these corporations. Could you and your office intercede and explain how many millions of dollars it would save, you know, if they just reinstated the contract? I can tell you that when Rohm and Haas learned that there were going to be representatives of the public speaking out against this, they hastily arranged a meeting Monday morning, very early in the morning, with the union, to say, Let's begin talking again.
And when I raised this issue at this open annual meeting, and there were others that also raised this issue -- and I didn't deal with the humanitarian reasons, I mentioned them. Obviously, it's a great tragedy to these 32 families, 'cause after many years, they had worked up to a decent -- a half-decent wage salary. But shouldn't Philadelphia play a role in it? It certainly impacts upon us very heavily.
I think the simple answer is yes. I mean, other than you asking me 114 COMM. ON FINANCE - BILL NO. 980228 this question this morning, it's the first I've heard of it.
Well, incidently, Rohm and Haas said they were excellent workers. They had no complaint, they spoke of Aramark as a company, in providing these kinds of services, it is doing outstanding work. They have Aramark in two other plants where the contracts have not yet expired.
But we're very concerned about what may happen. The company saves 300,000, but it may cost the City, I estimate, to million, maybe even more, to deal with all of the problems of 32 additional unemployed Philadelphians on top of those we already have in the face of our trying to get jobs for people, you know, that are leaving the welfare roll. And it just seemed to me that government has a responsibility. And from a financial point of view, it's very costly to us.
Right, yeah. I mean, this instance was in Bristol, though. Is that -- 115 COMM. ON FINANCE - BILL NO. 980228
Was the facts that these people were laid off from employment in Bristol? Is that what you said?
They worked in Bristol. They were all employed in Bristol, they were all Philadelphians.
Because, you know, it's the same problem of people in Philadelphia, and they had managed to solve the transportation problem that often plagues Philadelphians, you know, when they get jobs available in the suburban areas. But because this was well established, this contract had originally been set forth 11 years ago.
And in the course of that time, the wages and the working conditions 116 COMM. ON FINANCE - BILL NO. 980228 had worked up to at least a minimally good wage, about $10 an hour.
Kind of the same wages that the unionized shops get, that unionized buildings pay their janitors and custodial services.
Right. But the simple answer is yes. And, as you know, there's an ordinance that provides a notification process if a company is phasing out jobs in Philadelphia. And those notices go to the Commerce Department and they are responded to, and whether at our level, in a number of instances. The Mayor has personally intervened in terms of job loss, companies rearranging opportunities to try to --
Well, it's -- this isn't any of that. It's just a technical problem.
That they're Aramark employees working totally for the Bristol plant of Rohm and Haas.
And where they state 117 COMM. ON FINANCE - BILL NO. 980228 -- and, you know, I urge you to call their officials 'cause you can verify these statements. But at the annual meeting, the Chief Executive Officer got up and said, Yes, this company did excellent work, Aramark, and in the furnishings, they had no complaint. He said a little proudly, "We didn't pick the lowest bidder." My understanding is that they picked the one next to the lowest bidder. And the savings, they estimated, were $300,000 yearly.
And I had to point out from a -- you know, we thanked them because Rohm and Haas is one of our very good employers.
And they contribute, you know, we know, to Kvaerner Ship Yard, they're contributing $4 million worth of paint.
You know, they think it's good business because they're anxious to sell. You know, they have a new paint on the outside of ships that's supposed to be much 118 COMM. ON FINANCE - BILL NO. 980228 longer-wearing.
And so they were anxious, from a business point of view, to get people to know their paint, and they took advantage of the Kvaerner situation, but it's very helpful of making a gift of $4 million worth of paint for the first three ships that the Kvaerner Ship Yard builds.
They're going to do all the painting for free, they're going to supply the paint for free.
I'd like to urge, and then following up Councilman Nutter's question, I would like to see if you can develop a plan because I'm sure this kind of thing happens elsewhere. Sometimes they're organized, sometimes they're not organized. And we learned of it only because it's an organized group --
-- that we work with. And I thought it so important to arrange to 119 COMM. ON FINANCE - BILL NO. 980228 get a proxy to be able to attend their stockholders' meeting.
But it seems to me that that's a great area of job development. If we could get Philadelphia corporations to increase their hiring because they can legally, you know, factor that into what they do, and I would think they'd want to help the Philadelphia company Aramark, you know, because it does excellent work. So I raise with you, I would like to suggest that as you reply to Councilman Nutter's questions, that you prepare in writing a plan to kind of deal with this kind of situation. I think it offers a great possibility for increasing the number of jobs available to residents.
Yeah. I think working with the Commerce Department and the Private Industry Council, they tend to be actually the agencies that respond to those 'cause --
All right. And I 120 COMM. ON FINANCE - BILL NO. 980228 understand there may be questions quickly. And I tried to indicate that this City Council adopted a resolution -- Madame Chair, you'll recollect -- at the end of March, urging Rohm and Haas to bring back, you know, to restore the contract.
Councilman Cohen. I don't mean to interrupt you, but Councilman Longstreth asked to be recognized.
Go right ahead. I always recognize junior members. (Laughter.)
I'd like to simply ask for permission to go down to attend the service for the police and firemen who have died during the year, and would like to be listed as voting for the bills that are before us today.
Thank you. Councilman Cohen. 121 COMM. ON FINANCE - BILL NO. 980228
No, that's all I have. I do have a question of the OHCD people with respect to the labor matter that has been before them over a period of a number of months. The offices, you know, the workers at the OHCD, whether there's any up to date, those --
Mr. Kromer, before you -- Councilman Ortiz, did you want to ask questions of Mr. Hankowsky?
Well, all three of them, but I'll let Dave finish, and then I'll -- I'll wait.
My question is, could we have an update? Can we get some good news that maybe we've restored some labor peace somewhere?
I was glad to have an opportunity to meet with you last week at some 122 COMM. ON FINANCE - BILL NO. 980228 length to talk over the issues.
And I do appreciate the time that you devoted to that. I did what you had asked and reviewed the issues. And I think that, although there's no 8 good news today, that the prospects for resolution 9 are reasonably good. I didn't know at the time that we had met that a mediation session is scheduled for this Friday, the 8th. And this session, I think, will be the first in which we'll really be able to engage with the recently-appointed State mediator and get into issues. I know that union representatives are scheduled to testify today, and I would be glad to respond to any testimony that they may have, which, I believe, will be forthcoming shortly.