COUNCIL OF THE CITY OF PHILADELPHIA PUBLIC HEARING COMMITTEE ON COMMERCE AND ECONOMIC DEVELOPMENT - - - Room 696, City Hall Philadelphia, Pennsylvania Thursday, February 27, 2003 1:20 p.m. - - - RESOLUTION 020238 - Resolution authorizing City Council Commerce and Economic Development Committee to conduct Public Hearings to investigate the underutilization of Disadvantaged Business Enterprises (DBE)... RESOLUTION 030038 - Resolution calling on the Philadelphia Workforce Development Corporation to conduct a needs assessment of training opportunities within the Building and Construction Trades... - - - PRESENT: COUNCILMAN MICHAEL NUTTER, Chairman COUNCILMAN DARRELL CLARKE COUNCILMAN DAVID COHEN COUNCILMAN W. WILSON GOODE COUNCILMAN ANGEL ORTIZ COUNCILWOMAN MARIAN TASCO - - - VINCENT VARALLO ASSOCIATES, INC. Registered Professional Reporters Eleven Penn Center 1835 Market Street, Suite 600 Philadelphia, Pennsylvania 19103 (215) 561-2220 I N D E X RES. 020238, 030038 PAGE PATRICK CLANCY, PWDC ....................... SAMUEL STATEN, SR., Laborers' Local 332 .... 40 WILLIAM PEEBLES, DAP ....................... 45 TONY LEWIS, Housing Association ............ 53 SACAREE RHODES, African Daughters of Fine Lineage ....................... 57 ANTHONY FULLARD, Contractors Roundtable .... 69 JANICE DAVIS, Director of Finance .......... 77 JAMES ROUNDTREE, MBEC ...................... 83 JAMES DICKERSON ............................ 98 WILLIAM GAMBLE, Procurement Commissioner... 106 LAZAR KLIET, Philadelphia Commission on Human Relations ...................... 147 DEBORAH MCCOLLOCH, Director of Housing .... 155 MJENZI TRAYLOR, First Deputy Director of Commerce .......................... 158 VINCENT COLES, OHCD ....................... 165 MICHAEL BELL, Redevelopment Authority ..... 169 JAHAD ALI, Contractor's Roundtable ........ 188 3 2/27/03 - COMMERCE - RES. 020238, 030038
Good afternoon, ladies and gentlemen. This is the Committee on Commerce and Economic Development. I am Councilman Nutter, Chair of the Committee. Other Councilmembers here at the moment are Councilman Goode and Councilman Ortiz. I apologize for the delay in getting our hearing started. The committee is taking testimony on two resolutions, Resolution 0202338 and 030038. Resolution 020238 is a Resolution 12 authorizing City Council Commerce and Economic Development to conduct public hearings to investigate the underutilization of Disadvantaged Business Enterprises (DBE) and the underemployment of women, disabled and minority residents of the City of Philadelphia on local construction projects and City procurement contracts, and further authorizing the Committee to issue subpoenas and such other processes as may be appropriate to compel the attendance of witnesses and the production of documents in furtherance of the investigation to the full extent authorized by Section 2-401 of the Home Rule Charter. Resolution 030038 is a resolution 4 2/27/03 - COMMERCE - RES. 020238, 030038 calling on Philadelphia Workforce Development Corporation to conduct a needs assessment of training opportunities within the Building and Construction Trades, particularly to improve minority and female employment participation through PWDC financial support of initiatives such as the Diversity Apprenticeship Program, and authorizing City Council's Committee on Commerce and Economic Development to hold hearings into the state of training opportunities for minorities and women in Philadelphia's Building and Construction Trades. Both of the sponsors of the resolutions, Councilman Goode and Councilman Ortiz, have assembled. Witnesses and panels, we will do our best to maintain the integrity of the schedule. And I believe both members have opening statements. The Chair will recognize Councilman Goode and then Councilman Ortiz.
Thank you, Mr. Chairman. I will make my remarks brief. Several months ago I was invited by the Philadelphia Workforce Development Corporation to participate in the final panel discussion of a Workforce Development Conference. I was invited as 5 2/27/03 - COMMERCE - RES. 020238, 030038 an economic development professional and legislator. The panel discussion was entitled, "Workforce Development - Where Do We Go From Here." My presentation focused on the disconnect between work force development and economic development and my assertion that job training is not economic development unless it leads to a job. We must create more job opportunities for Philadelphia residents. We must prepare more people for those job opportunities. There must be a direct link between training opportunities and real jobs. Particularly, as we invest billions of dollars in stadiums, convention center expansion, and neighborhood transformation, including Community Development Block Grant and Capital Budget spending, there are lost economic opportunities for Philadelphia residents, particularly minorities and women, if there are training gaps that are not being addressed. Otherwise, Philadelphia residents will continue to watch others economically benefit from public investment of Philadelphia taxpayer dollars. This Resolution 030038 calls for a hearing to address those training needs. Thank you. 6 2/27/03 - COMMERCE - RES. 020238, 030038
Thank you, Mr. Chairman. For the last years and ever since -- 5 actually, since 1982 when legislation was passed in 6 this City creating MBEC, the Office of Minority 7 Business Enterprises. And then in '97-'98, a 8 Supreme Court, going on a lawsuit by Contractors 9 Association, really nullified that 1982 law. And we 10 have had really an office that has very little force 11 for implementing obligating the hiring of minority 12 contractors in this City. 13 Over the years we have asked MBEC and 14 other institutions and government offices of the 15 Procurement Department for data and information as to minority participation in all of the contracts, the millions of dollars in contracts that the City gives out, personal service contracts, bond contracts, contracts for a multitude of issues and projects and services. We really haven't been able to detail what minority participation we are getting. However, what we do know, because even the Mayor in his State of the City speech in January said it, the participation of minority contractors and minority business in the City of Philadelphia 7 2/27/03 - COMMERCE - RES. 020238, 030038 needs to be hugely improved. We're not where we thought we were or we should be, and we have no 4 means of really getting there. A few months ago, a group of black activists in this City, Sacaree and other individuals, Sacaree Rhodes and other activists in the City began organizing around the issue of minority contractors in all of the building projects across the City, going down to the Constitutional Center that was getting built, SEPTA operations. What they found and what we want to really emphasize is that there were very -- minority contractors were nonexistent in any of these projects across the City. Both Councilman Goode and I believe and Michael Nutter that if you give contracts and minority contractors begin getting contracts in this City, be they for construction projects, be they to supply services and goods to the City for materials that the City needs, that minorities will get employment. We believe that if we create an environment of business in this City in which minority folks, African American, Latinos, and women and other minorities can begin and can trust that 8 2/27/03 - COMMERCE - RES. 020238, 030038 they will be getting participation in the millions of dollars that are contracted out by the City, I believe that employment will happen. I believe that blacks will get employed. I think that Latinos will get employed. But we have to provide the contracting opportunities to African American entrepreneurs, Latino entrepreneurs. And we no 9 longer use the excuse that was given back when I started in this business in '84, "Well, there are no 11 minority contractors out there. There are no 12 lawyers out there that can do bond work. There are no minority entrepreneurs that can provide services and goods in this area or that area." Well, I think if there aren't, I think we have to begin making it possible that they come about. And if they are, we've got to make sure that they have a very good opportunity to become involved and get the contracts. Today we put legislation to try to assure that that happens. All of my colleagues signed that legislation. We will be having hearings on it and we will pass that legislation. It will replace what is commonly known today as MBEC with a new organization that the Mayor will put together 9 2/27/03 - COMMERCE - RES. 020238, 030038 and then that the Mayor will put an executive order that will fit into the purposes and goals of the new Affirmative Action legislation. So today, we have a beginning, really. This is a hearing that I remember having in 1985. This is the year 2003 and we're still talking about the lack of minority participation. We shouldn't be having this hearing at this time. Thank you. So let's begin the hearing.
Thank you to both Councilmembers for their opening comments. And the record should note that we've also been joined by Councilwoman Tasco and Councilman Cohen. The first panel that we're going to hear testimony from is from the Philadelphia Workforce Development Corporation as Panel 1.
Good afternoon, Chairman Nutter, Councilwoman Tasco, Councilman Cohen, Ortiz and Wilson Goode, Jr. I thank you very much on behalf of the Philadelphia Workforce Development Corporation to bring you testimony today. , who invited us. I bring you greetings from our 10 2/27/03 - COMMERCE - RES. 020238, 030038 President, Mr. Earnest Jones. At the same time, I relay his regrets for not being able to be here personally because of an out-of-town event. I am Patrick Clancy, Vice President for Training and Defense Programs at the Philadelphia Workforce Development Corporation, formerly known as the Private Industry Council, however we will be known as PWDC in this testimony. PWDC is the largest work force development agency in Philadelphia and also serves as the City's fiscal agent for work force funds from the Department of Public Welfare and the Department of Labor and Industry. In this capacity, we contract most of these funds for training and placement services for our constituents. We realize the importance of getting City residents into building trade, and consequently, have funded a number of apprenticeship programs to accomplish that. 2 million. The contracts were with the following organizations as you'll see in my testimony and there's a break-out of the investment we made, the 11 2/27/03 - COMMERCE - RES. 020238, 030038 amount of people that were enrolled, the number of people that were employed from the program, and then you'll see the number of people that actually were able to get into union positions. And for the sake of my friends behind me who may not have the chart, I'll read it quickly for them. 2 million for a pre-apprenticeship training program. We've been working with Congreso for five years in which they've been able to enroll 248 individuals. They've been able to secure employment for 182 individuals. And 90 of those individuals were able to access union positions mainly within the carpenter union. Over the past years was also invested in TOP/WIN which is a non-traditional training for women. So it's a program that helps to convince women to access into building trades and other trades because the pay is what we would consider a self-sufficient wage. The program earlier on had a much more concentrated effort on trying to get people into the unions, but that did not work out. So most of their training now really focuses on 12 2/27/03 - COMMERCE - RES. 020238, 030038 getting individuals into a variety of unions, maybe not necessarily the construction union even though they're open to that. The third program that we're currently funding is a program called Connections Training, and it works predominantly with ex-offenders who are trying to reestablish themselves in the community. And what we've been able to do with Connections is really look at taking someone who's had minimal skills or who had skills that are not updated to get them into a position, whether it be union or non-union, but to continue them on the road toward that self-sufficiency. So even though you will see that none of those individuals have transitioned into union employment, it is the goal of the program to get people towards that. Based on the information we have received from our training vendors, 80 percent of the students who have taken the apprenticeship have passed. The challenge has been actually getting people into the unions. So we have individuals who've done all their due diligence, who've taken all tests, but yet have not been able to access union opportunities. 13 2/27/03 - COMMERCE - RES. 020238, 030038 Additionally, the Philadelphia Workforce Development Corporation is a fiscal agent. What that means is that we've received funds directly from the State for other organizations. 1 million. And that money came directly from the State's Department of Labor and Industry. Because the program is a pass-through program, they are not required to give us performance outcomes. That normally goes to the State.
And trying to get that information back from the State is not an easy challenge. I was able to read in your resolution 16 what some of the outcomes have been based on testimony they may have given to you, and I just repeated them in my testimony. 1 million, it's estimated that 775 people were to go through pre-apprenticeship training, of which 49 have gained access into the building trades and 108 have gained employment elsewhere. We believe at PWDC that survival and growth of our local economy depends largely upon our 14 2/27/03 - COMMERCE - RES. 020238, 030038 ability to provide a skilled and prepared work force that allows the business community a steady pool of Philadelphia residents ready to enter or in some cases re-enter the world of work. We recently received a two-page concept paper from the Diversity Apprenticeship Program to provide training and job placement for the City's Neighborhood Transformation Initiative. We will meet with them in the near future to see if we can develop a proposal which meets the benchmarks set by our Board of Directors, namely, that the investment of public funds leads to real union jobs. To this end we stand ready to partner with training providers that offer sound practical programs leading to jobs providing family-sustaining wages. I thank you for your attention, and I'll be happy to address any questions I can.
Thank you, Mr. Chairman. Good afternoon, Mr. Clancy, and thank you for your testimony. Let me start by asking a 15 2/27/03 - COMMERCE - RES. 020238, 030038 few basic questions.
What level of Workforce Development funding comes to the City on an annual basis?
On an annual basis, both with the Department of Public Welfare and the Workforce Investment Act, we received close to $110 million.
$110 million. What percentage of local Workforce Development funds flow through PWDC directly? The same $110 million?
Well, there's actually additional programs that the State funds. We're sort of like the bank in the City that receives funds.
The first question is, what amount of money actually comes to the City annually? The second question is, what percentage actually flows through PWDC?
All of it for training for currently constituents on TANF and for those who 16 2/27/03 - COMMERCE - RES. 020238, 030038 have been displaced.
How many PWDC clients are placed annually in real jobs?
That is about -- we probably serve close to 10,000, so it's about 40 to 45 percent actually.
Yes. Now just so I can clarify that. That is based on how we train individuals to get additional skills. Some of the placement activity we're still trying to capture, but we train about 4,000 a year that we now get into positions.
The average cost across all 17 2/27/03 - COMMERCE - RES. 020238, 030038 of our programs is probably around $5,000.
So you are familiar with the Diversity Apprenticeship Program?
Have you done any analysis of the program and its effectiveness?
Well, what is PWDC prepared to do on its own initiative related to the subject of this resolution?
Well, our goal would be to get the critical partners in the room to decide how can our local investment really help individuals get into the union. So we would be meeting with the representatives of DAP. We also are trying to meet with representatives of local unions to figure out where does it disconnect and how we can begin to -- and I know others have begun that conversation so it's not something that we want to recreate, but it's something that we want to figure out how we can help.
So PWDC does realize there needs to be a direct link between workforce development and economic development, particularly 18 2/27/03 - COMMERCE - RES. 020238, 030038 if we are spending hundreds of millions or billions of dollars --
Absolutely. I mean, the biggest we invest in is customized training for employers.
And besides sitting down members of the training providers, including DAP and others that you're already contracting with, are you prepared to do a formal assessment of training needs and whether there actually is a training gap with regard to minorities, women, ex-offenders?
Councilman Ortiz in his opening remarks spoke about being unhappy about the fact that I think he said in 1985 he was working on this and now it's 2003 and we're still working on it. Well, I have to run back a further. In my first term in City Council which began 1968 and ran through 1971, it was something called the 19 2/27/03 - COMMERCE - RES. 020238, 030038 Philadelphia Plan that the federal government set out for the construction industry and for the unions. It was called a Philadelphia Plan because it was aimed at permitting minorities, including those of color and also gender, women, to get into the building trades. There were two Councilmembers who participated in that discussion. One was myself, the other one was Councilman Longstreth. Councilman Longstreth urged that nothing be done; and, of course, urged as I have over the years that workers be hired, that minorities get into the union, democratize the union movement and give real validity of the American dream of a country being a place of opportunity for everybody. Well, nothing much happened. I think Longstreth won that battle because, as I see it, there's been almost no progress made since that time or so a little progress that it's not worth talking about 35 years later. It seems to me that this is the time that's urgent now. I think we've got to find the road to move, and it would be nice to talk with people who are interested in achieving a goal. But I think that what we have here is that the people 20 2/27/03 - COMMERCE - RES. 020238, 030038 who are principal partners might not be anymore interested in 2003 than they were in 1971 to achieve the goal that we think is important, and that's that everybody be treated equally and fairly and that there really be equal opportunity for everyone. And I think that until the labor movement can show that it's interested, I think they're going to need a lot of help for government and I think we're prepared to find the road to do it. So I commend you. I understand from what you said, your organization works directly not to get contracts for entrepreneurs, but to deal with people in the community who want to work as workers; am I right on that?
Well, I commend you for doing it. And I think we ought to set sights high enough to make the job worthwhile and then we've got to be ready to use every bit of political skill, every bit of political capital to bring that about. Because what we find is that the building trades, you know, we keep getting reports that when their construction sites, including those that are financed by the City of Philadelphia, when you look 21 2/27/03 - COMMERCE - RES. 020238, 030038 around you often see many more out of state car licenses than you see anything else. And when you look around the faces of workers, they tend to all or overwhelmingly to be Caucasian. There are many anecdotal stories about how difficult it is to get into the union and that if you finally do break away to get into a particular union that the jobs you're assigned are not the nicest jobs, and it has a completely discouraging effect. So I commend you and I hope that out of these hearings develops a determination for everybody to see to it that at least as far as Philadelphia financed contracts that the City of Philadelphia is involved in, that the democracy really prevails both with respect to union organization. I believe strongly we need unions, but we need democratic unions. We need unions that recognize the dignity of every worker, not just some workers. And that's got to be without respect to ethnicity, color, or gender. Are you committed -- I gather you are committed to that.
Is there any way you've ever been able to determine the membership of particular unions? For example, take the carpenters union that's been referred to -- the same can apply to any number of unions, cement masons, electricians union, the full brunt of the building trade. Is there any way of getting specific information as to membership?
That would be our goal, based on Councilman Goode's question. I think we need to do a full analysis, and with the partnerships that we have, we hope that we can bring that information back to you.
And you need strong government support to get that information.
Thank you, Councilman. Let the Chair note that Councilman Clarke has joined us at the hearing today as well as 23 2/27/03 - COMMERCE - RES. 020238, 030038 Councilwoman Tasco. The Chair recognizes Councilwoman Tasco.
Thank you. Mr. Clancy, when was the DAP program started?
And what generated the implementation of this program?
There was a dire need to begin to transition minorities and women into the building and construction trades.
What role did they play in the origination of this program, the unions?
There is a board that DAP has, and the union -- I know Pat Gillespie and others sit on that Board. And part of it was designing the curriculum that the students would learn to get in to take the test, and then the second part of it is where people need to get the sponsorship. And I think that's where we begin to see the challenges. Individuals are passing the apprentice test, but they're still not being able to access the union jobs. 24 2/27/03 - COMMERCE - RES. 020238, 030038
Yes, because I'm looking out of your testimony and I see that out of 418 people that were enrolled in your program, $2 million expenditure, you had 307 employed but only 90 of them were accepted into the union. And I think my comment is that that is the bottom line to all of this. And as Councilman Cohen gives his experience, from 1968 I was at the Urban Coalition in 1970-71 until 1977 and was Task Force Coordinator for the coalition around the whole issue of manpower in dealing with this. It's, what, 30 years later, and we are still no further along than we were back then. Same discussion. I could write the script. And until there's a serious commitment on the part of these unions to allow the members in there, we're going to continue this with the training people, building their hopes, and then out of 307 people 90 people are in the union. The others may be employed but it's temporary employment because if they don't have the union card they can't get in. And so there has to be a serious, serious commitment on behalf of labor to be more inclusive and open of their membership to a diverse community. I appreciate all the people who are 25 2/27/03 - COMMERCE - RES. 020238, 030038 working very hard to try to make this happen, but I think today we need to have the people here who ultimately determine whether or not our employees get on these jobs should be here testifying today, because it's a very frustrating effort. It's been going on, and I don't know at what point it ends. Until drastic steps are taken to possibly deal with it. I don't know.
But I look at your Congreso de Latinos where they have all those 90 people come out of Congreso. Could you tell me how that program can have 90 employees into the union and -- and I'm very familiar with TOP/WIN. I think it's a wonderful program for women to get them into the trades program. And I don't know too much about Connections Training, but I'm sure it's probably a good program too. But why they have zero participation because TOP/WIN excludes.
No, excluded from 2/27/03 - COMMERCE - RES. 020238, 030038 membership in the union. I'm looking at zero participation there.
I think what has happened, when I spoke to the people at TOP/WIN, and I've been at the Philadelphia Workforce Development Corporation years so I also know TOP/WIN for a 8 variety of years. And I think they've changed their 9 focus, knowing it was easier to get these single 10 mothers into other union related positions at SEPTA, at PECO, and some major employers in the City, than have to go through, you know, all the weight that it takes to get into a building trade union. So I think a lot of focus came early on when they realized they were having difficulties with that.
So if an employee finishes or completes an apprenticeship program, he or she has to have a sponsor in order to get in?
So they have to establish a relationship to get in? 27 2/27/03 - COMMERCE - RES. 020238, 030038
Correct. They need a union sponsor to get into the union, and that's where the challenges start.
I just wanted to add, with respect to the creation of DAP, was that program assisted in terms of resources as a result of some state initiative on funding for stadiums?
It was actually right before that. I think it was in preparation for the larger programs that were coming down. That is correct, that the State Department of Labor and Industry put aside some money to help this organization get started in hopes that by the time the stadium projects got up and running there would be a pool of applicants that could transition into 28 2/27/03 - COMMERCE - RES. 020238, 030038 positions.
I just remembered during the debate as a part of an agreement for some legislative support for the State's portion of the stadium funding that there had to be some commitment for funding for an organization that would train and hopefully implement an installation program to get people in the trades.
Can I ask you in terms of Workforce Development's relations to all of the trades, to what degree is information available to you about the testing of the various apprenticeship programs? Because I find that too often, particularly members in my community, found out about it after the fact or at the last minute I just happen to be privy. Recently, the plumbers union actually sent a notice to my office actually prior to the application process for the apprenticeship test. Do you have an ongoing relationship with all of the trades where you can get that information out to people who participate in PWDC?
Unfortunately, it's not as 29 2/27/03 - COMMERCE - RES. 020238, 030038 coordinated as we'd like. We work very closely with the AFL-CIO. They help us to sort of troubleshoot and get information. But we find the same challenges that your office finds, that some of the information is timely, and other times it's not. Sometimes we would expect a certain flow of information and then other times it doesn't arrive. So what we're trying to do now is figure out, you know, when are the tests announced, how can we get it out to our broader constituents in the neighborhoods so that everybody knows.
Have you asked them and the information is not forthcoming? What arrangement do you have?
With the AFL-CIO, they're working with us on trying to get all the unions together to figure out how individuals through our career link centers and our one stop system can figure out how we can get people at least informed about when the tests are going to be. Now, the actual programs do a whole lot more specific outreach. I know Congreso is very active. They have a full-time staff person dedicated just to going around to all the unions to 30 2/27/03 - COMMERCE - RES. 020238, 030038 see when the tests are given. So Congreso is probably the partner I look at to give us the most information because they're able to --
I understand that. I'm asking does the Philadelphia Workforce Development have such a relationship with the various building trades, i.e., the business agents in terms of getting notification?
At a minimum, I would think that that information would be forthcoming if you just simply ask when you would anticipate your testing programs or application programs for the various apprenticeship programs throughout the year since you deal with individuals who are obviously seeking opportunities.
That is something, Councilman Clarke, we have to do a much better job at.
And I'm assuming that you will assign an individual to basically just reach out.
I just want to veer a little bit off the building and construction trades issue at point because I know you have a varied approach. And I want to thank you all for participating and helping me with a earlier jobs fair last year that was relatively successful. In terms of other initiatives as it relates to employment opportunity, what does your organization do? Do you contract with other agencies?
Our goal at the Philadelphia Workforce Development Corporation is really to make the link between the skill gap between the jobs that exist in the our area and the people that we're serving. So we serve mainly two distinct groups of individuals. We serve people who are coming off of TANF, who are transitioning off of welfare and trying to get back to work. We also serve adults who are transitioning for a variety of reasons, whether they're coming out of prison, whether just down on their luck. And then we also serve dislocated workers, people who are laid off from their job through no fault of their own. And with those three groups of individuals, we try to do 32 2/27/03 - COMMERCE - RES. 020238, 030038 a full assessment of their skill level. Then we have staff that goes out and meets with organizations or employers in particular in which we then try to develop customized training for where the jobs that exist. So we really want to make sure that our investment of public dollars really yields people jobs. We're not opposed to sending people to traditional training vendors and training organizations, but we want to make sure up front before we invest any public dollars that there are employers willing to take these individuals after they're trained, because we don't want to see the precious dollars that we have get utilized on programs that really won't yield people jobs. So recently we've been able to go into contracts with Independence Blue Cross, the Aramark Corporation, School District of Philadelphia, Cottman Transmission. So we've been able to coordinate our efforts to make sure that, you know, Workforce dollars are tied into the economy and it's not just sending people to school and hope that they go to work. Our customers need to go to work. I mean, these are people with families, with children. 33 2/27/03 - COMMERCE - RES. 020238, 030038 They need to go back to work.
Thank you, Councilman. Councilman Clarke and all the Members of the Committee, and ladies and gentlemen, I just wanted to make one announcement and recognize Governor Mark Schweiker, President and CEO of the Greater Philadelphia Chamber of Commerce has joined us here this afternoon. I think it's significant that he would attend this hearing. The Governor has been in the building actually throughout the course of the day meeting with individual Councilmembers as a part of a meet and greet. This stop is not any of the Councilmembers offices, and so the Governor has taken the time and gone out of his way to come by this hearing because of his concern about the issues that are being raised here today, and I think it's rather significant that he has come to be with us this afternoon. So, Governor, I wanted to say thank you. GOVERNOR SCHWEIKER: Thank you, Mr. Chairman. And with all due respect to your respondent and commentator, it is a great interest 34 2/27/03 - COMMERCE - RES. 020238, 030038 of the Greater Philadelphia Chamber of Commerce that it go about the business of economic development. We certainly realize that workforce development specifically is an important front and are very supportive of an increase of this nature. As someone who has been involved in this for a long time, not just as a state office holder, but as a local official like the good Members of the Council here today, finding real world training for real world jobs and putting folks on the path, that kind of outcome is an important aspiration. And having said that, we will continue to pursue that as a business advocacy organization. And I say thank you for the opportunity just to offer that remark.
Thank you very much, Governor Schweiker. Councilman Cohen.
The building trades unions contribute a great deal to the welfare of the country. They happen to be the only unions I know of whose wage levels are guaranteed by government bodies. That seems strange most people don't know that, because the building trades unions seem to create the impression that they're independent and 35 2/27/03 - COMMERCE - RES. 020238, 030038 they often are critical of efforts made by other labor organizations seeking governmental help. But there is no other unions that I know of that have legislation at the federal, state, and local level which guarantees what they call Prevailing Wage Rates. Whenever federal money is involved in the construction of a project, the federal government guarantees the wage level. And the wage level is set by the region and if the union has a majority of the work in any particular region then the union wage becomes a prevailing wage that is guaranteed to the workers. I think workers in every union ought to have some form of guarantee like that; it would help them a great deal. But the thought strikes me that if the wage levels are guaranteed by federal, state, and local government, has there been any thought given to the question as to getting the governments to require that as a condition of the prevailing wage rate each labor organization seeking to benefit by that legislation must meet a certain level of openness in its membership? Has there ever been any thought given to that? For example in the City of Philadelphia, has there ever been any thought given to our 36 2/27/03 - COMMERCE - RES. 020238, 030038 guaranteeing that if City money is involved that we will guarantee their prevailing wage rates provided their membership be democratic and open to all segments of the worker population, including females, including people of color, including every democratic consideration involved? Have you run into that question at all?
We have run into that question. The thing that we try to do with our public investments in the City is to almost guarantee that any project that we invest in starts individuals between 9 and $10 an hour. And keep in mind, we try to do some studies on self-sufficiency in the City of Philadelphia and we want to make sure that any public investment really begins to move individuals towards a higher wage. The other thing that we want to make sure of when we invest is that the training is something that has a career ladder attached to it. We don't want to invest any dollars into any training that's not going to yield somebody an opportunity to see that, "You're at level A now, but if you continue to move up the educational ladder or experience ladder, you can make more money." 37 2/27/03 - COMMERCE - RES. 020238, 030038
I'm sure individual leaders in the union are fine people and very much dedicated, but sometimes people need governmental help like to help enforce the democratic principles. And I'm wondering whether that might not be thought of as a possible useful tool which would help ensure cooperation on everybody's part.
I actually have a couple questions, but I'm not going to torture my colleagues with my normal questioning. What I'd like to do is give you my questions and ask if you would provide the information later.
This is based on some questions that you actually responded to Councilman Goode regarding -- you said you had placed 4,000 of your approximately 10,000 or so people being trained? 38 2/27/03 - COMMERCE - RES. 020238, 030038
What I can do is actually be a little more specific. We have 10,000 people that walk in our doors interested in training. About 75 percent of them who go into training actually get placed. So it's not 45 percent that get placed. Those that actually go into training programs, about 75 to 80 percent will get trained. And I can break that out for you. I can break out those numbers for you. There's a certain percentage who walk in our doors looking for services, get some basic services. And then there are others that actually get a chance to go into training.
I'd also be interested in if you're tracking your program participants, if you could give us any information regarding how long they stay in the jobs they're placed in or what's their average length of the employment, the average salary of the jobs. You indicated that the cost of training was about 5,000, and I'd like to see what the relationship is between the cost of training and the 39 2/27/03 - COMMERCE - RES. 020238, 030038 actual placement in positions and what the salaries are.
And lastly, your chart broke down number enrolled, number employed, number union employment. I'd be interested in -- you have a total of 418 enrolled, 307 employed, and 90 in union employment. Is the 90 figure within the 307 or is that in addition?
Okay. So then I'd be interested to know of the 217 what kind of jobs are those people in.
The next panel is Mr. Samuel Staten, Sr., Business Manager Laborers Local 332 and representatives from the Diversity Apprenticeship Program. While Mr. Staten is coming to the table, let me also recognize Representative Ron Waters who is a State Representative and a member of the 40 2/27/03 - COMMERCE - RES. 020238, 030038 Pennsylvania Legislative Black Caucus who is joining us here day. And is our courtesy, whenever members of the State Legislature join us, they are naturally participants in all of our proceedings. Please identify yourselves for the record.
Gentlemen, please begin your testimony. We have copies of your testimony, so on the one hand I want to tell you you should not feel compelled to have to read it all. On the other hand, I'm certainly not trying to short circuit or preempt any of your testimony, so it will be at your discretion.
First of all, I would like to say good afternoon to the distinguished members of City Council. , Business Manager of Laborers' Local 322 and the Chairman of the Board of Directors, Philadelphia Revitalization and Education Program, also known as PREP. PREP began in 1996 as a result of my brother, Tony Lewis, Managing Director of the 41 2/27/03 - COMMERCE - RES. 020238, 030038 Housing Association of Delaware Valley, approaching me the year before about the inclusion of tenants as laborers at their development. I indicated to him that I would speak with my International Union about the possibility of creating a special dispensation. But I also indicated that the tenants should be looking at all the trades, not just the laborers. After a number of meetings with the tenants, the Laborers' International Union of North America, the Housing Association, and Laborers' Local 332 developed PREP. PREP provided training and employment to over 100 public housing tenants, with about 75 entering the laborers' union. When Philadelphia decided to build new stadiums in 1998 and requested State support for the project, the Pennsylvania Black Legislative Caucus announced opposition to the stadiums, citing that African Americans had been systematically excluded from the trades and unable to get work on City construction projects. I received a call from the then Pennsylvania Governor Ridge asking me if I could try and bring the minority community and the building trades unions together to discuss the new stadiums 42 2/27/03 - COMMERCE - RES. 020238, 030038 and their impact on Philadelphia. I agreed to try. For me, it was like a double-edged challenge. On the one hand, I am an African American and I could feel the pain of my community as they watched billions of dollars in construction work being done in their backyard and many wanted to work, but could not get jobs. On the other hand, I'm a member of the building trades, and I knew that all of the charges being made did not apply to all of the trades. I had worked with many of these guys for decades and I knew that you couldn't paint them all with the same brush. I immediately reached out to Pat Gillespie of the Philadelphia Building Trades, Representative Louise Bishop of the Pennsylvania House, and State Senator Anthony Williams. They all agreed to join me in an effort to bring the two sides together. In January of 1999, I convened the first meeting. Joining us was Congressman Bob Brady, Pennsylvania Labor Secretary Johnny Butler, and Mayor Rendell. About 12 state elected officials, over 20 building trades representatives, and some community representatives also attended that 43 2/27/03 - COMMERCE - RES. 020238, 030038 meeting. Halfway through the meeting, I wondered to myself, was this the right thing to do. The gloves came off and charges and counter-charges were traded. The elected officials accused the trades of systematically excluding minorities. The trades countered that they found many minorities applying to the trades to be unprepared for the entrance into their trade. However, it was Secretary Butler broke the impasse. " Mayor Rendell pledged to match the State's offer. The group agreed to give it some thought and to return for another meeting. At that second meeting a task force was set up to develop a program that would respond to the concerns of both sides. My brother Tony was asked to Chair the group and to convene a focus group of elected officials, building trade unions, and community leaders to come up with a plan. Once the task force was set up, a series of meetings were held. There was initially still some mistrust between the two. But as people stopped concentrating on differences and directed 44 2/27/03 - COMMERCE - RES. 020238, 030038 their attention to getting this money the Secretary had offered, they began to let down their guard. More and more you could see the team begin to develop.
The trades apprentice coordinators provided guidance to the requirements of the trades and the specifics of where applicants often fell short on their efforts to enter the unions. Cheney University, Berean Institute, two long-term African American institutions were asked to join the team to help to design the educational plan. Meetings were held with officials at the Philadelphia Board of Education to talk about the shortfalls and the needs to provide the requisite skills early on. Monthly meetings of the larger group was held, where the progress of the task force was reported and input was possible. In January of 2000, the program was funded by Secretary Butler, and the first applicant entered that April. Recently, the numbers indicate that the trades have slacked off in their participation in the program. We have communicated our concerns to them. Pat Gillespie has been working to increase this participation. DAP is a 45 2/27/03 - COMMERCE - RES. 020238, 030038 program created by the building trades, and the building trades must step up to the plate. It would be a shame, with all due respect, if the government would have to step in to make the trades do what is right. DAP is the vehicle. It has demonstrated that it is capable to providing the training necessary to get minorities prepared for entrance to the trades. It must have the support of the trades to succeed. It must have the support of the City to succeed. I stated earlier that Mayor Rendell pledged to match the State's contribution. Since the inception to this day, there has not been one dime from the City to this program. We can concentrate on the problem or we can concentrate on the solution. I think we have the solution. DAP is the solution. I thank the honorable Council for this opportunity to speak before you today.
Good afternoon. My name is William Peebles. I'm the Director of the Diversity Apprenticeship Program, known to most of you as DAP. 46 2/27/03 - COMMERCE - RES. 020238, 030038 DAP is a union-based program created to move qualified minorities into apprenticeships of the construction building trades. It is a public/private venture founded by members of the Pennsylvania Black Legislative Caucus, the Philadelphia Building Trades Council, and Philadelphia Revitalization and Educational Program, PREP. It's training was designed and developed by members of the trades in consultation with the black elected officials of Philadelphia, PREP, the Philadelphia Office of AFL-CIO, Cheney University Berean Institute and other community activists. DAP Advisory Board meets every quarter to discuss progress of the program, new opportunities for DAP participants, and placement requests from trades. The Advisory Board co-chaired by four respected leaders of both the community and the trades advises the program and takes the information back to the communities related to apprenticeships for minorities. These co-chairs are Mr. Samuel Staten, Sr., Business Manager of Laborers' Local 332; Mr. Patrick Gillespie, Business Manager for the Philadelphia Building Trades Council, State Representative Louise Williams Bishop 47 2/27/03 - COMMERCE - RES. 020238, 030038 and State Senator Anthony H. Williams.
Why don't I try to make this quick suggestion. You have extensive testimony. I think some of us have been reading through it.
If you could give us a general overview because I'm sure some members are going to have questions and we have a significantly long day here today. The testimony is very good. I mean no disrespect. And the testimony will be included in the record as if had been read in its entirety. I'll assure you that.
To make it short, I'll try and make some key points in the testimony. Number 1, DAP is an economic development program, not a jobs training programs. That is, it's designed to make sure that some of the dollars go back into the community and not just getting people jobs. In the testimony, I outline the specific training process that we have. And you're right, it 48 2/27/03 - COMMERCE - RES. 020238, 030038 is lengthy. However, it's very clear that we take a very holistic and good approach to make sure that the people that we put through our program are qualified to make application to the apprenticeships. One of the things I'd like to highlight is the fact that Philadelphia School System -- I'll take this directly from the testimony. The Philadelphia School System has not done a good job in preparing our students for the trades. And you'll find this on . For example, we had 2,819 applicants to date. Of these, we tested 1,414, and of these 691 passed the test to enter the program where our standards are rather simple, asking people to be at the ninth grade level for reading and math. This represents percent of the 18 persons who apply and pass the academic portion of 19 our entrance requirements. 20 The City's educational system does not 21 provide students with the mathematic and reading 22 skills necessary to become members of those more 23 complicated trades, such as the boilermaker, 24 electrical steam fitter, et cetera. 25 What we need to understand is that the 49 2/27/03 - COMMERCE - RES. 020238, 030038 Philadelphia School System needs to do a better job in preparing our students. But in the mean time, we need to make sure that the people who are not in school have an opportunity to get into the trades. Until the year 2000, all the trades used the Genoa (ph) Aptitude Test Battery, but it was called the was called the GAT-B, to measure performance. That was one test designed for the trades administered by the State to allow people to enter the apprenticeships from an academic perspective. Today, every trade can have its own test. That makes it a little hard for minorities because we know we have to train people on different tests in order to go into the trade that they select and they're able to go into. We understand that 17 percent of the apprentices of the construction unions for the period beginning October 2001 through September 2002 were minorities. Well, if you reverse that, that means 83 percent of the people who went into the apprenticeships were not minorities. When we look at the dollars that are being spent in the Philadelphia area, particularly Philadelphia, and those dollars that are being 50 2/27/03 - COMMERCE - RES. 020238, 030038 leveraged either by taxes and/or by bonds, if you will, we're not getting a good return on investment for our minority community which the City is made up of more than 50 percent.
I'm sorry. I need to make sure I'm understanding one thing. I don't mean to interrupt you. You said percent of the 9 people who went into the apprenticeship program. 10 And you only get to go into the apprenticeship 11 program after you pass the test. 12
So let me back up to 14 before the test. What was the pool of people who 15 either indicated an interest or who actually took 16 the test? And how many people actually passed it? 17 And maybe you had that testimony earlier.
You're talking about the universe, or just DAP? Because DAP --
DAP, if I understand your 51 2/27/03 - COMMERCE - RES. 020238, 030038 question, basically we had 75 percent of the people who came into our program.
Passed our initial test to go into our pre-apprenticeship program was 691, and that's just to get into our program. Then from that number --
Right. And what I'm 15 saying is from that number, usually 50 percent of 16 those people get to make applications and complete 17 our program. This is just to get into our program. 18
And at journeyman we have a big drop off of minorities; is that correct? That's what all of the records indicate. That's the records that we have.
It appears that you're not starting off with a particularly large pool of apprentices.
So we begin with 10 percent, and of that 17 percent -- that's one of the 11 things I would like to get later on. Of that 17 12 percent, the percentage that go on to be journeyman 13 is probably smaller -- maybe half of that, right? 14
So of the 17 percent, 17 maybe half or less that half would go on to become journeyman; that's what our records indicate.
Councilman, I got these figures from the Bureau of Apprenticeship Training, and they only look at the five-county area, so they couldn't break it down to Philadelphia. The figure was 19 percent of the people who got into apprenticeships. The actual figure was 19 percent of the people who got into apprenticeships were 53 2/27/03 - COMMERCE - RES. 020238, 030038 minorities. At the end of the first year during that period, percent were minorities. So you 4 lost percent.
I don't know, Mr. 9 Staten, if you read the report that we put out, "The 10 Illusion of Inclusion," in which in Philadelphia we 11 looked at Philadelphia apprenticeships. In 12 Philadelphia, the apprenticeships were not at all 17 13 percent in that report. So if this covers the five, 14 if you could, Sam, make available to us a figure of 15 what it is in Philadelphia. 16
We can try to obtain those 17 numbers. But given just the racial breakdown and the numbers of where they come from at this point, the majority then would appear to be in Philadelphia, the minorities.
Thank you, Mr. Chairman. Good afternoon to Mr. Staten, Mr. Lewis, 54 2/27/03 - COMMERCE - RES. 020238, 030038 and Mr. Peebles, and thank you for your testimony. I'll be very brief. I have one question. The question is very simply, based upon experience and track record, what do you believe you can accomplish with $2 million promised to you by then Mayor Ed Rendell?
What do you believe you can accomplish with the $2 million that was promised to you by then Mayor Ed Rendell?
Let me just say that we don't want to leave the illusion -- and I think the Council is obviously on the right track in terms of the fact that this has got to be somehow accomplished through the cooperation of the trades as well as government. What we can do and what we've indicated we had initially planned to do was to get 200 people a year into the building trades. But, again, that to a great degree depends on the willingness and the cooperation of the building trades.
Again, I thank you for your testimony. You should know for the record 55 2/27/03 - COMMERCE - RES. 020238, 030038 that in previous testimony from PWDC, Mr. Clancy in particular, they have agreed to work with DAP on your proposal to consider needs assessment of training opportunities and to consider strategies for working with the trades. I believe they are prepared to talk to you about that previous commitment, about your standing proposal, and about future cooperation in terms of local funding. Thank you again for your testimony. That is Mr. Clancy who you should probably have a conversation with before you leave.
Let me say just say, Councilman, that last month we had a meeting with the building trades that indicate -- when DAP began two years ago, there was a tremendous amount of support and I guess everybody was involved with the euphoria of creating the program. We got a great deal of cooperation from the building trades. The first class we had 71 graduates and 38 of them were in the trades by the time graduation arrived. We noticed a tremendous drop in that we had approximately 48 percent of the first class go in, we only had 10 percent by graduation of the class. We met with the building trade just last 56 2/27/03 - COMMERCE - RES. 020238, 030038 month. They've indicated that they will give special attention to this. So we're taking them at their word that they're going to try to improve this.
You should know for the record that PWDC has said on the record they're willing to deal with your funding and so we can move this process forward. But as part of also a broader group of training providers but we have addressed that and we will move forward. We actually will continue this resolution for future hearings as we work through that process. We're very glad you came here today to talk about the DAP Program. And we're also thankful that PWDC has committed to working with you on your funding needs.
Gentlemen, thank you. Can I have a panel come up? Tara Walton, Jahad Ali, and Sacaree Rhodes are the next to testify. While they're approaching the witness table, I have one other question for the gentleman 57 2/27/03 - COMMERCE - RES. 020238, 030038 who testified earlier, Mr. Clancy. You don't need to come back to the table. On your chart, you're showing union employment out of the Congreso de Latinos Unido program of 90 people, no other union employment for the other two problems. What I'd like to know is for the 90 people, what unions are they employed in. Please identify yourself for the record and proceed with your testimony.
Good afternoon. My name is Sacaree Rhodes. I belong to the African Daughters of Fine Lineage and I'm a community activist. Before I go into my testimony, I would like to thank Councilman Ortiz for being a catalyst for change and for truth, demanding justice for Latinos, black women, black men in this racist City of Philadelphia who has denied black people, Latino people, jobs in a City where black people are paying taxes and the contracts and the jobs are going to others than persons that look like myself. Mr. Nutter, as I sit here in these chambers, City Hall, the people's house, there are painters in this building, painter contractors that has not hired, to my knowledge, any black painters. 58 2/27/03 - COMMERCE - RES. 020238, 030038 I looked for them, unless they're hiding. You know, it's a disgrace that black men and Latino men and black women and Latino women are not allowed to paint in the people's house. Also, for the last six or seven months, I have gone on a crusade to demand justice and fight for jobs. I have gone out to work sites. I hear the names on a regular basis, MBEC, GPUAC, the DAP Program, Workforce for Development. Personally, I think that the DAP Program has no teeth. MBEC, I think all of them should go to jail. And GPUAC, they should be in handcuffs too. And Workforce for Development, I'm so tired of people coming forth and saying that we're training welfare to work folks and then all you do is turn around and giving them their welfare check back and you're not giving them a credible profession. First of all, I don't work for anybody. Nobody pays me. I am only here on behalf of poor black and Latino people. So there's so much dishonesty in the City of Philadelphia when it comes to poor persons. A lot of persons are in the union, out of the union. They say that in order to get into some of these training programs you have to 59 2/27/03 - COMMERCE - RES. 020238, 030038 have this and that. But the white boys that come in North Central Philadelphia it Darrell Clarke's district, which I'm appalled and upset about when I go and look at the Richard Allen Project development and you see a black one day, a black -- it's almost like they place them. Ya'll must know when we're coming. I mean, they're picking up trash. I don't see them doing nothing that's really serious of any grave nature. Black folks in North Philly are standing outside on the corners while white folks are in these fences with these expensive trucks. And black folks are wondering, "Well, why am I not working?" I mean, grown men 50 years old have not had a chance to participate or have a part of this purse called Philadelphia. Right here in Center City, there are Public Works projects where the City of Philadelphia certainly has money in. There are no black women, no Latino women. One or two black folks. SEPTA is the most racist disgraceful organization right here. The City of Philadelphia does give SEPTA money, but black folks are not working. They are racially discriminatory in terms of the police, in terms of women, in terms of the 60 2/27/03 - COMMERCE - RES. 020238, 030038 lawyers. They do nothing. But we have a black Mayor, we have black Councilpeople, we have all of you here, and we deserve to work. I go to West Philadelphia, we have PHA projects. Black folks are not working on these sites. Here we go again, white contractors are inside these fences with these big red trucks and black folks are sitting outside. And they say you are not trained. But I've talked to some of those white boys; they are in the union, they're on drugs, they have all kinds of issues. But the contractors hire them. But then we have to come under all of these standards in order to hire black folks in our own neighborhood. There is no reason that a black person or a Latino person should come out of their door and see these multiple contracts and these jobs in their communities and nobody hires us.
Ms. Rhodes, I don't mean to interrupt you and I know you're on a serious roll, but I need to do one thing and then you can go back to your testimony. I need to recognize one of my colleagues, Councilwoman Reynolds-Brown, and I know that Councilwoman Miller was in the room and will be 61 2/27/03 - COMMERCE - RES. 020238, 030038 return. Councilwoman Reynolds-Brown.
Thank you, Mr. Chairman. Good afternoon. I want to salute Sacaree Rhodes for your testimony and go on the record saying that I and a number of members of this legislative body are completely in support of this legislation put forward by our colleague Angel Ortiz. We join with you in the ongoing meetings and discussions that have been started by your organization and members of -- in fact, all elected officials have been invited to those meetings on Saturday morning. So we're prepared to work with you and for you to make a difference and actually make a change in the kinds of issues that this legislation reflects. I am now supposed to be at another meeting that I Chair, so I wanted to go on the record and show my support and step out and then step back in once I have taken care of my duties in the Caucus Room. Thank you, Mr. Chairman.
Thank you, 62 2/27/03 - COMMERCE - RES. 020238, 030038 Councilwoman. Ms. Rhodes, please continue.
Mr. Nutter, young African American males and Latino males a lot of times are on the corner selling drugs or either looking for work. They're working low wage jobs, sometimes two and three to make ends meet. " And then the grandmothers and the mothers who are trying to find work for their sons and grandsons and cannot find work because the contractors say that we're shut out. What I hear that there for sometime has been a document that white contractors, they've orchestrated which tell you how to keep Latino and blacks out of -- you know, keep them from getting contracts. That's unconscionable. When I hear that MBEC and some of these other groups have padded these numbers about who's at the stadium and who has these jobs. And they had 63 2/27/03 - COMMERCE - RES. 020238, 030038 a report that was done some years ago and they've been holding it and telling lies to the community. When I hear people tell lies about the stadium -- I've been down to that stadium. I know who's working. There is not 80 percent of those jobs for black and Latino people. It's a lie. And the Mayor said that. " But until the second floor and everybody in this City that's supposed to be representing goods and services for taxpayers -- and black people and Latino people pay taxes -- that we should have a piece of this purse. I'm just so tired of these lies that they tell us and they send us away when our young people want to work. And then there are even persons with union cards who are not working. They're standing on the walls. I was told that Mr. Sam Staten said that a lot of times when he sends his persons out to these apprenticeship programs that a lot of times they are treated with disdain and such racism that they end up on his door step, they come back. They've been isolated. They've been treated like a dog because of their color. Somebody needs to do something about that. Because I can't understand it 64 2/27/03 - COMMERCE - RES. 020238, 030038 that if Gillespie and Coryell (ph) and what's the other one's name, Johnny Dock (ph), you know, they enjoy the money and the taxes of these people here in the City of Philadelphia, black folks. So they need to be made to hire black people and Latinos. Who are they? And I pledge to this Council, and it's getting warm, that I swear to you that we will shut down and raise more hell in this town. And so if the white union heads will not hire us, they will not enjoy the pleasure of that money. We will go everywhere we have to night and day. We will go to jail if necessary. We will not let these white folks get this money and not hire black folks. We will not let black folks work with these union people and cut deals behind our back and knowing that they have not served their constituents. We are tired of it. And we are not fools. And I can go out and count heads. So a lot of this stuff on paper is a bunch of lies. And the lies got to stop. And as I say, it's going to get warm. It's not going to snow always. We're going to be everywhere. So we're serving notice on everybody that can hear my voice, and these contractors, we're coming after 65 2/27/03 - COMMERCE - RES. 020238, 030038 you. You're not going to continue the way you've done. And we're going to expose you if we have to sue you. We're going to go after SEPTA. SEPTA has lied. They held all those meetings in those churches telling those people they had that work. Now we found out through Fay Moore, she has said there may not be under a hundred jobs. There may not be contracts at all. The lies that SEPTA -- MBEC. I'm serious, you need to do something about MBEC. It needs to be scrapped and then you need to look at criminal charges, conspiracy charges. Because how many black people lost their homes and had a chance to have a fruitful life, but MBEC told lies. The stadium, I was at the stadium the other day. There are black people working there that are saying that the white contractors are calling them niggers and mistreating them.
And because a lot of times, you know, like black women have always had to take stuff to feed their family. There's a lot of black men that take things too. But they shouldn't have to keep taking in 2003. So I plead with you to make sure that 66 2/27/03 - COMMERCE - RES. 020238, 030038 this process is honest and the truth comes out, because thus far, we are living lies. And lies have been told from the second floor to where we are. And these organizations who are supposed to be about the business of monitoring jobs, who's working, who's getting what contracts, they're plagued in deceit and I really believe these person should be put in jail. )
Thank you for your testimony. There may be a couple questions. Representative Waters. REPRESENTATIVE WATERS: Thank you, Mr. Chair. Ms. Sacaree Rhodes. As you know, I totally support you. I've been out there in the cold with you standing on the corners and doing what I believe I was elected to do, that's to represent the integrity of the community that voted for me. I agree with your testimony. We have a number in our community in the City of Philadelphia, the minority population represents a certain number, then if we have contractors which are funded with public dollars and people who are coming to work or receive contracts 67 2/27/03 - COMMERCE - RES. 020238, 030038 are asking for an opportunity to go for work, they're not asking for an opportunity to break the law, they're asking for an opportunity to earn an honest dollar so they can do what other families do; feed their family, pay their bills on time, and not have to scrap and work two or three jobs in order to try to make ends meet. So I agree with you that we should do more. More has to be done to make sure that if we represent 50 percent of the population of the African Americans and Latinos represent 50 percent of the population, then we should see that kind of reflection when we go to these work sites. We should see people there who are -- And when it come to SEPTA in particular who happens to run right down my legislative district, I agree, that is a disgrace what we see right there. For it to come down in an area where the people are asked to stand on the sideline and watch work taking place in their neighborhoods and to deal with all the inconveniences that come with that. Businesses are folding up there on 60th Street, Market Street. The community has been totally disrespected up there. So I agree with Ms. Rhodes with what she 68 2/27/03 - COMMERCE - RES. 020238, 030038 has said right here day. You're only asking for some representation with your taxation. That's all you're asking for. If they are contributing toward it, they should benefit from it, too. So I just wanted the record to say that I had been there with you on those sites to do what we had to do to make sure that we continue to fight to get justice in the communities that we all represent. So I just want to let the record show that I support you in that effort, too.
I just want to identify this young man who will say something in a few minutes. He is a contractor. This young contractor has to go five minutes out of Washington, D.C. to find work to build a church. Now, that is sinful. With all of this work in this City, he has to go to Washington, D.C. But when we look in the neighborhood, there are trucks that say Delaware, New York, Baltimore. I understand that there's a contractor in here from Vermont. But he lives in the City of Philadelphia. His children attend public schools. 69 2/27/03 - COMMERCE - RES. 020238, 030038 His wife works here. They pay taxes. That's not right. This is what I am talking about. See, he's shut out. But then somebody somewhere in the people's house is responsible for this because somebody's letting these contractors -- and I say this -- these white boys get away. Somebody has told them, "Maybe you gotta hire black folk, you don't hire Latino." I wish I could uncover who that person is. But I believe such a thing has been said. But we're going work very hard and find out because we're going to expose that person to the overall community. And I thank you very much.
Thank you very much. Please identify yourself for the record.
Anthony Fullard, I am the Chairman of the Contractor's Roundtable and under the African American Chamber of Commerce. Since we had a greater Philadelphia Chamber of Commerce announced, the African American Commerce is also here and in full support of Councilman Ortiz' hearings that he has constructed here today as well. And we are in full support of Ms. Rhodes. We've 70 2/27/03 - COMMERCE - RES. 020238, 030038 also been out in the forefront, out on the streets with State Representative Waters and as well as State Senator Anthony Williams as well protesting these sites and are very, very concerned about this climate that has taken place in our City. The African American Chamber of Commerce is now trying to put together many programs. We've been working very closely with Mjenzi Traylor who is sitting right here on my right as well on trying to finalize some programs for the NTI Program and see how we can get more African Americans involved into this demolition that is going to take place in our own communities that we live in. Hopefully, that can move as quickly as possible so that we can get this resolved and then move forward so that we can get some of these brothers out here working. But my main concern is that -- I want to bring up a current issue that has almost allowed me to lose sleep. And this is this very issue about all the meetings that we have, all of the different laws and the specs that we put in place in order to ensure that we have fair inclusions on these jobs and we set goals and we set percentages and we put things in place that once a prime contractor is 71 2/27/03 - COMMERCE - RES. 020238, 030038 identified that is going to the prime, whether he is a majority prime or if he's a minority prime and then there's certain paperwork that has to be filled out that will name your participation, the subs and all. Now, the Chamber is in a fight right now on an issue at the Philly stadium that all of these things have happened. Then we have a labor leader, Johnny Dock calls the prime and tells the prime that he cannot use that minority sub and that he will pick the sub that he's going to use. That's a problem. That's a huge problem. If someone thinks that they can do that in this City after all of the things that we put in place to ensure fairness, that's a problem. When the unions think that they can step in and tell someone who they have to use, then everything that we are doing here, Councilman Nutter, is being undermined.
I understand. I want to make sure that we have as clear a record as possible. First let me apologize. I know you identified yourself, but I didn't catch your name.
Anthony Fullard, F-U-L-L-A-R-D. 72 2/27/03 - COMMERCE - RES. 020238, 030038
My company is Merck Steel, but I am also the Chairman of the Contractors Roundtable.
It would certainly be helpful and I think it will lead to a clearer record if you share with us any additional information with regard to either which contractor was involved in this particular situation, what subcontractor was being proposed and, I guess, kind of generally how do you know this particular information? This is a public record, so I think we want to try to be as clear as possibly about all --
I understand that. I just want to be clear about all the facts and I generally like not to have a record that's somewhat filled with "he said, she said, the other person told me" and kind of third-hand information. So to the extent that you can be as detailed as possible, it would certainly be helpful.
Well, let me be clear. This is dealing with public information and on a 73 2/27/03 - COMMERCE - RES. 020238, 030038 public job that has public money funded in. This is something that just came about last couple of weeks. Factual, and also detailed. The African American Chamber Commerce was contacted for support and help in this matter. And we reached out and we contacted our contractor who is Precision Electric who is a minority subcontractor that has been down on the Phillies project since the conception of the start of that project. The Phillies and also Driscoll Hunt (ph) who is the construction manager are very pleased with this contractor. And when more electrical packages started to come out to bid, Precision Electric submitted their bid, marketed their company and they were chosen by the prime contractor who was Petrocelli (ph) to represent a certain percentage of the minority participation for this contract. Everything went in. Things was negotiated as far as the various companies, and then things was documented to submit for approval by MBEC, GPUAC, the Phillies and also Driscoll Hunt. Everybody was satisfied with what the team was and signed off that we would like to see this contract move forward. Before the actual, I would say, subcontract from 74 2/27/03 - COMMERCE - RES. 020238, 030038 Petrocelli to Precision was sent out, there was a call made to Petrocelli from Local 98 business manager or president -- I don't know his exact title who is Johnny Dockery (ph), but I'm sure that we all know in this room who Johnny Dockery is -- that they could not use Precision Electric.
Petrocelli who was the prime contractor for that awarded contract. And they must use --
As I'm trying to keep track of the story, did you say Precision was already working on the job for someone else?
Yes, yes. They already had smaller contracts doing other things on the project. And then I explained that as more contracts out, they marketed themselves and they went out for various other electrical packages, jobs that has gone out to bid for that project. And as I said, there was a call made to the prime, and this prime is in New York. They are based in New York. And they shared with the Phillies that they don't want to have any problems 75 2/27/03 - COMMERCE - RES. 020238, 030038 coming in to start this job with the unions. But the problem lies is when someone can go and disregard everything that has been put in place in order to do the right thing and that everything has been procured and when the submittals and everything has went forward per the specs and per how jobs are awarded and just disregard all of that that and I want you to use this minority firm over an awarded minority firm. And to this day it's not resolved. That's a huge problem. That sends a message that these union laborers -- and outside of 332 because I believe that when they start saying percentages, that's where we get our large percentages from Local 332 on these projects. You remove them, then everything goes down. But when an union labor leader believe he can make a call and change what has been in writing to what he wants to see happen, that's a problem. And for him to think that he can do this -- because obviously if he thought that he couldn't get away with it, he wouldn't do it. He wouldn't even dream of doing something like that. So that's.
I understand. You've explained yourself. I appreciate it. 76 2/27/03 - COMMERCE - RES. 020238, 030038 Anything else?
I was trying to be nice. Thank you very much. I will not be asking anybody else that question. The next panel will be our Finance Director, Ms. Janice Davis, and the Director of MBEC, Mr. James Roundtree. Councilman, do you want to make a statement?
Welcome, Ms. Davis. I'm sorry, but I just got a phone call; I've got a family emergency. While everybody is here, I would hope that everybody can put the testimony on the record. We're going to have another hearing on the legislation that we put forward today, but I have to do this because my wife is calling me and I have to go home. So continue with the record.
Thank you, Councilman. Ms. Davis, identify yourself for the 77 2/27/03 - COMMERCE - RES. 020238, 030038 record.
I'm Janice Davis, Director of Finance. Good afternoon, Councilman Nutter and Members of the Committee. I'm Janice Davis, Director of Finance. I'm here to offer testimony on Resolution 020238. Here with me today are the Procurement Commissioner, William Gamble, and the Director of Minority Business Enterprise Council, also known as MBEC, James Roundtree. They are available to answer any questions you may have about the operation of their specific departments. A diverse business community is essential to the economic health of any City. The Street Administration is committed to achieving diversity in all aspects of the City's operations. We are not satisfied with the current level of inclusiveness in the economic activity of this City. This Administration's commitment to increase diversity and procurement is demonstrated by the initiatives directed at achieving that end. A few of these initiatives are presented below. Procurement and MBEC are working together to increase the diversity of the vendors 78 2/27/03 - COMMERCE - RES. 020238, 030038 doing business with the City. Their efforts include training and outreach to small minority and women vendors concerning the City's bidding process and business opportunities. The Procurement Department recently implemented a program to increase the use of small businesses as suppliers. Under the new small order purchase program, solicitations of bids for small order purchases are limited to small businesses.
Secretary Davis, I hate to interrupt you. Do you possibly have copies of your testimony?
Okay. 79 2/27/03 - COMMERCE - RES. 020238, 030038 Under the new small order purchase program, solicitation of bids for small order purchases are limited to small businesses. Beginning in March 2003, Procurement will make a list of the upcoming small order purchases available on its website. Small firms will be able to contact the department to request that they receive the bid solicitation for particular commodities. The Mayor's initiative to create 100 new, viable businesses has as its goal the reduction of the time and confusion involved in understanding and complying with the complex rules and regulations involved in starting a new business. Participants in this program, which is a joint effort of the Commerce Department, PCDC and the Office of the Director of the Finance, can utilize the services of several development and support centers. These centers include Temple Small Business Development Center, the Universal Business Support Center, the Women's Business Development Center and the Philadelphia Development Partnership, just to name a few. These centers provide training, technical assistance, one-on-one counseling and financial assistance. Among the other assistance provided are 80 2/27/03 - COMMERCE - RES. 020238, 030038 credit repair, accounting services, business planning and preparation of bond application packages. One important service provided through this initiative is a surety-bonding program. Recognizing that one of the barriers to small contractors is the inability to obtain bonds, the Administration instituted a surety-bond program to assist small, disadvantaged, minority and women-owned contractors bidding on construction contracts. The program managed by Surety Bond Associates, a woman-owned business located in Philadelphia, works with firms to provide surety bond programs through the Small Business Administration and through traditional surety market channels. To date, there are 56 contractors enrolled in the program. A total of bonds have 18 been issued. 19 The City has partnered with the 20 African-American Chamber and the major banks in the 21 City to create the Emergency Contractors Financing 22 Fund, a loan program that will provide working 23 capital loans for small minority businesses. As 24 part of this program, the City will provide a grant 25 to the Chamber to be used for business training and 81 2/27/03 - COMMERCE - RES. 020238, 030038 development activities. To date, the banks have made a commitment of $20 million. The City has created a wrap-around insurance program to provide a low cost alternative to traditional liability insurance for contractors on City construction jobs. Another Administration effort developed to positively impact minority participation is the Contract Review Committee process. The CRC reviews every RFP, invitation to bid and contract renewal for compliance with all City requirements, including meeting diversity goals. The Administration is finalizing an Executive Order designed to address the deficiencies in the existing order. Among other things, the new Executive Order will provide for a weighting scheme for determining "good faith effort." That concludes my testimony. We will be happy to answer any questions you may have at this time.
Can you tell me of anything specific that the City of Philadelphia has 82 2/27/03 - COMMERCE - RES. 020238, 030038 done to ensure that the work force, not the entrepreneur, but the work force be truly diverse and representative of the City's population?
We heard from the Workforce Development Corporation. Can you give any examples? For example, the Mayor calling in the building trades leaders and getting information as to the number of blacks, the number of Asians, the number of Puerto Ricans, the number of women employed in different trades, checking on them and saying, "What's your goal going to be for the next year and how are you going to improve that? What did you do about the complaints we've been getting?" At the stadiums, for example, the work force is not at all a diverse work force, but seems to eliminate many members of minority groups, many women. Very few women are employed there in the construction work. I think I can say probably that no women are employed in the work force. While I understand the complaints we've gotten, specific things like that, what is the City 83 2/27/03 - COMMERCE - RES. 020238, 030038 doing on a day-to-day basis to ensure that there is constantly increasing participation in the work force of all the diverse elements?
My name is James Roundtree. I'm the Director of Minority Business Enterprise Council. Currently there is no 8 legislation for MBEC to monitor the day-to-day work force, unless it's under a Bill that was passed under Council, where a project seeks a labor work force or labor agreement, arrangement, then the Minority Business Enterprise Council can review the work force that will be utilized on that project to determine what level of participation should be minority or women. But we have to get the information from the union. And before the program can be started, the unions, all of the unions, would sign on for a project labor arrangement, must submit to the MBEC that breakdown. As of today, they have not done that. We have sent out three requests asking for the information from different Locals. I 23 think we've gotten six responses back. The six 24 responses that we have gotten back, we have not 25 found a project, nor has a department requested that 84 2/27/03 - COMMERCE - RES. 020238, 030038 a project with those activities be considered for a project labor agreement. The Minority Business Enterprise Council is only responsible for the labor aspect if a project labor agreement is put in place. And right now, we only have had two of them -- we haven't had any since the enaction of the legislation. Because before it can be agreed, the MBEC must provide Council and the Administration with the report detailing that information, and right now, no 12 department has requested a project labor agreement.
In a very polite way, it seems to me that the answer to the question I asked, from the answer that you've given me, is that nothing has been done of any consequence.
Well, the way you asked the question, the only way I could answer it was the way I did, Councilman.
It certainly seems to me that the City of Philadelphia is not at all doing what it ought to be doing. Because the proof is in the pudding. If there were a diverse work force on construction projects, we'd know about it. People in Philadelphia would be happy. The rate of 85 2/27/03 - COMMERCE - RES. 020238, 030038 unemployment in the minority communities would be no 3 higher than in the majority community. People would know that there was a diverse work force and that everybody in Philadelphia gets treated properly. Wouldn't you expect that to be the case if the right steps were taken?
Why would legislation be needed when the building trades are so well represented at every level of government? The chairman of the Redevelopment Authority, I believe, is a union official. PIDC union officials are very much recognized. It seems to me that the building trade as a group of unions is supported fully by the City Administration. Why would we even need legislation? It would seem to me that all the Mayor would have to do, if he wanted to, was to call everybody in and say, "This has got to change. I want a monthly report. I want to see progress each month. And I want by the end of the year to make sure every job is fully diversified." Would that be a practical approach, you think? 86 2/27/03 - COMMERCE - RES. 020238, 030038
Councilman, I'm not certain that the Mayor is not having meetings with those labor representatives that you referenced. It's just that MBEC and my office are not tasked with work force issues. And so we're addressing that aspect of minority participation in the City that we are tasked with. We're not in the meetings that the Mayor is having, if he's having meetings with the labor unions. And I would not want to speculate on what is said or not said. We're just trying to address it from our standpoint in that area where we have responsibility.
Well, in government we know that everything becomes known to the public. There's no such thing as a secret. If meetings like that were taking place, everybody in Philadelphia would know about it, one way or the other. Either CLOUT would write it in the Daily News or some columnist at the Inquirer or the City Paper or the Philadelphia Weekly or the Northeast Times or the South Philadelphia Review or the Public Record. Somebody would begin talking about it. But the fact is, that the reason I believe the minority community is so distressed is that, not only is the situation 87 2/27/03 - COMMERCE - RES. 020238, 030038 absolutely deplorable, but it looks as if nobody's doing anything. I mean, nobody at the level where something could be done. We would like to have ideas on legislation. I propose one. I propose the notion that in order to be eligible for prevailing wage legislative support to guarantee the union contracts at the proper wages that -- and I have no problem with the wages -- but what I have a problem with is using government to gain things but not to feel a duty to return the support you're getting in a way of guaranteeing a diverse work force. It seems to me it would be in everybody's interest to guarantee a diverse work force, not just in the interest of the minority community. I'm looking for suggestions as to how we do it. Philadelphia ought to be leading the nation in this area, right? There's no reason why we're not the model on how you diversify the work force, particularly with respect to City contracts. We have so much building ongoing and have had it for years now. I don't understand why the situation seems to be just like it was 35 years ago when the 88 2/27/03 - COMMERCE - RES. 020238, 030038 building trade said, no, and there's no Council, as the young man testified before. Apparently labor feels that it is free to say no. I think we've got to change that situation. Thank you. If you have any specific ideas as to how the Council can be helpful, we want those ideas. Because I can tell you that this City Council is, in fact, committed to a policy of having a diversified work force. We will do anything we can do to guarantee that. The problem is that under the City Home Rule Charter, basically those decisions are left to the Mayor. And we're looking for legislation to state the policy of the City of Philadelphia and require the Mayor and every other agency in City government to follow them. We ought to be ashamed of our current record, and it's time now for immediate change. That's what we're looking for as a result of these hearings. Thank you, Mr. Chairman. (Applause.)
Thank you, Councilman Cohen. Mr. Roundtree, I have just two requests 89 2/27/03 - COMMERCE - RES. 020238, 030038 of you, and then Councilman Goode has a question. I didn't understand completely your response to Councilman Cohen. You talked about the need for a project labor agreement, and then I heard you say something else about someone having to request something, and I didn't understand that.
What I will get for you, Councilman, is the exact Ordinance that Council created for the -- it's called Project Labor Agreement. That's what I was referring to. The only authority that MBEC has to monitor work force is under that Project Labor Agreement. A department has to request --
I believe it was in 2000. I will get you the specific number. I prepared testimony on it. It passed. And we were actually using that legislation or law as part of the letter trying to get the union to respond to information about their membership.
Whose legislation was that? Do you remember who the sponsor was?
No, I don't. It's 90 2/27/03 - COMMERCE - RES. 020238, 030038 passed.
Yes. I think you introduced it in 2000 and it actually passed in 2001, somewhere in there.
And what's the issue about a request? Who has to request what?
The department. I think it was used basically for capital projects. So the department would have to make a request for the project to be considered a Project Labor Agreement. Once that is done, the MBEC is responsible getting the information from the unions as to the members, their membership, be it journeyman or apprentice, and then assigning a range for participation for minorities and females and then monitoring that process.
No, they have not. Nor has the union fully complied. The labor agreement won't kick in place until the union complies. That was part of Councilman Cohen's and Councilman 91 2/27/03 - COMMERCE - RES. 020238, 030038 Ortiz's.
Thank you, Mr. Chairman. I have two questions. One for Ms. Davis and then one for anyone in the panel that can answer it. My first is regarding work force development. Ms. Davis, what is the City's relationship with PWDC organizationally?
No. Actually, I wanted a response from Administration regarding what they view as their formal relationship, organizational relationship, with PWDC.
They're a quasi within the City. They're not a department of the City.
How do they interact? What is the City Administration 's authority, connection, board position?
Do any PWDC dollars 92 2/27/03 - COMMERCE - RES. 020238, 030038 flow through the City, or do they go directly PWDC?
They go directly from PWDC. My understanding, and it's very faint understanding, is we would almost have to have a separate contract or agreement to provide some service for them. There is no funding --
I'm asking, is there a pass through, through the City to PWDC, or do they receive their dollars directly?
PWDC receives all of the work-force-type dollars directly. They're the bank, if you will, for the region.
The Mayor is part of and has appointments within the Workforce Investment Board?
I don't know. I'll get that information for you, unless Mr. Clancy knows.
The Mayor sets the entire board. Right now, there's mandated partners that need to be at the board. And then there's discretionary appointments, which is about 22, that 93 2/27/03 - COMMERCE - RES. 020238, 030038 the Mayor has choice over.
And so the Mayor appoints the board that oversees $110 million that flows through the City?
Well, it's a little confusing. The Workforce Investment Board technically helps us to plan our investments, but their board doesn't necessarily oversee our board.
What appointment powers does the Mayor have regarding PWDC's board?
I think Mr. Jones and the Mayor get together and decide who -- I don't know the authority that Mayor Street may have over our board. I know there's been multiple discussions between Mr. Jones and Mr. Street on that issue.
Okay. While you're there, you might as well pull up a seat. When PWDC makes application to the state for funding, does it require the Mayor's signature?
It's only required in the beginning of the year when we do our formal plan. When we get additional funds throughout the year we do not. All our funding are both federal and state funds. So we don't receive any City funds. 94 2/27/03 - COMMERCE - RES. 020238, 030038
So, similar to the way that City Council have used Community Development Block Grant money -- because a signature is required by the local official -- City Council could pass an Ordinance to require the Mayor to require review of training dollars before the Mayor's signature?
My sense is that the Mayor could have the plan reviewed. We have to submit a plan every two years to the state on how we're going to invest the money. When the money actually comes into the City, then it's invested in a variety of projects.
The only reason that I ask that question is because it was actually then Councilman John Street who actually forced a review of Community Development Block Grant money in his first term. So I'm sure he wouldn't necessarily be against our same type of review regarding training dollars. Thank you. The second question I had -- I want to state for the record for those people who don't know, Councilman Ortiz's office prepared and Councilman Ortiz introduced a new Bill today which 95 2/27/03 - COMMERCE - RES. 020238, 030038 actually would repeal Chapter 17-500 of the Code and replace -- and I believe that that Bill may have been co-introduced and sponsored by every Member of Council. My question is dealing with the history of that portion of the Code and its success or failure, for the record, do you know, since that part of the Code become law, how much money has gone toward disadvantaged businesses?
Don't tell me you don't know it off the top of your head.
Ms. Davis, do you know how much money has gone toward disadvantaged businesses since 1982 and since minority set-aside law was enacted?
I will forward the information. 96 2/27/03 - COMMERCE - RES. 020238, 030038
Along with that, I would specifically also like to know what portion of that happened during the Administration of Mayor W. Wilson Goode and what portion of that happened afterwards.
The portion during Mayor Goode's Administration and then everything after.
And what portion happened since then. Thank you, Mr. Chairman.
I have the distinct impression that what the City has been doing over a number of years has been to create a lot of smoke and mirrors to try to indicate something ongoing in such a mystifying way that nobody knew what was happening. And the result was inevitable, that nothing happened. Because it was intended to create an illusion of something happening without anything happening. Because the building trades certainly play a very important role in the City's activity on a daily basis. And it seems to me that this is something that cries out for quick attention. Let me ask personally. We know it's very difficult if you work for the Mayor and are 97 2/27/03 - COMMERCE - RES. 020238, 030038 subject to dismissal by the Mayor, it's very difficult to have independent opinions. Because I remember when Mayor Rendell was the Mayor, he used to first have a budget hearing with his commissioners. And he would say to the commissioners, "All of you are free to not support my budget request or support it. But if you're not going to support it, just leave your resignation on the way out of the room." And I'm not absolutely certain as to the exact truth of that, but I've been told that so many times by so many commissioners that I've begun to believe it. And, of course, we understand that, you know, people should not be put in a position where to tell the truth their job is at stake. But I think on this problem what we need are some hard facts and some hard information. There's absolutely no reason why Philadelphia should not be number one in the nation in a diversified work force. Does anybody here have doubt about that? I'd like somebody to come and testify why that shouldn't be done or why it couldn't be done? Would you come forward? 98 2/27/03 - COMMERCE - RES. 020238, 030038 Could you add just another Chair for a moment? I don't want to dismiss the panel because that's Chairman Nutter's job.
My name is James Dickerson. I don't know if you all heard about me. I was the person who was in a shelter. I wrote a proposal. I didn't have a dime to my name. Philadelphia Housing Authority sent a flyer around stating, "Would you like to start your own business?" I wrote the proposal. It was accepted. They called me down and gave me $25,000 to start the business. They gave me a $1 million contract. Now, here's a man who had been sleeping on the floor, been in the street, in the shelter. Somebody wakes you up the next morning and says, "James, you have $1 million." The top of my head almost blew off. Called me down there. Gave me a check. $25,000, James. But what you have to do is hire people from the housing projects. I hired six people. We began to cut the grass, went through the housing projects, do the 99 2/27/03 - COMMERCE - RES. 020238, 030038 landscaping. She said, "Well, because this is your first year, James, you don't have bonding. We're not going to give you the contract. We're going to give it to Bustleton Services and Avant Guard (ph). But because you're a PHA resident, you are what we call Section 3 compliance. This is guaranteed to you. And in order for these two Caucasian prime contractors to get this contract, they must have a minority, and you're it." I signed percent; 20 percent. They 12 said $200,000 from this one. I said, "I've never 13 seen that much money in my life." $200,000 from 14 this one. 15 I had the six people from the projects. 16 We were all waiting. "Oh, my God, let's work. 17 Cutting grass." They wouldn't give us no work. 18 They didn't want us there. We got one month and one 19 week worth of work. They got rid of us. Every time 20 I call PHA and said, "They won't let us work." "Oh, we can't do anything about that." I said, "But how can you expect me" -- They said, "You've got to pay that $25,000 back, James." I said, "How can I pay the $25,000 when 100 2/27/03 - COMMERCE - RES. 020238, 030038 you all don't give me no work?" Everybody had to go home. The other people kept the work to themselves. PHA said, "We can't make them give you no work. You're a problem, James." And if there's anything that comes out of your legislation today, sir, I would like to say to ya'll that it has to be enforcement, enforcement, enforcement. (Applause.)
Because even though in the federal guidelines of HUD money -- and this was HUD money -- the federal guidelines in Section 3 compliance, they have no one to enforce it. It is written very fairly. If they go by how it is written, it would have came out fair. But they had nobody to enforce it. They couldn't help me. They couldn't give me any work. So here I now have what you call -- what Mr. Ortiz said? This was the delusion of the inclusion. And here I am stuck with a bill that I never had. Here I am owing Tom, Dick, and Harry, and nobody can help me in one, way, shape, form or fashion. Mr. Caldgreen (ph), they washed their 101 2/27/03 - COMMERCE - RES. 020238, 030038 hands of me. Mrs. Asia Coney, this made her program look so wonderful. "Oh, here's a tenant that we selected. He got a $1 million contract." And they wouldn't even give me no work. So if there's anything I have to say to you, sir, through anything that Council does, please enforce it. Please put together a team that can actually enforce what you've written and then it will work. Because in the reality and scheme of things, once the work begins, they don't care. They don't care. It's all about greed. When I went back and said this to Ms. Asia Coney, she said, "James, you should have known that they're businessmen, that they were going to keep the work to themselves." I said, "Miss, no, I didn't. I thought that you went with Section 3 compliance, the federal guidelines of HUD." No. 19 So that's what I been waiting here to say to ya'll. And, again, if ya'll do anything, please put together some people who will enforce whatever you write and will go behind and make sure that what you say is getting done. Because they washed their hands of me like Pontius Pilate. They 102 2/27/03 - COMMERCE - RES. 020238, 030038 won't even return my calls. That's what they did to me. God bless you. Thank you all very much for everything you do. (Applause.)
Thank you very much. Will the panel come back, because the Chairman of the Committee is here and only he can dismiss.
Councilman Cohen, I understand that you've been taking full advantage of the absence of the Chair, as I would expect you to do. I knew it was a mistake to go out of the room, but I do appreciate the previous testimony. I had a couple of questions that I wanted to get on the record and I know that Councilman Ortiz had some as well. So let me ask these questions. Primarily directed at MBEC, but certainly Ms. Davis or Mr. Gamble -- and I have a couple of questions for Procurement, as well. Under Executive Order 193, what is your responsibility and how have you been able to enforce compliance?
Our responsibility is to 103 2/27/03 - COMMERCE - RES. 020238, 030038 review all of the bids mostly over $100,000 and to set goals and ranges for participation and then monitor that activity, do outreach for on-City projects. And the second part of your question, Councilman, was?
Desk audits. We send out an audited letter asking the contractor if they have received a certain amount of money on a certain contract, and ask them to sign that document and provide us any additional information, unless it's a large contract like, for instance, I used at One Parkway project is because we did that in totality. We can request a copy of the subcontractor, if subcontractors are involved, and we do it based on that. Any signed document that can be utilized as a contract document, that's what we request.
Are there any actual 104 2/27/03 - COMMERCE - RES. 020238, 030038 field audits conducted? This sounds like this is more of an honesty-based system or whatever somebody's willing to sign.
Most of the field audits that I've done, I've done based on larger projects. I currently have a staff of people that's divided 8 up into three different units. And so my resources 9 right now to do field audits on all of the projects 10 are limited. So what we have been doing on large 11 projects, mainly TIF projects, is dispatching our 12 resources to that. 13
What was the overall level or percentage of participation for MBE's, WBE's and DBE's during the last Fiscal Year on projects that were monitored by MBEC?
On Public Works contracts, there are 10 percent for minorities, about 4 percent for females. I can give you the specific breakdown on the rest. Those are the ones I know off top of my head because I was comparing to this Bill from last time.
Does MBEC have the capacity to monitor all the projects --
One second. I was just 105 2/27/03 - COMMERCE - RES. 020238, 030038 passed the participation report.
You always do, Ms. Davis. Is it possible for the Committee to receive a copy of this subsequent to the hearing?
For Public Works, 9.2 percent for minorities. For women, 4.6 percent. In supplies, 1.3 percent for minorities.
What's the total dollar value of the supply contracts during FY '02?
$39,800,000. So that 106 2/27/03 - COMMERCE - RES. 020238, 030038 would come out to $500,000 for minorities.
Are minority firms just not bidding on supply contracts?
What are these contracts? What kinds of contracts would be in the supply category?
My name is William Gamble, Procurement Commissioner. In those items will be things such as janitorial supplies, office supplies, basically anything from A to Z that we procure.
Well, I know we buy a lot of cars. There was testimony the other day in the City Council budget hearing, Mr. Roundtree. I seem to recall generally the round number of 1,200 107 2/27/03 - COMMERCE - RES. 020238, 030038 companies are MBEC certified; is that correct?
Do you have a ballpark figure on how many of them are in a business that generally supplies these kinds -- would be respondents to a supply bid?
I don't have it right here with me, Councilman, so I'd have to respond to you in writing.
This goes back to a conversation or discussion that we were having just the other day about review and analysis of data. I mean, does anybody think it a little strange that minority businesses would only be supplying 1.2 percent or winning 1.2 percent of the contracts in this particular area? I mean, does that strike anybody as, what's going on?
Yes. And what we've tried to do is identify -- these are specialty contracts. So what we are doing with the Procurement Department is identifying the areas 108 2/27/03 - COMMERCE - RES. 020238, 030038 where we are the weakest. For the last several years, when we were purchasing a lot of furniture, we identified that as a weakness. We tried to identify firms that could provide furniture or furniture items to the City. We were successful in helping locate two local firms that have been providing furniture and equipment to the City since then. As a matter of fact, in our next annual report, a minority firm won the City's annual contract for supplying the City with furniture.
Those are particularly hard areas because it is where someone is buying something from someone else. And because it may be a small firm that does not have the advantage of a relationship with a particular manufacturer in several places, they're at a price disadvantage when they purchase to resale to us. So those are particularly difficult areas. The other thing is that we do citywide contracts. It's one of the reasons why at CRC we are looking at packaging certain things in different ways. Because where a firm may be able to compete on a smaller piece, if we do it as a citywide, where 109 2/27/03 - COMMERCE - RES. 020238, 030038 it's going to become just -- it's just a bid in most instances. We don't have the flexibility of an RFP. It's low price that prevails. So supplies for all people who are looking at goals is a particularly difficult hurdle because our people have to purchase from somebody else. And we don't control those sweetheart deals that may be upstream from us. And by the time it gets to us, the damage has already been done or they've already been set in place. And there's very little competition when you get to automobiles, which would be a large dollar amount and probably represent almost half of that $30-plus million. Since we procure about $15 million in vehicles, that effectively becomes a very large piece of that $30 million.
The last contract was won by a company in Rhode Island by the name of Rizzo Ford.
I have to talk to 110 2/27/03 - COMMERCE - RES. 020238, 030038 the Councilman about that. A company in Vermont?
Rhode Island. A company in Rhode Island won the City bid on vehicles. What was the dollar amount of the contract?
The dollar amount of the contract was roughly about $6 million and it was for vehicles for the Police Department.
So these are Crown Victorias? Mr. Gamble: Most of them, yes.
Mr. Roundtree, you talked about Public Works. You just mentioned to us supplies. I don't know if you finished. And is the last in that category equipment?
No. The next one is service, where minority firms receive 15 percent. Women businesses receive 4.3 percent. And then the next category is equipment. Minorities receive 3 percent. There was no female participation. And professional services for a profit, 111 2/27/03 - COMMERCE - RES. 020238, 030038 minorities received 9.5 percent, and women received 9.6 percent. But the dollar value in professional services for profit was $200 million, with minority firms getting $19.1 million and females firms getting $19.2 million.
Let's talk about professional services. That's not subject to lowest responsible bid; is that correct?
That seems to be an area that has a tremendous amount of discretion or subjectivity. Based on -- obviously people have to meet the threshold of being qualified to do the work. I guess I'm somewhat surprised that even in that area the numbers aren't higher. What's the problem in the professional services area?
Well, we'd have to take a look at what we bought that year. For instance, we know we're going to do --
Hold on for a 112 2/27/03 - COMMERCE - RES. 020238, 030038 second. I thought you said $19.1 for minorities.
So generally the total percentage is 19, right, somewhere in the 9 range, 38 out of 200? 10
Right. And you were 11 asking me, why we didn't do better. And I would 12 suggest to you that we took a look at that and we've 13 identified some areas where, in the past, minority 14 firms may have subcontractors, but in this Fiscal 15 Year, they will be prime contractors. And one of 16 the big areas is, we'll be in our facilities where 17 a firm will have won the whole contract of 18 $12 million. And so we think we have made some 19 strides in that area.
Does the MBEC have the capacity to monitor all the projects covered by Executive Order 193? 113 2/27/03 - COMMERCE - RES. 020238, 030038
So you have all the people you need, all the resources you need. You're just all over it. And at times, people are actually bored over there?
No, we don't. No, Councilman. We, too, are subject to the budgetary constraints that has been placed on the Administration due to the budget. So our task is to do better with what we have to improve in our automation or technology. We're looking to increase or enhance our report mechanism by enabling to link through the City's computer system. We think we can do what we're tasked to do with the staff we have and some technology information.
You're going to stick to the party line that you have enough people, there, you're not going to ask for anymore, regardless of what the reality situation is, right?
The draft Executive Order sets up some responsibilities and some other avenues and it also makes several mentions -- because it was drafted by Mr. Roundtree -- of being provided adequate resources. 114 2/27/03 - COMMERCE - RES. 020238, 030038
-- under discussion. So I anticipate that, as a result of implementation of that -- because it does entail some additional responsibilities and an expansion of the current responsibility -- recognizing that there does need to be a greater effort towards monitoring to the extent that we cannot provide the resources. Through some type of restructuring, there's going to have to be additional resources provided.
Let me ask about some reporting requirements. Ms. Davis, are you aware of the provisions of Ordinance No. 990181 that has a recording requirement by the Mayor that, no later than December 31st of every year, that Council is supposed to receive a report with respect to tax increment financing districts?
I'm not specifically aware of that requirement. 115 2/27/03 - COMMERCE - RES. 020238, 030038
Are you aware of any reporting requirements from Ordinance No. 990326 that has a Section 13 requirement for monthly reports by OHCD, which actually I think we do actually receive? Are you aware those reporting requirements?
Are you aware of the reporting requirements from Ordinance 990563 that require annual reports by OHCD and the Department of Commerce that are to be submitted to the Mayor and the Council no later than December 31st of every year regarding the Neighborhood Benefit Strategy?
The OHCD and Commerce people are here, and perhaps they'd like to address that.
Okay. I understand. When they come up I'll ask them about it. Are you familiar with the reporting requirements of Bill 000181-A regarding employment of low and moderate-income persons by City contractors?
No, I'm not. Does it specify a department with responsibility or area? 116 2/27/03 - COMMERCE - RES. 020238, 030038
The reporting requirement is, "All bidders or contractors on any covered construction contract shall provide to the Procurement Commissioner, in the case of contracts to which to the City is a party, credit, or the Director of Finance, in the case of contracts to which the City is not a party, such information as the Commissioner or the Director may need to assess the bidder's or contractor's ability to meet the hiring requirements set forth in Section 17-1002. That requirement is, every covered construction contract shall contain a provision requiring the business responsible for performing work under the contract must certify that at least 40 percent of the workers who work on the covered construction contract are low or moderate-income persons." Are you familiar with that reporting requirement?
No, I'm not. Councilman, would you give us a copy of that at the end of the meeting? We'd like to comply with our requirements to the extent that they exist.
Actually, so would I. 117 2/27/03 - COMMERCE - RES. 020238, 030038 And there's finally Bill 000180, which is related to the Neighborhood Benefit Strategy, which also has a reporting requirement. These bills, the last couple of those bills, as you can tell from their Ordinance number, are all bills that were introduced in 2000 and probably passed in 2001. I'll be glad to give you copies of the material. It would be helpful, I think, for all of us if we actually take these reporting requirements seriously that are passed by the Council, signed by the Mayor, and turn them into something. So, again, I think we can use the power of information to deal with some of these situations. Let me ask this last question. After the successful challenges, legal challenges, were made to Chapter 17-500, what legal tools were at your disposal to enforce compliance with minority participation legislation or Executive Orders?
Just that. The Executive Orders themselves and the way the Executive Order is written, it provides the MBEC with the opportunity to recommend to the Procurement Commissioner debarment of contracts who are not in compliance. 118 2/27/03 - COMMERCE - RES. 020238, 030038
That's subjected to -- we are not happy with the level of participation, but we have not been able to prove that a contractor discriminated. The provision under 193 is based on whether or not the contractor discriminated.
Minority firm or female firm was denied a contract, perform a contract, solely on the basis of race.
Do you think that any contractor would generally be stupid enough to say, "I'm not giving you this contract because you're African American, Latino, Filipino, female or some other gender that we don't know about"?
Take your best shot. Yes or no. It's a yes-or-no question. 119 2/27/03 - COMMERCE - RES. 020238, 030038
I think if you push a person far enough for them to say, "I'm not going to do this, and I'm not going to do this because."
No, it's not that they're not getting any business. They're not getting the business at the level that we would deem successful. These numbers by no means represent --
So if no one has reported that any of those kinds of comments were made and you're not satisfied with the level of participation, what do you think is going on?
We think our greatest weakness right now is the outreach and the monitoring of the actual project. Once we are able to hold people accountable for the letter of what they sign and once we are able to make sure that 120 2/27/03 - COMMERCE - RES. 020238, 030038 there's an ample market of ready, willing, and able contractors --
When you say, once we're able, is there something we're waiting on to allow you to be able?
No. I'm saying that we need to do what you're saying. We need to do a better job at what we're doing, simply put.
And how is that going to happen? I think we've all known that for a little while.
Hopefully, how it's going to happen is, once the new Executive Order is passed and we begin to implement, that's how we believe it will happen.
We were requested by a transition team from the new Administration to do that. And we did that.
Are we talking about sometime in early 2000? You wrote it down?
Yes. We've been kind of tweaking it since then. It was submitted to the 121 2/27/03 - COMMERCE - RES. 020238, 030038 Finance Director just before Christmas.
So you worked on it during transition in the winter of 2000, tweaked it for a while, submitted, I guess, what you think is kind of a final draft or close to a final draft somewhere near Christmas 2002. And the present status is?
It's with me to set up a meeting with the Mayor. We had budget hearings to intervene and that's why it hasn't moved since Christmas. But it is with me now to be moved to the Mayor.
Well, I'm never going to get into how people spend their time, but we've done a fair number of things since January of 2000, all of which, I'm sure, were very important. We helped build stadiums. We tried to work on resolving School District issues. We passed a couple budgets during that time period. We had a Republican National Convention. We negotiated 122 2/27/03 - COMMERCE - RES. 020238, 030038 contracts. I mean, how long is this Executive Order?
Sir, as soon as I got it in November 2002, I started reading. I had been asking for it. It was delivered in November of 2002. I was not here when the original request was made of MBEC to prepare it, so I don't know who didn't ask for it subsequently. But now that I have it, I am moving it forward. I admit it has been much too long in coming and that's why I intend to move it aggressively. But it's not a lone order. It's not boxes. So we will move it now that I have it. It's with me now and it won't be with me, I can guarantee, beyond next month, because I want to get out of my office and into some form that will give us some teeth to do what we need to do. We recognize that we are not where we need to be. I'm from the so-called racist south where we did it a lot more aggressively than it's done in Philadelphia. So I'm particularly not happy when I have to talk to my friends back down in Texas and Louisiana about how well they're doing and how well I'm not doing. So it's not going to stay with 123 2/27/03 - COMMERCE - RES. 020238, 030038 me long. My desire would be to put more teeth in. But I have to go with what the rules are in Pennsylvania. And there are definitely differences between operating in a Commonwealth and operating in just a plain old state. And the level of aggressiveness that Southerners take with issues like this is very different than the genteel way in which Philadelphians approach things. So I've adjusted to that, but I am not happy with it. I don't think this Administration is happy with where we are.
I would actually ask you not to adjust to it. Please don't adjust to it.
I'll deal with you, Ms. Davis, however the situation is going to be. This is a priority of the Administration?
It is definitely a priority. I cannot begin to tell you how many meetings I have been in with entrepreneurs, with people who would like to be entrepreneurs, where I leave disgusted 124 2/27/03 - COMMERCE - RES. 020238, 030038 and brokenhearted. Because I'm African-American too. I have a husband who owns a small construction firm. And I know how hard it is on a family to wonder from week to week if there's going to be another job to pay the bills. So believe me, being a wife and a mother of African-Americans who are dependent on the, in some instances, good will of somebody willing to take you on to do a job, that it is not a comfortable place to be. And I don't wish that place for anybody. I personally take it very seriously and this Administration takes it seriously. It is just that very often what people see as places where we can demand, because of Crozen and some of the other impediments, we are in the position of asking. And it is very uncomfortable when you go to the person who holds all of the cards to ask. Perhaps finalizing our Availability Disparity Study, provided that that study supports our going to set goals oriented program would give us those teeth. But until you get to point where you have something that represents a hammer and not a glove, you're dealing with an ask and not a tell. 125 2/27/03 - COMMERCE - RES. 020238, 030038 And we need a tell.
Ms. Davis, I agree with probably 98 percent of everything that you said. I would only probably disagree with one particular issue, which is, it's our money. And we have a right to make certain conditions on how we spend the public's money. I can choose to go to a particular store and patronize a particular business with my money. And I think that we have some ability and a little bit of a hammer, or any other tool that you might want to identify, to say, "This is the deal. This is how we do business. We are going to be within the law. We're going to be within the Charter. We're going to do whatever it is that we have to do to maintain the public trust and public responsibility. But some of this behavior is unacceptable. And if you want to do business here, these are the rules."
I agree wholeheartedly with you. That's what we are attempting in those instances, which are primarily professional services where we have the leeway, we are attempting through CRC to force that behavior. But what you have to realize is that, while there are many of us who are 126 2/27/03 - COMMERCE - RES. 020238, 030038 people of good will, there are many people in departments making decisions who don't have the same interests that we have. And so it is not just a "you do it." It's not telling them to do it and they do it instantly. It's telling them to do it and you sit on them to make certain it's done. It's why we review every contract. It's why we attempt, before people make a decision to spend the money, to force them to at least consider the fact that there are people of other colors other than white, that there are people who are female, that there are people who have disabilities. But again, you're looking at behavior that is deeply embedded in -- not this government, when you think of government as the big political -- but this City, when you look at City government. So it is something that has proven to those of us who sit on the CRC to be amazing, because we still hear some of the stories about there not being anybody qualified to do it, when we're some of the people sitting at the table.
I've heard about some qualifications issues recently myself and who's qualified to do what. 127 2/27/03 - COMMERCE - RES. 020238, 030038 (Laughter.)
I'm used to that conversation. We can have that discussion.
I would never go there, Councilman. I've had too many people go there on me.
I have a great appreciation for the qualifications discussion.
We actually do hear that from departments. And they're sort of in dismay because the three of us are part of the team that they're talking to. So it is an attitude that doesn't change because you dictate it. It's an attitude that you have to force to change. We've begun this process in May with a very short time frame for the first one because we were facing the deadline of getting things on tap for the new budget year. I'm hoping that that process becomes one that does accomplish what we're attempting. And based on your recommendations of Tuesday, we're going to start to measure and we're 128 2/27/03 - COMMERCE - RES. 020238, 030038 going to start to track how many we change just by virtue of sitting there and forcing people to come before us. Because it is important that we measure and know what impact we're having. Because it's kind of uncomfortable to come here when we know we're doing stuff and we can't prove it to you because we don't have those objective numbers, the things that accountants always love to have and say, "See, we're doing much better." So we will begin to measure. But we're not happy. I mean, we are not happy people. We come here with our heads bowed because I, for one, always want to do a good job. And when I am not serving those who need my services most, I don't feel that I am doing a good job. And so from that standpoint, our efforts have to continue.
I now have a tremendous dilemma. I've had simultaneous requests by Councilwoman Tasco and Councilwoman Reynolds-Brown, and I will leave it to them to 129 2/27/03 - COMMERCE - RES. 020238, 030038 figure out who goes first. I think that's the best course of action for me. The Chair recognizes Councilwoman Reynolds-Brown.
Foot note question. Does the Capital Program office -- does the work you're doing with the CRC, is the Capital Program a part of the process as well?
I think we haven't identified actually -- because we're continuing a conversation from a couple of days ago. I think we haven't identified CRC. It's a contract review team?
CRC is a Contract Review Committee. We'd like to get it to the point where every time somebody thinks about spending a dollar, they have to come see us. In fact, we are looking at incorporating in any financial system changes we do, a requisition, and implement a requisition phase for everything. So that if you were going to do personal services, you'd have to do a requisition 130 2/27/03 - COMMERCE - RES. 020238, 030038 that would come up the chain, because then I know when you're thinking about spending a dollar. CRC grew out of the Mayor asking the simple question, "Who in the government can obligate this government?" And we started looking. And directors had delegated to the point that there might be some clerk sitting in a corner somewhere who can spend a million dollars, and the director would never know that the dollar was spent. But that clerk may have been here 30 years, because we have a lot of people who have been here 30 years. 30 years, you've got to remember, is only 1973 at this point. So you have some 30-year people here. You've got a lot of 30-year people here. So that clerk might be a 30-year person who has been doing it that way forever and they have their loyalties. And thier loyalties aren't our loyalties. Their loyalties may be loyalties to somebody we don't even recognize. But they're going to do it the way they've always done it. It's their department's money. It's their money. We have no right to intervene. So when we say, get MBEC involved, we found out MBEC wasn't involved. In fact, the 131 2/27/03 - COMMERCE - RES. 020238, 030038 contract would be drawn up and the Law Department wasn't involved. People would take it on themselves to negotiate it. Do everything. Tell the people to start working. And then the contract would catch up later. When that's happening, the government's not controlling anything. It's happening. It's not being directed. So CRC is an effort to force accountability, number one, on the director and the head of the department to say, you at a minimum are going to know what dollars are being spent and why they're being spent. How can we have a larger citywide agenda when people can spend money for anything that may not tie into the City's agenda? So CRC first looks at, is this mission critical? Is it something that we are doing in furtherance of a larger goal? Or is it something that we're just doing because we've always done it? It then looks at, can we get it done a different way? Does it make sense doing this way versus doing it some other way? It looks at whether we're following rules and regulations. Around the CRC table we have a saying that a dead contract cannot be amended. It's dead. 132 2/27/03 - COMMERCE - RES. 020238, 030038 We can't bring people back from the dead, so how can we bring a dead contract back? But that had been a practice. A contract could be dead for a year and somebody amended it back to life. Well, we don't allow that anymore. Once you've passed the point of death, you don't come back. You became a new contract. And with that, you give us a second bite at the apple because that's another way to get around the process.
The next thing you know, you'll be trying to stop the dead from voting. Ms. Davis, how far does this go? (Laughter.)
I'm from Louisiana. We never stopped that. You need those extra votes. No, we would never stop the dead from voting. But we don't want the dead doing contracts with us. (Laughter.)
And then we also looked at where in this process was minority participation being considered. How are people procuring things? Were they doing it formerly? Or were they calling up Joe because they knew Joe and Joe was a good guy and they knew he wouldn't give them a headache? 133 2/27/03 - COMMERCE - RES. 020238, 030038 And a lot of times they were calling Joe because Joe is a good guy. Well, I don't know Joe. And a lot of times what Joe is giving me, particularly in certain services, is tying me to Joe for the rest of my life. So if we call Joe for something, what we had a lot of were people saying, "Well, I can do it as a small order purchase without a bid." And what that began was, it opened the door for millions more to follow. But then you were trapped with Joe because it was a sole source at that point. Joe did something for $10,000 that you didn't have to bid out, but then the follow on could be a million because Joe had his foot in the door. And the Joes weren't our Joes who are getting their feet in their door. The Joes were friends. So when somebody comes to us with something, the questions are, "Well, how is this procured? What's your participation? How does it fit in the overall plan? Can you do it some other way? Has everybody who needs to see it, seen it? Was MBEC involved at the beginning? Because if they weren't, we're not going to do it." And we hold things up. Or we say, "We don't think you need to do it." 134 2/27/03 - COMMERCE - RES. 020238, 030038 Or when someone has jumped the gun and gone ahead and done it, we just say, "You know what? Go out and do it again, because we don't like the way in which you did it." So we are using that as a dollar control mechanism. But what is happening -- and I can remember after two meetings MBEC says -- you know, sometimes you have to be careful what you ask for. I said, they weren't contacting me. And now they're contacting me for everything. So we're getting in where we can have an impact, where we can set ranges and hold people accountable for the ranges. We need to change our Executive Order to kind of reflect now, the activity that we're doing. We need more financial systems support to track the things that we consider important and to facilitate making people do what we want. Because if there is somebody who knows that it's happening because it's coming through electronically, that gets to you a lot faster than some department coming to you and telling you at the last minute, "Well, you know, it's rush now." It's changing the culture of the City of 135 2/27/03 - COMMERCE - RES. 020238, 030038 Philadelphia and the way it works. So that's what CRC is. That was a long answer, but I talk a lot.
Well, I think that's very refreshing because you hit the nail on the head. You really do see where the systems have been institutionalized through the years. I hope that your efforts will institutionalize the change.
Because Administrations come and Administrations go and we don't want this to go at the end of the term.
And that's why we're looking at the Charter and ways that the Charter can be used to create some hammers that are hammers that transcend Administrations. Because unless you have something that isn't dependent on personalities, that's dependent on a system in place, it's not going to be long lived. And Philadelphia deserves something that lasts well beyond our tenure here.
I just want to ask you a couple questions. You mentioned the Crozen 136 2/27/03 - COMMERCE - RES. 020238, 030038 case. Is there any way we could use our disparity study if there's a will on the part of the Administration to challenge that case? I mean, nothing is ever set in stone.
I'll turn that over to Mr. Roundtree because good disparity and availability studies give you additional tools. So I'll let Mr. Roundtree answer that one.
I don't know if I can answer that as eloquently as you just did. Councilwoman Tasco, that, in fact, was what happened. What we need to do now is, once you all review the study, is to refresh the data that's in it and use that data to establish factor or predicate for what we believe will be two programs really. One will be a race and gender preference program and one will be a non-race and gender, but more specifically a small business program. You need to have the components of both of them in order to have very viable programs, because you have to be flexible and you have to set what they call guidelines and it must be narrowly tailored. So once the legislative hearings begin 137 2/27/03 - COMMERCE - RES. 020238, 030038 you will begin to be able to do that. You'll be able to hear both sides and develop a legislative picture to show that it is a factor or predicate for you to have what was once known as a set-aside program, but is now called race and gender preference programs.
I know that. We need a five-minute break for the stenographer. (Brief recess.)
Ladies and gentlemen, we're back in Session. The Chair recognizes Councilwoman Tasco who was in a question prior to the break.
In the Resolution I was just reading that was used to establish these hearings, it has, "Whereas the Greater Philadelphia Urban Affairs Coalition has reported favorable progress in advancing diversity goals, but has refused to validate their findings by sharing 138 2/27/03 - COMMERCE - RES. 020238, 030038 certified payroll information on the new stadium construction projects with City Council; and Whereas, GPUAC has further stated that the payroll information is not for public consumption, although approximately $670 million that were realized for the first new stadiums has come from state and city sources, including taxpayers." Did they contract with the City? Or who are they contracting with to be the Oversight Committee for the stadiums?
What information do we require from them since we do have some financial investment in this project?
We require the business information from them, but not the employment.
So how are we going to determine whether or not they're meeting their goals? 139 2/27/03 - COMMERCE - RES. 020238, 030038
We're monitoring the business participation, but not the employment.
Well, I thought when we had the discussion here in City Council on the legislation, you know, as we were talking about the day, our main concern was about participation in terms of employment also. It was not either or. And how do we monitor that?
Well, I am on the Oversight Committee and I do participate in all the outreach programs that the teams and the Urban Coalition perform.
So do you get reports on the minority participation on these projects?
It's basically the same report that was agreed upon City Council, the information that City Council receives is basically that information. We do go through a more detailed analysis at the actual Oversight Committee meeting, but essentially you get the summary of that information. 140 2/27/03 - COMMERCE - RES. 020238, 030038
I would prefer for them to answer. They're not meeting all of the goals, no. But I think they will be here to provide their testimony.
GPUAC, I believe, were scheduled for today's hearing. There was, as I understand it from Councilman Ortiz, and I believe they actually contacted me a little while ago, apparently there was a scheduling conflict when the request was made for this particular hearing. We are actually going to adjourn today's hearing to a date and time certain on March 13th. And I'm going to assume that Councilman Ortiz is going to re-contact GPUAC to make sure that they're at that particular hearing on March 13th at 3:30. But they are not on the list for today, and my recollection is that there was a scheduling conflict between the organization and today's Committee 141 2/27/03 - COMMERCE - RES. 020238, 030038 hearing.
Thank you, Councilman. Mr. Roundtree, as a member of the panel, if they are not meeting their goals, how do you communicate with Council to let us know what's going on?
Council also has a representative on the Oversight Committee, and generally it is someone from Councilman Clarke's office or Councilman Goode's office that attends either one of the meetings. I know that Councilman Clarke, he and his representatives have been attending the Eagles meetings. I'm not sure whether or not he is on the Eagles, but Council does have a representative on each one of those Oversight Committees.
Let me stay in that area, because I was slightly confused by the response. Are you saying that MBEC is not directly involved in oversight of either the contracting activity or the employment? 142 2/27/03 - COMMERCE - RES. 020238, 030038
No, sir. I said that we were not involved in the employment. We're not involved in monitoring the actual employment.
Because we were created to monitor the business aspect. The only employment we were asked to monitor has been under the Project Labor Agreement.
And then you said GPUAC is responsible for monitoring the employment. And then did I understand you earlier to say that the employment goals were not being met? Mr. ROUNDTREE: To my understanding, the total level of what was supposed to be achieved was not being met. They're working towards that end, but I don't think that they've reached that plateau yet.
That's why I would defer to them to really provide that answer because I don't have that report to produce to you.
Well, are they sharing this information with you as a part of the 143 2/27/03 - COMMERCE - RES. 020238, 030038 City government? As Councilwoman said, we made a little investment in this.
Yes. But, Councilman, it's the same information that's being provided to Council. And they send a report around to Council on a monthly basis that at least gives you the summary. What has been the most difficult is, I think, you were requesting the details. They have not provided you with the detail, but they have given you a summary and they have broken it down by Councilmatic district and ZIP code.
Does the report go to the President, or it goes to each Councilmember?
I've seen these before. We get one from the Phillies. That one, I have best recollection on. And I think I've seen some stuff from the Eagles from time to time. You look at the reports and the numbers seem almost incredible. And I've been involved in different discussions and different places where questions have been raised about the integrity of the numbers, but I'm not aware of any independent analysis of these figures to verify what actually is going on. There was a question raised the other 144 2/27/03 - COMMERCE - RES. 020238, 030038 day about the issue of companies receiving contracts, and then the prospect of those companies subcontracting with other people and whether or not the initial contracting entity, for accounting purposes, is being credited with the entire percentage of the work, notwithstanding the fact that some significant components of that contract may have been subbed out to other people. Now, have you heard or been aware of that concern?
Yes, Councilman. It basically revolved around a joint venture issue. There's been a lot of unrest about how joint ventures accounted on as participation.
Well, what's your understanding of how they're counted?
If a minority firm or a female firm has 51 percent of the joint venture and is in control of the day-to-day operations, or can control the day-to-day operations, it is counted as 100 percent of the contract, of the contract dollar value.
Even though they're only 51 percent? 145 2/27/03 - COMMERCE - RES. 020238, 030038
They are still responsible for the overall contract. Has 51 percent of the contract and 51 percent of the day-to-day management, they still control the contract. Ans that's directly out of 17-500. When it was promulgated, that's how it was established to encourage firms to joint venture.
Well, I understand that. But does the underlying factual information layout that the company is, in fact, doing a hundred percent of the work?
It lays out that if it's -- just as I explained to it you. If they have 51 percent of the ownership of the joint venture, and if they are in charge of 51 percent of the day-to-day operations, then it would be credited 100 percent.
51 percent is not 100 percent. 51 percent is 51 percent, the last I checked.
Okay. We're implementors of what was put in there, and that's the one thing that was encouraged to increase the capacity. 146 2/27/03 - COMMERCE - RES. 020238, 030038
Maybe what we need to do is get some contractors in here to negotiate these agreements.
It seems to me they seem to know a little more about this than we do, although we have good intentions. It's tricky business. We can learn a little bit. They bring more stuff. Thank you.
In my attempt to maybe explain some of the things that MBEC is about, I wanted to express that we are totally in favor of this legislation. We are in favor of this Committee reviewing the activity. We fully and wholeheartedly believe that more -- and we try to do more -- can be done. And, again, we're the implementors of your policies. 147 2/27/03 - COMMERCE - RES. 020238, 030038
Ms. Davis, I love that word "genteel." We're not genteel. We're just slick up here. The South is known for gentility. The North is known for slickness. Slickness is going up here.
Thank you very much. Executive Director of the Philadelphia Human Relations Commission, Lazar Kliet. Please identify yourself for the record.
My name is Lazar Kliet. I'm the Executive Director of the Philadelphia Commission on Human Relations. I wanted to thank Councilman Nutter and the rest of Council for allowing me to testify today, and especially Councilman Ortiz, who provided the initial invitation. I also want to deliver greetings from James Allen, the Chair of our Commission. I apologize for not having prepared testimony, although we may very well be better off that I don't, because that forces me to talk quick and be to the point. 148 2/27/03 - COMMERCE - RES. 020238, 030038 Basically I could talk for hours about what the agency does and what our legal mandate is. Essentially we do two things. One, we enforce portions of Chapter 9 of the City Code which prohibits discrimination in employment, housing, public accommodations, and the delivery of City services. The second thing is, we deal with all matters of inter-group conflict that occur within the City. But what I would rather do is talk a little history, because I may very well be the only person here whose service with the City of Philadelphia is co-terminus with Councilman Cohen's. I started in '68 and we've been having the same discussion.
You were part of the Teenage Employment Program that the City had back at that time?
Were you involved with me at the Urban Coalition in '70, what?
At any rate, my age and infirmities are not really the important thing. 149 2/27/03 - COMMERCE - RES. 020238, 030038 The important thing is that all of the mechanisms that you were asking about -- not you individually -- but Council's asking about, are in place. They exist in theory. And they existed in fact in 1968, 1969, 1970, where we did a number of things that were in support of -- God forbid, I should mention the word -- Affirmative Action. And the City was in support of it in ways that were quite legal. Councilman Cohen mentioned the Philadelphia Plan. That was the federal Philadelphia Plan. There was also the Philadelphia, Philadelphia Plan. And I'm going to oversimplify, so there may be a little bit of inaccuracy here. If you wanted to do business with the City you had to meet certain standards. And those standards were that you were both hiring in a nondiscriminatory manner and treating your employees in a nondiscriminatory manner in terms of conditions of employment, as well as promotions. And you were also acting in an affirmative way to increase minority and subsequently female representation, which was much narrower than it is now. What you were doing for a living -- and 150 2/27/03 - COMMERCE - RES. 020238, 030038 it didn't matter whether or not your company was inside the City of Philadelphia. At one time there was a rule that dead voters either had to have died in Philadelphia or be interred in Philadelphia. As far as people under our jurisdiction, they have to do business within the City of Philadelphia. They don't necessarily have to exist within the City of Philadelphia. We have gone from 85 staff when I started here to 38 staff as we speak. And that's not a complaint as far as agencies like ours go nationally, we are treated extraordinarily well. We are funded as well can be expected, given current financial circumstances. But nevertheless, in order for us to really perform our mandate, we have to do things that require employers to report information to us. We have to have the ability to in some way analyze that information. And then we have the ability to do two other things, and to me they're critical. One is something that we did for a very long time, plant inspections. And I apologize, I'm talking through the veil of the three fracture ribs so if you can't hear me, let me know. The plant inspection was quite literally 151 2/27/03 - COMMERCE - RES. 020238, 030038 going out to a construction site or to a bank or to wherever there were a large number of employees with documentation that we received from the employer, and we'd have somebody counting heads. Now, obviously, there would be a disparity, but we would frequently find the disparity between 80 percent and percent. Somebody was lying. We could then 9 force the issue by subpoenaing employment records, 10 not simply reports submitted by the employer. The other thing which I think is the most critical thing that any government can do to combat employment discrimination is testing. And testing is simply you send in -- there's a job announced or you have to make a buying call and you send in a white tester -- and it could be any combination. White tester, black tester, white tester. And you want to see if the two white testers are treated the same as the black tester. And the sequence is very important. And it can be, you know, black, Asian, black. It could be anyway you want to divy it up. In order for the City to be able to accomplish the goals contained in that resolution, there has to be an investment in doing the 152 2/27/03 - COMMERCE - RES. 020238, 030038 day-to-day grunge work of gathering information, of testing the validity of that information, and pursuing people who are violating the law. As far I'm concerned -- and this is not a legal opinion. I can be overruled. If you want to do business with me, then you have to meet my standards. Me as an individual. If you want to sell me a product, it has to fit me.
I me grossly fat clothing, but it has to be the size that it is. Conceptually it's no 11 different. I mean, we're not talking brain surgery. Conceptually it's no different. If you want to do business with the City, you have to meet certain standards. The one area of the law -- and then I'll finished. And again, I'll be happy to respond to any questions or come back later. We don't have jurisdiction over the way contractors are treated by other contractors. Now, I don't know if that's -- and I honestly don't know. I would have to ask Nelson Diaz about this. That I don't know if that's some that Council could change. We've never really explored it. We certainly have jurisdiction over unions as employers, over anybody as an employer. And our jurisdiction can be expanded by allowing us 153 2/27/03 - COMMERCE - RES. 020238, 030038 to verify the qualifications of a contractor or a supplier who wants to do business with the City. Thank you very much.
I want to ask you, where are we with the Philadelphia Plan? Did it just die or is it still in existence or did it have to be revitalized by the federal government? Because I remember very vividly working under that when we were at the Urban Coalition.
Again, there was the federal Philadelphia Plan, which I believe was declared unconstitutional. The Philadelphia Philadelphia Plan which was something that we invented at our agency in conjunction with the Tate Administration is just a matter of City policy. It may have tested in the courts; I'm not sure. The only reason why we don't do it is because we can't. I mean, we being the Commission on Human Relations. It can be almost any entity of City government that does it, but it requires fundamentals that I described before, the 154 2/27/03 - COMMERCE - RES. 020238, 030038 ability to investigate, the ability to examine. And we had a social scientist working for us at one time who did nothing but statistical evaluations of what was in front of us to see if they made sense. We had two guys who did nothing but head counts, would walk through a construction site making sure that the contractor was telling us the truth, which they frequently were not. I know this shocks you. It shocked me; I was young then. And the ability to test. Frequently, you have the statistical result or a numerical result, but it doesn't tell you how you came to that result. So it's simply a matter of the will and a money. It's not a lot of money, by the way, to do something like that. We're not talking about hundreds of employees. We're talking about 35, 40 people who would do nothing but that sort of work. It ain't a biggie.
Thank you very much. I would anticipate at the continued hearing that Councilman Ortiz very well may ask for you to return.
I'll be happy to. It's 155 2/27/03 - COMMERCE - RES. 020238, 030038 going to be on the 13th?
The 13th, yes, 3:30. Thank you very much. Deborah McColloch, Vincent Coles and Mjenzi Traylor, which will be our last formal panel. There may be others who wish to speak. And certainly, anyone who is here who wishes to speak will have that opportunity. Please identify yourselves for the record and proceed with your testimony.
My name is Deborah McColloch, I am the Director the Housing. I apologize that the written testimony was not presented earlier. There was a misunderstanding. I thought it had been distributed to you all earlier, so it is now coming around so you'll have a copy of the written testimony. I'm not going to read the written testimony, I'm just going to give you a couple of highlights. We were invited to attend this hearing by Councilman Ortiz to talk about what OHCD does in terms of the implement and enforcement of the Neighborhood Benefits Strategy. OHCD, as you know, is a planning and 156 2/27/03 - COMMERCE - RES. 020238, 030038 contracting agency. We don't actually build any houses, we don't hammer any nails, we don't build any roofs. We contract with others who do that sort of the work. And so our development projects are placed under contract, for the most part, to the Redevelopment Authority and Philadelphia Housing Development Corporation. What is attached to my testimony and is being distributed is a summary of the MBE/WBE projects administers by the Redevelopment Authority for the period January 1, 2001 through December 31, 2002. The summary total for these contracts show MBE awards of 13.8 million, which is a percent 15 minority participation; and WBE, Women Owned Businesses, awards of 9.1 million, which is a 9 percent female participation. The summary also indicates that 39 percent of the work force on these contracts were residents of the Philadelphia. One of the questions that we were asked was, what actions do we take to try to increase participation and ensure compliance with the -- I'm sorry.
Mr. McColloch, your testimony says "That summary also shows 39 percent 157 2/27/03 - COMMERCE - RES. 020238, 030038 of the work force..." Are you talking about from --
During that period, during the period January 1, 2001 through December 31, 2002.
This is 1332 out of 3333, is that what we're talking about?
Yes. You'll see it at the bottom of the last page is the summary. And then the other thing that we were asked to talk about was just what we do to increase minority and female-owned business participation. And the OHCD staff works with the Redevelopment Authority and Philadelphia Housing Development Corporation staff to try to increase that. We support job fairs. There was recently a job fair held February 25th to promote construction jobs for three development Projects, St. Ignatius, the Aletha Gibson Education Center and the Calcutta House, three projects. Seventy-five residents participated in the job fair and expressed an interest in employment. We do what we can to try to match up the jobs that contractors have to offer with neighborhood residents. Through the delegate 158 2/27/03 - COMMERCE - RES. 020238, 030038 agencies, the Redevelopment Authority and PHDC, we provide lists of interested residents to the contractors who have made a commitment to hire neighborhood residents. We provide the list of minority and female-owned businesses, and we assist through the MBEC process. So we're doing what we can to try to promote the minority and female-owned business so that the contractors meet their goals, but it is through our delegate agencies that this work is done.
Good afternoon, Councilman Nutter and Councilwoman Tasco and Councilwoman Reynolds-Brown. My name is Mjenzi Traylor and I'm First Deputy Director of Commerce. And I too will try to remind myself of the lateness of the hour and just touch upon -- I think by now my testimony has been distributed. First, let me state that in Fiscal 2002 the Department of Commerce, including the Philadelphia International Airport, participated directly in procurement activities. 2 million went to women enterprises. A total of 14 159 2/27/03 - COMMERCE - RES. 020238, 030038 million was expended on personal and professional service contracts. 2 million went to minority and women-owned business enterprises. Miscellaneous and small order purchases total 463,000, of which 38,000 went to minority businesses. So we can see that it's very necessary for us to make every effort to continue to increase the share of disadvantaged business enterprises in our contracting efforts. Each year the Commerce Department receives Community Development Block Grant funds which are then used to fund economic development in neighborhoods. " I am happy to report to the Council today that most of our neighborhood development contracts have met or exceeded the expectations of these legislation. The Enterprise Center, headed by a female entrepreneur had a 100 percent minority participation when the Commerce Department assisted 160 2/27/03 - COMMERCE - RES. 020238, 030038 them with the funding of the renovation of the west wing of the center. And a lot of our activity, as you know, is done through CDCs, and they help to create projects which benefit neighborhoods, not only by bringing idle or blighted real estate into economic use, but mostly by providing permanent jobs for low-income residents of the neighborhood. And I just want to touch quickly on a few of these. Universal Communities CDC serving the South Philadelphia area created a mini-mart that provides permanent jobs to neighborhood residents. APM Central Philadelphia developed the Cousins Supermarket. The Macado developed a shopping center in Norris Square. And Hasay continues to develop the Fifth and Lehigh shopping district all to the benefit of the Hispanic businesses and residents. In many instances, prime contractors have expressed the opinion that minority contractors are not sufficiently available, trained, financed or bonded to participate in contracts. The commerce Department as an agency that encourages economic and business development in the City is instituting and conducting measures to change this perception. And I think you heard about some of that when Mr. 161 2/27/03 - COMMERCE - RES. 020238, 030038 Fullard testified and the fact we're doing that work through the African American Chamber of Commerce. Another operation, the Enterprise Center in West Philadelphia, it's a leading engine to create and strengthen small businesses and revitalizing the neighborhood by empowering the residents with entrepreneurial skills, resources, and opportunities. These efforts have enabled these entrepreneurs, all of whom are small and disadvantaged, to generate jobs and wealth. Currently, the Enterprise Center works with incubator clients. The center has eight 14 graduate businesses. That means that they grew and 15 got strong enough to leave the incubator operation. 16 And the biggest graduate in terms of sales is a 17 multimedia production firm that grosses several 18 million dollars annually. The biggest in terms of 19 employees is a janitorial services firm that employs 20 85 people. The Women's Business Development Center is also worth mentioning and it is, of course, dedicated to the economic empowerment of women. And since 1998, the Department of Commerce funded a child care program which has now produced more than 500 providers. Most of these 162 2/27/03 - COMMERCE - RES.
020238, 030038 women entrepreneurs who are providing a twofold service inasmuch as they provide a safe place for parents to leave their kids so that these parents can in turn participate in the work force. The Small Business Support Center conducts several seminars and workshops. The information covered in these seminars and workshops include business planning, credit review, legal structure, licensing and zoning, and market research. PCDC has identified a pool of seven consultants that are being used to assist companies in resolving critical business problems. Consultants include accountants, business plan specialists, tax specialists, credit repair professionals, attorneys, and computers specialists and website developers. And we are providing dollar support for that program. Philadelphia Development Partnership is very important in that it serves micro-entrepreneurs in low and moderate-income neighborhoods. These companies are well below the radar of most banks and economic development agencies. And most of the micro-entrepreneurs are part-time and have another 163 2/27/03 - COMMERCE - RES. 020238, 030038 job. They're mainly home based. And PDP dispenses cash, technical assistance, and social services, offering loans of 500 to $5,000, an intensive class teaching the basis of cash flow, accounting and marketing, leadership training, and networking opportunities. The Commerce Department awarded PDP $475,000. These grants will be used to support the operations of PDP as well as its micro-enterprise lending effort. And the thing that's important about that is this is the way we talk constantly about how business is operating under the table and, you know, are not legitimate. Well, the importance of this program is it provides a system through which businesses can become legal and grow. Then over at PCDC, Council is well familiar with the various programs, lending programs, that serve these disadvantaged businesses that we're talking about. On the Surety Bond Program that was mentioned earlier, it's now available to small, women, minority-owned and other businesses operating in the City. There are many contracting opportunities which disadvantaged businesses miss 164 2/27/03 - COMMERCE - RES. 020238, 030038 out on because the bidding process frequently requires that they secure a surety bond to guarantee performance and payment. The Commerce Department and other agencies have joined together to institute a pilot surety bond program for these contractors. In April of 2002, the Commerce Department provided 71,500 to finance this program. Obviously, we're working off an earlier report that was reported on earlier by the Finance Department where they said that 56 contractors are now enrolled in the program. As of the time of the report that we had, it was 40 businesses. So we're glad that it's grown. So we're doing our part to change the inequities in the provision of contracting and other services to DBEs and we are partnering with other public sector agencies and with the private sector to make businesses ready to take advantage contracting opportunities. Thank you.
Thank you. First, let me say that I do appreciate receiving these reports. We get a couple of them; one from Mr. Coles in accordance with Ordinance 990563, and I think I received another one recently from the RDA 165 2/27/03 - COMMERCE - RES. 020238, 030038 in accordance with another ordinance that has a reporting requirement. So I do appreciate the housing agencies being responsive. What I do notice about them, and I have the January 8, 2003 report for October 2002 from Mr. Coles, and we've been getting these reports for some time, it never ceases to strike me when we look at the non-Philadelphia workers on these projects, and some of them are 65 percent, 59 percent, 67 percent, 60 percent. And for the month of October, at least, for the CDBG projects, 51 percent total -- this is 11 or 12 different projects. 51 percent of the people who worked were non-Philadelphia residents. And I guess the question goes back to maybe how this hearing started, which is, one, given the level of unemployment in Philadelphia; two, given the level of unemployment in some of the neighborhoods where these development projects are taking place, I still cannot understand why more Philadelphia residents aren't working on these development projects. And I'd be interested in your perspective on all of this.
Councilman Nutter, my name is Vincent Coles. I'm the newly appointed 166 2/27/03 - COMMERCE - RES. 020238, 030038 Administrative of EEO and OHCD. We looked at this situation, too, based on the fact that we knew that we needed to increase the number of Philadelphia-based people on these particular jobs. So what we've started doing is going out to the contractors early on, hopefully, before they started construction so that we could have discussions. And principally, the first one that we went to see was at St. Ignatius, and we had to chance to talk to Domus, Inc. They told us what their plan was to try to get more Philadelphia-based people in. Subsequent to that --
It's under construction now. We had a meeting out there in between the snow and ice days where we went to the trailer and we actually talked to the people who are in charge of the doing the work. We're going to continue to do that on a monthly basis, seeing as many contractors as we can to do some maintenance-type things and also to talk to them before we actually begin production. 167 2/27/03 - COMMERCE - RES. 020238, 030038 And we've talked to them seriously about it, and they're aware of the fact that we're looking for more neighborhood people. And on Tuesday of this week, there was a job fair for the three projects where we actually got people from those neighborhoods to come in and they expressed an interest in some type of employment. So now we have yet another list that we can give to the people who are in charge so that they have some access to the people who live in that area that are interested in working.
Thank you. Providing this is an important first step, so often as previous testimony indicated, due diligence happens on the part of the community to do the work for these contractors and find interested residents who want to work and the follow-through doesn't happen by the contractors. So providing the list is an important first step. What are the subsequent steps to ensure follow-through?
What we're going to continue to do is put these contracts on rotation where we're 168 2/27/03 - COMMERCE - RES. 020238, 030038 going to go out and talk to the people who are running them to look to see if they are adhering to what they said, if they contacted the people on the list that they gave them, we're going to see whether or not they're on the payrolls. And if not, we're going to ask why. Because we do have some power in that we don't have to pay them if they don't comply.
So there's some written set of -- I am a stickler for SOPs, Standard Operating Procedures, in black and white for these contractors to follow. And then what I hear you saying is that there are provisions for penalties if they do not within the time frame of that contract, because it's no use if at the end of the contract you discover that they haven't done the follow-through.
That's why we're trying to make sure that we have times that we see them on a routine basis. Because as I came into position, we found that there were a number jobs that you just couldn't do anything about because they were over. They had already let the subcontracts and things were going on. But I'm able to work with the staff, Mike Bell and Jim Roundtree in order to get these 169 2/27/03 - COMMERCE - RES. 020238, 030038 things done, at least for RDA and PHDC.
So is that to suggest that heretofore there hasn't been any kind of enforcement mechanism in the agency to hold these contractors in check?
My name is Michael Bell, and I'm the Director of Minority and Women's Business Development at the Redevelopment Authority. And Vince, he is just taking over, but we have done this on a number of projects in the past where we conduct job fairs, we get referrals from the Community Development Corporations and we make referrals to the general contracts. If you look at the a list, on a number of them on the list where Davis Bacon or union jobs, that's where we have had the most difficulty is because we have get individuals sponsored. But we've also gotten individuals sponsored and we've suspended projects from the Federal Street project, Reed Street Presbyterian Project until community residents were hired. But also, like I said, the individuals in the neighborhoods that have skills, 170 2/27/03 - COMMERCE - RES. 020238, 030038 we take priority in terms of making referrals to the general contractors and the subcontractors. We also have two other projects in our sight right now, Elders Place and also another South Philadelphia Presbyterian apartments project in which we're doing recruitments now in terms of making referrals to the general contractors. So there was enforcement. We have stopped payments on project. And like I said, on some of the commercial projects, that's where we've had the most difficulty. We've reached out because of the fact that you have to be union or you have be in an apprenticeship program.
That's commercial where the Redevelopment Authority would be involved with these projects because of a land agreement. So for instance, there was a grand opening recently on a industry and technology building at Community College, and those numbers were maybe 135 Philadelphia residents out of 500 total. We met with the contractor on a regular basis, and that's where the difficulty was. We couldn't stop payments 171 2/27/03 - COMMERCE - RES. 020238, 030038 on that project because we didn't fund the project. We had the land deal, but we tried as hard as we could on those. On the projects in which the funding is coming through the RDA by way of the Community Development Block Grant funding, we've had more success.
So given that reality and knowing that there were handicaps to exercise enforcement with the type circumstance you just presented, can you from this point forward craft contracts or provisions that overcome the handicap you just mentioned?
When we see the contractor coming back again intact, we will have to have goals set higher. Or for instance, if it's a Keating project -- and we got some better success from a Keating project when we got OHCD involved and we did more recruitment. It was finding individuals. It's basically finding because all the commercial projects, everybody has the same requirements. It's finding the skilled individuals that we can keep on the projects. In the neighborhoods, like I said, it has been easier. But we've also worked with the PHCD Job Center on a number of projects in the past, 172 2/27/03 - COMMERCE - RES. 020238, 030038 including a number of the Cecil B. Moore projects in which we've had better success in terms of getting neighborhood residents hired.
Any relationship with DAP? And my colleagues will have to help me remember what that acronym stands for, DAP.
We have not because every time we've tried to work with DAP, there was a funding issue. Like they needed money from us and we couldn't be in a situation where we could fund DAP. So basically at the RDA, we work with the Philadelphia Housing Development Corporation and we utilize the services of their job center on most of our projects.
Thank you very much for your testimony. Thank you, Mr. Chair.
You're welcome, Councilwoman. 173 2/27/03 - COMMERCE - RES. 020238, 030038 Let me ask another side of that question -- before I get to that question. When you talk about the Redevelopment Authority having a -- what is that, a land lease?
Redevelopment agreements. So in terms of the Redevelopment Authority helping developers to acquire land, then they would sign redevelopment agreements indicating that they're going to reach goals with regards MBE/WBE participation and also hiring a Philadelphia-based, minority, and also women residents.
On some of the larger commercial projects, Dock Side Residences, the Hyatt Hotel, Filbert Street Garage. There was a TIF involved in the Filbert Street Garage and we worked with Parkway Corporation, but we got success once the Parkway Cooperation knew they wanted to do additional tax incremental financing deals. We really were able to give leverage in terms of employment and also participation. So like I said, on the two Keating projects, we called in MBEC on the Dock Side Residences because we were having some 174 2/27/03 - COMMERCE - RES. 020238, 030038 resistance initially, but we did get some success. But most of those projects, those numbers would go towards 70 percent non-Philadelphia residents as you got into the skilled trades areas.
I'm going to assume people are told up front what the requirements are or what the specifications are before they bid and prior to the award.
And am I hearing a bit of a need for additional -- we've used the term leverage or enforcement power. There are other things that you might what to have at your disposal to make sure that people do what they're supposed to do.
Well, like I said, with Philadelphia being a union town, where I sit it's very difficult for us, you know, like I said, on the larger projects. When you look and you see some of the projects that are funded and are residential, we can fight that battle a little bit better. But like I said, it would probably be a need for either additional sources of recruitment or additional leverage that we could put on some of the 175 2/27/03 - COMMERCE - RES. 020238, 030038 subcontractors or in some of the trades that we haven't been able to have the success in.
What I think I'm hearing you say is that you're having more success with the neighborhood projects in terms of getting local residents hired because you're now telling people that basically, if you don't hire folks, we're going to stop payment?
And those are the projects that are being funded with Community Development Block Grant funds. The larger projects to which Michael was referring are not CDBG funded. RDA's participation is as part of the land transfer, not as part of the funding. So the projects that have the direct development subsidies from OHCD, we have more clout, if you will, to withhold the payments to ensure that they do what they're supposed to do.
Well, I think what will be helpful to all of us is as you monitor these activities, if other ideas come up -- I mean, everyone recognizes that there is certainly a strong union presence and activity in Philadelphia and 176 2/27/03 - COMMERCE - RES. 020238, 030038 that's certainly more than fine. I think what the discussion here is how do we get more Philadelphians into the trades and to participate. Nobody's making a big issue or any particular issue that people are in unions. And, you know, quite honestly, because of what the unions do and how they negotiate agreements, a person is pretty much assured, as long as there's consistent work, of a pretty decent livelihood. So I think overall it's something that we want to encourage and support. But we're not necessarily trying to create an environment where Philadelphia is a great place to work but not to live and that we're helping to subsidize the school systems around us and housing purchases around us and you can just kind of pop into town, do your job, get the pay and the employment, and go back somewhere else while the City continues to have significantly high levels of unemployment in many neighborhoods and cutting across, in some instances I'm sure, racial or ethnic lines. I mean, we want people to work. If there's work going on here, we want people to work. My preference generally would be that they're from the City. I doubt that there are many Philadelphians working on job sites outside 177 2/27/03 - COMMERCE - RES. 020238, 030038 the City of Philadelphia in other counties in significant numbers. They don't necessarily have a goal of supporting folks from the City to do work outside. And I don't want to get into a big city/county kind of thing, but until somebody can show me that we have virtually eliminated unemployment in Philadelphia, I think your primary focus has to be on people who are living here and trying to struggle to make a living. So again, I would say, one, these reporting requirements I think are helpful to us because it lays out in the clearest terms in black and white what's really going on. And as the numbers continue to improve, certainly you'll let us know about that. But you see some of those jobs and you wonder both from the contracting side as well as the employment side, you know, what's going on. And people have a right, I think, to be at times angry, upset, and chastising us in a way when they're standing around watching all this activity going on in their neighborhood and folks drive up in the morning and leave out for all parts north, south, east, and west to enjoy the benefit of what's going on. I don't think that that's a system that we want 178 2/27/03 - COMMERCE - RES. 020238, 030038 to continue to encourage or promote. And if folks want to live in the City and continue to enjoy these benefits, that's wonderful. Thank you for your testimony. Councilman Ortiz has returned. Councilwoman Brown and then Councilman Ortiz.
Thank you. Your remarks trigger another question for me. In the contracting provisions that you present to those you do business with, is there a question posed where you want to know how many of those working on the job are indeed Philadelphia residents? Do you ask that question at all?
We use the ordinance that was passed by City Council. It was the Mayoral Executive Order that came to the level of law. And so anytime that we have a project in which the number of Philadelphia residents on project dip below 50 percent, then we have a job site meeting. And like I said, we've been working since Vince has taken over in his position. It has also given us more force when we tell them that we're bringing a representative from the Office of Housing to the job site from the policy organization. 179 2/27/03 - COMMERCE - RES. 020238, 030038 So on our regular meeting when we receive Section 3 reports and we have to tabulate the reports for the CDBG report. And when those numbers go below 50 percent, we're out there, we're writing letters. You have to do what you have to do. And like I said, it has been very effective to have Vince, as he indicated, go out to job sites, reference the Office of Housing and also reference we will not pay you if the numbers don't come up.
Do you take that at face value or do they have to provide record of --
They have to provide the record. The Section 3 reports that are forwarded to you are sent to us by the subcontractor under Section 3 HUD forms, so these are federal forms that they sent into us. That's where we get the information and we tabulate the reports. So if they don't send in the report or we don't see that there are improvements, we're back out there again and we're suspending payments. But also, like I said, once again, we have to have the community residents identified either through the community groups or if they're coming to the trailers and filling out applications. 180 2/27/03 - COMMERCE - RES. 020238, 030038 And on the three projects that we talked about, we dropped off PHDC applications and encouraged people that come there and encourage the subcontractors to have the residents fill out the applications. And then we take them back. We assess people's skills and we make the referrals to the general contractors and the subcontractors after that.
Well, the model that you've shared with us, at least for me, having been here almost 40 months, signals that it can work. So if we could get major quasi-public or at least agencies receiving some support from the City, specifically SEPTA to embrace what you're doing and execute those kind of measures with major projects like what they're doing in West Philadelphia, we might not have the need for this kind of hearing. So I do applaud the work that you're doing. It's a signal that it can be done, but the challenge for us is how do you, if not persuade, use a hammer with agencies like those like SEPTA who refuse to honor and provide opportunity for neighborhood residents.
If the federal regulations weren't in place, it might be more difficult. But since these are federal regulations and, like I 181 2/27/03 - COMMERCE - RES. 020238, 030038 said, also helped strengthen by the local ordinance 3 that was passed by City Council, then we have some teeth. And the only thing, like I said, we can really concentrate on the housing programs. We can't really solve the ills of what's happening in the City. But in the housing agency, we have the support from the policy organization and we just go after these guys that don't do what they're supposed to do.
Mr. Bell, let me ask you this question and then I know Councilman Ortiz has a question. We heard a story earlier and know you probably don't directly monitor what goes on at PHA, but there was kind of a somewhat incredible story, a tragic story shared with us earlier. Are there periodic checks in the course of a workday as to who's actually on the job side with, you know, as the Director from the Human Relations Commission talked about, basically of counting heads as to who's working and dealing with issues of diversity? Because you always hear about the numbers on paper 182 2/27/03 - COMMERCE - RES. 020238, 030038 are one thing, what's actually happening at a job site may be another thing. Do we from time to time go out and periodically check?
I utilize the services of my field inspector for my Davis Bacon inspections because I'm also the Director of Wage and Compliance. But also, too, I was necessitated to go to a job site because on a project that we have, Elders Place in Germantown, we had 78 people, only 9 minorities and only 23 Philadelphia-based residents. So I had to go out there. And I saw less minorities than I thought. So once again, on that project, based on the job fair that we had the other day, we had Germantown residents because we had not been receiving referrals from the Greater Germantown Housing Development Corporation of people that were actually interested in working. So I went out to the site, went to the job site meeting, had a tour. And we're going to have people based on the job fair that we had the other day that we're going to be referring to Allied Construction so they can increase their numbers. But I will go out to job sites. As Vince indicated, we went out the St. Ignatius early 183 2/27/03 - COMMERCE - RES. 020238, 030038 because Domus, which is the general contractor, was working on a project called Interim House. And as they got to the skilled trades level, the numbers, once again, were going more toward people from outside of Philadelphia. And we notified Domus early on, to do this again is not going to be acceptable. And so what we're doing is trying to cast a net out to get skilled people so not just at the laborer phase, but once the skilled tradesmen come that we can have a higher representation of Philadelphia-based and minority residents.
Are the contractors required as a part of the bidding process to tell you how they're going to meet the prospective goal?
That's an Affirmative Action plan that's submitted. And the general contractor --
Is that considered as a part -- I mean, you know, in the City we utilize -- the terminology is lowest responsible bidder. And, I mean, I think that there is a fair amount, even legally, of leeway in the definition of "responsible." So then the question becomes, maybe 184 2/27/03 - COMMERCE - RES. 020238, 030038 your price is right but the rest of your stuff is not. At what point does a person tell us how they're going to meet whatever the specs are of the job or the goals?
Councilman Nutter, what generally happens is each contractor fills out an Affirmative Action plan. And this is basically what we use to gauge what they're doing. They say they're going to have so many minorities, so many women. So when we have our subsequent meeting, you know, to meet with them before they issue their proceed order, we're going to see whether or not these people are in place and we're going to keep looking to see whether or not they're in place. So as we get to about maybe 50 percent of the job, if they're not on target, at that point we know what we have to do. They have to come in line -- because you don't put some of the trades people on until the end. But they have to make sure that they give us information saying who's going to be doing what and at what percentage they're going to be doing this work.
Lastly, can you tell us on the record, you know, one of the other big 185 2/27/03 - COMMERCE - RES. 020238, 030038 stores with all this is -- and I guess it goes back to what the gentleman was laying out to us. The whole notion of Subcontractor Sam Jones is contacted by Prime Contractor Jim Smith and puts down on a form that Sam Jones is going to provide whatever Sam Jones provides. And ultimately on paper and possibly even by payment Sam Jones is credited with doing certain work and gets paid for doing certain things, but in reality Sam Jones never really does anything. Does that happen?
What you're talking about is when contractors -- before I would approve an Affirmative Action plan, contractors have to submit on a solicitation and commitment form. So as you indicated, what my department would do is we call the people. So if you listed Debra's Painting Service or Vince's Carpentry, we're calling you. "This contractor listed you for a $80,000 contract for carpentry. Is this in fact the case?" And what also happens is in order for us to enforce that, once the contract starts, we get copies of the subcontracts. If we notice that people are not on the project, then that's when we're raising a red flag. 186 2/27/03 - COMMERCE - RES. 020238, 030038 We've also had situations, for instance, like I said, the South Philadelphia Reed Street Presbyterian where there was a WBE firm that was committed to. And in order to make it better in the community, they tried to replace the WBE firm with a minority firm. But that violated our laws when you got rid of the WBE firm. We stopped payments until we got the company Applewood Painting back on the project. So it happens, but that's part of what our enforcement responsibility is, is that we get the subcontractors list. We have the Affirmative Action plan. And if we don't see the companies that are working in the monthly Section 3 reports that are submitted, then the red flag is raised. There's a violation of our anti-discrimination policy. So it does happen. As much as possible, we're trying to be vigilant with the submission of reports and with checking the original Affirmative Action Plan with who is actually working on the job site.
Thank you. I want to thank you, Mike, for stepping 187 2/27/03 - COMMERCE - RES. 020238, 030038 up to the breach. I want to thank everybody who came. I'm sure that my questions have been asked already. I will be reading the report. I will be looking at it. But, obviously, this is a problem that we have to fix and come up with the right program and the right solutions. I mean, we cannot keep on coming back periodically to resolve and deal with these questions. We are a City that is growing. We're a City of color. And to have this question hanging over us over the last 30 years, and for a hearing such as this to be needed in the year 2003 is something that baffles all of us. And I believe that if this is the beginning of the end of this type of attitude and situation in this City, I think we've made a good start. I know that all of the right people that came in, and I know -- I mean, I have friends, Mjenzi has been a person in the struggle since I've known him for 27, 28 years. We came into this thing in order to end all sorts of discrimination and exclusion. And on our watch, we've got to make sure that it's over. We've got to make sure that on our watch our kids do not have to go through this, do 188 2/27/03 - COMMERCE - RES. 020238, 030038 not have to be feeling that in their own City they're excluded from the process and the jobs and the contractors that are available. So I'm very glad. And I want to thank Michael again for stepping in and doing what he did. And my colleagues who stayed, Blondel, Darrell, Marian, Wilson Goode who is here, I just want to thank you for coming in and doing this.
Councilman, we appreciate that, but we're actually not finished. We still have a couple people who want to be heard. Any other questions for this panel? (No response.)
Thank you very much. Jahad Ali. Please identify for the record. And before you start, is there anyone else who plans to testify? Okay. And we're going to have a continuation hearing. Please identify yourself.
Good afternoon, Chairman Nutter, Councilman Ortiz and other distinguished members of City Council. My name is Jahad Ali, and 189 2/27/03 - COMMERCE - RES. 020238, 030038 I'm a African American Contractors Roundtable, which is an organization of African American 4 contractors, particularly African Americans and 5 Hispanic contractors who recognize the need to be 6 organized to fight the very things that we're here 7 today about. I wanted to testify today, but in 8 light of the time, I'd like to come back on March 9 13th. 10 But there was one thing that the 11 previous speaker said, Michael Bell, that I would 12 like to have clarified. Michael said that the 13 prevailing wage jobs were union only jobs. And I 14 don't know if that's a correct statement. I think 15 that we should have that defined because that's not 16 a fact of law that prevailing wage jobs are union 17 only, and we shouldn't concede that point. The 18 unions, they have their vested interest to make sure 19 that their people participate, but I don't know if 20 that statement that he made is reflected by the fact 21 that the director of that organization is a union 22 official and that might be one of those points 23 that's said but that's not written anywhere. But we 24 need to be on top on all the points. 25 And I also wanted to commend you, 190 2/27/03 - COMMERCE - RES. 020238, 030038 Councilman, on questioning of the panel consisting of Jim Roundtree, because it is through the questioning of people in the manner that you did that we will arrive at the truth. Because both sides of this veil that's put up to stop African American participation, they have black people, people of color participating in this conspiracy to keep us out. Maybe they know it and maybe they don't. But I think by you nailing them with those types of questions that we can get to where we want to go. And I would like to come back on the 13th with some testimony.
Sure. Thank you. Mr. Ali, thank you very much for your statement and I appreciate your comments. This committee hearing on both Resolutions 020238 and 030038, both of these Resolutions will be held in this Committee. The Committee is going to recess until March 13 at 3:30 p.m. There will be a continuation of this hearing in order to take further testimony. Thank you very much. I appreciate the committee's attention. (Council adjourned at 4:25 p.m.) 191 C E R T I F I C A T I O N I HEREBY CERTIFY that the foregoing proceedings of the Council of the City of Philadelphia of February 27, 2003, were reported fully and accurately by me, and that this is a correct transcript of the same. RE: COMMITTEE ON COMMERCE AND ECONOMIC DEVELOPMENT ___________________________ Lisa C. Bradley, RPR and Notary Public