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Minutes

Committee Hearing, February 27, 2003

Philadelphia City Council Committee HearingsFeb 27, 2003

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Councilman Nutter

Secretary Davis, I hate to interrupt you. Do you possibly have copies of your testimony?

Ms. Davis

Copies were supposed to have been delivered to the Chamber.

Councilman Nutter

Thank you. Sorry about that.

Ms. Davis

We'll get them from the Chief of Staff.

Councilman Nutter

I understand. Thank you. Please proceed.

Ms. Davis

Do you want me to mush on through?

Councilman Nutter

Yes.

Ms. Davis

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.

Councilman Nutter

The Chair recognizes Councilman Cohen.

Councilman Cohen

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?

Ms. Davis

We're not the Workforce Development.

Councilman Cohen

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?

Mr. Roundtree

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.

Councilman Cohen

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.

Mr. Roundtree

Well, the way you asked the question, the only way I could answer it was the way I did, Councilman.

Councilman Cohen

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?

Mr. Roundtree

Yes, sir, Councilman.

Councilman Cohen

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

Ms. Davis

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.

Councilman Cohen

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.)

Councilman Nutter

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.

Mr. Roundtree

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 --

Councilman Nutter

When was that?

Mr. Roundtree

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.

Councilman Nutter

Whose legislation was that? Do you remember who the sponsor was?

Mr. Roundtree

No, I don't. It's 90 2/27/03 - COMMERCE - RES. 020238, 030038 passed.

Councilman Goode

It was passed last August?

Mr. Roundtree

Yes. I think you introduced it in 2000 and it actually passed in 2001, somewhere in there.

Councilman Nutter

And what's the issue about a request? Who has to request what?

Mr. Roundtree

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.

Councilman Nutter

Have any departments made such a request?

Mr. Roundtree

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.

Councilman Nutter

Okay. Councilman Goode.

Councilman Goode

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?

Ms. Davis

I'll let PWDC --

Councilman Goode

No. Actually, I wanted a response from Administration regarding what they view as their formal relationship, organizational relationship, with PWDC.

Ms. Davis

They're a quasi within the City. They're not a department of the City.

Councilman Goode

How do they interact? What is the City Administration 's authority, connection, board position?

Ms. Davis

I will have to get that information for you.

Councilman Goode

Do any PWDC dollars 92 2/27/03 - COMMERCE - RES. 020238, 030038 flow through the City, or do they go directly PWDC?

Ms. Davis

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 --

Councilman Goode

I'm asking, is there a pass through, through the City to PWDC, or do they receive their dollars directly?

Ms. Davis

PWDC receives all of the work-force-type dollars directly. They're the bank, if you will, for the region.

Councilman Goode

The Mayor is part of and has appointments within the Workforce Investment Board?

Councilman Goode

How many appointments does he have?

Ms. Davis

I don't know. I'll get that information for you, unless Mr. Clancy knows.

Mr. Clancy

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.

Councilman Goode

And so the Mayor appoints the board that oversees $110 million that flows through the City?

Mr. Clancy

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.

Councilman Goode

What appointment powers does the Mayor have regarding PWDC's board?

Mr. Clancy

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.

Councilman Goode

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?

Mr. Clancy

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

Councilman Goode

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?

Mr. Clancy

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.

Councilman Goode

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?

Mr. Roundtree

We can provide that information to you.

Councilman Goode

Don't tell me you don't know it off the top of your head.

Mr. Roundtree

Okay. I won't tell you that.

Councilman Goode

Ms. Davis, do you know how much money has gone toward disadvantaged businesses since 1982 and since minority set-aside law was enacted?

Ms. Davis

I don't have that number off the top of my head.

Councilman Goode

If you could forward that information to the Chair --

Ms. Davis

I will forward the information. 96 2/27/03 - COMMERCE - RES. 020238, 030038

Councilman Goode

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.

Ms. Davis

The portion during Mayor Goode's Administration and then everything after.

Councilman Goode

And what portion happened since then. Thank you, Mr. Chairman.

Councilman Cohen

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.

Mr. Dickerson

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.)

Mr. Dickerson

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.)

Councilman Cohen

Thank you very much. Will the panel come back, because the Chairman of the Committee is here and only he can dismiss.

Councilman Nutter

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?

Mr. Roundtree

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?

Councilman Nutter

How have you been able to enforce compliance?

Mr. Roundtree

Through the use of a desk auditor to make sure that --

Councilman Nutter

Through the use of what?

Mr. Roundtree

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.

Councilman Nutter

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.

Mr. Roundtree

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

Councilman Nutter

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?

Mr. Roundtree

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.

Councilman Nutter

Does MBEC have the capacity to monitor all the projects --

Mr. Roundtree

One second. I was just 105 2/27/03 - COMMERCE - RES. 020238, 030038 passed the participation report.

Ms. Davis

I came prepared, sir.

Councilman Nutter

You always do, Ms. Davis. Is it possible for the Committee to receive a copy of this subsequent to the hearing?

Ms. Davis

Of course.

Mr. Roundtree

For Public Works, 9.2 percent for minorities. For women, 4.6 percent. In supplies, 1.3 percent for minorities.

Councilman Nutter

I'm sorry. What was that number again?

Mr. Roundtree

1.3 for minority participation in supply.

Councilman Nutter

Okay. Hold on for one second. This is for FY '02?

Councilman Nutter

So supplies was what?

Mr. Roundtree

Supplies for minorities was 1.2.

Councilman Nutter

What's the total dollar value of the supply contracts during FY '02?

Mr. Roundtree

$39,800,000. So that 106 2/27/03 - COMMERCE - RES. 020238, 030038 would come out to $500,000 for minorities.

Councilman Nutter

Was that 390-some-odd thousand dollars?

Mr. Roundtree

$544,661.

Councilman Nutter

Are minority firms just not bidding on supply contracts?

Mr. Roundtree

It's a combination of both.

Councilman Nutter

What are these contracts? What kinds of contracts would be in the supply category?

Mr. Gamble

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.

Councilman Nutter

Let me ask this question.

Mr. Roundtree

Cars, too.

Councilman Nutter

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?

Mr. Roundtree

Yes, sir.

Councilman Nutter

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?

Mr. Roundtree

I could get you that information.

Councilman Nutter

That would be nice.

Mr. Roundtree

I don't have it right here with me, Councilman, so I'd have to respond to you in writing.

Councilman Nutter

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?

Mr. Roundtree

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.

Ms. Davis

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.

Councilman Nutter

Where are we buying our vehicles these days?

Ms. Davis

It's low bid.

Councilman Nutter

I understand that. Who won the last contract?

Mr. Gamble

The last contract was won by a company in Rhode Island by the name of Rizzo Ford.

Councilman Nutter

I have to talk to 110 2/27/03 - COMMERCE - RES. 020238, 030038 the Councilman about that. A company in Vermont?

Mr. Gamble

No, Rhode Island.

Councilman Nutter

Rhode Island. A company in Rhode Island won the City bid on vehicles. What was the dollar amount of the contract?

Mr. Gamble

The dollar amount of the contract was roughly about $6 million and it was for vehicles for the Police Department.

Councilman Nutter

So these are Crown Victorias? Mr. Gamble: Most of them, yes.

Councilman Nutter

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?

Mr. Roundtree

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.

Councilman Nutter

Let's talk about professional services. That's not subject to lowest responsible bid; is that correct?

Mr. Roundtree

No. 11

Councilman Nutter

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?

Mr. Roundtree

Well, we'd have to take a look at what we bought that year. For instance, we know we're going to do --

Councilman Nutter

You bought $200 million worth of stuff.

Mr. Roundtree

And of that, $39 million went to minorities and females.

Councilman Nutter

Hold on for a 112 2/27/03 - COMMERCE - RES. 020238, 030038 second. I thought you said $19.1 for minorities.

Mr. Roundtree

Right.

Councilman Nutter

How much --

Mr. Roundtree

$19.2 for women gives you 38 out of 200.

Councilman Nutter

So generally the total percentage is 19, right, somewhere in the 9 range, 38 out of 200? 10

Mr. Roundtree

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.

Councilman Nutter

Okay. You'll get us the full report, right?

Mr. Roundtree

Yes. Yes, sir.

Councilman Nutter

Does the MBEC have the capacity to monitor all the projects covered by Executive Order 193? 113 2/27/03 - COMMERCE - RES. 020238, 030038

Councilman Nutter

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?

Mr. Roundtree

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.

Councilman Nutter

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?

Ms. Davis

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

Councilman Nutter

This is the new Executive Order?

Ms. Davis

Yes, the one that's currently --

Councilman Nutter

Under discussion.

Ms. Davis

-- 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.

Councilman Nutter

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?

Ms. Davis

I'm not specifically aware of that requirement. 115 2/27/03 - COMMERCE - RES. 020238, 030038

Councilman Nutter

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?

Ms. Davis

I'm not aware of what OHCD's reporting requirements are.

Councilman Nutter

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?

Ms. Davis

The OHCD and Commerce people are here, and perhaps they'd like to address that.

Councilman Nutter

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?

Ms. Davis

No, I'm not. Does it specify a department with responsibility or area? 116 2/27/03 - COMMERCE - RES. 020238, 030038

Councilman Nutter

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?

Ms. Davis

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.

Councilman Nutter

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?

Mr. Roundtree

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

Councilman Nutter

How many contractors were debarred last year?

Mr. Roundtree

None.

Councilman Nutter

Everybody is doing the right thing?

Mr. Roundtree

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.

Councilman Nutter

How would you prove it?

Mr. Roundtree

Minority firm or female firm was denied a contract, perform a contract, solely on the basis of race.

Councilman Nutter

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"?

Mr. Roundtree

I don't know how to respond to that, Councilman.

Councilman Nutter

Take your best shot. Yes or no. It's a yes-or-no question. 119 2/27/03 - COMMERCE - RES. 020238, 030038

Councilman Nutter

You think somebody would be stupid enough --

Mr. Roundtree

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."

Councilman Nutter

Has anybody reported that to you?

Mr. Roundtree

No. 11

Councilman Nutter

But they're not getting any business?

Mr. Roundtree

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 --

Councilman Nutter

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?

Mr. Roundtree

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 --

Councilman Nutter

When you say, once we're able, is there something we're waiting on to allow you to be able?

Mr. Roundtree

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.

Councilman Nutter

And how is that going to happen? I think we've all known that for a little while.

Mr. Roundtree

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.

Councilman Nutter

When did you draft the Executive Order?

Mr. Roundtree

We were requested by a transition team from the new Administration to do that. And we did that.

Councilman Nutter

Are we talking about sometime in early 2000? You wrote it down?

Mr. Roundtree

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.

Councilman Nutter

Christmas?

Mr. Roundtree

Of last year.

Councilman Nutter

2002?

Councilman Nutter

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?

Ms. Davis

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.

Councilman Nutter

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?

Ms. Davis

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.

Councilman Nutter

I would actually ask you not to adjust to it. Please don't adjust to it.

Ms. Davis

I don't think you would like the mean me.

Councilman Nutter

I'll deal with you, Ms. Davis, however the situation is going to be. This is a priority of the Administration?

Ms. Davis

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.

Councilman Nutter

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."

Ms. Davis

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.

Councilman Nutter

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.)