civus
Minutes

Committee Hearing, February 27, 2003

Philadelphia City Council Committee HearingsFeb 27, 2003

People mentioned

Names our system found in this transcript. Automatically extracted, so it can include anyone named in the record, not only officials or parties.

Organizations mentioned

Ms. Davis

You brought that one up. I wasn't going there.

Councilman Nutter

I'm used to that conversation. We can have that discussion.

Ms. Davis

I would never go there, Councilman. I've had too many people go there on me.

Councilman Nutter

I have a great appreciation for the qualifications discussion.

Ms. Davis

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.

Councilman Nutter

Thank you, Ms. Davis.

Ms. Davis

Thank you.

Councilman Nutter

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.

Councilwoman 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?

Ms. Davis

Everyone has to come to that meeting. Everyone.

Councilman Nutter

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?

Ms. Davis

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.

Councilman Nutter

The next thing you know, you'll be trying to stop the dead from voting. Ms. Davis, how far does this go? (Laughter.)

Ms. Davis

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.)

Ms. Davis

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.

Councilwoman Brown

It's appreciated nonetheless.

Councilman Nutter

Councilwoman Tasco.

Councilwoman Tasco

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.

Ms. Davis

That's what we're hoping.

Councilwoman Tasco

Because Administrations come and Administrations go and we don't want this to go at the end of the term.

Ms. Davis

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.

Councilwoman Tasco

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.

Ms. Davis

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.

Mr. Roundtree

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.

Councilwoman Tasco

Okay.

Councilman Nutter

Thank you, Councilwoman Tasco.

Councilwoman Tasco

I haven't finished.

Councilman Nutter

I know that. We need a five-minute break for the stenographer. (Brief recess.)

Councilman Nutter

Ladies and gentlemen, we're back in Session. The Chair recognizes Councilwoman Tasco who was in a question prior to the break.

Councilwoman Tasco

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?

Mr. Roundtree

Directly with the teams, the teams representatives.

Councilwoman Tasco

So they work for the teams?

Councilwoman Tasco

What information do we require from them since we do have some financial investment in this project?

Mr. Roundtree

We require the business information from them, but not the employment.

Councilwoman Tasco

So how are we going to determine whether or not they're meeting their goals? 139 2/27/03 - COMMERCE - RES. 020238, 030038

Mr. Roundtree

We're monitoring the business participation, but not the employment.

Councilwoman Tasco

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?

Mr. Roundtree

Well, I am on the Oversight Committee and I do participate in all the outreach programs that the teams and the Urban Coalition perform.

Councilwoman Tasco

So do you get reports on the minority participation on these projects?

Councilwoman Tasco

So what is it like?

Mr. Roundtree

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

Councilwoman Tasco

While they're meeting the employment goals?

Mr. Roundtree

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.

Councilwoman Tasco

Are they coming here, Councilman, the Coalition?

Councilman Nutter

The teams?

Councilwoman Tasco

Whoever.

Councilman Nutter

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.

Councilwoman Tasco

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?

Mr. Roundtree

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.

Councilwoman Tasco

Okay. Thank you very much.

Councilman Nutter

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

Mr. Roundtree

No, sir. I said that we were not involved in the employment. We're not involved in monitoring the actual employment.

Councilman Nutter

Why is that?

Mr. Roundtree

Because we were created to monitor the business aspect. The only employment we were asked to monitor has been under the Project Labor Agreement.

Councilman Nutter

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.

Councilman Nutter

Only one of the stadiums is almost done.

Mr. Roundtree

That's why I would defer to them to really provide that answer because I don't have that report to produce to you.

Councilman Nutter

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.

Mr. Roundtree

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.

Councilwoman Tasco

Does the report go to the President, or it goes to each Councilmember?

Councilman Nutter

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?

Mr. Roundtree

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.

Councilman Nutter

Well, what's your understanding of how they're counted?

Mr. Roundtree

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.

Councilman Nutter

Even though they're only 51 percent? 145 2/27/03 - COMMERCE - RES. 020238, 030038

Mr. Roundtree

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.

Councilman Nutter

Well, I understand that. But does the underlying factual information layout that the company is, in fact, doing a hundred percent of the work?

Mr. Roundtree

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.

Councilman Nutter

51 percent is not 100 percent. 51 percent is 51 percent, the last I checked.

Mr. Roundtree

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

Councilman Nutter

Okay. Councilwoman, I'm sorry.

Councilwoman Tasco

Maybe what we need to do is get some contractors in here to negotiate these agreements.

Mr. Roundtree

That's who has to negotiate them, Councilwoman.

Councilwoman Tasco

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.

Councilman Nutter

Anything else you'd like to leave with us?

Ms. Davis

We're done.

Mr. Roundtree

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

Councilman Nutter

Councilwoman Tasco.

Councilwoman Tasco

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.

Ms. Davis

That's what it is. Okay. Now I know. Thank you.

Councilman Nutter

Thank you very much. Executive Director of the Philadelphia Human Relations Commission, Lazar Kliet. Please identify yourself for the record.

Mr. Kliet

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.

Councilman Nutter

You were part of the Teenage Employment Program that the City had back at that time?

Councilwoman Tasco

Were you involved with me at the Urban Coalition in '70, what?

Mr. Kliet

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.

Mr. Kliet

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.

Councilman Nutter

Councilwoman Tasco.

Councilwoman Tasco

I want to ask you -- what's your name again?

Mr. Kliet

Lazar Kliet.

Councilwoman Tasco

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.

Mr. Kliet

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.

Councilman Nutter

Thank you very much. I would anticipate at the continued hearing that Councilman Ortiz very well may ask for you to return.

Mr. Kliet

I'll be happy to. It's 155 2/27/03 - COMMERCE - RES. 020238, 030038 going to be on the 13th?

Councilman Nutter

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.

Ms. Mccolloch

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.

Councilman Nutter

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 --

Ms. Mccolloch

During that period, during the period January 1, 2001 through December 31, 2002.

Councilman Nutter

This is 1332 out of 3333, is that what we're talking about?

Ms. Mccolloch

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.

Mr. Mjenzi

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.

Mr. Mjenzi

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.

Councilman Nutter

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.

Mr. Coles

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 --

Councilman Nutter

That project's under construction now, right?

Mr. Coles

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.

Councilman Nutter

Councilwoman Reynolds-Brown.

Councilwoman Brown

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?

Mr. Coles

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.

Councilwoman Brown

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.

Mr. Coles

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.

Councilwoman Brown

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?

Mr. Coles

I can't answer that question.

Mr. Bell

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.

Councilwoman Brown

Which type of project you said, commercial?

Mr. Bell

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.

Councilwoman Brown

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?

Mr. Bell

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.

Councilwoman Brown

Any relationship with DAP? And my colleagues will have to help me remember what that acronym stands for, DAP.

Mr. Bell

Diversified Apprenticeship Program.

Councilwoman Brown

Yes. Is any relationship with them at all?

Mr. Bell

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.

Councilwoman Brown

Thank you very much for your testimony. Thank you, Mr. Chair.

Councilman Nutter

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?

Mr. Bell

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.

Councilman Nutter

And you say you are having trouble enforcing those.

Mr. Bell

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.

Councilman Nutter

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.

Councilman Nutter

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.

Mr. Bell

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.

Councilman Nutter

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?

Ms. Mccolloch

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.

Councilman Nutter

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.

Councilwoman Brown

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?

Mr. Bell

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.

Councilwoman Brown

Do you take that at face value or do they have to provide record of --

Mr. Bell

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.

Councilwoman Brown

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.

Mr. Bell

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.

Councilwoman Brown

I thank you again. Thank you very much.

Councilman Nutter

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?

Mr. Bell

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.

Councilman Nutter

Are the contractors required as a part of the bidding process to tell you how they're going to meet the prospective goal?

Mr. Bell

That's an Affirmative Action plan that's submitted. And the general contractor --

Councilman Nutter

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?

Mr. Coles

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.

Councilman Nutter

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?

Mr. Bell

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.

Councilman Nutter

Councilman Ortiz.

Councilman Ortiz

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 Nutter

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.)

Councilman Nutter

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.

Mr. Ali

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.

Councilman Nutter

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