City Council this week heard of plans for a new eco-friendly trash facility planned for Northeast Philadelphia that officials said would guarantee about $5 million a year in business for minority- and women-owned firms.
That figure hinges on Council’s approval of a new waste disposal contract that features the construction of a plant that would convert the city’s trash into fuel. It will be one of only two such plants in the nation.
“We’re going to see many benefits from this new deal,” Streets Commissioner Clarena Tolson told Council. “We were in competition with other cities for this innovation.”
Members learned of the plans for the $22 million facility Wednesday during hearings on two bills that give contracts worth $256 million over the next four years to Waste Management and Covanta 4 Recovery for hauling and getting rid of the city’s trash. Tolson said that represented a savings of about $7 million a year. In addition, she projected that the plant would generate about $1.25 million annually in tax revenue.
The plant, which is expected to be built later this year in the Northeast, harvests recyclables from the city’s 143,000 tons of trash then turns the remaining solids into fuel pellets that can replace coal at chemical manufacturing plants, cement kilns and electric generation plants.
“Now instead of that trash going to a landfill it will be going to a waste to energy facility, or this spec fuel plant,” she said. “Under these contracts no pre-processed waste will be landfilled.”
According to Tolson, the plant, which will be owned by Waste Management, would process 500 to 1,200 tons of trash a day, and produce enough fuel to generate power for 150,000 homes. It would also create 25 full-time jobs, most of them skilled jobs like equipment operator and plant operator.
Residue created by the making of the pellets would go to landfills.
The gain for minority businesses would come in hauling the trash, Tolson said, adding that the Mayor’s Office of Economic Opportunity had signed off on the deal.
Both companies have agreed to give their hauling contracts to minority- or women-owned firms, specified in the contracts, but not yet named publicly. That would provide $5 million a year in business for those firms — which would collect trash and haul the waste to other facilities.
Councilwoman Blondell Reynolds Brown asked how the city verified that participation rate. Tolson replied that the OEO handled the verification, again noting that it has signed off on the plan.
Waste Management has a test facility in San Antonio, Texas, and the company’ s vice president for the mid-Atlantic region, Tara Hemmer, said the company is creating a market for the fuel, noting that all of the pellets created in Texas had been sold.
Tolson extolled the plans as “a major step in the greening of our city.”
A vote on the proposal is expected next month.
Councilman Jim Kenney asked if any of the jobs at the plant could be given to ex-offenders.
Hemmer said Waste Management would be open to the idea, but noted that most of the jobs were skilled positions requiring some sort of training.
“It’s really very specialized equipment,” Hemmer said. “They’re higher paying, skilled jobs with a minimal number of entry level positions.”
Overall, the contracts would not create any new jobs for the city, because the new deal eliminates a contract with a company called Republic that operates two trash facilities that currently employ about 25 people.
Members vote unanimously to keep the controversial pension program
City Council unanimously overrode the mayor’s veto of DROP legislation on Thursday but sustained — temporarily, according to the bill’s sponsor —– his rejection of the paid sick leave bill.
Council took action on a number of controversial items this week while continuing its debate over redistricting. Thursday afternoon was largely taken up with a public hearing on redistricting as Council struggled to move two proposals out of committee in time for vote next week.
Nothing had moved out of committee as of Tribune press time.
Paychecks for Council members have stopped until a redistricting plan is approved.
The override of Mayor Michael Nutter’s veto of a piece of controversial legislation that kept the Deferred Retirement Option Program, with a few minor changes, sailed over the two-thirds hurdle needed for an override. Only three members had opposed the bill when it passed in June, and all three now changed their minds.
“If we vote to override the mayor, we save money,” explained Councilman Jim Kenney. “If we vote to sustain the mayor’s veto then that bill is defeated and we would still have in place the original legislation.”
The new law allows the controversial program to remain, but changes the rules for employees in an effort to save the pension fund money.
Now, employees will be required to work two years past their minimum retirement date before they could enroll in the program. And, a provision that guaranteed 4.5 percent interest payment on DROP payments was eliminated and replaced an interest rate equal to the one-year U.S. Treasury bond.
A study by Council estimated the changes would save about $1 million a year.
Nutter condemned the decision.
“Obviously, council is ignoring completely the vehement opposition of the public for whatever their own interests are,” he said. “It’s a program we can’t afford.”
Nutter said he would continue to work for the elimination of DROP. Adding that he hoped that Council will eventually change its mind — perhaps next year when a new council convenes.
“I am certainly hopeful that the current members would revisit this issue or with a number of new members, potentially a third of the body being new next term that more fiscal soundness will come into the decision making process,” he said.
Council sided with Nutter as far as paid sick leave and tabled a bill initially approved in June.
Its sponsor, Bill Greenlee, moved to table the bill just as it appeared it would come up for vote.
“Unfortunately, we don’t have 12 votes,” he said, obviously deflating the handful of activists waving signs supporting the measure.
He went on to promise that he would re-introduce the proposal after a new council was seated and said that he thought it would pass eventually.
“This issue is coming,” he said. “In every poll that was taken, the citizens of Philadelphia said this is a good bill.”
Nutter vetoed the bill in late June saying it would dampen the business climate in a city that is struggling to create jobs.
A vote on another controversial bill — a reduction in the city’s parking tax — divided members, four of whom asked Kenney, the bill’s sponsor, to withdraw, suggestions he declined and ended up passing by a 12-5 vote. Council members Bill Green, Maria Quinones-Sanchez, Brian O’Neill, Blondell Reynolds Brown and Darrell Clarke opposed the bill. Green, Sanchez, Brown and Jack Kelly asked Kenney to hold the bill, which will slowly decrease the parking tax from its current 20 percent to 17 percent starting in 2014.
Nutter had very vocally opposed the plan and had also asked Kenney to hold it in a letter sent Thursday morning.
“We can’t afford it at this time,” said the mayor, saying it would create a hole in the budget that would be difficult to fill. “When you look at what’s going on in the national and local economy. Unemployment unfortunately is slightly creeping up. Tax revenues in two big areas for us — wage and sales taxes — were weaker in July and August.”
The mayor also opposed the plan because parking garage officials said they would not pass their savings on to consumers.
“It is astounding to me that the parking industry folks testified that they will not reduce the parking rates for folks who use parking lots for years while they will absorb what, in essence, is a significant windfall,” he said. “So, it’s an insult and a rip-off to the parking public.”
Asked whether he would veto the bill he replied: “I’ve not made a decision.”
In other news, Council stepped onto the international stage, passing a resolution “reaffirming the commitment of the United States to a negotiated settlement of the Israeli-Palestinian conflict.”
The resolution was proposed in advance of a United Nations vote on a Palestinian move to establish an independent Palestinian state without consulting the broader community of nations.
It passed 14-2 with Sanchez and Councilman Curtis Jones Jr., opposing and Donna Reed Miller abstaining.
The resolution, the type of thing that usually passes quietly, stirred up a debate among audience members. Ten speakers rose to discuss the issue; eight for and two against.
Israel’s Consul General in Philadelphia, Daniel Kutner, urged Council to pass the measure.
“Israelis are not against a Palestinian state,” he said. “They are only against it if it’s declared unilaterally.”
Susan Landau, a Jewish resident of East Falls, urged Council avoid the issue.
“Why is City Council reaching out to get involved in supporting legislation that is divisive within the Muslim, Jewish and Christian communities and has nothing to with the city of Philadelphia? Matters related to Israel and Palestine go well beyond the purview of this body.”
In an effort to convince Bank of America to renegotiate a financial deal that is estimated to cost the city’s transit authority about $4 million a year, the president of SEPTA’s blue collar union is asking members to withdraw any deposits they keep with the banking giant.
“We’re in the process of doing that …,” said John Johnson Jr., president of Transport Workers Union, Local 234, noting that his organization has more than 5,000 members, at a press conference Tuesday at City Hall. “My executive vice president and I are drafting a letter to our members right now.”
Johnson contends that interest rate swaps held by the Southeastern Pennsylvania Transportation Authority are costing it about $1 out of every $6 it generates. Similar financial deals cost the city and SEPTA a combined $40 million, he said.
Hours earlier, Johnson and about 20 union members were thrown out of the lobby of the Bank of America branch at 16th Street and John F. Kennedy Boulevard.
With the assistance of another organization called Fight for Philly, the group invaded the lobby and asked to have a letter urging national bank officials to re-open negotiations with the transit authority. A bank official, who declined to give his name, promised to fax the letter to the bank’s corporate headquarters in Charlottesville, N.C. After he spoke to protestors, he retreated out of sight. Shortly thereafter, a single Philadelphia police officer appeared and asked the group to move their protest outside, which they did.
The demonstration came as City Council investigates the possibility of suing several large banks over similar deals.
According to Councilman Jim Kenney, who appeared with Johnson at the press conference, Council has retained an independent law firm to advise Council whether it should proceed with plans for a suit.
“They have some social responsibility,” said Kenney of the banks, adding that if the city does sue he’d like to see SEPTA and the school district join the legal action. “We’re hoping that the law firm that we have engaged comes back with a favorable idea to go forward with a lawsuit. Hopefully, if we can sue them we can get them to the table to renegotiate.”
At issue are a number of deals involving interest rate swaps.
Like transit agencies at 12 large cities across the nation, SEPTA and its bankers reached a deal that changed the way government agencies borrowed. Typically, municipalities and public agencies issued bonds with variable interest rates. Under the interest rate deal, they agreed to pay a fixed rate on their bonds, and banks offered a variable return. They were supposed to create certainty in the amount of future interest payments owed by the public bodies.
It was expected that with interest rates rising, the variable return would generate money for the municipalities and government agencies. As interest rates fell, municipalities and agency started to lose money.
For the last three years, SEPTA has trimmed its capital budget by 25 percent because of funding shortfalls. According to its budget proposal for FY 2013, these reduced funding levels will “severely hamper SEPTA’s ability to bring the system to a state of good repair and will curtail the Authority’s ability to advance system improvements.”
The city has swap deals with Bank of America, Citigroup, JPMorgan Chase and the Royal Bank of Canada, which are costing the city $35 million every year. Already the city has paid at least $34 million in penalties to Wells Fargo, Bank of America, Citigroup and JPMorgan Chase to terminate some of these bad swap deals in 2010.
City Council’s unease with the Actual Value Initiative — the shift from property taxes based on partial values to one based on full market values — was apparent this week during budget hearings.
A number of members are concerned that the shift, which was supposed to be revenue neutral, is actually a tax increase.
“You need to address the outstanding questions as relates to the math of this on the issue of whether or not we are asking the public for a tax increase,” said Majority Leader Curtis Jones Jr. on Wednesday morning as he summed up concerns about AVI.
Jones was just one member of Council who peppered Finance Director Rob Dubow and Budget Director Rebecca Rhynhart with questions and comments over several days this week as Council dug into Mayor Michael Nutter’s $3.6 billion budget proposal.
The administration’s budget numbers show that the move to AVI would provide an additional $90 million in funding for the school district this year, for a total of $673 million. The city, which splits property tax revenue with the district, would collect $458 million, roughly the same amount it collected last year.
Administration officials have avoided calling that extra revenue a tax increase, and instead say it represents the amount captured by increasing property values, which have risen since the city froze assessments in 2010.
But council members, who now appear to be fielding more questions from angry constituents, are nervous.
“This AVI issue is probably going to be the most difficult and angry issue that we’re facing — maybe since I came into council in ’92,” said Councilman Jim Kenney. “I can’t yet find a justification for explaining to people that I represent, citywide, why the additional $90 million makes sense.”
Kenney, like many of his colleagues, voted for property tax increases in several recent budget cycles, and said this week he supports funding for public schools. But, noting that in testimony Monday School Reform Commission Chairman Pedro Ramos said previous school administrations were guilty of “bad fiscal policy,” Kenney added that he wanted a better idea of how the district would spend the additional money.
His questions and comments suggested that council might feel more comfortable if revenue figures were changed to eliminate the added $90 million for the district.
“Would you agree with me, subjectively, that with the $90 million off the table it would be difficult for people to argue that this is fact a tax increase?” he asked Dubow, who declined to “get into whether it’s a tax increase.”
Dubow then added that he was sure the district was aware that it would need to justify the added money.
Last year council approved a 3.9 percent property tax increase after school officials, led by former Superintendent Arlene Ackerman, said if it didn’t the district would be forced to get rid of full-day kindergarten and yellow buses.
“We were spun,” said Jones, agreeing with Kenney that he would need to know where any additional money was being spent.
Council members are also concerned about how the administration plans to roll out AVI.
The mayor wants to see it done this year. Under the administration’s plan, residents will receive their new assessments in October, and bills based on the new numbers in December.
That concerns council members who are being asked to make decisions based on budget numbers that could change as residents challenge tax bills through city appeals and maybe even court challenges.
“If we for some reason go forward and find out what we’re doing here, the formulation, the method is not legal … and all those appeals are granted we’d collect less revenue, correct?” asked Councilman Mark Squilla.
Dubow said the city had factored greater appeals, losses and lower collections when drawing up the budget.
“We’re assuming that goes up substantially,” he said.
At last week’s city council meeting, Squilla emerged as one of the prime opponents of AVI after he introduced legislation that would freeze property tax millage rates and assessments at current levels.
Squilla also raised concerns about a portion of the city’s AVI plan that would create a $15,000 exemption for residents’ primary residence. That portion of the plan needs approval by the state legislature before it can be enacted.
“We’re still at a point where we cannot give the public real information because we don’t know everything that is going to happen,” said Squilla.
If kids curse in school or with their friends already, then there’s no reason the dropping of a few F-bombs should deter these same kids from learning anti-bullying techniques.
And to be subjected to hearing that word five times through a documentary that is 90-plus minutes long is well worth it, if it can help the thousands of youth facing one form of harassment or the other, says one prominent local politician.
At-Large City Councilman James Kenney is pushing an effort for the film “Bully” to be shown to area middle-school students; the problem is the Motion Picture Association of America has given the Lee Hirsch-directed documentary an “R” rating — which means that children under 18 cannot see the movie without being accompanied by a parent or guardian.
“We’re trying to concentrate on sixth-, seventh- and eighth-grade students; those not yet in high school,” Kenney said. “Because by the time they become juniors, [the documentary] is nice to see, but it’s not quite as urgent.
“The kids I’m trying to get are not the ones doing the bullying or the ones being bullied, but the ones that see or witness the bullying and maybe don’t know what to do,” Kenney continued. “All it takes is for one person to reach out, or a group of people reaches out, and brings that person in to their circle.”
Kenney referenced the recent bullying case of Nadin Khoury, who was assaulted by a group of teens who dragged Khoury through the snow and hung him by his jacket from a wrought-iron fence. That case drew the attention of Philadelphia Eagles wide receiver DeSean Jackson, who publicly backed Khoury while admonishing his abusers.
“We especially need our athletes, leaders and scholars to stand up and say, ‘This is our guy now,’” Kenney said. “The impact this [bullying] has on their lives needs to be understood. It can’t [produce] a very fun environment; it’s not good for learning or self-esteem.”
“Bully” follows the lives of five school kids for a full school year, documenting the effects bullying had on them and their families. The movie is set to open March 31 in New York and Los Angeles; the movie will open here sometime in April.
Kenney understands that while the school district has been welcoming of his idea, it can’t move unless the MPAA lowers the rating of “Bully.” Toward that end, Kenney has petitioned the MPAA by way of a letter-mailing campaign and a signature list; interested parties can sign the petition at Change.org; Kenney has also enlisted the help of Safe Schools advocate Kelly Hodge and the local chapter of the Anti-Defamation League to help spread the world, and he has also posted updates and links on his Facebook page.
In his letter to the MPAA, Kenney wrote “the film has a vitally important and powerful message that can open the eyes of all students to the pain and real consequences of bullying other students.
“Philadelphia has our own problem trying to confront the issue of violence and bullying in our schools…Rightly or wrongly, the use of the “F” word is common among many of our young people,” Kenney’s statement continued. “It is a reality to hear the “F” word uttered by teenagers — and it’s a sad reality that bullying and violence is epidemic in our schools. That is why I would ask you to reconsider your “R” rating for the film ‘Bully’ and change the designation to a ‘PG-13’ so that thousands of young people can see this vitally important film.”
Councilwoman Blondell Reynolds Brown, chair of Council’s education committee, fully supports Kenney’s initiative and applauded Kenney for pushing the issue. A former educator, Reynolds Brown knows it’s a “fine and narrow line” by allowing kids to see a movie with such coarse language, but the outcomes will be worth it.
“When you look at who this movie is about, who the target audience is, and who will benefit, it’s the very young people, under 13 in middle school,” Reynolds Brown said, mentioning that Kenney has been at the forefront ever since he approached Reynolds Brown more than a year ago to seek support for this project. “And for the audience the movie is targeting, sad to say, many of our kids hear the word all the time.
“The over-arching purpose absolutely outweighs five ‘F’ words,” Reynolds Brown continued. “Given the purpose and audience we’re trying to reach and aspire to not engage in this ugly activity, I fully stand by Councilman Kenney and I credit him for extending to my office an opportunity to work with him and the school district.”
Kenney says it will cost $50,000 to get the local of-grade students to view this film, and he is in the process of setting up fundraisers — which is part of a nationwide initiative to get 1,000,000 students to watch the documentary.
“We are trying to raise outside money, but if we can’t get a ratings change, no district can cooperate,” Kenney said, noting that City Council has passed a resolution in support of screening the documentary. “Now sadly, the word really has no meaning and is used so frequently; sad to say, our kids are using the word.
“So I don’t think language should be an obstacle to kids viewing this film.”
Long goodbyes overshadowed the passage of several pieces of legislation — including a landmark zoning ordinance — in City Council on Thursday, as members held their final meeting of the year and bid farewell to six retiring colleagues, most notably long-serving Council President Anna C. Verna.
“It’s so very difficult to believe that this is my last Council session,” Verna said in a speech at the end of the meeting, during which she was showered with accolades from members and an impromptu visit from Mayor Michael Nutter, who presented her with a Philadelphia Bowl, one of the city’s highest honors.
“She is the longest serving public servant in the entire city of Philadelphia,” he said, noting that he learned a great many political lessons from her during his tenure as a city councilman. “The great thing about our Council president is that she wears her passion for this city on her sleeve. She cares so much.”
Verna has been Council president since 1999, the 2nd District’s representative since 1975, and has worked at City Hall since 1951.
It was also the last meeting for five other members — Frank DiCicco, who has represented the 1st District for 16 years; Joan Krajewski, 6th District representative since 1979; Donna Reed Miller of the 8th District, who has held her seat since 1996; at-large Councilman. Jack Kelly, who has served since 1988, and Councilman Frank Rizzo, who has served as an at-large member since 1995.
“I wish you Godspeed as you continue the important work that still needs to be done,” said Verna in a farewell speech to those remaining in office. Then turning to those about to enter retirement, she said, “I wish you continued good health and happiness. Enjoy every minute of it.”
Moments earlier in more candid remarks, Verna noted that over the course of her career she’d spent more time in City Hall than she had at home.
“I wonder if that’s a good thing to do,” she said, adding: “I’m going to miss this place.”
Verna received three prolonged standing ovations during the meeting.
During the meat-and-potatoes portion of the meeting, Council unanimously approved a proposal from Councilman Jim Kenney that would require subcontractors to report to L&I (the Department of Licenses and Inspections) when they sign with a general contractor on any job.
Kenney said the move was intended to make sure that workers pay the city’s taxes and worker’s compensation.
“One general contractor will pull a permit and they will hire unlicensed contractors who bring in workers who get paid cash or as independent contractors so we’re not getting any of the wage taxes or the permit fees,” he said.
The bill prompted comment from two Black contractors.
Colin Johnson, a licensed plumber and electrician, said he did not oppose the bill, but told Council he would like to see some legislation that would force contractors and the trade unions to add Black members.
“The present PLAs (project labor agreements) that the city has with the trade unions is unfulfilling to African-American males in terms of inclusion,” he said. “Because the specialty trades, which are made up or predominantly white males … they are going to make decisions which are reflective of their white male colleagues.”
“We can’t allow bills to come before this Council and we don’t do anything for African-American males,” agreed Jihad Ali, noting that Kenney’s bill was not intended to address his concerns and adding that he hoped Council would soon tackle the problem of union inclusion. “Look at the record, we’re not reflected in the unions. We’re here to change that.”
The departure of the six members paves the way for a radical change in the make up of Council. And, Verna’s retirement sets the stage for the election of a new president, which means there will likely be much jockeying among three contenders for the office over Christmas recess. Majority Leader Marian Tasco, Majority Whip Darrell Clarke and at-large Councilman Kenney have all expressed an interest in the position. Clarke appears to have the backing of the nine members he’ll need to secure the spot, but with several weeks before the new Council is seated that could change.
Of the departing members, several will receive large DROP payments upon retirement. It was a fact that DiCicco couldn’t help but tweak his fellow retirees about as Nutter gave each a framed print of City Hall along with a mayoral citation for service.
“These are blow-ups of the DROP checks,” quipped DiCicco.
In another unanimous move, Council passed a new zoning ordinance, ending five years of work on an overhaul of the zoning code.
Among its major provisions: a requirement that developers to keep communities abreast of their plans, allowing them to shape projects long before they’ve had that opportunity under the current zoning code, where most issues are addressed at Zoning Board of Adjustment hearings. The proposed code requires developers to notify registered community organizations, or, in their absence district Council representatives, of large projects. It also requires developers to meet with those groups so they can air their concerns.
The new code also deals with uses that often did not exist when the old code was drafted. Among them are some that often end up being the most contentious —like private re-entry facilities, group homes and group medical practices.
Council also passed a lead paint abatement bill 16-1 with Councilwoman Jannie Blackwell opposing the measure.
In other news, Council amended a proposal by Councilwoman Blondell Reynolds Brown aimed at keeping children from coming into contact with lead paint. The bill requires landlords who rent to families with children age six or under to remove lead paint from their properties.
Finally, Nutter vetoed a bill that would have allowed a “wall wrap” billboard planned for a property at Sixth and Spring Garden streets.
Eliminating start-up fees, lower privilege tax get bipartisan support
Two tax bills — intended to eliminate business start up fees and cut the city’s business privilege tax — moved out of committee this week.
Both had council leadership’s stamp of approval and the endorsement of the mayor.
“At the end of the day we were all seriously working to make sure that our businesses seriously benefit in the city of Philadelphia,” said Majority Leader Marian Tasco, at a press conference late Monday afternoon, held to announce that both bill had been approved by the finance committee.
High business taxes and licensing fees have long been blamed for pushing business from the city to the suburbs.
In combination, the bills were expected to cut taxes by more than $70 million.
“The proposals in front of us today are the kinds of things we’ve been in favor of,” said Mayor Michael Nutter, who took the unusual step of publicly endorsing the tax measures before they were presented to the full council. “We’re still in challenging economic times, but we need to do something to jump start our own situation.”
The first bill, sponsored by Councilman Jim Kenney, would waive the business privilege tax for new businesses that employ at least five city residents full-time in their first year, and add five full-time jobs, again for city residents, in the second year. In addition, the $50 business privilege license fee would be waived, as would all related business license fees.
The business privilege tax is 1.415 mills on gross receipts (one mill equals one tenth of one percent) and 6.45 percent on taxable net income. In addition, new businesses pay licensing fees ranging from $50 to $500 before they can open in the city. Those fees would be waived — though the licenses would still be required.
Kenney, who said that while official unemployment figures put unemployment at 11 percent, that number is probably closer to 25 percent, adding that he hoped the bill would spur job creation in the city.
“I think the problem we’re facing in this country and in this city is unemployment,” he said. “These two bills will hopefully break the jam. To allow people, again, to think about coming to the city and staying in the city.”
A second, sponsored by council members Bill Green and Maria Quinones-Sanchez, would provide a $100,000 exemption on the gross-receipts portion of the business-privilege tax and exempt the first $100,000 in sales for the net-income portion on the first $100,000 in sales. It also included a provision called single sales factor apportionment, taxing just sales made in the city.
“Philadelphia city government… sent a clear message to the business community in the region and the nation: Philadelphia is open for business,” said Green. “We want you here. We want you to create jobs here.”
As City Council prepares to take a look at working conditions for approximately 3,000 security guards, 32BJ, Service Employees International Union has released a report arguing for higher pay and better benefits for Philadelphia’s security guards — the vast majority of whom are Black.
“The … report draws attention to an often neglected issue in our society, the growing number of working poor in America in general, and in Philadelphia in particular,” said Stuart Emir, associate professor of sociology at Widener University. “Millions of Americans wake up every morning, work hard all day, and at the end of the day can’t make ends meet. This is a problem not just for workers and their families, but for society at large.”
The report, titled Securing Our Future, comes as City Council’s Committee on Labor and Civil Service prepares to hold hearings at 1 p.m. Monday on labor practices involving security workers. Emir is among those who will be testifying.
Council agreed to hold hearings after officers asked Council to look at their working conditions.
“SEIU came to me and said they think it’s appalling, the conditions that people in the security business work in, they’re strong-armed by their employers and they want to have a discussion around the issues of private security in the city,” said Councilman Jim Kenney, chair of the labor committee. “Legislation could come out of this, but this is a fact-finding mission at this point.”
Private security officers across the city, many employed by Allied Barton, are in the process of unionizing, most under the umbrella of 32BJ SEIU.
The report provides a comprehensive look at the demographics of city’s security officers. Roughly 79 percent of the city’s security guards, about 2,400 people, are African American, about half men and half women. According to the report, most are also between the ages of 25 and 54, the age where most are likely raising families.
A majority of them live in struggling pockets of North and West Philadelphia and earn wages that are on average $11.70 an hour, but some as low as $8 an hour — lower than the area average. The mean hourly wage for workers in the Philadelphia metropolitan area is $22.82, for laborers its $12.53.
“Beyond lower pay, Philadelphia’s security officers receive few meaningful benefits,” said the report, adding, “Security officers are twice as likely as the overall city workforce to rely on public assistance for their healthcare.”
Roughly 40 percent lacked health insurance.
The report argues that by giving security officers better pay, the city would benefit through lower public assistance payments and reductions in a variety of other assistance programs.
“Paying livable wages and benefits is not just a matter of fairness and a responsible business practice, but it saves taxpayers millions of dollars with a rare opportunity to boost our economy,” said Mark A. Price, a labor economist at Keystone Research Center.
SEIU has been working to unionize local security officers for years. However, their efforts in Philadelphia stopped in 2007 after national union officials made a deal with security companies, agreeing to end its efforts in Philadelphia in return for neutrality agreements in Los Angeles and Chicago. That deal expired in 2011, reviving the local efforts.
The city’s move to base property taxes on the actual value of a property rather than a millage based assessment will hit gentrifying neighborhoods the hardest, the head of the Office of Property Assessment told members of City Council this week.
“When you have neighborhoods that are evolving, some of the younger, yuppie individuals will buy the most basic house, almost literally in shell condition, just because they want to get in,” Richie McKeithen, head of the assessment office told Council members during budget hearings on Wednesday. “That’s how neighborhoods increase in desirability and increase in valuation.”
The price new buyers pay for their home will ultimately serve as part of the basis for their neighbors’ tax bills. Under the new system, called the Actual Value Initiative, property taxes will be driven by recent sales of comparable properties and demand in individual neighborhoods. Other factors, like size and condition, will also affect tax bills.
But, with sales value playing a larger role in determining property taxes, longtime residents could face large increases in their tax bills.
“We’re going to really hurt some folks who have not moved out of the city, not moved to southern New Jersey, not moved to Delaware County,” said Councilman Jim Kenney. “They’re going to get this bill in the mail that it is going to knock them off their kitchen chair.”
Politically, the issue is complicated by the fact that many new homeowners can avoid paying property taxes for 10 years under the city’s tax abatement rules — pitting new residents against old.
“I don’t want to chase folks out of town because certain neighborhoods are doing better than they have done in the past 20 years,” Kenney said.
It is a scenario that has many Council members, some of whom have agreed to tax increases in each of the last three years, worried as they face their confused and angry constituents. Council members are also frustrated by the fact that they have so little information for their constituents.
City officials have repeatedly said they hope to have assessments on paper and mailed to residents by October, with new bills out by December.
But, Council has to approve a budget based on revenue figures linked to new assessments by May, long before the administration hopes to have a handle on just which direction property taxes are moving.
“There is significant concern about wrapping up this process, from Council’s perspective, without a real sense of the actual values and what we’ll ultimately be voting on,” said Council President Darrell Clarke.
Council members have been pressing the administration for new assessment numbers as soon as possible. McKeithen said this week he hoped to be able to provide data snapshots of certain neighborhoods by May, then added, “That depends on what happens. I oftentimes run into roadblocks, so it’s hard to commit.”
Most sources expect a rise in values, despite the recession.
In putting together the fiscal 2013 budget, the administration assumed, overall, a 25 percent increase in values since assessments were frozen in early 2010. That rise in value translates roughly to an 8 percent increase in taxes for the average homeowner. Administration officials have stressed that some residents could see their taxes go down.
Finance Director Rob Dubow said the administration would put together numbers that reflect market values and average assessed values for neighborhoods across the city, which can serve as an indicator of what residents might expect.
“That won’t be exactly what happens with assessments, but it will give you some general idea,” he said.
The administration has taken steps to try and ease the pain of new tax bills, Dubow said, noting that it plans to implement a “smoothing process” which will allow taxpayers to stretch payments on their new tax bills out over the next three years. Administration officials are also hoping to enact a homestead exemption that would allow residents to cut $15,000 off their property tax bill for their primary residence. There is some uncertainty as to whether or not that will happen, as it requires the approval of the state legislature. A bill is pending in Harrisburg, but it’s unclear whether it will pass.
“We’re happy to talk about other possibilities that could help with these issues,” Dubow told Council members.
Though there seems to uniform agreement among council members, Mayor Michael Nutter and members of the administration that an overhaul of the property tax system is necessary, Council and the mayor have been sparring over when and how to implement a new system.
Administration officials want to have the new system in place by the end of the year. As Nutter put it recently to reporters: “It’s time to bite the bullet.”
Some Council members want to wait until next year to move on actual value, putting off any decisions until Council has time to see and digest all the information relating to the new values.
“There has been no analysis done in terms of what the impact might be in Philadelphia,” said Council President Darrell Clarke. “I’d be interested to know that.”
Nutter says city can’t afford resulting revenue loss
City Council let stand a mayoral veto of a proposed cut in the city’s parking tax, but the bill’s sponsor vowed to re-visit the issue next year.
Councilman Jim Kenney, who sponsored the bill that would have cut the tax from 20 percent to 17 percent, said he didn’t have enough votes to pass the measure over Mayor Michael Nutter’s veto, a move that would take 12 votes.
“Apparently the mayor has learned to lobby in the last couple of days,” Kenney said. “So, I will not be asking my colleagues to put up a vote, but I will tell now that the first day back in session, in January, this piece of legislation will be re-introduced.”
Council passed the bill three weeks ago with a 12-5 vote, seeming to guarantee that it could withstand a veto.
But, Kenney told reporters after the meeting that four members of Council — he declined to say who — had changed their minds, temporarily sinking his proposal.
Council members Bill Green, Maria Quiñones-Sanchez, Brian O’Neill, Blondell Reynolds-Brown and Darrell Clarke were the original five members to oppose the bill. O’Neill and Brown reiterated their opposition again on Thursday.
“This industry does not bring tears to my eyes at all,” O’Neill said, noting that the tax cut was only for the parking industry and not across the board. “They absolutely gouge people who come into the city.”
The proposal came at time when city revenue is again falling, added Brown, and parking officials said in public testimony that they would not pass the savings on to their customers.
“The parking industry has not made any real commitment to lower parking rates for customers,” she said, adding that with revenue projections lower than expected, the city could not afford to lose any more money. “Given … the city’s revenue loss we simply cannot provide this reduction for the parking industry.”
Nutter, in explaining his decision, said the cut, which would not have gone into affect until 2014, would have cost the city $24 million over four years.
“This is the wrong time to adopt new tax breaks, particularly for a single industry,” he said, in a letter to Council, noting that sales and wage tax revenues had fallen $10 million below projections so far this year. If that trend continued, he said, the city could lose $60 million over the next two years.
In other news, Council is expected to vote on whether or not to join a suit that would ban natural gas drilling with hydraulic fracturing until a full environmental impact study is completed.
And, the council designated Oct. 8 as Indigenous Peoples Day and approved a resolution that set the first Saturday of October as Indigenous Peoples Day.