Philadelphia City Council Committee on Finance, 1 May 2023

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From YouTube: Committee on Finance 5-1-2023

Description

The Committee on Finance of the Council of the City of Philadelphia held a Public Hearing on Monday, May 1, 2023, at 10:00 AM to hear testimony on the following items:

230186
An Ordinance authorizing an increase in the non-electoral indebtedness of the City within the Pennsylvania constitutional limit; authorizing the Bond Committee to sell bonds at public or private negotiated sale, to provide funds toward various capital municipal purposes; providing for appropriations to the Sinking Fund Commission for the payment of such bonds; and authorizing agreements to provide credit or payment or liquidity sources for the bonds in connection with issuance of the bonds, and certain other actions.

230250
An Ordinance amending Ordinance (Bill No. 190935) of the Council of The City of Philadelphia, approved by the Mayor on December 18, 2019, to authorize the refunding of additional series of outstanding general obligation bonds; authorizing the purchase by The City of Philadelphia, from time to time, of any of its outstanding general obligation debt; authorizing the amendment, novation or termination, from time to time, of any agreement to manage interest costs incurred in connection with The City of Philadelphia’s general obligation debt; further amending said Ordinance (Bill No. 190935) to authorize the payment by The City of Philadelphia from proceeds of general obligation refunding bonds of any required settlement payments and related required amounts in connection with the termination of any such agreements to manage interest costs and additionally authorizing the payment of such settlement payments and related amounts from other legally available funds; and authorizing certain other actions.

230251
An Ordinance authorizing and approving (i) the execution and delivery of one or more supplements to an existing service agreement (or a new service agreement on substantially the same terms) between The City of Philadelphia and the Philadelphia Redevelopment Authority relating to a comprehensive neighborhood transformation program; (ii) the issuance by the Philadelphia Redevelopment Authority, from time to time, of bonds, notes or other evidence of indebtedness to refund bonds, notes or other evidence of indebtedness issued to refinance such neighborhood transformation program; and (iii) the obligation of The City of Philadelphia to pay the amounts payable under such service agreement; authorizing certain City officers to take certain actions required to issue bonds, notes or other evidence of indebtedness; confirming covenants that The City of Philadelphia will make necessary appropriations and payment each year to provide for the amounts due under such service agreement as so supplemented; and making such covenants with respect to such new service agreement; all under certain terms and conditions.

A

B

Thank you and good morning today is the committee on finance, Monday, May, 1st 2023, and the public hearing and I will make the following announcements: do the continuing threat to Public Health from covid-19 city council committees are currently meeting remotely? We are using Microsoft teams to make this remote hearing possible instructions for how the public May, View and offer public testimony and public hearings of council committees are included in the public hearing, notices that are published in The Daily, News, inquire and legal Intelligencer prior to the hearings and can also be found in phlcouncil.com.

B

I now note that the Hours come Mr Logano. Will you please call the roll to take attendance for the members in attendance? Please say a few words, so your image may be displayed on the screen.

C

Councilwoman Bass.

A

Good morning, I am president. Thank you very much.

C

Councilman Johnson.

C

Councilman Jones.

C

Councilman squilla.

B

Good morning Mr chair president.

C

Yes, councilman Thomas.

B

Good morning, Mr, chair I'm president, thank you requirement, committee president, and the hearing is now called to order. This is a public hearing on the committee on finance regarding bills. Number two three.

B

0186-230-250 and 230-251: please read the titles of the bills bill.

C

Number excuse me: Bill number, two: three: zero one: eight six authorizing an increase in the non-electoral indebtedness of the city within the Pennsylvania constitutional limit, authorizing the bond committee to sell bonds at public or private negotiated sale to provide funds toward various Capital Municipal purposes, providing for Appropriations to the sinking fund commission for the pavement of such bonds and authorizing agreements to provide credit or payment or liquidity sort resources for the bonds and connections with issuance of the bonds and certain other actions.

C

Okay, bill number: two: three: zero: two: five: zero amending ordinance bill: number 190935 of the Council of the city of Philadelphia, approved by the mayor on December 18, 2019., to authorize the refunding of additional series of outstanding General obligation, bonds authorizing the purchase by the city of Philadelphia from time to time of any of its outstanding General obligation. Debt authorizing the amendment Novation or termination from time to time of any agreement to manage interest costs incurred in connection with the city of Philadelphia's General obligation.

C

Debt further amending said ordinance bill number 190935 to authorize the payment by the city of Philadelphia from proceeds of General obligation, refunding bonds of any required settlement payments and related required amounts in connection with the termination of any such agreements to manage interest costs and, additionally authorizing the payment of such settlement.

C

Payments and related amounts from other legally available funds and of authorizing certain other actions and Bill number 230251 authorizing and approving the execution and delivery of one or more supplements to an existing service agreement or a new service agreement on substantially the same terms between the city of Philadelphia and the Philadelphia Redevelopment Authority related to a comprehensive neighborhood transformation program, the issuance by the Philadelphia Redevelopment Authority from time to time of bonds, notes or other evidence of indebtedness to refund bonds, notes or other evidence of indebtedness issued to refinance such neighborhood transformation program and the obligation of the city of Philadelphia to pay.

C

The amounts payable under such service agreements authorizing certain city officers to take certain actions required to issue bonds, notes or other evidence of indebtedness, confirming covenants that the city of Philadelphia will make necessary. Appropriations and payments each year to provide for the amounts due under such service agreements, as so supplemented and making such covenants with respect to such new service agreements, all under certain terms and conditions.

B

Easy for you to say thank you Sean. Thank you before we begin the hearing. Testimony from the witnesses we have for today, everyone who has been invited to the meeting to testify should be aware that public hearing is being recorded because the hearing is public. Participants and viewers have no reasonable expectation of privacy. By continuing to be in the meeting, you are consenting to being recorded additionally prior to recognizing members for questions or comments they have for the witnesses.

B

I would know for the record at this time that we'll be using the chat feature available on Microsoft teams to allow members to signify that they wish to be recognized in order to comply with the sunshine act. The chat feature must only be used for that purpose.

B

Please call the panel, for uh we have to testify this morning for the first bill.

C

Can we please have pavare brown on Bill number 230186.

D

Director for Capital.

B

Thank you, Devar just uh proceed with your testimony. All.

D

Right good morning, chairperson Escuela and members of the finance committee, my name is tavaria brown, Deputy budget director and I'm here today to testify in support of Bill number 230186, which was introduced on March 9th 2023. The purpose of this bill is to obtain approval from city council to authorize an increase in the non-electoral indebtedness of the city within the Pennsylvania constitutional limit. This bill requests an increase in indebtedness and an amount not to exceed 193 million dollars to fund the city's proposed fiscal 2024 capital budget.

D

As of February 23rd 2023, the city's legal debt limit was 16.257 billion dollars and the amount of debt applicable to that limit was 2.423 billion dollars. As a result, the city has a debt margin of about 13.834 billion dollars. The proposed fy24 capital budget for new general obligation bonds is approximately 185 million dollars.

D

The proposed ordinance includes the new Geo loan amount, with an additional four percent for cost of issuance. This brings the loan amount. Approximately uh the loan amount to approximately 193 million dollars. The loan authorization, if approved, would Finance capital projects included in the f524 budget and classified for the following purposes and in the following aggregate amounts.

D

The administration proposes the following amounts: Transit, five million nine hundred; ninety four thousand dollars streets and sanitation; 51 million four hundred eighty four thousand municipal buildings; 79 a million one hundred four thousand parks, recreation and museums, 41 million five hundred fifty two thousand economic and Community Development, 14 million 866 000.

D

For a total of 180 193 million dollars, I respectfully request that you report bill number 230186 out of committee with a favorable recommendation. This concludes my testimony. I'll be happy to answer any questions that the committee might have at this time.

B

Thank you for your testimony. um Are there any questions or comments from members of the committee.

B

Hearing none. Thank you. So much, um no further questions for the members, the there being no other uh Mr mcmonagle. Will you please uh is there anybody else here to testify on this bill.

B

Seeing none thank you so much Mr Ronald, please read the title and the next person testify on the following bill.

C

Yes, can we please have Jacqueline Dunn on Bill number, 230250 and 230-251.

B

Just state your name again for the record and pursue of your testimony great.

E

Thank you. Thank you good morning, chair Escuela and members of the finance committee. My name is Jackie Dunn City, Treasurer and with me are Natalia Dominguez Buckley, the first Deputy City Treasurer and Matt Bowman Deputy treasurer for debt I'm here to testify in support of Bill 230-250 Bill 230-250 amends Bill 190935 to authorize the refunding of additional series of outstanding General obligation, bonds and broaden the type of refundings or refinancing of Geo bonds that the city May undertake.

E

This would give the treasurer's office the timely ability to pursue refundings of approximately 1.74 billion of outstanding General obligation, bonds that were previously issued with Council approval between the years 2009 and 2021.

E

This authorization would allow the treasurer's office to pursue refunding opportunities for future Debt Service Savings in accordance with the city's debt management policy, when market conditions permit. In the current rate environment, there are no immediate opportunities to pursue traditional, fixed rate refunding of any Geo bonds for Debt Service savings, but this ordinance positions the city to respond timely in the future. In addition, the ordinance provides authorization for the city to pursue additional refinancing opportunities, including tenders or exchanges, and the termination of existing swaps, which were not provided for in the prior ordinance.

E

A tender is when the city repurchases a select amount of previously issued bonds directly from bondholders and issues lower cost debt to fund the purchase value. If the city secures sufficient bondholder participation, this tender option can be another efficient way to achieve Debt Service savings.

E

A swap termination is when the city exits a swap by refunding the outstanding variable rate debt and the associated swap with fixed rate debt unwinding, a swap can result in either the city owing a payment to the counterparty or the city, receiving a payment and effectively achieving savings, depending on the value of different interest rates. At the time of the transaction, the city is currently monitoring one opportunity to terminate the city's remaining Geo Series 2009 B, swap for savings, which would further de-risk the debt portfolio.

E

In short, this ordinance would expand the toolkit we have available as we seek to reduce future debt service costs for the city. These tools allow the city to be nimble and react to changing market conditions when it would benefit the city economically. Thank you for your consideration and the opportunity to testify I'm happy to answer any questions at this time and chair. Would you like me to read the testimony for the second bill as well.

B

Yeah, why don't we do both? If that's fine, I I, don't there is no questions here? So if we'll just continue check just say your name again and then start no.

E

Problem good morning, chair school and members of the committee, I'm Jackie, Dunn, City Treasurer and with me again, our Natalia Dominguez Buckley for Deputy City, Treasurer and Matt Bowman, treasurer of Deputy treasurer for debt I'm here to testify, and supportive Bill 230-251 Bill 230-251 authorizes the Director of Finance to authorize the Philadelphia Redevelopment Authority or the pra to execute and issue bonds to refund outstanding pra City service agreement, revenue bonds, Series 2012 that were originally issued as a part of the neighborhood transformation Initiative for savings currently There's an opportunity to refund these 2012 bonds for Debt Service Savings.

E

In line with our debt management policy, the total refunding par size is approximately 24 million. We plan to issue the refunding bonds at the same time as the next round of the neighborhood preservation initiative or NPI bonds this spring pursuing their funding. At the same time as the NPI new money transaction allows us to be more efficient with transaction costs. Should this ordinance pass, the bonds are tentatively scheduled to price on May, 17th and close on May 25th.

E

The senior manager for the bond transaction is loop capital markets, a minority-owned Investment Banking firm that has successfully sold multiple prior transactions for the city. Thank you for consideration and the opportunity to testify, given the upcoming financing schedule, I'd also request suspension of the rules to allow for first reading, at the next meeting of council I'm happy to answer any questions that you may have at this time.

B

Thank you for your testimony and um is there any questions on either bill, 230250 or 230-251?

B

Is there anyone else here to testify on bills? Two three: zero: two: five zero or two three zero: two five one!

B

Well: okay! Well! Thank you. um So much for your testimony.

B

um Hearing no further questions from members from the last panel um and there being no other panels to testify we'll take a brief, Break, um Mr, mcmonagle and uh Darion. Do we know if there's any public commenters.

C

I have no enlisted for public comment. Mr chair, okay,.

B

Since there's no public commenters- uh and nobody else will be testifying on this bill, I'd like to thank you for your testimony um that will conclude the hearing and now we'll go into a public meeting there being no further questions from Members. The committee and no other Witnesses testify. I will ask that there is anyone else present in hearing who is named.

B

We have failed to call, and that wishes to offer testimony of the bill considered today.

B

Barry Nunn I want to thank all the panels and Witnesses for their participation. Today we value our opinions. I now invite all panelists and witnesses to please disconnect from the meeting before we go into our public meeting. We will now pause the proceedings briefly as multiple participants leave the hearing.

B

This concludes a public hearing for the committee. We will now go into a public meeting. Consider the accident to be taken for the bills before the committee today, we'd like to pause for one second,.

B

That thank you so much. We're now convened to a public meeting and call the roll Mr mcmonagle We Now call the roll for members who are into Finance.

C

Councilwoman Bass.

A

Thank you, Mr chairman I'm still present.

C

Councilman Johnson councilman Jones.

C

Councilman squilla councilman.

A

C

B

Thank you all that as a quorum and the chair would for the for. The public meeting will now recognize. Councilmember bass for emotional bill number 230186.

A

Thank you, Mr chairman I move. The bill. Number 230-186 be reported from this committee with a favorable recommendation and further move that the rules of council be suspended to permit first reading of this bill at the next session of council.

B

Second, thank you. The chair notes for the record councilmember Thomas seconds the motion. It has been moved and properly. Second, at the bill number 230186 be approved. All those in favor of the motion will signify by saying aye aye those clothes the eyes have it. The motion carries bill. Number 230186 be reported from this committee with a favorable recommendation and further move that the rules accounts will be suspended as permit the first reading of this bill at the next session of council.

B

The chair now recognizes councilmember bass for emotional bill number, two: three: zero: two: five: zero.

A

Thank you, Mr chairman I move that bill number two: three zero: two five zero be reported from this committee with a favorable recommendation and further move that the rules of council be suspended to permit first reading of this bill at the next session of council.

B

Second, put your note notes for the record council member Thomas seconds. The motion has been moved and properly. Second, that bill number two three zero, two five zero be approved, all those in favor. The motion will signify by saying aye all right. Those opposed the eyes have it, and the motion carries bill. Number two: three: zero: two: five: zero.

B

We reported from this committee with a favorable recommendation and further move that the rules account to be suspended to submit the first reading of this bill to the next session to cancel the chair now recognized the councilman bass for emotional bill number, two: three: zero: two: five one.

A

Thank you, Mr chairman I move that bill number 230-251 be reported from this committee with a favorable recommendation and further move that the rules of council be suspended to permit first reading of this bill at the next session of council.

B

Second, chair notes for the record councilmember Thomas seconds the motion: it has been moved and properly seconded the bill. Number two: three zero, two five one be approved. All those in favor of the motion will signify by saying aye aye opposed eyes. Have it the eyes have it. The motion carries bill number two: three zero. Two five one be reported from this committee with a favorable recommendation and further move that the roles accounts will be suspended as to admit the first reading of this bill, the next session to cancel that will conclude our meeting today.

B

Thank all the members for joining I know it's busy time uh and I really appreciate your attendance. It concludes the business before the committee on finance. Everybody have a great day. Thank you.

A

Thank you. Take.

B