City Controller to fiscal watchdog: Reject Mayor Nutter's five-year plan

City Controller Alan Butkovitz called on Philly's fiscal watchdog to reject Mayor Nutter's five-year plan because city coffers are projected to reach dangerous lows in future years.

The Pennsylvania Intergovernmental Cooperation Authority (PICA) will meet tomorrow to vote on the plan. But, Butkovitz is concerned about the city's steadily declining fund balance which is projected to reach $8.5 million by 2017.

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Butkovitz

"Any significant deviation because of unforeseen circumstances such as litigations, severe weather or future unexpected commitments to the School District of Philadelphia could drastically impact city operations," Butkovitz said, adding the assumptions are not reasonable. 

PICA Chairman Sam Katz said Butkovitz' concerns raise red flags, but said he hasn't made up his mind yet on how he'll vote on the plan.

Butkovitz said that the city may not collect $536.6 million in fiscal year 2014 and $2.26 billion over the remainder of the plan in property-tax revenue if a large number of tax appeals under the new property-tax system are successful. He also noted that the updated plan does not include potential higher costs for the city's blue-and-white collar unions who have been without a contract since 2009.

The Nutter adminisitration is comfortable with the plan submitted to PICA.

"It heeded the Controller's call to specify increases to labor costs. This plan does to the tune of $300 million in additional wages," said mayoral spokesman Mark McDonald, adding this plan is stronger than last year's and the administration hopes PICA approves it.

A vote on the plan was delayed awaiting the outcome of Nutter's long-running appeal of the firefighters' arbitration award. Nutter withdrew his appeal more than a week ago.

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