Sunday, February 1, 2015

City Carefully Watching Cash Flow

As the city anxiously awaits a Sept. 8 vote on legislation that would provide budget relief, Finance Director Rob Dubow says he is carefully watching the city's bank balance.

City Carefully Watching Cash Flow

As the city anxiously awaits a Sept. 8 vote on legislation that would provide budget relief, Finance Director Rob Dubow says he is carefully watching the city's bank balance.

"As you know, our cash flow situation is pretty tight," Dubow said today. Last month, the city started withholding most vendor payments in an effort to preserve cash. Only payroll, benefits, debt service and payments deemed emergencies are being made at the moment.

Dubow said that because they are withholding cash, the city should be able to last several months. But he stressed that they hope state relief will happen soon.

Next week, the state House of Representatives will vote on House Bill 1828, which would allow the city to temporarily raise the sales tax and defer some pension payments. Those items -- worth $700 million over five years -- are key to balancing the city budget. If the state doesn’t approve the city's budget requests, the mayor will have to implement a dire budget that would prompt layoffs of 3,000 city workers.

But in addition to the hold-up on HB 1828, the city has been strained on two other financial fronts, Dubow said. The unresolved state budget is holding up reimbursements that the city counts on for social services provided. And because the city budget is in flux, officials have been unable to do some standard short-term borrowing to cover bills.

If HB1828 passes, the city should be able to borrow money, Dubow said. But state reimbursments won't happen until the state budget is resolved, which means the city's finances will still be under some pressure.

About this blog
William Bender, a Drexel graduate who landed at the Daily News in 2007, has covered everything from South Philly mobsters to doomsday hucksters. He occasionally writes about local food trucks and always eats everything on his plate, whether it be a bloody rib eye or a corrupt politician. E-mail tips to benderw@phillynews.com
 Follow William on Twitter

Jenny DeHuff is a 2005 graduate of the University of Rhode Island, where she cut her teeth in journalism. A South Philly transplant from New England, she joined the Daily News City Hall Bureau in 2013. For the past several years, she has worked as an investigative reporter exposing corruption in suburban politics, covering sometimes ghastly criminal court cases and following the people’s money and how its spent. In addition to being a dogged news hound, she enjoys reading and writing about travel, animals, Irish whiskey and aviation. E-mail tips to dehuffj@phillynews.com
 Follow Jenny on Twitter.

David Gambacorta, has been a reporter with the Daily News since 2005, covering crime, police corruption and all of the other bizarre things that happen in Philadelphia. Now he’s covering the 2015 mayor’s race, because he enjoys a good circus just as much as the next guy. He’s always looking to get a cup of coffee. Send news tips and other musings on life to gambacd@phillynews.com
 Follow David on Twitter

PhillyClout Team
Also on Philly.com
Stay Connected