City Finance Director Rob Dubow and Treasurer Rebecca Rhynhart briefed City Council this morning on the fiscal crisis facing the city.
Last week, Mayor Nutter announced that the city faces a budget shortfall of up to $850 million over the next five years. He has repeatedly said that “everything is on the table”, including layoffs and service reductions, when it comes to how the city will scale back. Nutter plans to release a comprehensive financial plan later this month.
Before a number of Council members and staffers, Rhynhart and Dubow talked mostly about the fact that the bond market -- the market that buys up municipal debt -- has been frozen for weeks, preventing cities and states from borrowing. And rising interest rates are making standard borrowing transactions much more expensive. (Check out this primer on the bond market from last week’s Daily News.)
The city was planning to borrow $350 million this fall, to cover bills until tax revenues come in in the New Year. But currently, it’s not clear if they can get that done.
“I think if the market doesn’t open up in a few months, by December, there’s going to be a wide scale problem that needs to be addressed by cities across the country," Rhynhart said.
Dubow would not get into specifics of the financial plan expected later this month. “We’re still figuring out what we’re going to do,” he said.
Philly is not the only city with looming money problems. In Chicago, Mayor Richard Daley yesterday ordered a “partial shutdown” of city government for three days this year and three days next year to save cash.