Sunday, August 30, 2015

Butkovitz too wants five-year plan rejected

City Controller Alan Butkovitz today added his voice to calls for the city's financial overseer, the Pennsylvania Intergovernmental Cooperation Authority (PICA), to reject the Nutter administration's five-year financial plan.

Butkovitz too wants five-year plan rejected


City Controller Alan Butkovitz today added his voice to calls for the city's financial overseer, the Pennsylvania Intergovernmental Cooperation Authority (PICA), to reject the Nutter administration's five-year financial plan.

Butkovitz objected to the plan's assumption of millions in labor cost savings, despite a recent costly arbitration award for firefighters.

The city has appealed the arbitration award, which the administration says would cost more than $200 million over the next five years and push the city's budget into the red. The five-year plan calls for $50 million in overall workforce savings, even though the city's blue and white collar unions, District Council 33 and 47, also have been due for new contracts since their old ones expired in 2009.

“There is no reasonable basis for the city to assume a favorable outcome in its appeal of the firefighters (IAFF) award,” Butkovitz said in a statement. “There is also no reasonable basis for the city to assume that there will be no added costs resulting from ongoing negotiations with unions representing the city’s non-uniformed workers.”

The five-member PICA board is scheduled to meet Thursday to vote on the plan. Last week, board Chairman Sam Katz expressed similar concerns about the plan, but refused to say how he would vote. Katz also said he was "uncomfortable" with the notion that a vote in favor of the plan would be seen as validation for the city's reasoning in its appeal of the firefighters award.

Brett Mandel, a tax activist and former and current candidate for Controller, also has been urging PICA to reject the administration's math. Rejecting the plan could jeopardize state funding for the city, but the most likely consequence simply would be the need to rewrite the plan.

The argument against budgeting for unknown wage and benefit increases is that doing so establishes a "floor" in negotiations with the unions.

Butkovitz, who is required by law to review the five-year plan, also questioned other city forecasts. Butkovitz said: 

-The Plan overstated expenditures for debt service over the life of the Plan by approximately $90 million.

-Forecasted FY13 revenue includes a $9 million request to PICA for design work for a new Police Department headquarters, city morgue and health offices in the City’s general fund. These expenditures should be budgeted and recorded in the City’s capital projects fund.

-The probability of additional large funding requests by the Philadelphia School District (District) in future years. The District’s current year deficit is approximately $282 million; a staggering amount which has it on the brink of insolvency.

“Regarding the School District’s financial situation, I want to reiterate my recommendation that the School District prepare a five year plan of its own which would require the approval of an independent authority,” said Butkovitz.

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The Philadelphia Inquirer's Chris Hepp, Tricia Nadolny, Julia Terruso, and Claudia Vargas take you inside Philadelphia's City Hall.

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