Phila. report offers 4 ways to repair BRT

Saying that Philadelphia's property-tax system is confusing and inequitable and suffers from "damaged public perception," a city task force has sent city leaders a road map for reform - including an option to blow it up and start over.

The study on the Board of Revision of Taxes was ordered by Mayor Nutter and City Council after an Inquirer series on the agency in May.

It confirms the BRT has serious problems, including "inconsistent" assessment practices, possible conflicts of interest, and property values that are stacked against low-income property owners.

"Appropriately, there has been a public outcry in response to the issues raised . . . about the mismanagement of the BRT," says the draft report, obtained by The Inquirer yesterday.

One national expert who reviewed the report said it was clear the city should not settle for minor tweaks in BRT operations.

"There's no way to redeem it. It's just got to be put in the toilet and flushed away," said Peter Davis, a national expert on property-tax systems.

"Whatever it takes, the system must be rebuilt in order to restore the public trust in local government," said Davis, a Kansas-based consultant who's done work for Philadelphia's suburban counties.

Charlesretta Meade, the BRT's chairwoman, and other board members did not respond to requests for comment.

The report is no guarantee that city leaders will actually tackle the prickly issue of fixing the agency, which for decades has served as a source of well-paying board posts for the politically connected, and patronage jobs for the party faithful.

About 80 BRT positions are reserved for clerical workers and funded by the city school district, a maneuver that allows those workers to hold city jobs but still be active in politics.

Most of those jobs are under the control of U.S. Rep. Robert A. Brady, the city's influential Democratic leader. Brady declined to comment.

In an interview yesterday, Nutter cautioned that the city has to move carefully - a contrast to his stern words of the spring, when he promised "massive change."

"This is a significant undertaking. This is not somebody trying to operate a water-ice stand," Nutter said.

"We're only going to get one opportunity to do this well and do this right, and we should be guided by that principle first."

Yet the leader of a watchdog group said nothing is likely to change without a strong push from Nutter.

"It comes down to the mayor's leadership and whether he has the will and the skills to do it," said Zack Stalberg, of the Committee of Seventy.

The 85-page report, by a task force of City Council staffers and officials in the Nutter administration, is not a ringing call to remake the BRT.

In fact, Council made sure that it wasn't. The leadership instructed the task force to offer no direct recommendation on how to fix the agency - only alternatives.

One of those possibilities - "Option A" - would make only modest changes, such as improved training for assessors.

Other options would leave the agency intact but allow the mayor and Council to pick the members; or split the BRT into two agencies, one to set values and the other to handle appeals.

"Option D" would wipe out the BRT and put assessments in the hands of city leaders or a new agency. The last three ideas would require approval by city voters, the task force noted.

The study also lays out best practices in other cities, and analyzes the impact of the BRT's "Actual Value Initiative" or AVI, the ongoing attempt to set property values at their real worth in the marketplace.

" . . . It is an undeniable fact that for many years, the BRT's assessments have not kept pace with changes in the Philadelphia real estate market," the study says.

The study noted that the success of AVI depends on the accuracy of the BRT's computer models - still an open question.

Even without recommendations, the memo could make it harder for Council and Nutter to settle for the BRT status quo.

In its analysis of the pros and cons of each option, the study seems to take the position that the BRT needs a real overhaul, and might not be worth saving.

The negatives are frequently variations on the theme that change is hard and might require an adjustment period to work.

For instance, when considering the choice of abolishing the BRT, the task force concludes on the pro side that it would "increase public confidence" and mean that the "city seizes opportunity for fundamental change."

On the con side: If the city kills the BRT, it would have to create a new system to replace it - and possibly delay the AVI project.

With the staff-level work on BRT reform drawing to a close, the focus now shifts to Nutter and City Council, who have a politically fraught and technically difficult job ahead of them.

For Nutter, BRT reform is shaping up as a crucial test of leadership. He won office with a hard-won reputation as a politician who would take on entrenched interests.

"It's a minefield, but Mayor Nutter was elected as the guy who would reform City Hall. That's what people thought they were getting," Stalberg said.

For Council members, the risks are also considerable. Do too little or nothing at all, and they could be tarred - fairly or not - as party hacks unwilling to give up patronage positions in exchange for an equitable property-tax system.

Do too much, and they could end up alienating party leaders, who still exercise substantial influence on election day.

"Practical political considerations are not in play yet," said Councilman Bill Green, referring to anticipated pressure from party leaders to preserve BRT patronage positions.

Another wild card is the reaction of taxpayers who have benefited for years from the agency's inaccurate assessments, paying less than they should because the BRT sets their values too low.

When and if the higher tax bills arrive, residents could take out that anger on Council, the mayor, or both.

"It's a situation where you're damned if you do, and double damned if you don't," said Council President Anna C. Verna.

In interviews this week, Nutter, Verna, and other Council leaders said reform was important - but so was caution.

Nutter's tone, in particular, was less urgent than it was last spring, when he abruptly called for the resignation of the agency's entire board.

When asked if he still thought the BRT's board members should resign, Nutter dodged the question.

"I haven't talked about that in recent times," he said. "I'm not going to revisit that particular issue at the moment."

The mayor said he did not know when BRT reforms would be enacted.

City Council, though, does have a rough timeline for getting something done on BRT: May 2010, a deadline driven by the city's election cycle.

Any large-scale BRT reforms will require a ballot referendum, and because Council opted not to convene special summer sessions to consider BRT reform, there is now not enough time to hold hearings, craft legislation, and get a measure on the ballot for the November election.

With the next election in May, it's not clear that Council has the appetite to make BRT an immediate priority. But some members say it should be the top item on their agenda.

Councilman Frank DiCicco, for instance, plans to introduce a resolution in City Council tomorrow that would authorize BRT hearings.

DiCicco also sent a letter to the BRT complaining about notices of assessment hikes sent last week to a small percentage of property owners, including some in his district.

"I would hope that we could resolve these concerns amicably and fairly," DiCicco wrote, adding that in the meantime he would "aggressively explore" legislation to rein in the BRT.

The note was CC'd to Brady.

In addition to DiCicco, eight Council members contacted by The Inquirer said they favored some manner of BRT reform. Though there was little consensus on how much change would be necessary, it was nonetheless clear that Council's disdain for the BRT now crosses party and factional divides.

"You couldn't commit more errors in a game than they have," said Republican Councilman Frank Rizzo.

"No one has faith in anything they're doing," echoed Councilman James F. Kenney.

Philadelphia's school board - which relies on the city for 60 percent of its funding - also has been slow to tackle the patronage system at BRT.

School money is crucial to preserving that system. Because the 80 workers - nearly half the BRT staff - are on the school district's payroll, not the city's, they can continue to be active in politics.

The task force report says that moving the workers off the school district payroll would cure the public perception "that these employees are patronage hires who do not add value."

On the con side, it said, they would have to pass a Civil Service test to keep their jobs.

When the School Reform Commission approved its budget in May, it moved $3.2 million of the $4.28 million budgeted for the BRT workers into another account.

School district spokesman Fernando Gallard said the district hopes the BRT workers will be on the city payroll after September.

If not, he said, money will be moved back into payroll funds so the workers can continue collecting paychecks.

"We cannot stop funding of the work they are doing," he said.

Helen Gym, president of Parents United for Public Education, said there's no reason why the district should continue supporting the patronage jobs at BRT.

"With the crisis the school district faces, there are no options," she said, noting that the district is considering layoffs of nurses, counselors, and prekindergarten teachers.

"Every dollar counts. If we care about what happens to kids, the school district needs to focus on essential services for children."