Philadelphia City Controller Alan Butkovitz yesterday called for greater fiscal oversight of the school district in response to its uncertain finances.
He said he was troubled that Fitch Ratings - one of three major bond-rating agencies - had recently lowered the district's underlying bond rating.
Though it's still investment-grade, if the district's bond rating is lowered again it would fall to junk-bond status, making it difficult for the district to fund construction projects.
Butkovitz proposed that the Legislature and City Council grant him "pre-audit authority" over the district's budget; that the Pennsylvania Intergovernmental Cooperation Authority be empowered to oversee district finances as it does the city's; and that the district provide him, the mayor and the governor with all the information the district provides to the bond-rating agencies.
While the district's chief financial officer characterized the bond downgrade as having little impact on day-to-day operations, she said it could slightly change the cost of borrowing money.
More pressing, said Chief Financial Officer Folasade Olanipekun-Lewis, is a budget deficit totaling about $183 million - $30 million from the 2005-06 fiscal year, and approximately $153 million projected for the upcoming 2007-08 budget year that begins July 1.
"We are now looking at everything and making decisions about how we can right-size our budget in relation to our projected revenue stream," said Olanipekun-Lewis.
She said the district already provides Butkovitz with all the information it gives the bond-rating agencies, information that is also on the district's Web site. His two other proposals, she said, are not for the district to answer.