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Authorizing the Council Committee on Fiscal Stability and Intergovernmental Cooperation to hold hearings in order to fully examine and analyze the current and future financial condition of the City and to receive testimony from the Budget and Finance Directors, the City Controller and the Executive Director of the Pennsylvania Intergovernmental Cooperation Authority in an effort to provide guidance to City Council on prioritizing expenditures, balancing fiscal demands, and making strategic investments for the long-term health and viability of the City of Philadelphia.
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WHEREAS, The City's economic health and the success of the current Five-Year Financial Plan depend on a strong national economy; and
WHEREAS, The national economic downturn is already having a major impact on the City's finances and, according to the Fiscal Year 2001 Annual Report by PICA, "the City shows little preparedness for a general economic decline; and
WHEREAS, If tax collections continue at the growth rate demonstrated in the first quarter of Fiscal Year 2002, the City will end the fiscal year below budgeted levels; and
WHEREAS, The increased security response to threats of terrorism and the anthrax scare resulting from the September 11th attacks has generated significant unanticipated expenditures. Police over-time costs alone through October 18th amounted to over $760,000; and
WHEREAS, Due to these serious economic conditions, the City Administration has instituted a hiring freeze and has asked City Departments to prepare "cut-back scenario" budgets; and
WHEREAS, Police and fire fighter contracts expire on June 30, 2002, but the current Five-Year Financial Plan reflects no increase in these wages and benefits; and
WHEREAS, The City is quickly approaching its allowable debt limit which will greatly reduce future capital budget spending and will jeopardize infrastructure repairs and replacement; and
WHEREAS, PGW continues to have severe financial problems which have been exacerbated by the current mild winter and the disapproval by the PUC for a recent rate increase; yet, the current Five-Year Financial Plan assumes that PGW will continue to pay the City $18 million each year and that PGW will repay the $45 million loan from the City in Fiscal Year 2003; and
WHEREAS, The School District of Philadelphia projects a current deficit as high as $300 million and a City-State negotiated resolution to the long-term educational and fiscal stability of the School District has yet to be crafted, but is most likely to call for a significant increase in City funding -- perhaps as much as $75 million or more; and
WHEREAS, The Mayor is asking Council to approve a bond authorization for his Neighborhood Transformation Initiative which would require a dedicated payment of $20 million per year for the next thirty years; and
WHEREAS, Given the weakening national, state and local economies, the unanticipated expenditures resulting from the September 11th terrorist attacks, the uncertainty of up-coming labor negotiations, and the severe fiscal condition of PGW and the School District, City Council and the City Administration should proceed cautiously on any new spending initiatives and should carefully evaluate all current and projected revenues and expenditures in order to make informed decisions regarding budgetary priorities and strategic investments for the future fiscal health of the City; now therefore
RESOLVED, BY THE COUNCIL OF THE CITY OF PHILADELPHIA, That the Council Committee on Fiscal Stability and Intergovernmental Cooperation is authorized to hold hearings in order to fully examine and analyze the current and future financial condition of the City and to receive testimony from the Budget and Finance Directors, the City Controller and the Executive Director of the Pennsylvania Intergovernmental Cooperation Authority in an effort to provide guidance to City Council on prioritizing expenditures, balancing fiscal demands, and making strategic investments for the long-term health and viability of the City of Philadelphia.
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