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November 18, 2004
TO THE PRESIDENT AND MEMBERS OF THE
COUNCIL OF THE CITY OF PHILADELPHIA:
I am returning herewith as disapproved Bill No. 040779, passed by the Council on October 28, 2004. This Bill would transfer $6,776,000 in appropriation from Finance Department – Benefits to the Fire Department Class 100 appropriation, in violation of the FY05-FY09 Five-Year Financial Plan approved by PICA.
The FY05 Operating Budget approved by City Council included budget increases for a few line items, primarily benefit costs and the Department of Human Services’ needs-based budget, but the majority of City departments took significant budget reductions totaling $107.1 million. The budget of the Fire Department, which is the City’s third-largest department, received a reduction, approved by City Council, for the first time in fifteen years as part of this total reduction of $107.1 million. In the fifteen years that the Fire Department has received steadily increasing appropriations while other departments have taken cuts, the number of structural fires has dropped dramatically. In City Council testimony and briefings, and in the FY05-FY09 Five-Year Plan, the Fire Department described that this reduction would be accomplished by departmental restructuring that would reflect the significant citywide drop in structural fires, and an increased demand for emergency medical services, without diminishing public safety. The Five-Year Plan approved by PICA was balanced in each year based on the assumption that this restructuring would be achieved.
Abandoning the plan to restructure the Fire Department commensurate with the City’s fire service needs, as well as its financial resources, would create a $29 million hole in the Five-Year Plan. Subsequent to approval of the budget reduction by Council and PICA, the restructuring became the subject of a court case and labor grievance arbitration. The arbitration case is currently pending. A consultant has provided evidence to the arbitrator that the City’s restructuring plan would maintain fire safety within national standards. The arbitration process should be allowed to proceed without further legislative interference.
Departmental budget reductions of over $100 million in FY05 were made with the intent of maintaining quantifiable service levels wherever possible. The Fire Department restructuring would maintain service levels. The Administration believes, and its expert consultant agrees, that the restructuring will not impair public safety in any way. Although the Administration continues to seek new sources of operating efficiencies as we enter the FY06 budget process, at this time it is clear that this restructuring is the least harmful way of achieving the $6,776,000 in savings that this Bill seeks to restore to the Fire Department’s budget.
This Bill seeks to transfer needed funds from the Finance Department – Benefits appropriation as a stopgap measure that would force the Administration to cut jobs and services from other areas. The City Council approved this Fire Department reduction as part of the FY05 budget, when the Council was restricted by the Charter-mandated responsibility of producing a balanced budget and balanced Five-Year Plan. The Five-Year Plan approved by PICA, and the revised Five-Year Plan submitted earlier this week, are balanced based on manageable spending reductions like this Fire Department restructuring as well as significant reductions in staffing – a ten percent reduction in budgeted personnel from FY03 to FY09. Our cash flow margin is razor-thin through the end of this fiscal year. We are already considering layoffs to cope with this year and continuing financial difficulties in FY06, without being forced to take this appropriation from another part of the budget and give it to the Fire Department, where the experts in the field agree that it’s not needed. I can not approve this Bill and tie the hands of the arbitration panel that is currently considering this important matter.
Respectfully submitted,
John F. Street
Mayor
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