Butkovitz calls for rejection of Nutter’s five-year plan

Posted: August 09, 2012

Philadelphia City Controller Alan Butkovitz called Wednesday for the city's financial overseer to reject Mayor Nutter's five-year budget plan because it does not account for a recent costly arbitration award for firefighters.

The Pennsylvania Intergovernmental Cooperation Authority (PICA) plans to meet Thursday to consider the plan.

In more than two decades as financial overseer, PICA has never voted down a five-year plan. But last week, PICA Chairman Sam Katz raised concerns similar to those Butkovitz highlighted.

Katz would not say whether he would vote against the plan. The four other members of the board either declined to comment or did not return calls last week.

The city has appealed the firefighters' arbitration award, which the administration says would cost more than $200 million in wage and benefit increases over the next five years, pushing the budget into the red.

Katz also said he was uncomfortable with the idea that approving the plan would bolster the city's contention that the contract was unaffordable.

The plan calls for $50 million in overall workforce savings. The city's blue- and white-collar unions, AFSCME District Councils 33 and 47, had their contracts expire in 2009.

Butkovitz said there was "no reasonable basis" to assume the city would prevail in its appeal of the firefighters' award or that there would be "no added costs" from new D.C. 33 and 47 contracts.

He also questioned $90 million the city budgeted to pay off debt from bonds not yet issued. Those bonds, to finance needed infrastructure improvements in the final years of the plan, would add from 20 percent to 30 percent to the city's debt, Butkovitz said.

"Is it probable that a city this tightly squeezed is going to take on 20, 30 percent more in borrowing?" he asked. "If they were serious enough about doing it, wouldn't they do it right now?"

Finance Director Rob Dubow said the bonds were not "extraordinary issues."

"These are issues we do in the normal course of business to keep up with our infrastructure," he said.

The argument against budgeting for unknown wage and benefit increases is that doing so establishes a "floor" in negotiations. Butkovitz, who is required by law to review the five-year plan, acknowledged that issue and said the city ordinarily would get a pass on budgeting for increased labor costs when negotiations are starting.


Contact Troy Graham at 215-854-2730, tgraham@phillynews.com, or follow on Twitter @troyjgraham.

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