Katz, a former mayoral candidate, said the second-term Nutter was in the "best position" to do deals with AFSCME District Councils 33 and 47, the city's blue- and white-collar municipal unions representing about 13,000 nonuniformed workers.
The two unions have been working without a contract since 2009, after agreeing to a one-year extension in Nutter's first year in office.
"This administration is in a very unique position in that it has been reelected. It didn't get reelected with strong labor support," Katz said. "In the next election, everybody running for mayor is going to want to get labor support."
Under the 1991 law that created PICA, the city must submit a balanced, five-year budget annually to the authority.
The PICA board delayed approving this year's plan because the administration did not include money to finance a contract the firefighters' union won this summer through arbitration.
Administration officials later submitted an addendum showing the $200 million in cuts they said would be necessary to pay for the contract over the next five years.
The city is appealing the award, while the union is suing to force the administration to honor it.
Katz said he believed the city could find the money to cover the award without making those difficult cuts.
The firefighters also have been without a new contract - and a raise - since 2009. Unlike other municipal employees, firefighters and public safety workers are barred from striking. Their contract disputes must be settled through arbitration.
Bill Gault, president of the Philadelphia Firefighters Union, said he was disappointed that PICA approved the five-year plan and said he hoped Nutter "sees the light."
"There's money. We've proved there's money," he said.
The five-member PICA board approved the plan Wednesday by a 4-1 vote, with member Sam Hopkins voting against. Hopkins said he objected to Nutter's simply submitting a list of cuts to cover the firefighters' award.
"It's just a list. It's not incorporated into the plan in any way," he said. "I don't think it should be accepted as such, and I think it's going to haunt us for many years."
Contact Troy Graham
at 215-854-2730 or firstname.lastname@example.org, or follow on Twitter @troyjgraham.