PICA promises closer looks at pensions, taxes

Posted: January 04, 2014

The authority that oversees the city's finances plans to have a greater say in the coming years on Philadelphia's most vexing challenges.

The Pennsylvania Intergovernmental Cooperation Authority (PICA) said in its annual report, released this week, that it would seek to publish a series of studies on issues such as the underfunded pension system and tax enforcement, and hold forums to publicize the findings.

In the process, PICA would "broaden its oversight" to discussions of whether the city's financial planning is adequately addressing those concerns.

PICA Chair Sam Katz says he hopes to build the kind of agreement around issues that would help shape the discussion in the 2015 mayoral campaign.

"We have enough studies," he said Thursday. "What we need is consensus around what's best to do. That doesn't always mean we'll do what people like."

PICA, governed by a five-member board, has produced studies on thorny issues in the past. Katz said now he would like to get the city's major institutions and think tanks "on the same page" to promote fixes for a wide range of issues.

"Whether that's possible, I don't know," he said. "Just getting PICA on that page may not be possible."

PICA already has one report in the pipeline on the city's pension system for its employees, which was only 48 percent funded in July 2012. Katz said the report, which should be ready in the next few months, would be "more of a risk analysis."

"What drives risk to the pension fund?" he said. "They may all be obvious, but we quantified them."

Katz also said a 2012 study on the Philadelphia Fire Department - a 289-page report that cost $219,000 - would serve as a model for future PICA work.

Though outside consultants wrote that report, they took input from a steering committee that included administration and labor representatives.

PICA was created as part of a 1991 bailout of the city's finances. Since then, the city has been required to submit a balanced five-year financial plan to PICA each year. The agency's oversight role is slated to expire in 2023, when bonds issued as part of the bailout are set to be retired.

Katz, a two-time Republican mayoral candidate, has waded into policy discussions from his PICA chair before. (Katz, who has been producing a series of documentary films on Philadelphia history, said he is "very busy" and not contemplating another run for mayor.)

In 2012, he threatened to disapprove future five-year plans if the city did not settle contract disputes with firefighters and the two unions that represent nonuniformed city workers.

Though the firefighter contract was settled, nonuniformed workers still do not have a deal. PICA nonetheless unanimously approved the five-year plan last year.

Katz said PICA's new long-term goals reflect his thinking - the authority's newly named executive director, Harvey Rice, doesn't begin work until later this month. "I'm pretty confident Harvey shares a similar outlook as to what PICA is and can be," Katz said. "He's going to have the chance to do this his way."

Katz said he wants to make sure future PICA studies do more than "sit on a shelf."

"It strikes me that no study is of any value if it doesn't have the imprimatur of those who have to make the changes," he said.

City Finance Director Rob Dubow, the Nutter administration's most frequent emissary to PICA, welcomed the efforts.

"Some of these are really important issues," he said. "It helps to shine a light on them."


tgraham@phillynews.com

215-854-2730 @troyjgraham

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