March 6, 2014
MAYOR Nutter, who appears before City Council tomorrow to present his budget proposal, is a man on a roll. This week, he announced a deal to sell the city-owned Philadelphia Gas Works for $1.86 billion, a top price that will yield at least $445 million for the city, money it intends to pay into the beleaguered municipal pension fund. Last week, after five years of talking, the administration reached a tentative agreement with District Council 47, the union that represents white-collar city employees.
March 1, 2014 |
Like many investors, Philadelphia's city employee pension fund had a good year in 2013. It earned close to 11 percent in the fiscal year ended last June and kept making gains the rest of the year. But the better-than-usual investment performance didn't dent the pension system's huge unfunded liability. That figure actually climbed to nearly $5.2 billion as of July 1, leaving the fund with less than half (48.1 percent) of the assets it should have to meet its eventual liabilities, according to a new actuarial analysis presented Thursday to the city's retirement board.
February 28, 2014 |
DESPITE HIGHER-than-expected investment returns, the city's pension fund remains less than half-funded, an actuary told the city yesterday. At the end of the last fiscal year, in July, the pension system had enough money to cover only 48.1 percent of its future liabilities - the same ratio as last year - Kenneth Kent, of the actuarial firm Cheiron, said at a meeting of the city Board of Pensions. Later in the meeting, the board voted to lower its expected rate of return on investments, which will have the effect of further increasing the unfunded liability.
February 27, 2014 |
ENDING A five-year stalemate, Mayor Nutter yesterday signed a tentative agreement for a new contract with the city's white-collar union. Nutter announced the deal last night with Fred Wright, the recently elected president of the American Federation of State, County and Municipal Employees' District Council 47. Nutter cited Wright's replacing union president Cathy Scott as a reason the negotiations moved forward. "This agreement, as everyone knows, has been a long time in coming, and not for a moment would I suggest that it's been an easy process because it has not been," Nutter said at a news conference.
February 11, 2014 |
THE PENSION crisis facing Philadelphia - and cities and states across the country - is almost universally blamed on the kick-the-can-down-the-road tactics of past politicians, who promised costly retirement benefits to workers without creating revenue streams to pay for them. Now, just as governments begin to tackle this reality, some economists and observers are saying that officials are once again kicking the can. But this time, the maneuver is a little trickier. In short, governments are assuming that their pension-fund investments will do better in the market than many believe is possible.
November 23, 2013 |
The West Chester Borough Council on Wednesday killed a proposed earned income tax that officials had said was necessary to save the borough's diminishing pension fund. Mayor Carolyn Comitta, who was in favor of the 0.25 percent tax increase, said she was "very disappointed" in the 4-3 council vote. "Quite frankly, it is in my opinion a mistake," she said. "You really can't kick these very important decisions down the road and that's what happened again. We're in the same place we were before.
November 13, 2013 |
PHILADELPHIA When it comes to postrecession recovery, Philadelphia is in the middle of the pack of large cities, according to a Pew Charitable Trusts report released Monday. While the city was almost near full recovery in 2011 - the last full year of data used for the report - Pew researchers warned that Philadelphia's unfunded pension and retiree health benefits posed great threats to the city's available revenue in years to come. The report, "America's Big Cities in Volatile Times," was based on data from 2007 through 2011 and looked at how the country's 30 most populous cities fared in the aftermath of the recession, which ended in June 2009.
October 20, 2013 |
MAYOR NUTTER'S administration yesterday continued to build the case for the sale of Philadelphia Gas Works, releasing a cost/benefit analysis showing how the sale could be a good deal for taxpayers. The new report, completed by the city-hired consulting firm Lazard Freres, estimates that PGW will fetch $1.45 billion to $1.9 billion in a sale - a $50 million increase from an estimate 18 months ago. That would result in a net profit of $422 million to $872 million, after PGW's substantial debts are paid off. Budget Director Rebecca Rhynhart said the report provides a conservative estimate of the utility's value for two reasons: It did not take into account the potential for new business opportunities that bidders may be eyeing through a purchase, and it did not consider rate increases that PGW is already pursuing.
October 19, 2013 |
A privatized Philadelphia Gas Works would pay very little city tax compared with the $18 million fee the utility now generates annually for the treasury, but Nutter administration officials say its sale could yield far bigger long-term benefits for city taxpayers. City Budget Director Rebecca Rhynhart acknowledged Thursday that the municipal utility, if sold to a private buyer, would generate a "minimal amount of tax revenue" for the city - less than $300,000 a year. But Rhynhart said proceeds from the sale, if used to pay down the city's underfunded pension liability, could reduce the annual pension obligation by much more than the utility now generates in income.
September 27, 2013 |
MAYOR NUTTER yesterday gave a high-profile speech about urban violence and illegal guns at the National Press Club in Washington, D.C. But back home, one of the mayor's signature gun-control efforts, the "Sandy Hook Principles," appears to be struggling to gain steam. The policy, announced in January after the massacre of 20 children and six adults at Sandy Hook Elementary in Newtown, Conn., aims to compel gun manufacturers and retailers in which the city's pension fund invests to sign off on eight safety-minded policies.