Pica

Ronald G. Henry, executive director of the state board overseeing Philadelphia's finances, has resigned effective early next month. The Pennsylvania Intergovernmental Cooperation Authority was established by the state Legislature in 1991 in response to Philadelphia's financial crisis. It issues bonds on the city's behalf and regularly monitors its finances. "It's been three years, and I've largely accomplished what I set out to do," Henry said yesterday, "to help PICA get organized, to help the city get through its financial crisis, and set up a structure to promote fundamental institutional change.

SOMEONE alert the academy! It's Our Money is making a summer blockbuster movie. It's called "PICA 2011: Judgment Day. " Here's our tagline: In a world of many fiscal dangers, one city budget fights to survive. The plot? Tomorrow, the Pennsylvania Intergovernmental Cooperation Authority, also known as PICA, will vote on whether to approve the city's five-year plan. PICA's job is to make sure the city has enough money to cover the spending it projects over the next five years.

Memo from the state fiscal oversight board to Mayor Rendell: Get out your pencils and calculator and do some more homework on your five- year plan. The response of the mayor and his financial advisers to the Pennsylvania Intergovernmental Cooperation Authority's first evaluation of his plan to make the city solvent? No problem. "I accept their assessment; they have legitimate questions," Rendell said. Those questions - contained in a five-page memo released by PICA yesterday - cover matters like the $400 million the administration wants PICA to borrow on the city's behalf and how the city will use some of it. The authority also wondered what calculations the city used to forecast its revenue and proposed labor and management savings over the next five years.

James Eisenhower, Gov. Ed Rendell's appointee as chairman of the Pennsylvania Intergovernmental Cooperation Authority, stepped down Tuesday as Gov. Corbett was sworn in. PICA is the state-appointed board that oversees Philadelphia finances. It was created in the early 1990s during the city's fiscal crisis, and requires each mayor to submit a five-year budget plan for approval by the board. In his final meeting, Eisenhower said he was optimistic about the prospects for a comprehensive study of the city's firefighting needs - meaning the Nutter administration and the city firefighters union may be able to agree on its parameters.

District Council 47 president Thomas Paine Cronin was briefly detained by city police yesterday after a lunchtime demonstration against the state panel overseeing the city's finances. Cronin and his union of white-collar city workers were protesting comments made last week by members of the Pennsylvania Intergovernmental Cooperation Authority. While dozens of picketers protested outside of PICA's offices on Walnut Street near Broad, Cronin and five other union members occupied the agency's suite of offices and refused to leave until board members apologized for the remarks.

So you think the city budget is balanced? Not so fast, says the state agency overseeing city finances. In a report yesterday, the Pennsylvania Intergovernmental Cooperation Authority said it would be "incorrect and dangerous" to believe that the city's "revenue structure is sufficient to maintain city services. " That despite the city's audited statement for the most recent fiscal year showing a $118 million surplus. PICA warned that when adjusted for inflation, the city's tax base has been shrinking since 1988, and that "budgetary balance at present expenditure levels cannot be maintained in a declining economy.

Empty pleasantries and a fond farewell were all the board overseeing city finances expected yesterday when it asked City Finance Director David Brenner to say a few words. Instead, Brenner delivered a bitter tongue lashing that left members of the Pennsylvania Intergovernmental Cooperation Authority speechless - until one of them bit back. "I have not enjoyed the experience," Brenner told the board at the last meeting he'll attend as an ex-officio, non-voting member. "From day one, you exhibited a lack of trust in me or anyone connected with the city.

The state agency overseeing city finances is scheduled to give city officials their first report card tomorrow, and the grade apparently will be much better than the agency's staff originally planned. After protests by the Rendell administration, the Pennsylvania Intergovernmental Cooperation Authority is toning down a caustic draft report that blistered city officials' progress in making the city fiscally solvent. The draft of the PICA analysts' report - obtained by the Daily News - shows that the authority's staff wanted to give an "F" to the administration for its efforts to cut costs and improve worker productivity to balance the city's budget.

I WANT TO correct a few inaccuracies in your June 23 editorial ("We Want the Bad News, Too"). Foremost is your assertion that "PICA ruled that the city didn't need to submit [Plan B], too. " In fact, as reported in your own paper, the board requested that the mayor submit a five-year plan for PICA's review by June 22. As in every year since 1992, PICA did not dictate what the city should submit, save that it be a plan the city believes meets the statutory requirement of a five-year balanced budget using reasonable assumptions.

A multimillion-dollar cloud hangs over the city's budget and it's making the special state agency overseeing city finances impatient. Members of the Pennsylvania Intergovernmental Cooperation Authority think an arbitration panel is taking all too long to decide on a new contract for city police. The firefighters' panel has suspended proceedings pending a decision on a police contact. "The silence is deafening," said PICA member John Egan, noting how no final budget can be decided until the city knows how much it will have to spend on police and fire protection.

Fran Burns, who was widely credited with modernizing Philadelphia's Department of Licenses and Inspections, will leave her job as head of that agency to become executive director of the Pennsylvania Intergovernmental Cooperation Authority, the state board created as a fiscal watchdog for city government. Burns, 36, initiated a number of changes at L&I after taking the post in 2008, including reducing overtime and demolition costs, and consolidating the number of permits required of businesses.

Teresa Pica, 66, of Philadelphia, a professor in the University of Pennsylvania Graduate School of Education and a leading expert in the field of second language acquisition, died Tuesday, Nov. 15, at home of complications from viral encephalitis. She had been ill since March after returning from a lecture abroad, said her sister, Anna Marie Goldberg. Dr. Pica's influence on the theory and practice of second language acquisition was groundbreaking, according to biographical material Penn made public.

THE CITY'S state-appointed fiscal watchdog is set to take on Philly's most daunting financial problem - the drastically underfunded city pension fund. Sam Katz, the board chairman of the Pennsylvania Intergovernmental Cooperation Authority, said yesterday that the agency will research and consult with experts about the fund - which has just 47 percent of the assets needed to pay projected benefits - and make recommendations on how to improve the situation. "If this was a corporate situation, this would be considered a crisis," said Katz.

HE PENNSYLVANIA Intergovernmental Cooperation Authority, the city's fiscal watchdog, yesterday approved Mayor Nutter's five-year financial plan, though board chairman Sam Katz raised concerns about the future of the city's pension fund. Katz even said the city might need to sell an asset - such as the airport or the Philadelphia Gas Works - to improve the health of the pension fund, which has just 47 percent of the assets needed to pay projected benefits. "When you think that $500 million a year in an operating budget of $3.6 billion goes to benefits paid for services rendered in the past, that's a tough place for a city to be," said Katz, after the five-member PICA board voted to approve the five-year plan.

The city may have to sell major assets such as the Philadelphia Gas Works or the airport to deal with the $5 billion hole in the municipal pension fund, according to Sam Katz, chairman of the state board overseeing city finances. "There have to be solutions or [the pension-fund deficit] is going to choke the city," Katz told reporters Tuesday. "When you think that $500 million a year in an operating budget of $3.6 billion goes to pay benefits for services rendered in the past, that's a tough place for a city to be. . . . We're strangling in our own pension juices.

The city may have to sell major assets such as the Philadelphia Gas Works or the airport to deal with the $5 billion hole in the municipal pension fund, according to Sam Katz, chairman of the state board overseeing city finances. "There have to be solutions or [the pension-fund deficit] is going to choke the city," Katz told reporters Tuesday. "When you think that $500 million a year in an operating budget of $3.6 billion goes to pay benefits for services rendered in the past, that's a tough place for a city to be. . . . We're strangling in our own pension juices.

SOMEONE alert the academy! It's Our Money is making a summer blockbuster movie. It's called "PICA 2011: Judgment Day. " Here's our tagline: In a world of many fiscal dangers, one city budget fights to survive. The plot? Tomorrow, the Pennsylvania Intergovernmental Cooperation Authority, also known as PICA, will vote on whether to approve the city's five-year plan. PICA's job is to make sure the city has enough money to cover the spending it projects over the next five years.

YESTERDAY, after an ugly journey that included a dramatic school-funding crisis and ended in yet another property-tax hike, Philadelphia's second in two years, the city finally passed a budget. Two days earlier, Sam Katz had threatened to blow it all up. Back in March, Gov. Corbett appointed Philly's most famous Republican to head the Pennsylvania Intergovernmental Cooperation Authority, Philly's least-famous important watchdog. PICA's power is narrow, but considerable: It tells the city whether it has enough money to cover the spending proposed in its budget and five-year plan.

Two of the four current members of the state board that oversees Philadelphia's finances left open the possibility Tuesday that they might reject Mayor Nutter's five-year spending plan next month because it funds the DROP pension program. One "no" vote by any of the four is enough to reject the plan, which could spark a cash-flow crisis, because the board could withhold certain state grants and tax funds. Rejection would also require the mayor to redo the city's spending proposals for the fiscal years 2012 to 2016.

Philadelphia city wage taxes are filling city coffers this spring at the fastest rate since the U.S. economy slumped in 2008. The city collected $519 million from its tax on workers' paychecks through April 30, up from $505 mil- lion last year at this time and $485 million in 2009. The total still lags the $534 million Philadelphia collected from wage earners in the first four months of 2008, when the tax rate was slightly higher than it is now. Philadelphia currently clips residents 3.928 cents of every dollar they earn; nonresidents pay 3.4985 percent.