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- What to Make of the Fiscal Cliff Deal?
It’s a question that Parents United for Public Education, Public Interest Law Center of Philadelphia, and the Education Law Center are considering right now.
At issue is this section of state law, 72 PS 5341.21, which states that responsibility for the expenses of the BRT lies with the county:
§ 5341.21. All salaries provided for in this act and the proper expenses of the board shall be paid out of the treasury of the county.
The Pennsylvania School Boards Association said they aren’t aware of any other county in the state which charged a school district for property tax assessments. Why us?
Whatever you think about the importance of the Bureau of Revision of Taxes, there’s no question that what the city, and perhaps most importantly the Mayor, does with this mess of an agency is a test of leadership and vision that’s under the public – re: media – scrutiny.
The draft statements coming from the Mayor’s appointed task force aren’t entirely encouraging:
The 85-page report, by a task force of City Council staffers and officials in the Nutter administration, is not a ringing call to remake the BRT.
In fact, Council made sure that it wasn't. The leadership instructed the task force to offer no direct recommendation on how to fix the agency - only alternatives.
One of those possibilities - "Option A" - would make only modest changes, such as improved training for assessors.
Other options would leave the agency intact but allow the mayor and Council to pick the members; or split the BRT into two agencies, one to set values and the other to handle appeals.
"Option D" would wipe out the BRT and put assessments in the hands of city leaders or a new agency. The last three ideas would require approval by city voters, the task force noted.
Which means that significant action on the BRT won’t happen until the 2010 election cycle, way too far down the road.
Meanwhile, half the BRT workers sit on the School District of Philadelphia payroll. The District’s money for these positions runs out at the end of this month, and the question is what to do next.
It’s hard to imagine the City of Philadelphia in more dire financial straits than now. On the line are thousands of jobs, potential increases in taxes for residents, closure and reduction of city services . . . we know the picture.
And then there’s one agency that’s just rolling in money – the Philadelphia Parking Authority, which has seen revenues double over the past few years and anticipates even more of a windfall with the obnoxious new parking meter rates throughout the city. Now this $200 million agency – which calls itself the most efficient Parking Authority in the nation – is supposed to turn over all its profits to both the City and the School District, but the funny thing is that they have a hard time finding profits because . . um well . . . BECAUSE.
So in the fall of 2007 some parents took up this issue and the media did what it does best – a kick ass expose on the waste and excess spending and hoarding of cash of this agency – and politicians did their thing which was to bluster and call for an audit, so 18 months later the City Controller's office finally releases this document at the end of July. And here’s how it opens:
The procedures performed were agreed to by CCO [Philadelphia City Controller’s Office]. The sufficiency of these procedures is the sole responsibility of CCO, and therefore, we make no representation regarding the sufficiency of the procedures for the purpose for which this report has been requested or for any other purpose. . . Our procedures did not constitute an audit, review, or compilation of the information provided and, accordingly, we do not express an opinion or provide any other form of assurance on the completeness or accuracy of the information.
So to be clear the public, in some fashion, paid for this audit right? And while there are some interesting things in there, as laid out in this Inky article and this completely unanalytical Daily News article (didja guys read the document or did you just reprint the Controller’s press release?), the real news is how little the Controller’s office found.
For example, it gave the Parking Authority a free pass on salaries. The accountants initially looked at information from the International Parking Institute, but claimed that because of the PPA’s vast responsibilities there was no comparable organization for them to review. So guess where they decided to make their salary comparison? The School District of Philadelphia!
The accountants chose the top three executive positions at the School District, which for the record is a $3 billion agency with 260+ schools, 60+ charters, 10,000+ teachers alone, which serves meals, buses kids all over the city, runs afterschool and summer programs, provides social/behavioral and mental health services, tests and educates and has responsibility for over 200,000 children (including the charters) in the city. Incidentally, the top three positions at the School District - which includes the CEO and the Chief Counsel - have been flagged in the past as being overpaid as well, despite the scope of their responsibilities.
Meanwhile, at the PPA, the Executive Director makes more than the Governor and the PPA Board Chair earns $75,000 a year for a couple of hours a month. Both the Inky and Daily News investigations in 2007 flagged the fact that more than 20 managers at the PPA earned over $100,000 a year with an overload of executives at the top. The accountants themselves note that they saw no staffing plans for the PPA and didn’t do a desk or performance audit.
Nevertheless, here's their conclusion:
Given the magnitude and responsibility of PPA’s executives and the size of operations, in our judgment PPA’s salaries are within a competitive range.
And, again, the public paid for this in some way right?
What the report didn’t even look at was something that Parents United for Public Education has consistently raised as a serious concern: the amount of money the PPA hoards in unrestricted cash reserves and cash reserves designated for future expenses.
In 2007 when we did our analysis, we found between $40-50 million was hoarded in some sort of “reserve” account, more than a quarter of the agency’ operating revenue. By comparison, the Government Finance Officers Association recommends that government agencies keep the fund balances between 5-15% of operating revenue.
Parents United also found discrepancies around workers compensation, with the agency claiming $11 million in reserve for self insurance for workers comp even though they had a certificate showing that they were already covered through their own insurance for workers comp. When political pressure helped bring a settlement to the campaign in December 2007, the PPA dipped into its self insurance reserves to meet the funding request from the City.
But hey, when your document doesn't even count as a "review" and some media focus on the fact that the PPA can't account for free parking badges for airport employees, who cares about $40-50 mil?
Some media have characterized the report as "blasting" the Parking Authority. But to be clear, the report has made its requisite political rounds for more than three weeks and was distributed, not "leaked," to the media. Meanwhile, the Authority reacts in mock defense and has said it will get back to the Controller in six months or so when it will write a full response to the Controller's findings (maybe a few airport badges can be returned?). But it's hard to look at that back and forth and, at this point, take it as much more than perfunctory media campiness.
At the end of the day, the Parking Authority - despite all the exposure, despite its known wealth in times of fiscal crisis - is getting yet another free pass to continue along its merry way. In 2007, Parents United accepted the political compromise given to us by a then-incoming Mayor because we believed City leadership wouldn’t let this agency continue to get away with it.
18 months later, looks like things are about the same as they ever were.
Ben Waxman has an article today about the Mayor's Office of Community Services that I would encourage everyone to check out.
PRESIDENT LYNDON Johnson's notion of a "Great Society" was embodied by his 1964 speech that declared the "War on Poverty."
That war was abandoned long ago, but a legacy lives on in City Hall in the Mayor's Office of Community Services (MOCS).
MOCS is expecting a huge influx of new money into its $12 million budget, set to come from President Obama's recovery act. It could receive up to $6 million for local agencies charged with fighting poverty.
But, according to an "It's Our Money" analysis, more than $1 million of the agency's current budget is being spent on salaries in other departments. And very little data is being collected to ensure that those being served by MOCS-financed programs are actually in poverty.
MOCS is supposed to be the city's primary anti-poverty agency. It's mostly funded through a program called the Community Services Block Grant.
The MOCS is in theory supposed to be the poverty fighting agency of the the Mayor' office. But it seems to be somewhat of a dud. While good people work there and everything, the article points out that much of money that should go to the office is is simply funneled elsewhere, to places such as the Rec Department. And, because it often times simply funds departmental salaries, the impact of office is often times unclear. (And of course, the reality is that funding someone at the Rec Department in many neighborhoods in Philly means you are serving an overwhelming majority of poor people.)
I don't particularly know what goes on in City Hall, but, when I talk to people who have been inside the City, including people from that office specifically, the MOCS is frequently brought up as one of the last patronage-type offices that the Mayor controls. The article hints at that here:
Until last year, federal block grant dollars were being used to partially fund the Mayor's Action Center, which was responsible for answering information requests about city government and services. State officials responsible for oversight raised concerns because the majority of people being served by the Mayor's Action Center were not poor.
"It was our impression that the last administration was using funds to essentially answer phones for people who were complaining about city government," said Ken Klothen, who served as deputy secretary for community affairs at the Department of Community Economic Development before resigning in May. "We didn't think that all of that activity was sufficiently related to Community Services Block Grant goals. We viewed it as casting too broad a net."
I am going to guess that the people on the other end of the line were probably not your every day, unconnected people. It is good to see that that piece of the office appears to have ended. And the Mayor has also acknowledged that the office isn't really doing what it is supposed to do. That is a good start. But after 1.5 years in office, it is time to get past talk, and see real, concentrated reforms.
So here's Gov. Rendell in Nov. 2007
"Recent press accounts of skyrocketing expenses, bloated payrolls, excessive salaries, and parking-garage mismanagement suggest that the internal fiscal and management controls expected by Act 94 are not in place," Rendell's letter read, citing the law that gives the state-run agency the power to enforce Philadelphia's parking regulations.
The governor was responding to reports in The Inquirer and in the Philadelphia Daily News that disclosed an unprecedented growth in staffing at the Parking Authority even as the agency's contributions to the city and school budgets have remained relatively static.
Rendell asked the controller's office to commence a "fiscal and performance audit" of the agency. Butkovitz said it appeared the governor was looking for a top-to-bottom review of the authority, which he called "an enormous undertaking."
Still hasn't happened. Wonder why?
With the news that the Mayor and City Council are in a fuddle over what to do with the Bureau of Revision of Taxes, here's one place to start:
TAKE THE BRT EMPLOYEES OFF THE SCHOOL PAYROLL
Why is it relevant to the situation before the city?
- According to the District's FY10 budget book (p. 332), the BRT expenses have actually increased this year by 17% and will again next year a nominal amount. Their behavior can't be rewarded.
- The School District houses 80 employees, between a third and 40% of the total number of BRT employees. That's a sizeable figure.
- Because city ethic laws prohibit political hires, many of the most political people on the BRT land on the school payroll - like ward leader Donna Aument, or "clerks" Helyn Cheeks, David Shadding, and Lorenzo McCray all of whom were mentioned by name in Monday's unbelievable "BRT serves as political jobs bank" story. In fact, according to our studies, at least 40% of School District employees, hold political positions as ward or committee leaders.
- Putting them back onto the city payroll clears a $4.5 million burden on the schools - AND helps offset the fact that the city is delivering $10 million less in funds to the schools anyway - AND forces the political hires off the BRT payroll or loses them the plum political assignments that appeared to be the primary qualification for "clerkship."
There's no question something needs to be done about this agency - especially and because of the Mayor's proposed property tax hike and the Actual Value Initiative. But calls from one extreme (abolish the BRT!) to another (let's wait!) shouldn't hide the fact that one move could strike a quick blow to the BRT's system of operation.
(Read a school-focused take on the BRT at The Public School Notebook's website)
OK I stole that line from Jon Stewart, but what do you say about the Inky’s phenomenal series about the Bureau of Revision of Taxes – the people who’ve been assessing your homes?
What do you say when:
- The BRT’s Executive Director who took full advantage of the city’s DROP program only to return to work with a pay raise two days later says he has “nothing to do” with property tax assessments;
- One member of the BRT’s board became president of Citizen’s Alliance, former Sen. Vince Fumo’s non-profit that was at the center of his corruption trial, and is currently being investigated on abuses including unlawfully increasing taxes on a property that the Senator had allegedly wanted to purchase;
- Agency officials told reporters that a tax assessor, who had reduced an assessment for the BRT board member above, had “died.” She hadn’t and basically told reporters she was encouraged to reduce the taxes on that board member’s property;
- Private deals on commercial properties abound including a 44% reduction in the assessed value of the Ritz Carlton from $35 million down to $19.5 million.
- Two members of the BRT’s board say they don’t know anything about the sunshine law or conducting official business in public?
And there are so many amazing quotes here, quotes you can’t quite make-up like:
Catherine Scott, Local 2187 pres., representing some BRT workers: "I don’t think it’s fair to say none of them work. The level of work varies greatly."
Republican leader Michael Meehan on why the BRT is where old Parking Authority employees go: "At a certain age they can’t be out on the street on a cold day and walking. The BRT is a more attractive place."
BRT Executive Director Enrico Foglia on his non-relationship with Dem. Party Chief/U.S. Congressman Robert Brady: "It’s not like we’re old buddies or nothing like that. I wasn’t real tight with Bobby."
Court of Common Pleas Judge William Manfredi on qualifications of BRT board members: "I haven’t the faintest."
As daunting as the School District’s 552 page online budget is, it’s funny how much it can reveal about ingrained systems that cost our society -- things like say, patronage.
Buried at the bottom of page 385 under the category “Undistributed Budgetary Adjustment/Interfund Transfers/Other,” it shows 85 BRT employees on the School District’ payroll for a cost of $4.7 million in FY08. That’s 18% more than it was last year. Next year at $4.9 million it will be almost a million dollars more than just a year ago.
Parents United for Public Education requested a list of the BRT employees (who are listed as real estate assessors). A review found that 74 employees are currently on the District’s payroll. Over 40% of them hold political positions, including two ward leaders and committee leaders.
What’s wrong with this picture? A lot.
- First, what specifically do these people do on behalf of the schools and why do we need so many of them?
- Second, the fact that such a large percentage of them appear to hold political positions and are outside the scope of both the city (even though they’re doing city work) and the School District (since they work offsite at the Curtis Center) raises concerns that all the jobs are as necessary and efficient as they ought to be.
- And finally, $4.9 million may not seem a lot to some people, but it would almost double the arts and music programs in the school that were allotted this year. It would buy back 50 teachers, a third of the number cut this year. It would more than buy back the 25% librarian losses we suffered this year.
Conventional wisdom has been that since the schools receive 60% of the real estate taxes, the District should therefore assume a similar portion of the BRT expenses. However, there’s a big difference between billing the schools for real and actual expenses, and putting 85 employees on the District’s payroll who are outside the supervision of the District.
This isn’t a new struggle. A few years back, former School District CEO Paul Vallas tried to remove the 31 employees from the City Controller’s office who also sit on the District’s payroll (page 362) as well as highlight the BRT employees. It was apparently a lonely and unsuccessful battle.
But it is, as they say, a new day, and it remains to be seen whether things could change under a new administration.
Last week Parents United for Public Education sent a letter to the Board of Revision of Taxes asking them to remove BRT employees from the School District payroll and to justify expenses that compete with the education of kids. It’s not that we want to second-guess the work of the BRT, but we do need some accountability from agencies that park their expenses on our kids’ dime.
For more information, the list of employees, and to read Parents United’s letter to Charlesretta Meade, chair of the BRT, check out Parents United’s website.
I love the way THE INQUIRER is pounding the quote-unquote "Philadelphia" Parking Authority. City GOP benefits from Parking Authority. It needs it. The story starts off promisingly:
Though the Philadelphia Parking Authority has fallen short in its promised funding for city schools, it certainly has been a boon for the Philadelphia Republican Party.
Authority employees and consultants have contributed at least $214,000 to the Republican City Committee since 2001, according to an Inquirer analysis of campaign finance data.
The contributions this year have reached at least $33,210, or more than 14 percent of the party's total.
I wonder if that's the single biggest cadre of funders? Of course, "cadre of funders" gets hard to define for a newspaper article, but still I wonder.
My humble suggestion to Philadelphia reporters pursuing these questions: the story I'd like to see is some attempt to sort out how much money could, potentially, be going to schools and how, exactly, the law designates that they are supposed to determine that figure.
This schools issue is a big part of why I want to lambast the PPA so badly. If it were just an issue of over-spending and patronage, I would care but I wouldn't care as much. The simple fact is that the PPA is making our city harder to live in by tightening up parking rules, but they aren't delivering on the promised benefit of that: getting some more money into education.
Pound them, Inqy! Pound them!!!