The Next Mayor

Mayor Michael Nutter unveiled his plan to help Philadelphians who are at risk to lose their homes due to the mortgage foreclosure crisis. More than 6,200 homeowners in Philadelphia faced foreclosure in 2007 and that number is expected to rise to 8,500 this year.

City officials will undertake a number of measures designed to help people save their homes. Sheriff sales of homes will be frozen until at least July, more funds will be provided for housing counseling and legal assistance, and additional dollars will be made available to help homeowners with bad credit refinance their mortgages. The entire program is expected to cost about $2 million in 2008-9.

One aspect of the plan caught my eye: Nutter wants to spend about $40,000 on public service announcements to let people know that help is available. The spots, which are narrated by Nutter, point homeowners to a hotline where they can get free counseling. The PSAs will run on local radio and television. Here is the text of the advertisements:

Hi. I’m Mike Nutter, Mayor of Philadelphia.

Thank you.

These types of PSAs are very popular among elected officials. It's certainly important to let people know that help is available, but using public dollars for these types of advertisements should be reexamined. It could be argued that these PSAs amount to little more that free political advertisements for incumbents. At the very least, these PSAs provide elected officials with a platform that is simply not available to people outside of government.

That said, we absolutely need to make sure that folks know about services provided to those facing foreclosure and these advertisements certainly help inform people. So, what is the compromise? Well, why don't elected officials voluntarily remove themselves from these ads? Why does Michael Nutter have to narrate the spot himself? Hiring an actor or some other kind of neutral voice would eliminate that problematic issues raised by having politicians promote policies using tax dollars.

Last week, I went to Harrisburg and observed a meeting of the Performance Improvement Advisory Committee. This is a group of officials from more than a dozen state departments and agencies that meet regularly to figure out strategies to improve how government provides services to the public.

I spoke with several of the participates and filed this audio report. Take a listen and let me know what you think!

On Monday, the Philadelphia Parks Alliance released a report assessing the financial benefits of Philadelphia's park system. You can download the entire report from the Parks Alliance website by clicking here, but the basic message of the study is that Fairmount Park is a major municipal asset. According to the study, our park system is worth more than $2 billion.

The study broke down the benefits into two categories: direct and indirect. The city collects an additional $23 million every year in property taxes because of added value due to park proximity. Another $5 million goes into city coffers thanks to tax dollars generated from tourism. The report also estimates another $7 million in municipal savings from storm-water management, air pollution mitigation, and providing space for community activities. The indirect costs include an additional $729 million in wealth for those who own property close to the park system and $1.1 billion is savings due to health, recreation, and other benefits gained by using the system.

Estimating the financial benefits of parks and recreation is an interesting approach. Traditionally, conservation of natural resources is thought of as a altruistic enterprise. The report from the Parks Alliance shows that there are monetary benefits to planting trees. Who knew? This report should be a catalyst for rethinking how city government assess other municipal assets like libraries and recreation centers. For example, how much money does the city save by providing after school programs to youth who otherwise might be getting into trouble and filling up our prison system?

Of course, there is a political context behind the report from the Parks Alliance. City Council held hearings today about a bill that would combine Fairmount Park and the Department of Recreation into a single entity. This proposal has long been opposed by park advocates but has the support of Mayor Michael Nutter. I personally think combining the two makes a lot of sense (and is the approach of many other cities) because it can make the system more efficient by combining scarce resources.

Mayor Nutter's budget included a $2.5 million increase for Fairmount Park and additional money for the Recreation Department to maintain park facilities. This report seems to indicate that those dollars are a worthwhile investment that is likely to yield a healthy return for Philadelphia.

The City of Philadelphia will be terminating its contract with PhillyCarShare and switching to Boston-based ZipCar. The city had been paying PhillyCarShare $35,000 per year to use between 6 and 10 cars each day. The new contract with ZipCar will provide the same service but cost $5,000 less.

The city's competitive bidding process requires the contract to be awarded to whoever can provide the service at the lowest cost. Saving money is always a good thing, but the singular focus on the bottom line seems to miss some important factors. There are a number of reasons why PhillyCarShare might have been a better choice, but none of them could be considered by city officials because they are not financial.

PhillyCarShare and ZipCar are two very different entities. PhillyCarShare is a non-profit organization and ZipCar is a private company. Accordingly, they have very different missions. PhillyCarShare sees itself as part of the broader environmental movement while ZipCar exists to make a profit for investors. That distinction seems important when evaluating the best use of municipal resources. The social impact of using ZipCar or PhillyCarShare never comes into the equation because the bid process is entirely driven by costs.

The most basic argument for choosing PhillyCarShare over ZipCar is that purchasing services from local companies is better than sending public dollars to companies other cities. PhillyCarShare exists to provide car sharing to the Philadelphia-area, while ZipCar is looking to expand to markets across the country. Choosing PhillyCarShare ensures that much of the $35,000 would be returned to the local economy in some way. That is clearly not true of ZipCar. The company is based in Boston and operations in cities across the country.

Another item worth considering is the role that PhillyCarShare plays in encouraging other environmentally-friendly initiatives. For example, the non-profit has been involved in helping get a bike sharing project off the ground in Philadelphia. ZipCar is not going to invest time and resources into these types of things. Again, it comes back to the social mission of a non-profit vs. the profit motivation of a private company. PhillyCarShare invests their revenue into things that are good for Philadelphia.

The bidding process has been praised for being transparent and accountable. The impulse to award contracts to the vendor who offers the service at the lowest cost is understandable. However, the inflexibility means that city government cannot consider other social benefits related to awarding contracts. In the case of PhillyCarShare vs. ZipCar, it's not clear that paying less was the best deal for the city.

It's possible that SEPTA transit police could go on strike at 2pm today.

What do you think? Are SEPTA police being compensated adequately or do they deserve a raise? Does the possible strike make you less likely to ride public transit? Let us know!

The dream of creating a citywide wireless network, first begun under Mayor John Street, seemed nearly dead last month when Earthlink decided to abandon the effort. A group of local investors has breathed new life into the proposal by announcing plans to purchase the network on Tuesday. Good news for Wireless Philadelphia? Perhaps. But the new version of the initiative looks dramatically different than the original conception of the project.

The new group of investors came together so quickly that they haven't even figured out a name. The firm, currently called Network Acquisition Company, is led by businessman Derek Pew and former Verizon executive Mark Rapp, The investment group plans to dramatically alter the business plan.

First, the intended customers have changed. Earthlink provided residential internet service for $20. The new company plans to sell high speed internet access to businesses, hospitals, universities and other large tenants. Singing up big anchor tenants is very different from signing up thousands of individuals.

Second, it is not really going to be "wireless" anymore. The new company plans to hardwire customers to high speed internet. That's an important distinction because it may be the key to solving the technological shortcomings of the original plan. However, it does represent a fundamental shift in what kind of connection will be used to access the network.

Outdoor wireless is still a part of the plan. The new company intends to provide free internet access to anyone who can pick up the signal. However, it remains to be seen if the investment group can strengthen the signal and extend coverage to the areas of the city currently without service. The new company has already made clear that they will not be providing customer service to users of the free wireless network.

Another big question is digital inclusion. Providing internet access, computers, and technical literacy to low-income individuals was the centerpiece of the original proposal. The new investors have said that they plan to continue that portion of the initiative, but it will clearly take a different form. Since the new company will not be signing up new residential customers, how exactly will it provide services to poor households?

There is one component that has stayed the same: the cost to city taxpayers. The new owners of the network say they can accomplish everything without a major new investment of public dollars. If that wasn't true, the deal probably could not have happened.

Public funding of Wireless Philadelphia been a thorny issue in the past. "It's Our Money" covered this angle of Wireless Philadelphia story during city budget hearings. City Councilman Frank Rizzo, an early opponent of the plan, pointed to $200,000 in the budget of the Mayor's Office of Information Services for Wireless Philadelphia.

The deal is extremely new, so I don't want to rush to judgment. However, we need to keep a close eye on this new formation of Wireless Philadelphia. It is very different from the original plan. The original spirit of the proposal should be honored.

For those of you who still follow this blog through a feeder, I just wanted to make you aware that It's Our Money's Ben Waxman just wrapped up a pretty extensive piece about Governor Rendell's 2009 budget proposal.

Enlisting the help of some think tanks who occupy the opposite ends the political spectrum, Ben analyzes 4 of the major components of Rendell's budget - explaining what they are, whom they impact, how much they'll cost, and where the money will come from.

With a little more than 11 days until the midnight deadline on June 30, the governor and the Republicans in the General Assembly are still pretty far apart on several of these spending programs. As you prepare for the heated rhetoric of "stonewalling" and threats of government shutdowns, worker furloughs, and nuclear disaster (just kidding), it may help to take the time to learn what they're arguing over.

When the clock strikes midnight in 11 days will Rendell's budget turn into one the commonwealth's fine pumpkins or will the governor come out looking like a slightly corpulent prince.

Check out Ben's work and let us know your thoughts.

You're going to be hearing a lot about the ongoing talks between the Nutter administration and the city's four major municipal worker unions.

It's contract time again.

That magical time that happens every three or four years when the mayor and his representatives sit across the table from folks representing your local cops, firefighters, sanitation workers, social workers and city lawyers, and try to hammer out a deal for raises, benefits and pensions.

Local cops and firefighters are prohibited by law from going on strike and most of the other folks in city government perform functions that, let's face it, most of us wouldn't miss if they didn't happen for a couple weeks. So it's the sanitation workers who are the real foot soldiers in this process because NO ONE likes to have their trash pile up for three or four weeks, nor does anyone enjoy loading it into their own cars and driving it to the dump.

Fortunately, this round of contract negotiations has been relatively free of garbage pile threats. In fact, it's been relatively free of anyone saying anything about how the negotiations are going.

So in place of the mayor or representatives from either side "talking tough" in the media, you may actually get some thoughtful pieces about the process like this piece by WHYY's Susan Phillips.

Most importantly (talk about burying the lede!) It's Our Money offers you this Citizen's Guide to City Contracts. It's an in-depth look at the three major issues of this year's negotiations - wages, health benefits and pensions - with commentary from It's Our Money informed by several recent studies about the state of city finances AND input from Thomas Paine Cronin, former DC 47 chief. Cronin provides the unions' points of view on these issues having been part of the negotiating team for previous contracts.

Feel free to use this thread to provide your own ongoing commentary of the coverage of the negotiations or the contracts themselves.

Here's a request for all of our blog readers out there. What's the story, the real story, with Germantown Settlement?

In today's Inquirer, we learn that the School District has ordered that the Germantown Settlement Charter School be closed because "test scores are low, the school has not provided some financial documents and has failed to meet important provisions of the state charter law."

The charter movement has had its share of success stories. Apparently, Germantown Settlement Charter School is not one of them.

The Inquirer article and this earlier Daily News piece from when the potential of closure was first announced don't explain the connection between the school and Germantown Settlement - a large non-profit in Germantown that has connections to Councilwoman Donna Reed Miller.

Is there a connection? Phillyblog provides plenty of input about Germantown Settlement but also doesn't seem to make any explicit connections.

Got any info? Share it in the comments section or email me. Feel free to share links, etc.

A lot of taxpayer money is flowing in and around this organization. Are we getting our money's worth? If the school is connected, is its failure a signal of greater mismanagement?

Thank you John Baer. In today's column, the estimable Mr. Baer comes oh so close to saying what I will so here:

State legislators have been bought off by the pharmaceutical and health insurance companies and it's costing us $100 million.

Pass the rage-a-hol.

Let me 'splain, using Baer's column:

At issue is a Rendell administration plan allowing the Welfare Department to buy prescription drugs for a million folks on medical assistance, including about 400,000 in Philly.

And never mind that 20 other states, including neighbors Delaware, Maryland, New Jersey and New York have already made the switch.

So, if I could sit down with every voting-age person in Pennsylvania and just give them the facts, I wonder if it would make a difference.

The facts, as Colbert is fond of saying, have a well known liberal bias. In this case - as is the case with most issues of the Pennsylvania state legislature - the facts have an obvious anti-legislator bias.

Baer dug up some figures to illustrate how much money some major drug companies have pumped into politics. Unfortunately, you and I, as taxpayers, don't engage in similar lobbying efforts to buy off our elected representatives and get them to... well... look out for us. All we have is our vote, which apparently isn't worth as much as a bucket of spit.

This is a story that deserves some more investigation. One commenter to the story makes a pretty simple request:

It would be interesting to find out how many of the Legislators who are against this get political contributions from the Managed Care companies.

Exactly. Hopefully, after reading Baer's column, someone is doing the digging.

Council's three newest members continued their "we care about issues" tour with a joint appearance at a roundtable event that has "made notable contributions to the study and ethical practice of land use." (Their Christmas party is probably awesome.)

Councilman Jones has a nice idea to build a transit line from Center City out to the zoo and other parts of Fairmount Park (I like).

Councilwoman Quinones-Sanchez actually wants to tackle the fair/full valuation issue (the policy wonk in me likes, the homeowner of a South Philly home... no so much ;))

One thing in particular grabbed my attention:

Green said the city could save 10 percent to 20 percent on infrastructure costs in the long run if it addressed problems now, instead of waiting for roads to cave in or sewer lines to collapse. He suggested that the city should put $60 million to $125 million in savings realized by a planned pension bond into infrastructure, instead of conservative stocks or bonds.

The first part makes total sense to me. Fully fund infrastructure upkeep now using money from the operating budget rather than have to rebuild entire broken structures with the capital budget several years from now. It's like using your income to repair the leaky hole in your ceiling rather than waiting and having to take out a loan to rebuild your house when the roof collapses.

The second part escapes me. Hopefully Ben can chime in to illuminate me.

The city currently has pension obligations to current and future retirees. That number is x. Right now, in the pension fund the city has 52% of x, give or take. The city is proposing to borrow money to make up that other 48% (or so). All of the pension fund money is then invested with the goal of getting enough return on those investments so that the city doesn't have to spend additional taxpayer money (that is, in addition to what it contributes to each employees pension) to pay retirees. Right now, with the fund so chronically underfunded and because of a weak investment climate, it's not making enough of a return to cover those payouts. The city, therefore, has to step in to cover that shortfall - an amount that is only going to grow.

Add to that the fact that the city is also paying back - with interest - money that it borrowed in an attempt to cover the shortfall all at once back in the late 90s and the cost of pensions goes up.

When I first read the reporting of Councilman Green's idea, I thought, is he proposing that the city invest some proceeds from the new pension bond into infrastructure. But where would the return be?

Now, as I think my way through this, I'm beginning to get some clarity. If the city borrows money to close the pension obligation gap and if it invests the fund wisely and gets a decent return, it won't have to make the shortfall with yearly expenditures from the operating budget. That money could then be put towards addressing infrastructure and result in the long term savings envisioned by Councilman Green.

Does that seem right?

Fortunately, I get a lot more space to think these things through than a reporter and editor who have to fit the whole idea into a certain number of column inches. Also, the comment section lets you correct me if I don't have it 100% right. So have at it.

You may or may not be aware that we have expanded WHYY/Daily News' "It's Our" franchise to It's Our City - a sequel to The Next Mayor. For the time being, this blog space will continue to be devoted strictly to budgetary issues and anything that affects you as a taxpayer.

For the larger set of issues that affect you as a Philadelphian or a Greater Philadelphian, that is, as a citizen, you can follow take part in the conversation at It's Our City's website.

Meanwhile, the Center City Weekly Press was in attendance at the project's kick-off event - an hour-long, televised interview with Mayor Michael Nutter - and wrote this review.

Here are some highlights from the show:

Contact the project's Managing Editor - WHYY genius-in-residence Alan Tu - to find out how you can participate in this ongoing civic discussion.

Well, ok. By candy I mean ice cream and by baby I mean everyone that would have otherwise gotten the free ice cream being handed out Broad and Chestnut.

Philly Chit Chat captured the whole thing on camera and reported on the incident.

I'm all about cracking down on illegally parked trucks in Center City, especially UPS and other delivery trucks that think engaging flashers turns any patch of asphalt - including lanes of traffic and bike lanes - into a legal parking spot.

But c'mon... you can't kill a free ice cream buzz! (Plus, the commercials for those M&M ice cream treats crack me up. Must be Friday.)