City of Philadelphia Five-Year Financial Plan Fiscal Year 2007 - Fiscal Year 2011 (including Fiscal Year 2006) Fifteenth Five-Year Plan for the City of Philadelphia pursuant to the Pennsylvania Intergovernmental Cooperation Authority Act Presented by the Mayor, January 24, 2006 Approved by City Council, May 25, 2006 Approved by PICA, July 5, 2006 CITY OF PHILADELPHIA MAYOR John F. Street MAYOR'S CABINET Joyce S. Wilkerson .......................................................................................................................................................Chief of Staff Pedro Ramos .......................................................................................................................................................Managing Director Vincent J. Jannetti .....................................................................Acting Secretary of Financial Oversight/Director of Finance Loree D. Jones.................................................................................................................................... Secretary of External Affairs Stephanie Naidoff................................................................................................... Director of Commerce/City Representative Romulo Diaz ................................................................................................................................................................. City Solicitor Thomas A. Chapman ......................................................................................Secretary of Strategic Planning and Initiatives/ Executive Director of City Planning Commission Sylvester Johnson........................................................................................... Secretary of Public Safety/Police Commissioner Jacqueline Barnett .......................................................................................................................................Secretary of Education Dianah Neff............................................................................................................................................ Chief Information Officer Kevin Hanna ........................................................................................Secretary of Housing and Neighborhood Preservation Budget Director Dianne E. Reed COMMISSIONERS AND AGENCY HEADS Lloyd Ayers James Muller Fire Commissioner Deputy Managing Director, Fleet Management Mark A Focht John Nacchio Executive Director, Fairmount Park Commission City Treasurer Bernard Brunwasser Lynda Orfanelli Water Commissioner Personnel Director Julia Danzy Cheryl Ransom Director, Division of Social Services Human Services Commissioner Joan Decker Victor N. Richard III Records Commissioner Recreation Commissioner Carmen Paris Joan Schlotterbeck Interim Health Commissioner Public Property Commissioner Arthur Evans Barry Scott Director, Office of Behavioral Health/Mental Retardation Svcs. Director, Risk Management William Gamble Elliot Shelkrot Procurement Commissioner President and Director, Free Library of Philadelphia Joseph Tolan Eva Gladstein Director, Office of Labor Relations Director of Neighborhood Transformation Dainette Mintz Robert Solvibile Director of Adult Services Licenses and Inspections Commissioner Charles Isdell Clarena Tolson Aviation Director Streets Commissioner Nancy Kammerdeiner Richard Tustin Revenue Commissioner Director, Capital Program Office Leon A. King Prisons Commissioner CITY OF PHILADELPHIA FIVE-YEAR FINANCIAL PLAN Introduction.......................................................................................................................... ………i-xxv Maintaining Fiscal Health..............................................................................…………… B1 - 35 City Workforce ................................................................................…………. …………C1 - 12 Implementing Neighborhood Transformation and Blight Elimination.........................D1- 7 Promoting Economic Development.................................................................................. E1 - 27 Providing High Quality Public Education and Comprehensive, Coordinated Social Services............................................................... F1 - 17 Enhancing Public Safety and Quality of Life..................................................................G1 - 12 Departmental Overviews...................................................................................................H1 - 11 Enterprise Funds and Assets ............................................................................................. I1 - 15 Appendices: I. Departmental Key Performance Measures II. Departmental Five Year Obligations Summary III. Enterprise Funds: Division of Aviation, Water Department IV. Long-Term Obligations V. Other Statutory Requirements – General Fund VI. Other Statutory Requirements – Cash Flows VII. Base Obligation Methodology VIII. FY2007 Capital Budget IX. Acronym Dictionary Introduction Overview Over the last six years, the Administration has strived to create a Philadelphia that will thrive in the 21st century supported by a city government that can live within its means: A smaller government that still provides needed services and safe streets, and fosters educational opportunity and an improved quality of life. The priority of this Administration has been and will remain tackling core citizen needs: Revitalizing neighborhoods in decline, improving public schools, strengthening families, attracting businesses to foster economic growth, ensuring public safety and high quality of life standards in every community, and to the extent possible, reducing the local tax burden. Since 2000, City wage and business taxes have been reduced by more than $1.1 billion. The City’s investment in neighborhoods to eliminate blight and pave the way for development have resulted in renewed quality of life in our neighborhoods. While neighborhoods have flourished, Center City and commercial corridors have not missed a beat. Out-of-towners, recent college graduates, and suburban empty-nesters are swelling Center City's population and remaking its neighborhoods; Center City now has the third-largest downtown population after New York and Chicago. The results of the City’s efforts have received local, national and international recognition. Responses to the 2005 Citizen Satisfaction Survey show satisfaction levels reaching all-time highs for the services rated most important by survey respondents: Trash collection/recycling, police protection, and street repair. Record high levels of satisfaction with Recreation, Fairmount Park were also achieved. In the October 2005 edition of National Geographic’s Traveler magazine, Philadelphia was featured as “The Next Great City.” The magazine called attention to the condominium-building boom downtown, and called the Old City area, with its vibrant arts and nightlife scene, the liveliest urban neighborhood between New York’s SoHo and Miami’s SoBe. National Geographic hailed Philadelphia as a walkable city that bridges the old and new, with stately nineteenth-century neighborhoods, the Champs Elysees-inspired Benjamin Franklin Parkway and, soon, wireless Internet access throughout its 135 square miles. Philadelphia’s well-deserved recognition as the “next great city” did not “just happen.” Improvements in the overall US economy have not always had the same positive effect on Philadelphia’s population or property values or economy. Philadelphia has been able to benefit from the economic upturn this time, in part because of a concerted effort by the Administration to focus on areas designed to improve quality of life, enhance services, and improve government efficiency and effectiveness, to right-size government while absorbing over $1 billion in tax cuts from FY00-FY05. Many individual efforts have contributed to the City’s transformation since the beginning of the Administration in FY01. At the end of this Introduction, departments provide highlights of their achievements over the past five years. Some achievements, grouped under the heading “quality of life,” have clearly made Philadelphia a better place to live and work. Other achievements, described under the “service enhancements” section, have provided valuable service upgrades for citizens and employers. A final group of achievements, discussed under “management efficiency Introduction FY07-FY11 Five-Year Financial Plan Page i and effectiveness,” have helped Philadelphia government operate better and smarter. Other achievements, such as the Economic Development Blueprint, are discussed elsewhere in the Plan, in this case in the Economic Development chapter. As a result of these efforts, as well as numerous other initiatives and an improved tax base, Philadelphia entered FY06 in a healthier fiscal condition and with a brighter economic outlook than it faced in FY04 and FY05. The fund balance, which had fallen to a negative $46.8 million at the end of FY04 from a high of $295 million in FY00, as shown in the chart below, grew to $96.2 million at the end of FY05, and is projected to reach $201.6 at the end of FY06, up $33 million since the proposed plan, due primarily to continued strong growth in Real Estate Transfer and Business Privilege taxes. Fund Balance at Year-End General Fund FY92 (Historical) - FY11 (Projected) 350 295.1 305.0 250 230.0 205.7 201.6 169.2 166.1 s r a 139.0 ll 150 128.8 o 118.5 D 91.3 96.2 80.5 of 71.4 76.0 69.9 s 58.9 63.9 n o 50 lli i 15.4 M 3.0 -50 -46.8 -150 1992 1993