Judge Gives City a Financial Break
PHILADELPHIA (AP) _ The city got a financial break when a judge ruled that $90 million owed its pension fund could be paid over the next three months.
The ruling means the city will have enough cash to avoid bankruptcy when the next mayor takes over in January.
Common Pleas Judge Abraham Gafni ruled Wednesday that the city could meet its pension obligations in three monthly installments.
The pension board sought to have entire amount by the Oct. 1 due date, but the payment would have virtually emptied the city treasury.
″We still get into a hole in January, but this gives us some leeway,″ said Finance Director David Brenner, who continues to work on a five-year financial plan that will get the approval of the state oversight board so it can arrange loans to help wipe out a $200 million deficit.
For months, Mayor W. Wilson Goode’s administration had been warning the city could run out of cash as early as Nov. 1.
Now, it hopes to delay the chances of going broke by getting a short term loan from non-profit hospitals and universities that will keep it afloat through January, while it continues to negotiate an agreement with the oversight agency.
Brenner said he’d like to settle differences with the Pennsylvania Intergovernmental Cooperation Authority before the end of the Goode’s term Jan 2.
″It’s an important issue that you don’t leave the next administration facing a big liquidity problem as soon as it takes office,″ he said.
An agreement with PICA needs approval from City Council, which is under heavy pressure from municipal labor unions to keep the agency from monitoring city labor negotiations that begin next February. PICA insists it needs that right to make sure city spending is proper under budget restraints.
It is likely that talks with PICA, and any settlement on a five-year plan, will be delayed until after the Nov. 5 election - and that will shift the problem to the next mayor.