Philly Council Asks Voters to Vote Blind on Bond Issue

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City Council Asks Voters to Vote Blind on Bond Issue
Republicans Recommend a "NO" Vote
By J. Matthew Wolfe

The Philadelphia Republican City Committee has voted unanimously to recommend to the voters that they vote NO on the question on the General Election ballot asking approval of a bond issue. We make this recommendation because of the shameful failure of City Council to give the citizens of Philadelphia any transparency or assurance that the funds will be used properly and for projects that advance the city’s mission.

The ballot question asks the voters to authorize a bond issue for almost $95 Million. The question on the ballot reads as follows:

Should the City of Philadelphia borrow NINETY-FOUR MILLION SEVEN HUNDRED FORTY-FIVE THOUSAND DOLLARS ($94,745,000.00) to be spent for and toward capital purposes as follows: Transit; Streets and Sanitation; Municipal Buildings; Parks, Recreation and Museums; and Economic and Community Development?

The legislation that City Council passed that authorized that this question be placed on the ballot gives little additional information. It puts an amount of money for each category as follows:

Transit $ 1,070,000.00
Streets and Sanitation $ 18,448,000.00
Municipal Buildings $ 44,599,000.00
Parks, Recreation and Museums $ 18,816,000.00
Economic and Community Development $ 11,812,000.00
Total $ 94,745,000.00

The legislation also states that City Council can transfer money between the various categories at any time.

Capital expenditures are critical to the city’s operations. The failure to adequately address renovations of property can end up costing more money over the long term. In order to carry out its responsibilities, the city requires an infrastructure that logically must be financed over the life of the asset. We understand and appreciate the necessity for the city to borrow money to meet its capital needs.

Philadelphia has a history of using capital funds for operating expenses, which is the functional equivalent of taking out a mortgage to buy groceries. Democratic Mayor Street’s signature program, the Neighborhood Transformation Initiative (NTI) was a nearly $300 Million scheme whereby the city sold bonds and, using cronies of the Mayor to manage the project, did things like clear vacant lots and tear down vacant buildings. These were tasks that should have come out of the operating budget. Philadelphia spent capital dollars and was left with long-term debt but few if any capital assets. Further, the whole idea behind the PICA board was that we took the operating budget deficits run up by Democratic Mayor Goode and financed them over time.

In addition to the lack of transparency and detail, there are several red flags that should concern voters. Transit, streets, buildings and parks are the sort of thing one would expect to see in a capital budget. "Economic and Community Development" is not. That is normally programmatic in nature rather than capital intensive. This is over 10% of the total. More concern is warranted due to City Council’s propensity to divide such programs into ten sections and give each district council member authority to award them in their district – which opens the door to patronage, mismanagement and corruption.

Another red flag is the authority that City Council has given itself to transfer money after the bond issue is approved between the categories. They have earned our mistrust.

Finally, City Council if also proposing to sell vacant school district properties and expects to recover $50 Million. These properties are capital assets financed over time with bond issues. Any sale of these assets should be used pay down our long-term debt or to pay for other capital assets. That money is over 50% of the money in the bond issue. Why, if we are selling $50 Million in capital assets, are we borrowing $94 Million to finance other capital needs?

A better question to be put before the voters would be an amendment to the City Charter that would require City Council to state the specific projects and the cost of those projects that make up a bond issue.

The Philadelphia Republican City Committee feels strongly that the voters should reject this ballot question and demand that City Council provide them with adequate information to make an informed decision on future bond issues.

J. Matthew Wolfe is a Republican Ward Leader in West Philadelphia and is a member of the Philadelphia Republican City Committee’s Policy Committee. He can be reached at [email protected]