Another free pass on the Parking Authority
by Helen Gym on Jul 29 2009
It’s hard to imagine the City of Philadelphia and our schools 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, the threat of an austere senate bill that will strip away millions of dollars from public schools, and the elimination of a historic school funding formula. You get 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 Parents United for Public Education, along with others, took up this cause and the media did what it does best – a devastating expose on the PPA's waste and excess spending – and politicians did their thing which was to bluster and call for an audit.
Now 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, 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 after-school 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’s 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.
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. 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.