Grading the Cities introduction THE GOVERNMENT PERFORMANCE PROJECT Report Card: Philadelphia Revenue Rank: 5 Form of Government: Mayor-Council Mayors: Edward G. Rendell (1992-2000); John F. Street (took office 2000) City Council: 17 members (10 elected by district, 7 at large) FINANCIAL MANAGEMENT: B- A decade ago, the City of Brotherly Love was a city of slovenly management, perhaps worse in the financial realm than in anything else. Deficit spending was endemic; budgeting was a joke. In 1991, Philadelphia skirted the edge of bankruptcy. To help dig itself out of an impossibly deep hole, it bonded out its huge deficit through the Pennsylvania Intergovernmental Cooperation Authority, which imposed a number of controls and requirements on the city, including a long-term plan. Then-Mayor Rendell seized upon the demands of the control board and the general emergency to recreate the accounting system almost from scratch, implementing a long-term plan for sound fiscal practices. Today, Philadelphia does a fine job at estimating revenue and expenditures, which it watches with monthly tracking and quarterly reports. The city council is required to accept the revenue estimates, which helps keep the budgeting process honest. The city is getting debt structure on a firm footing. It has above-par contracting practices, and has reduced the time it takes to pay its bills. But some of the ghosts of the past have not been completely exorcised. In particular, the city is hampered by antiquated, often foolish financial rules. For example, it is forbidden to budget any kind of surplus. Philadelphia’s accountants must juggle their figures to budget a zero fund balance, sometimes obscuring a true picture of the city’s fiscal condition. Philadelphia’s pension systems have been severely underfunded, with an accrued liability of about $2.7 billion at the start of 1999. The situation has improved in recent years, but, as one observer says, “it’s an area that’s gone from really bad to bad.” HUMAN RESOURCES: B- Philadelphia’s recruitment and training efforts have improved dramatically. Prior to 1997, the entire recruitment staff consisted of two clerks who accepted applications and made sure that job announcements were distributed. Then a professional recruitment team was hired, and the whole process of bringing new employees on line was revamped. Each city agency is now required to develop a written training and development policy to guide the process, which is largely decentralized here. Training can also be rewarded with bonuses. Unfortunately, the city has few other means to encourage superior performance with cash. Perhaps most important, the whole process has been speeded up considerably. But that is an achievement in relative terms only: It still takes well over two months on average to bring a new employee on board. The city’s official hiring practices remain much more rule-bound than true efficiency would dictate. INFORMATION TECHNOLOGY: B+ The forward motion in Philadelphia’s IT has been nothing short of miraculous since 1993, when the city installed its first chief information officer. The city now makes information of many kinds available for its managers. Implementation of a data warehouse will improve matters still more by easing access to data where it is currently difficult, especially in the areas of health and welfare. An overhaul of the HR data system is on the drawing boards. An intranet-based work force planning information system has been implemented. The city has a very good strategic information planning process, although not one that is fully immune to political pressure. One IT official complains that political considerations sometimes overrule sensible planning. To help alleviate that, the city’s CIO is strongly recommending that Philadelphia create a central steering committee for IT. That could help forge consensus about procurement decisions strong enough to resist outside pressures. CAPITAL MANAGEMENT: B- Philadelphia has a relatively solid capital planning process. Temptations by city council members to play with the written plan have been reduced by providing a lump sum of $1.2 million to each of the 10 council members to spend as desired. “It keeps the council people happy,” says one city official. However, the plan is far from perfect. It is written with little public input, and the final document contains no significant project justifications. There’s been dramatic improvement in evaluating and monitoring capital projects throughout implementation. In the past, many projects were over budget and delayed. A Capital Program Office was officially established in fiscal 1998 and has improved tracking of projects. The absence of an organized program for maintaining assets is a serious problem. As the city controller’s office notes, Philadelphia workers recently repaired the walls of one local recreation center, then moved on even though the roof still needed repairs. “If there is a flood or heavy rain, the work done to the walls will be a complete waste,” says one official. MANAGING FOR RESULTS: B In 1995, the Rendell administration produced a document called Philadelphia 2000, with agendas set out department by department. The plan, updated yearly, has allowed the city to communicate clear goals to its agencies, and there is a consistency of objectives and measures across departmental lines. The city has an aggressive performance measurement effort, with monthly, quarterly and annual reporting by departments that report to the mayor. The quality of the data varies. In 1997, the police department’s statistics were questioned, and it was discovered that numbers were being purposefully misreported. A new police commissioner has focused on getting better information. The city council has become much more involved in using results measures for policy making, and the Rendell administration did a particularly good job of providing performance information to citizens. AVERAGE GRADE: B Copyright © 2000, Congressional Quarterly, Inc. Reproduction in any form without the written permission of the publisher is prohibited. Governing, City & State and Governing.com are trademarks of Congressional Quarterly, Inc.