Core Services
The Office of the Director of Finance is responsible for the financial, accounting, and budgetary functions of the City of Philadelphia, setting city-wide fiscal policy guidelines, as well as providing oversight and direction on financial matters to all City and quasi-governmental agencies. In addition, Finance includes a Risk Management division that analyzes and manages city-wide insurance needs, as well as other risk exposure issues; the Office of Administrative Review that administers the adjudication process for taxpayer appeals of all city assessments or bills (with the exception of real estate tax assessments and tax principal); and a contract management unit that provides daily advice and guidance to various departments on compliance with Chapter 17-1400 of the Philadelphia Code.
Also under the purview of the Finance Director are the Revenue Department, whose mission is to set and interpret tax regulations, and collect all taxes and other fee revenue from the taxpayers of the City of Philadelphia; the City Treasurer, who oversees the management and investment of the City’s cash, as well as recommending and implementing policies regarding all City debt; and the Board of Pensions and Retirement, who manages all City Pension processes and oversees investment of the City Pension Fund.
Under the Philadelphia Home Rule Charter, the City Solicitor is the chief legal officer and counselor for the City. The City Solicitor represents the Mayor, and his Administration, City Council and more than 30 City departments, commissions and agencies. The City Solicitor manages the Law Department.
The City of Philadelphia Law Department is responsible for providing legal advice to all officers, departments, boards, and commissions within the City concerning any matter arising in connection with the exercise of their official powers. Included within this responsibility is the collection of all fines, taxes and other debts owed the City, the representation of the City and its officers in litigation, the preparation of ordinances for introduction in City Council, and the negotiation and preparation of City contracts.
Public Engagement:
Listening to Citizens
Throughout an extensive public
engagement process on the FY10
budget, one comment was raised
consistently and more frequently than
all others in both formal budget
workshops and informal conversations
with the Mayor and his senior staff –
Philadelphia should aggressively
pursue any citizen or business that
owes money to the City. While the
Finance, Revenue, and Law
departments had already dedicated
resources to the issue of increased
debt collection, public support for
these initiatives along with declining
revenues to the City, have further
prioritized these initiatives for the
upcoming fiscal year.
Moving Forward
Delinquent Tax Collection
The Finance, Revenue and Law
Departments are working aggressively
to pursue people and businesses that
owe the City of Philadelphia money.
Last fall, the City announced a series
of aggressive new approaches to
collecting delinquent taxes including
publishing the names of the City’s
biggest business tax delinquents,
enhanced auditing of taxpayers and
increased matching of City returns
with federal tax returns to identify
those who may not be paying their
share of taxes. Since the list of
delinquent taxpayers was published,
$1.4 million in payments have been
made and commitments for another
$1.4 million have been received. These
departments continue to work
together to devise new ways to ensure
that the City collects all of the money
that it is owed.
In the past few months, an emphasis has been placed on identifying non-filers of the parking tax. Investigators have been active in the area around the stadiums during games and events, and non-compliant operators have been contacted. Thus far, new investigations have yielded $382,000 in assessments, with enforcement efforts ongoing.
The Law Department will work to identify additional savings by controlling liability costs and identifying affirmative litigation opportunities to collect money owed to the City. Additional anticipated efforts include the creation of one taxpayer database to replace two separate databases now maintained in Law and Revenue, expanding the use of collection agencies, publicizing real estate tax delinquents and introducing a tax fraud hotline.
Streamline Payments
Public feedback and internal quality
measures indicate that there is room
for improvement in the way that the
City processes payments from citizens
and businesses. In order to address
this, the Revenue Department is
working hard to communicate,
primarily through tax professionals,
how citizens can speed processing
times by making sure all of their
information is clearly communicated
and easily captured. The Revenue
Department has explored the purchase
of additional processing equipment
and is adding an extra shift of
temporary workers during the
calendar year 2009 tax season to
deposit payments more quickly.
Decrease Outside Counsel Costs
In FY10, the Law Department
intends to increase its internal staff to
reduce outside counsel expenditures.
Based on recent trends, the Law
Department expects an increase in
Civil Rights matters filed against the
City. By using case management
methods used in prior similar lawsuits,
the Law Department intends to more
effectively control the City’s liability
costs. The Law Department will also
work with the Inspector General’s
Office to identify cost recovery
opportunities related to the
investigations of the inappropriate use
of City funds.
Smarter, Faster Collection of Penalties
The Office of Administrative
Review (OAR) administers the
adjudication process for taxpayer
appeals of all city assessments or bills
(with the exception of real estate tax
assessments and tax principal). These
include interest and penalties on
delinquent tax payments, contested
parking violations (through the Bureau
of Administrative Adjudication),
sanitation and other code violations,
false alarm infractions, EMS bills,
nuisance abatement fees and excessive
water and sewer charges. Last fall, as
part of the FY09 budget rebalancing
plan, OAR was able to obtain City Council approval to restructure the
fees and fines related to registration of
burglar alarms and associated false
alarm fines. As part of this process,
OAR was able to gain Council approval
to allow for administrative
adjudication of alarm fees and fines, as
opposed to the requirement that all
such cases be taken to Municipal
Court. This allows for timelier
disposition of cases and enhanced
revenue collections. To further
enhance collection efforts, OAR is
exploring the possibility of seeking the
same change in the adjudication
process for other Code violations, such
as SWEEPS violations and littering
fines.
Debt Management
The Finance Director and City
Treasurer are responsible for
overseeing the management of the
City’s debt. The current credit crisis
and bond insurer downgrades have
caused the variable rate bond markets
serious difficulties. This has affected
municipalities across the country,
including the City of Philadelphia.
Interest rates on some of the City’s
variable rate bonds increased significantly to the 7% to 10% range,
leading to higher costs and a need to
take action to remedy this problem.
The City had approximately $1.9 billion of outstanding variable rate debt including General Fund, Water, Aviation and PGW when the problems began in the market one year ago. Of that amount, approximately $750 million has been restructured or refunded over the last year, bringing costs down to historical averages on these bonds. The City along with the Water Department, Airport and PGW, are currently evaluating options to best handle restructuring or refunding the remaining variable rate bonds.
vii http://www.phila.gov/investor/pdfs/Moody_Philadelphia_2.pdf