COVID-19 presented big budget challenges for Philly, officials say

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PHILADELPHIA (KYW Newsradio) — Philadelphia finance officials, last week, gave a glimpse of the challenges the city budget is facing as a result of COVID-19. In a pair of City Council hearings, they laid out how the spending plan has changed to keep up with unexpected costs and lower revenues.

COVID-19 struck just after Mayor Jim Kenney presented an ambitious budget for this fiscal year. It had to be hastily rewired and budget director Marissa Waxman said, six months in, it was clear some things had to be moved around.

For example, no one guessed what the recent election would entail. The city commissioners needed $10 million more than was budgeted.

The fire department was the most dramatically underfunded. She said it needs $24 million dollars just to keep up current levels of service. Meanwhile, waste disposal costs rose by nearly $9 million. All of this ate into what was already a very low fund balance — the amount of cash on hand — but Waxman said it had little choice.

"Philadelphians have a lot of needs that we wanted to be able to meet so that is why we requested the additional spending," she said.

The appropriations committee approved the transfers, but in a follow-up hearing on city finances, Harvey Rice of the state budget watchdog, PICA, said the low fund balance is cause for real concern. The ideal is to have two months worth of spending on hand but the city has been hard pressed to keep two weeks worth on hand. Now, Rice said, the city is down to two days worth.

"Which the pandemic or one or two events could wipe it out completely," he worried.

Rice said PICA has asked the city to make a contingency plan, in case that happens.