We’re not hearing the full truth on city’s financial deals | Editorial
The shift in plans for the new police headquarters cost a lot more than we've been told.
The city budget of $4.7 billion is a massive number whose meaning is difficult to comprehend — and frankly, that can work to the advantage of the people in charge of spending it. What’s the loss of a few million dollars here and there in the face of billions?
But those millions do matter, especially in a city struggling with a seemingly intractable poverty problem. Too often, city officials shrug away the importance of the financial decisions they make, good and bad. It would be hard to tally all the decisions that cost the city money, but one recent set is worth looking at: the move of the new Police Headquarters from 4601 Market St. to 400 N. Broad St.
In 2014, the Nutter administration bought the former 325,000-square-foot headquarters of Provident Mutual Life — a white elephant for years, having failed to attract a viable reuse of the 15-acre campus. The city spent $52 million to buy and renovate the building. Last year, though, Mayor Kenney switched the plan and decided that the police would be better served at 400 N. Broad (the former home of the Inquirer and Daily News). He cited the more central location and space that could better accommodate other Police Department operations.
The city will pay more than $200 million to acquire the building and renovate it. Meanwhile, a recent Inquirer report by Jacob Adelman said the city is under contract to sell the Market Street site for $10 million – a small part of the $52 million outlay.
The words mistake, debacle, and massive financial loss haven’t been mentioned much in reference to the deal. But they should be. For example, it’s not true that the city spent $52 million on the Market Street site. In the borrowing required to finance the deal, adding the cost of the debt service put taxpayers on the hook for $117 million.
That’s on one deal.
Every year, the city spends tens of millions on debt service. For fiscal year 2018, the city paid $78 million just to borrow money.
That’s for one year.
Municipal finance is not a subject most taxpayers want to wade into. But too often, financial decisions are made in a black box that makes it impossible for those paying the bills to understand what they’re paying for and how much it costs. That black box needs to be opened — and it can start with officials being more transparent when they make deals to give a more fully realized picture of the cost, including fees for borrowing. The decision to move Police Headquarters from Eighth and Race Streets weighed a number of factors, like efficiency and proximity to courts. And maybe in the end it will turn out to be a financially responsible decision. But without the full picture of the finances involved, no one will ever be in a position to make that case.
Taxpayers may not understand the intricacies of big financial transactions, but they deserve to learn the full truth of the deals being made on their behalf.