Philadelphia's finances are improving and are likely to continue doing so through 2019.

The Pennsylvania Intergovernmental Cooperation Authority (PICA) board made that optimistic determination Monday when it unanimously approved the city's five-year plan.

The city's fiscal overseers cautioned, however, that various risks were still associated with the Nutter administration's long-term budget, including unresolved labor contracts, the School District's fiscal crisis, and the pension fund.

Despite its concerns, PICA staff found enough good news in the five-year plan and in its most recent revenue reports to endorse that administration's fiscal road map to 2019. So did the City Controller's Office. Both the staff and the controller had recommended the opposite last year, for the first time in PICA's history.

"The fund balances were higher, and that was a concern last year," Harvey Rice, PICA executive director, said after the meeting. "Preliminary revenues for '14 are higher than projected, and probably most important, there is a contract with D.C. 47."

Rice was referring to the eight-year deal the Nutter administration reached in March with AFSCME District Council 47, which represents about 3,600 nurses, librarians, social workers, and other white-collar employees. The contract, retroactive to 2009, is expected to cost $122 million over the next five years.

Still unresolved are talks with the city's blue-collar union, 8,800-member District Council 33.

"The assumptions pertaining to wage-and-benefit costs are particularly sensitive due to the uncertainty in the outcome" of bargaining with D.C. 33 and arbitrations with the police and fire unions, City Controller Alan Butkovitz said in his report to PICA.

PICA, which was created in 1991 by state law, is charged with reviewing the city's five-year plans. State funding to the city is dependent on PICA's approval of its plan.

Two large revenue streams that are not realities yet are the proposed Philadelphia Gas Works sale and the $2 cigarette tax. Finance Director Rob Dubow said that, even if both were to fall through, the city didn't expect to have a budget hole.

Proceeds from the PGW sale, which is expected to bring in $420 million to $650 million, would go to the pension fund and not disrupt other budget balances, Dubow said. The $2-per-pack cigarette tax, expected to generate $83 million in its first year, is for the schools.

Referring to School District officials, Dubow said at the meeting, "I don't think they'll come back to us for more money" if the legislature approves the tax and a budget gap remains. School officials have warned that without the tax, layoffs and other cuts would occur and the schools might not reopen on time this fall.

The city's $93 million fund balance for the fiscal year ended June 30 was $11 million lower than initially projected, thanks to added pension-fund costs. That caused PICA Vice Chair Michael Karp to voice concern about the balance's being too low for a city this big.

But when he asked whether the city was considering further belt-tightening, Dubow said there wasn't anywhere else to squeeze.

After the meeting, Karp said he would like to see the city reach a reserve of $200 million or more. Stashing away $30 million a year as rainy-day funds "would give us comfort," Karp said. But he noted that other issues needed addressing first.

"They have these labor contracts, and they have the School District, and they have the PGW sale, all things that are hanging out there," Karp said. "I understand why they want to wait another year until they want to have a serious discussion on that."

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A previous version of this article paraphrased Rob Dubow, the city finance director, as saying he didn't think the schools would ask for more city money if a cigarette tax isn't approved. He actually said if the tax passes and there still is a budget gap, he didn't think the schools would request more city funding.