City controller outlines steps to cut deficit

The city could cut its $1 billion, five-year budget deficit by 41 percent through stepped-up collections of delinquent fees and by raising rates for some services, according to a brief report released yesterday by City Controller Alan Butkovitz.

Butkovitz contends that the city would generate an additional $68 million in new annual revenue, plus $73.9 million in one-time collections if it adopted his recommendations.

His key recommendations include:

Increase ambulance reimbursement fees and improve Fire Department billing collections: $46.1 million a year.

Collect delinquent court fines for a onetime benefit of $69.8 million.

Improve collection of demolition service fees in the Department of Licenses and Inspections: $20 million a year.

Collect all $117 million in delinquent fees owed to the Water Department. Water revenue does not go into the city's General Fund, and thus this would not help the city close its $1 billion, five-year deficit.

None of the proposals were new. Rather, Butkovitz compiled recommendations he has made in past audits of city departments.

"These are all things we have seen before. We've looked through them," City Finance Director Rob Dubow said. "To the extent that the ideas were good, we've used them."

As an example, Dubow said the administration was "very aggressively" going after delinquent water bills and that a new deputy director had been hired to lead the initiative. So far, however, the percentage of water customers who pay their bills on time has remained at about 60 percent, the same as in earlier years.

Dubow said that the Clerk of Quarter Sessions has issued a request for proposal from collection agencies, seeking a contractor who would collect debts that are up to 15 years old.

The city is also increasing ambulance fees, but Dubow expects only to raise an additional $1.7 million off the hikes next year, far less than Butkovitz said can be generated.

"I think that there's a lot of room for increased savings by adopting and drilling down into these recommendations," Butkovitz said.

When asked if it was unrealistic to expect the city would ever collect all the bills owed to it, Butkovitz acknowledged that some percentage was probably not collectible. The debtors could be dead, for instance, or a company that owes the city money might have gone out of business.

But he said the city ought to step up its efforts to collect delinquent fees before concluding it would never get the money.

"If you don't bill people they don't pay their bills," Butkovitz said, alluding to an audit he did of the Department of License and Inspections before Mayor Nutter took office that found fees were not collected for demolitions.

Though Butkovitz focused on improving collections of delinquent fees, he also recommended more than $14 million in budget cuts and other money-saving measures, including moving to paperless paychecks, the sale of a city health center at 500 S. Broad Street, and getting rid of unused city cellphones that charge a $5 monthly fee (saving $168,000 a year).