City Council wants to probe PPA’s $11.3 million refund to Philly School District

Philadelphia City Councilmember Helen Gym is calling for hearings to probe the Philadelphia Parking Authority over an $11.3 million debt it lodged against the city’s cash-strapped School District last fall.

Each year, the PPA cuts both the city and School District a slice of its on-street parking revenue, as part of a 2004 profit-sharing agreement that solidified Republican control over the state-run Parking Authority. But for the first time, the PPA claims it overpaid the district by a hefty sum — and asked the district to pay back what advocates say amounts to the annual salaries for more than 100 teachers.

In a resolution introduced Thursday, Gym, who has long sparred with the authority, called the PPA’s request “unorthodox” and a sign of larger financial mismanagement issues.

“It is long past time for us to seek a longer-term, formal financial oversight over this body,” Gym told Council. “[The PPA] is a critical public trust. It has the responsibility of not only doing the good work of managing our streets and parking, but it also has the important responsibility of funding our city and funding our schoolkids.”

» READ MORE: PPA tells the cash-strapped Philadelphia school district to pay back $11.3 million

PPA spokesperson Martin O’Rourke disputed the characterization of the $11.3 million as “a refund,” saying that the overpayment was discovered during a routine audit and that the authority is bound to uphold the debt.

“Like all governmental agencies, because the PPA is bound by existing laws and accounting procedures, it cannot just dismiss the overpayment,” O’Rourke said.

The disputed amount is a small fraction of the district’s $3 billion annual operating budget. But it amounts to more than a fifth of the $53 million that the PPA has paid to the district since 2015, according to budget documents.

Gym and other public education advocates — who have been calling on the PPA to cancel the debt since December — cast the discrepancy as the latest in a string of misleading financial maneuvers by the authority. In 2014, the PPA promised that a 50-cent-per-hour parking rate increase would net the School District millions in additional revenue. Instead, the PPA’s annual contributions plummeted.

The district has been pushing back over the math behind the claim. In a January letter reviewed by The Inquirer, PPA executive director Scott Petri said the district’s concerns were “premised on an inaccurate understanding” of the 2004 law that outlines the funding formula.

Uri Monson, chief financial officer for the School District, said Thursday that the district is waiting on responses to more questions about the PPA’s basis for the financial miscalculations, which revolve around long-term pension and other post-employment benefit expenses.

The proposed hearings are far from the first call for a financial probe in the PPA.

According to Gym’s resolution, Council called for hearings with the PPA to address school funding in 2018, but the PPA did not attend.

Two independent agencies — the offices of the Pennsylvania auditor general and the city controller — have probed the PPA’s finances in the past. But unlike other government bodies, the PPA does not have its annual operating budget approved by lawmakers. Rather, the agency’s board sets its annual budget, and routine audits are conducted by financial firms retained by the agency.

With the resolution passed, Gym’s office is looking to schedule the first hearing sometime this spring.