Controller Candidates Endorsement Questionaire: Brett Mandel

Firstly thanks to all three Democratic candidates for Controller coming out to the April meetup - Alan Butkovitz, John Braxton and Brett Mandel. The lively exchange was appreciated.

Also as part of the endorsement process a series of endorsement questions was sent to all three candidates. Unfortunately, only one candidate was able to complete the questions within the set deadline. Fortunately, that candidate's answers reflect an impressive depth of thought and consideration.

That candidate was Brett Mandel. Please take time to review his answers not just in consideration of your endorsement vote, but also because several of the answers are quite timely in consideration of the current local budget crisis.

Philly for Change Candidate Questionnaire
Name: Brett Mandel
Office Sought: Philadelphia Controller
Campaign website: www.brettmandel.com
Contact person: DeWitt Brown
Email: mandelforcontroller@gmail.com
Phone: 215 545-1809

1. The Parking Authority was supposed to produce at least $25 million a year for schools after the state takeover. Since then it has more than doubled its workforce, expanded its control over cabs and redlight cameras but has so far failed to meet that $25 million a year goal. Where has the money gone and what will you do to make the PPA's finances transparent?

The current Controller was urged in November 2007 by Governor Rendell to audit the Philadelphia Parking Authority to determine if the agency was giving the City and the School District enough money each year. Despite the Governorʼs pleas, the Controller (who incidentally employs as a top campaign aide, the spokesperson of the Parking Authority) has still not completed the work. Philadelphians are still saddled with an underfunded school system and an unaccountable Parking Authority.

We don't know where the money has gone because the current Controller has failed to complete the audit the Governor requested. As Controller, I will immediately begin an audit of the PPA and pledge to publish the results of that audit no more than one year after I take office.

2. The Controller is the swing vote on the Pension fund between the City worker's unions and the City and bears a special oversight over the Pension Fund's health. How did we get to a point where so much of our current taxes goes just to making up for shortfalls in the fund's holdings? What are best practices to improve the fund's health over the long run?

While the international economic collapse has affected returns in the pension fund, much of the historical underperformance of the fund is our own fault. The pension board currently employs several fund managers. While some have done an excellent job delivering solid returns, others have consistently delivered below-average results. Despite their poor performance, the Pension Board has retained fund managers who have failed to earn a strong return in the marketplace.

As someone vested in our pension system, I find this disturbing. More troubling, underperforming managers may be retained more for their political connections than their ability to manage our money. As a member of the Pension Board, I will take action to eliminate underperforming managers, regardless of their political connections.

3. DROP: Is it being used effectively as a planning tool to manage City worker's retirements or should the program be refocused? Should it apply to elected officials? What is its actual impact on the health of the Pension Fund? If you don't have an answer, what will you do to come up with a solution should you be elected/reelected?

DROP should not be available to elected officials. The program was never intended to benefit elected officials and it is only because of a questionable City Solicitor opinion that the program has been subverted for this purpose.

In an article titled "Is DROP Working? Nutter Wants a Study" dated March 12, 2009, the Daily News reported that Mayor Nutter intends to spend tax dollars to commission a study of the city's Deferred Retirement Option Plan (DROP). The last and only audit of DROP was conducted by an outside consultant in 2003. Mayor Nutter has been forced to spend additional tax dollars to commission this study because the current Controller has never audited DROP.

Instead of hiring some high-price consultant to run the numbers, the Mayor should ask the Controller to audit the DROP program. I would certainly volunteer to do so to determine the effects on our pension fund and operating budget. Armed with that information, policy makers can determine DROPʼs future. Then, maybe we would have a few more dollars to spend on the services that are so important to us.

4. The School District is facing dramatic changes currently: President Obama's stimulus package means likely influx of funds for physical facilities, Dr. Ackerman has outlined dramatic if somewhat open-ended plans for transforming the management of low performing schools, and the membership of the School Reform Commission has seen its chair and a majority of its board recently turn over. On the fiscal side there were in the last few years large, unexpected budget shortfalls under the last full time school CEO, allegations of fraud in contracting of services, several different instances of Federal investigations of fraud by charter school operators.

What will you do as Controller to guarantee greater oversight over use of funds in the School District and to stop bad practices from snowballing? How will these practices be an improvement over recent past performance?

In addition to auditing city spending, the City Controller has “pre-audit” authority over city spending so the Controller must approve or disapprove all city payments before they are made.

This power allows the Controller to ensure that funds are only being spent as properly appropriated. The Controller should be granted the same authority over School District spending so he or she can be more proactive in monitoring District spending. This way, the Controller can identify problems and misuse of funds before it is too late to do anything but complain.

But, in evaluating the City Controllerʼs role in overseeing School District spending, one must note that the Current Controller uses scarce School District money to hire political aides — including his campaign treasurer — to work in his office. By taking money from our School District that should be spent to help our children, the current Controller evades the legal restriction prohibiting City employees from performing political work. This is appalling. The Controller's Office should not be using our tax dollars for such purposes. He should be setting an example for other City agencies. Instead he is providing a case study for how to use taxpayer's dollars to favor cronies and political insiders.

Ending the practice of using School District funds to evade rules prohibiting City employees from engaging in political activities is a necessary first step in restoring the Controller's credibility and Philadelphia's credibility generally.

5. What are some of the best fiscal oversight practices you see used in other cities that you would like to see adopted here in Philadelphia?

As Director of Financial and Policy Analysis in the City Controllerʼs Office, I was responsible for leading the Controllerʼs Officeʼs consideration of issues relating to financial and budgetary policies. In June 2003, we published BUDGETING FOR A PREFERRED PLACE: Improving Service, Accountability, and Efficiency With New Budgeting Tools — a review of best practices of fiscal-oversight practices.

While the city has made some progress toward including ideas from this report in its operations, the recommendations of the report remain relevant today and would greatly improve the cityʼs fiscal-oversight practices:

Create a community-based goal setting process — The city should amend the Five-Year Plan to include goals established through formal goal-setting process that would stress public involvement. Neighborhood goal-setting meetings could create a dialogue about proposed city programs. A citizensʼ advisory panel could be created to provide input on the goals to be articulated in the Five-Year Plan.

Introduce benchmarks to city services — The City of Philadelphia should join the ICMA performance measurement program. City performance measures should be compared against ICMA and other benchmarks. Program level benchmarks should be tied to department and citywide goal setting efforts.

Link performance measures to the budget process — The city should publicly link agency performance to budget details and use those links to create incentives for improvements and consequences for poor performance. The city should include more measures that track both agency outputs as well as outcomes and should be developed for all new initiatives and programs in the Five-Year Plan.

Expand accountability with performance measurement and data collection — The city should utilize frequent and regular measurement of relevant statistics affecting and affected by city services. To hold managers accountable and help direct service to problem areas, the city should convene regular CitiStat-like conferences.

Include activity-based costing in budget process — The city should determine the true cost of different government activities and include activity based costing procedures in department and citywide budgets.

Include budget trade-off discussions in budget documents — The city should include information about budget trade-offs in public documents so that policy makers and the public can better understand budget priorities and the budget process.

Create a Rainy-Day or Revenue-Stabilization Fund — The city should create a budget mechanism, such as a Rainy-Day Fund or Revenue-Stabilization Fund, to set money aside in times of plenty to create reserves for use during economic downturns. Use dynamic scoring for budget forecasts — The city should use dynamic scoring and other economic forecasting tools to improve efforts to predict the effects of current policies on future budgets.

Include asset maintenance schedules in Five-Year Plan — The city should include asset-maintenance schedules in its Five-Year Plan to budget for all existing and new government buildings and capital equipment.

Require Fiscal-Impact Statements — The city should require fiscal impact statements for legislation that has the potential to significantly impact city finances.

6. In this time of fiscal crisis where do you see the role of Controller in relation to the budget roles of the Mayor and City Council?

The Controller has three important powers when it comes to the budget process: he offers aformal opinion on the city budget and financial plan, he must approve or disapprove all requisitions for city payments, and he has the power to provide complete transparency for all city spending.

First, as mandated by state law, the Controller must prepare an opinion for the Cityʼs state appointed, financial-oversight authority on the reasonableness of the assumptions and estimates in the Cityʼs budget and financial plan. In what appears to be a clear violation of State law, the current Controller has refused to do so. If the citizens are to have any confidence in the Cityʼs plans to raise and spend our public money, the Controller must review the budget and financial plans and issue a formal opinion about whether our books will balance.

Second, the Controller is charged with the responsibility to examine and approve or disapprove all requisitions for City payments. The Controller should exercise this power like an umpire in baseball. If the spending is legitimate, it should be approved, but if that spending is bending rules or skirting proper procedures, the Controller must disapprove the questionable payments.

Similarly, in the shameful case of the Philadelphia Eagles owing the City $8 million, the Controller must not approve any more payments to the team until the City gets its money. (Sadly, the current Controller has approved payments to the Eagles every year without question.)

Finally, the Controller can provide the transparency our taxpayers deserve when it comes to city spending. In exercising the “pre-audit” power, the Controller could post every single City payment online and create an Internet-based searchable budget database so we can see exactly where our money goes. This information would benefit all parties interested in the budget process. From City Council to municipal unions to concerned citizens, an active Controllerʼs Office that creates a transparent budget will enable all
parties to have the same information that the Mayor has. When parties come to the negotiating table, I pledge that I will make my office available to provide all the information they need so that they stand on the same footing as the Mayor. I believe that this was the role originally envisioned for
the City Controller.

By failing to provide a necessary check on the Mayorʼs budget power, the current Controller has caused our strong-mayor system to become even further tilted in favor of the Mayor. I will restore the Controllerʼs office to its proper position.