The Philadelphia Parking Authority (PPA) has agreed to let the School District of Philadelphia keep $10.8 million that it had previously described as an overpayment.

In a statement on Monday, May 2, the PPA announced the reversal, saying that it reached a “legal and responsible” resolution with the city, which was made possible through some adjustments to pension and healthcare benefits for retired PPA employees.

 The agreement also provides an additional $859,000 to the city.

"This is a legal and responsible resolution for all parties that benefits the school children of Philadelphia,” said PA Board of Directors Chair Beth Grossman.

Annually, the PPA divides its on-street parking profits between the city of Philadelphia and its public school district. The profit-sharing is mandated by a 2004 agreement that solidified Republican control over the state-run parking authority.

Under the deal, the city gets a capped amount of parking revenues, and the school district gets anything beyond that.

In February 2021, the PPA claimed that its auditors had determined its $14 million payment to the school district in 2020 was a miscalculation, and requested the return of $10.8 million.

The debt stirred up a heated financial dispute between the district and school officials. Despite pressure from education advocates and council members, PPA officials insisted that they had a right to seek money the agency overpaid, and that it was legally required to collect it. 

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

The agency’s demand last year for the return of the funds prompted an immediate protest from City Councilmember Helen Gym, who accused the PPA of mismanagement and bad faith.

On Monday, May 2, Gym said the council will continue investigating the authority in the wake of this latest development. 

“Year after year, our District has consistently been short-changed by the Parking Authority. And year after year, we see new instances of financial mismanagement, surprising budgetary allocations, and forced leadership changes. The need for independent oversight has never been more evident, and today’s announcement does not change that fact,” Gym said in a statement. 

City Council President Darrell Clarke said he hopes the agreement will signal a new era of accountability to Philly residents and school children. 

“Whatever the nature of this dispute, the only thing that truly matters is educating our children, and ensuring that the District has the resources it needs to do so,” Clarke said in a statement. 

With the debt argument now settled, Uri Monson, chief financial officer for the School District of Philadelphia, said the district looks forward to maintaining a “cooperative relationship” with the city and the PPA in the future. 

“This is a good outcome for the district that ensures we can focus on devoting resources to meeting the needs of the students of Philadelphia,” Monson said.