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Bill Peduto asks Gov. Tom Wolf to end Pittsburgh's 'financially distressed' status

Bob Bauder
| Monday, Nov. 13, 2017, 1:21 p.m.
Pittsburgh Mayor Bill Peduto
Nate Smallwood | Tribune-Review
Pittsburgh Mayor Bill Peduto

Pittsburgh Mayor Bill Peduto announced Monday in an annual budget address to City Council that he's seeking the city's release from state financial oversight contingent upon council passing a series of fiscal reforms.

Peduto said he has asked council to legislate reforms including limiting borrowing to 12 percent of annual operating expenditures, maintaining a minimum yearly fund of 10 percent of operating expenditures and prohibiting any enhancement of employee pension benefits. Pittsburgh since 2004 has been under state fiscal oversight of two committees — Act 47 coordinators and the Intergovernmental Cooperation Authority — which have control over spending.

“Due to the progress we have made I'm happy to share a letter that I have sent to Gov. Wolf and Secretary (Dennis) Davin of the (Pennsylvania Department of Community and Economic Development) requesting their approval for ending the city's distressed status, termination of Act 47 provisions and the completion of ICA oversights contingent on city council enacting a series of financial reforms to ensure we don't return to the practices of the past,” Peduto said.

The Mayor said he has asked council for legislation — including a 1 percentage point increase in the city's realty transfer tax, now 4 percent of a property's sale price — to generate funding for affordable housing and universal city preschool.

Peduto said he would seek matching donations over 10 years from large Pittsburgh nonprofits, including Carnegie Mellon University, Highmark, University of Pittsburgh and UPMC, to fully fund the two initiatives.

“It makes my job so much easier to say, ‘Look this is what we've committed. Now I need you to commit to the same level, or more,' ” he said. “Being able to have those big four as the first four to commit will then allow other nonprofits, the foundations, the corporate community to be a part of this program.”

The nonprofits said they're willing to consider Peduto's proposal.

“Mr. Peduto knows he has UPMC's support and can count on our fullest possible participation for a solution that is fair and equitable and includes the other large nonprofits,” said UPMC spokesman Paul Wood.

City Controller Michael Lamb said a tax increase would put the city at a competitive disadvantage.

“He's basically suggesting that council should raise taxes to get more money from the nonprofits, which I think is just wrong-headed,” Lamb said. “Raising taxes at this point would really be devastating, I think, to the city from a competitive standpoint.”

Peduto said next year's $554 million operating budget will pay for more public safety personnel and building inspectors. He plans to train three classes of police recruits and one class of firefighter recruits next year and hire more inspectors to keep pace with increased development.

The $107 million capital spending plan will pay for nearly 200 separate projects, including additional street paving, facility maintenance and upgrades and improvements for senior and recreation centers, playgrounds and sports fields.

Pittsburgh will spend $16.4 million on paving projects next year and $900,000 on improvements to sports facilities, Peduto said.

The city also is seeking federal and state funding to enlarge a network of “smart” traffic signals that can sense congestion and automatically adjust the signals.

Peduto said plans call for a seventh police station that would provide coverage for entertainment districts, including the North Shore, Downtown and South Side, and a new public safety training facility. Planning for the training facility will begin in 2018.

“The 2018 budget and five-year plan continues our path toward long-term financial stability,” he said. “The 2018 budget and five-year plan strike a balance between the need to provide high quality and efficient municipal services and invest in the city's infrastructure while also being a prudent steward of the city's finances.”

Bob Bauder is a Tribune-Review staff writer. Reach him at 412-765-2312, bbauder@tribweb.com or via Twitter @bobbauder.

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