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City Council gives tentative approval to Peduto's early retirement plan

Bob Bauder
| Monday, Nov. 25, 2013, 4:06 p.m.

Pittsburgh Mayor-elect Bill Peduto said Monday his early retirement plan for non-union employees likely would have no effect on the city's spending.

Peduto's proposal cleared its first hurdle on Monday when City Council gave preliminary approval to legislation that would permit up to 136 employees, ranging from department directors to secretaries, to retire with a full pension. The plan could cost the city as much as $2 million annually in each of the next 10 years if all 136 take the offer.

Peduto, however, speculated that the tab would be much less.

“You don't want to tell people who have spent 20 years of their lives working for the city that they're just gone,” Peduto said. “This is a way to treat people with dignity.”

He estimated that only 50 to 60 employees would retire, bringing the yearly cost well below $2 million. He said his administration would account for the remainder by eliminating and combining jobs.

“About one-third of the positions would be merged with other positions or eliminated,” he said.

Council members, who earlier heard a dire report on the cost of backlogged capital projects, expressed concerns about issues with Peduto's plan ranging from its financial impact to loss of key personnel.

Four members voted for the bill, three abstained, and one was absent. Darlene Harris, Corey O'Connor and R. Daniel Lavelle said they needed more time to consider the bill. Ricky Burgess was absent but said later that he opposes it. A final vote is scheduled for next week.

Burgess called the offer unfair because it's being offered to employees who “did not earn and did not deserve” it.

“I have serious concerns about this proposal,” Burgess said.

He also said the city's fiscal overseers prohibit it. Peduto disputed that, saying they only recommend against it. Intergovernmental Cooperation Authority chairman Nick Varischetti said the agency was still awaiting information from Peduto and has not yet taken a position on the plan. The city's Act 47 coordinators did not return calls.

The state classified Pittsburgh as financially distressed in 2004 and appointed the Act 47 recovery team to create a plan to help the city resolve its financial issues. It created the Intergovernmental Cooperation Authority to oversee expenditures and approve city budgets.

Kevin Acklin, who will serve as Peduto's chief of staff, said money from the general fund would pay for the plan.

To qualify for early retirement, an employee would have to be at least 50 with at least eight years of service. The age and service time must add up to at least 70 years.

Peduto previously said 132 employees would be eligible. Spokeswoman Sonya Toler said that was based on a Dec. 31 retirement date. Peduto has since pushed the date back to Jan. 31.

Separately, budget Director Bill Urbanic told council that the city needs more than $50 million to catch up on street repairs, building demolitions, landslide repairs and city-owned building repairs. Previous administrations cut capital improvements to accommodate budget deficits and high pension obligations.

Bob Bauder is a staff writer for Trib Total Media. He can be reached at 412-765-2312 or bbauder@tribweb.com.

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