ShareThis Page

Peduto hopes to reach contribution deal with nonprofits by year's end

Bob Bauder
| Thursday, Sept. 25, 2014, 11:12 p.m.
Pittsburgh Mayor Bill Peduto meets with Pittsburgh Tribune-Review editors and reporters on Thursday, Sept. 25, 2014.
Guy Wathen | Trib Total Media
Pittsburgh Mayor Bill Peduto meets with Pittsburgh Tribune-Review editors and reporters on Thursday, Sept. 25, 2014.
Pittsburgh Mayor Bill Peduto’s public schedule stated he had Sunday off. But he was secretly flying to Cuba with Western Pennsylvanian business people to help build trade relations with the Caribbean nation in anticipation of the lifting of a U.S. embargo.
Guy Wathen | Trib Total Media
Pittsburgh Mayor Bill Peduto’s public schedule stated he had Sunday off. But he was secretly flying to Cuba with Western Pennsylvanian business people to help build trade relations with the Caribbean nation in anticipation of the lifting of a U.S. embargo.

Pittsburgh Mayor Bill Peduto said he hopes by year's end to complete an agreement with the city's largest nonprofits that would pay for chronically underfunded needs including infrastructure upgrades, employee pensions and housing in poor neighborhoods.

In an interview with Tribune-Review editors and reporters Thursday, Peduto said he was negotiating with the “Big Four” — Carnegie Mellon University, Highmark, University of Pittsburgh and UPMC — which together he said employ most of the people working at city nonprofits.

He wants an agreement with the nonprofits to last 10 years that would provide much more than the $5.2 million nonprofits provided as payments in lieu of taxes in 2012 and 2013 under a previous pact.

He said nonprofit leaders aren't willing to pay for daily operating expenses but would consider contributing to street paving, technology and housing and improvements to poor neighborhoods that could spread benefit across the city where many nonprofit employees work and live.

“We're looking at something much more significant for a long-term basis ...” Peduto said. “By getting the Big Four to the table to agree to this, we're basically getting the majority of the nonprofits there, but the rest need to be a part of it, too.”

Some nonprofit representatives confirmed they are in discussions with Peduto's office.

“UPMC will participate in whatever scheme the city can come up with as long as it is fair and equitable and includes all the other nonprofits,” UPMC spokesman Paul Wood said.

Reynolds Clark, chief of staff to Pitt Chancellor Patrick Gallagher, said the university is looking for a way to partner with Pittsburgh.

“We say all the time the city is our campus, and the University of Pittsburgh wants to have a vibrant, quality-oriented growing community in which we reside,” Clark said. “We want to look for ways that we can collaboratively help the city administration move forward in significant arenas.”

That willingness is a significant change from July when Clark said he had no information about efforts to work with city officials.

The talks between the city and nonprofits were nonexistent earlier this year before Peduto in July dropped a lawsuit filed in 2013 before he took office that challenged the tax-exempt status of medical giant UPMC, Pennsylvania's largest employer. It was difficult to negotiate with “guns pointed at each others' heads,” Peduto said at the time.

“Between the lawsuit and tuition tax (proposed by former Mayor Luke Ravenstahl) nonprofits walked away from the table,” Peduto said.

He previously said he wanted $20 million a year from nonprofits, but later said the amount was negotiable. He said Thursday that he hoped the nonprofits' contribution to the city would be “double or triple” the roughly $8 million a year that a proposed 0.5-mill real estate tax increase he is proposing for 2015 would generate.

Peduto said the tax increase is necessary to help offset a $35 million deficit caused by higher pension payments, a 2013 tax rate decrease triggered by a countywide property reassessment and employee benefit and debt service costs.

He said the property tax rate decrease from 10.8 mills to 7.56 mills led to a loss of about $7.3 million a year in real estate tax revenue. If City Council and the city's state-appointed financial overseer approve, the new millage rate would total 8.06 mills in 2015. The city also lost revenue because of decreased annual payments from entities such as Pittsburgh Allegheny County Thermal, a nonprofit established in 1983 to provide steam heat for Downtown buildings, including government offices in the City-County Building and Allegheny County Courthouse on Grant Street.

The company paid Pittsburgh about $600,000 a year for the right to use public rights of way and had been overpaying the city for years, Peduto said. The city agreed to waive future fees. In return, Pittsburgh Allegheny County Thermal dropped claims that it had been overpaying.

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

TribLIVE commenting policy

You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.

We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.

While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.

We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers

We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.

We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.

We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.

We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.