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Financial recovery authority receives budget boost from Pennsylvania

| Monday, June 30, 2014, 11:06 p.m.

An agency designated to help city government navigate its financial recovery is on track to more than double the money it gets from the state.

The state budget for 2014-15, which the House and Senate were expected to approve late Monday, includes $550,000 for the Intergovernmental Cooperation Authority, up from $228,000 this year. The increase follows some heated discussion in early June between the authority's chairman and Mayor Bill Peduto about the city's latest five-year financial recovery plan.

Senate Minority Leader Jay Costa, D-Forest Hills, said the expenditure was appropriate.

“It's a recognition by all four caucuses” of the need to enhance the work of ICA, he said.

Henry Sciortino, ICA executive director, said the money means the authority can offer consulting help in areas including financial management or the civil service system. The ICA's board will decide what to scrutinize.

Money cannot go toward the city's general fund.

“The city needs help, and it's critical that we take targeted opportunities to zero in on things that need to be done,” he said.

The board requested that amount from the state in its budget proposal in October. It has received funding in the $400,000 range before.

City Council this month accepted a five-year recovery plan from the city's Act 47 overseers, who are appointed by the state and are separate from ICA. That plan outlined $100 million in capital improvements, new investments to pension funds and a potential property tax increase.

ICA Chairman Nicholas Varischetti wrote to the mayor saying the city's operating costs are about 20 percent higher than necessary. That should be addressed, he said, before the city seeks new revenue sources.

“You are now in a position to act on the reality of hard choices,” he wrote.

Peduto replied he would require analysis of departments and programs before “indiscriminately slashing our operating budget by 20 percent.” He said the ICA needs to have a “stronger voice on these issues” to lobby for legislative reforms to improve the city's financial position.

Peduto spokesman Tim McNulty said the administration “has been working alongside both of the city's overseers, and looks forward to continuing that as we implement the city's final recovery plan.”

Melissa Daniels is a staff writer for Trib Total Media. She can be reached at mdaniels@tribweb.com or 412-380-8511.

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