State terminates Pittsburgh’s last fiscal oversight board |

State terminates Pittsburgh’s last fiscal oversight board

Bob Bauder
BJ Leber leads discussion during The Intergovernmental Cooperation Authority for Cities of the Second Class at the City-County Building, Friday, April 15, 2016. BJ Leber leads discussion during a 2016 meeting of the Intergovernmental Cooperation Authority. The state Department of Community and Economic Development on Sunday officially terminated the ICA.

Pittsburgh’s last fiscal oversight agency is officially kaput.

Dennis Davin, secretary of the Pennsylvania Department of Community and Economic Development, issued a letter on Sunday terminating the Intergovernmental Cooperation Authority. State lawmakers created the ICA in 2004 to work alongside coordinators of the Act 47 oversight program to help Pittsburgh avoid bankruptcy.

The General Assembly effectively nullified the often controversial ICA in 2017 by failing to appropriate funding for its operations. The ICA board last year completed its last audit and paid off outstanding bills, saying they could not operate without funding.

Gov. Tom Wolf in 2018 released Pittsburgh from Act 47 oversight, after declaring the city financially sound.

State law permitted Davin to terminate the ICA on June 30, 2019, after the end of Act 47 oversight.

“The legislation had embedded in it that they would cease operations after Act 47 went away and on June 30, 2019,” said Sen. Jay Costa, D-Forest Hills. “They’ve not been operational for close to a year.”

Pittsburgh had operated under the Municipalities Financial Recovery Act, known as Act 47, since December 2003, when chronic deficits, overwhelming debt and mounting employee pension costs nearly pushed it into bankruptcy and relegated its rating among credit rating agencies to junk bond status.

Previous ICA officials battled with city administrations over financial issues to force compliance with fiscal mandates. At times, the ICA withheld all or part of the $10 million in annual gambling tax revenue that Pittsburgh receives from hosting the North Side’s Rivers Casino.

Mayor Bill Peduto sued the ICA in 2014 over release of the money, but dropped the suit after a new board of directors took office.

District Attorney Stephen A. Zappala Jr.’s office ended a yearlong probe of the ICA and its former executive director, Henry Sciortino, in 2016, saying criminal charges were unwarranted following an investigative series by the Tribune-Review that documented shoddy record-keeping, among other things.

The Trib detailed the apparent destruction or loss of most of the authority’s financial records, including 92 percent of all ICA spending receipts between 2010 and 2016 and all ICA bank records between 2004 and 2009.

ICA directors terminated Sciortino in 2017 and the state enacted reforms that required the ICA to keep financial records up to seven years, undergo more regular audits and put more of its records and contracts online.

On Monday, city Controller Michael Lamb announced that the city’s spending is on target for the year and may end 2019 with a surplus close to $10 million.

Bob Bauder is a Tribune-Review staff writer. You can contact Bob at 412-765-2312, [email protected] or via Twitter .

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