ShareThis Page

State oversight panel considers releasing Pittsburgh from Act 47

Bob Bauder
| Friday, Nov. 9, 2012, 12:01 a.m.

Pittsburgh has made great strides since being on the brink of bankruptcy nine years ago and deserves to reclaim some of its financial independence, city officials and members of a state oversight panel said on Thursday during a public hearing.

But two speakers — City Councilman Bill Peduto and Controller Michael Lamb, both likely candidates for mayor next year — cautioned that Pittsburgh still bears the weight of more than $600 million in debt, a shrinking revenue base and $1.5 billion in legacy costs that include pension obligations, workers' compensation payments and soaring health care bills for retired city employees.

Peduto was the only person to argue against release from Act 47 oversight — the city would remain under the watch of the Intergovernmental Cooperation Authority. He said Pittsburgh has not met all of the terms of the Act 47 team's financial recovery plan.

“We're on a track to recovery,” Peduto said. “We're just not quite there yet.”

The state declared Pittsburgh to be financially distressed in 2003 after then-Mayor Tom Murphy sought a bailout from chronic budget deficits, debt approaching $1 billion and a junk bond credit rating.

The state appointed two oversight committees — the Act 47 team and the ICA — to help guide the city out of its financial morass. Since then, the city has been required to submit budgets and five-year financial plans to the oversight agencies for approval and to abide by the Act 47 team's recovery plan.

James Roberts, an Act 47 coordinator, said the city has met key components of the recovery plan by retiring $279 million in debt and replacing annual deficits with surpluses. He noted that bond rating agencies have upgraded the city's credit score, and that the city avoided state takeover of its pension system in 2010 by committing $736 million in parking taxes over 30 years to the pension funds.

“We're basically saying we think we worked ourselves out of a job,” Roberts said.

Roberts, a Downtown attorney, said the city needs continued ICA oversight to cope with the legacy costs and debt.

“This is not a mission accomplished,” said Gordon Mann, a member of the Act 47 team. “The pension problem isn't solved. The debt problem is not solved. But there are strategies in place, and there's been significant progress made.”

Mayor Luke Ravenstahl said the city's five-year budget plan projects annual surpluses and sets aside additional money to pay down the legacy costs.

“I think based on the facts and based on our budget, we all believe it's time for the city of Pittsburgh to be removed from Act 47,” the mayor said.

Lamb said he supports the city's release, but he warned that it must pump more money into pensions, continue paying down debt and find additional revenue sources.

“The cautionary tone you are hearing arises from the real concern people have about this administration operating without that additional layer of oversight,” Lamb said.

Twenty-nine people, mostly public officials and including local business and civic leaders, spoke at the hearing.

Fred Reddig, executive director of the governor's Center for Local Government Services, who acted as the hearing officer, said state Department of Community and Economic Development Secretary C. Alan Walker would weigh the testimony and a report from the Act 47 team before he makes a decision. That will come in “a timely manner,” Reddig said.

Pittsburgh is one of 21 municipalities under the oversight of an Act 47 team. It would be the seventh to be released from Act 47 oversight.

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

TribLIVE commenting policy

You are solely responsible for your comments and by using 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.

click me