Millions of dollars of gaming revenue hang in the balance while the city of Pittsburgh attempts to work out its differences with the Intergovernmental Cooperation Authority, a state overseer that holds the purse strings on the funds.
The ICA, one of two bodies the state appointed to overlook the city's finances when it was declared financially distressed, approves the city's budget every year and also controls the release of the gaming money to the city. The ICA rubber-stamped the city's 2013 budget in the fall, but also made its approval conditional on a number of requirements.
But Henry Sciortino, the executive director of the ICA, said the city hasn't complied and said the board is considering revoking the approval of the budget. This means it would release no gaming money and would be empowered to withhold other state revenues.
Last week, Mr. Sciortino said he notified city solicitor Dan Regan that if the city did not send the ICA a firm timeline of when it would comply with the measures, the ICA would take action.
Mayor Luke Ravenstahl, speaking at his first news conference since March 20, said the city was caught off guard by the ultimatum.
"That was a bit surprising to me because we have complied and will continue to comply with their asks," he said. He accused the ICA of saber-rattling because "they're an organization that's struggling to justify their existence, in my mind."
Mr. Sciortino said the city is failing to hold up its end of the bargain on two of the seven conditions the ICA laid out. First, the ICA required the city to create a task force on nonprofits with the goal of hammering out another agreement with a consortium of tax-exempt organizations that give the city voluntary contributions. The consortium, called the Pittsburgh Public Service Fund, gives around $2.6 million annually, but its agreement with the city expires this year.
While the city did appoint the task force, it has not had a meeting. The chair of the task force, Don Smith of the Regional Industrial Development Corp., wrote to the mayor and to Dana Yealy, the chairman of the ICA, on Wednesday asking if the task force could be tabled. He said there were a number of things that made it difficult for the group to move forward, including the mayor's decision to sue the region's largest nonprofit, UPMC. There's also legislation pending in Harrisburg that could change the ground rules for nonprofits and the change of guards that will occur after the mayor leaves office at the end of this year.
"It just makes it a much more difficult environment [in terms of] getting a solution ... as far as additional voluntary contributions to the city," he said in an interview.
The ICA also asked the city to purchase business intelligence software and claims the city committed to making the purchase before the end of 2012. Mr. Sciortino believes the software would streamline the city's financial management.
But city finance director Scott Kunka said the city is making progress and is preparing a bid for the software. He believes the software is "unnecessary." Nonetheless, per the requirement of the ICA, the city is purchasing software but is going through a competitive bidding process.
According to Mr. Sciortino, the city has until the end of business today to outline how it intends to comply with the ICA's conditions. If it does not, the ICA will prepare to take action.
Moriah Balingit: email@example.com, 412-263-2533 or on Twitter @MoriahBee.