Peduto's pension plan hits a couple of snags

Public hearing, oversight board at issue

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Pittsburgh Mayor-elect Bill Peduto's proposal to offer buyouts to some city employees hit a roadblock Tuesday when the city law department determined that there has to be a public hearing before a vote is taken on the matter, which could spell substantial delays.

Complicating matters, the head of a state oversight committee, Nicholas Varischetti, also has expressed concerns that the proposal runs afoul of the city's amended recovery plan, a blueprint passed in 2009 to get the city back on financial track.

The bill, which got preliminary approval with a bare majority last week, was scheduled to be up for a final vote Tuesday. But Kevin Acklin, Mr. Peduto's transition chief, requested the bill be held to allow him to speak with state overseers, including Mr. Varischetti.

The proposal would give 136 non-union city employees whose combined age and years of service are at least 70 the opportunity to retire early, shaving 10 years off of the current requirements. Mr. Peduto has described it as a way to provide longtime city employees who are not on board with his administration a "soft landing."

The legislation is a central aspect of Mr. Peduto's plan to restructure government with fresh faces using Talent City, a foundation-backed initiative that will open up many city jobs to national searches.

Initial estimates pegged the cost of the proposal at $2 million a year if all 136 employees took the buyout. But in the past week, Mr. Acklin said he's crafted amendments that would make the legislation "cost neutral" by eliminating or combining a third of the jobs left vacant.

But Mr. Varischetti, chair of the Intergovernmental Cooperation Authority, said the plan may violate the tenets of the Act 47 plan, which seems to prohibit pension enhancements. It says that the city "shall make no enhancements to existing retirement benefits."

"If this is being viewed as a pension enhancement ... that would be a violation of the recovery plan," he said.

Rodney Akers, an attorney with the state office of general counsel who spoke before council on Tuesday, also expressed concern. He was there on behalf of Charles Zogby, who heads the state department that administers Act 47. "We want to be sure the plan makes fiscal sense," he said in his remarks.

It's unclear if the ICA has to approve the measure, or what would happen if the city moved forward without ICA approval. This past year, however, the ICA withheld millions in gaming revenue when it viewed the city as out of compliance with requirements that it implement financial management software.

But council President Darlene Harris said she's wary of moving forward without approval from the ICA or the city's Act 47 team and worries that defying them could jeopardize state money for the city.

Mr. Acklin believes the proposal does comply with the Act 47 plan, and also hinted at communications issues with the interested parties.

"I'd rather us get in a room and figure it out," he said.

Moriah Balingit:, 412-263-2533 or on Twitter @MoriahBee.

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