Pittsburgh to spend $120 million on capital projects

Financial oversight groups push investment

Here's how little attention Pittsburgh has paid to its big-ticket items like roads, bridges and buildings while it has been in financial distress the past 10 years: 24 of its 86 bridges are structurally deficient; 56 percent of its roads are rated 0 -- the worst rating -- and 75 percent are in very poor condition; and the city spent an average of only $3 million a year for the past seven years to care for its 187 buildings, including police stations and fire stations.

The site of the former Davis Avenue Bridge in Woods Run on the North Side is a good example of how little capital spending the city has been able to do. The bridge was closed to vehicles in August 2001 and was imploded in 2009 when it began to fall apart, but the site remains an open valley because the city hasn't had the $8 million to replace it.

No more.

With a strong push from one of its state-appointed financial oversight groups, the city plans to spend at least $120 million -- $30 million a year -- on capital projects from 2015 through 2018. The five-year plan from the Act 47 coordinators, scheduled for final approval Tuesday, calls for the city to issue $50 million worth of bonds in 2015 and 2017 and augment that money with at least $5 million from its operating budget.

If it can get money from the city's nonprofit community, the coordinators want that money to be used for capital projects as well.

It will be the first major spending on the city's long-term capital assets in at least 15 years because of its ongoing financial problems. In recent years, the city hasn't borrowed money for capital projects or has used money for shorter-term items such as vehicles and equipment, which usually come out of operating funds.

"[This capital spending] is something that all sides -- the administration, council and the financial coordinators -- agree on," said Jim Roberts, who with partner Dean Kaplan wrote the city's latest five-year plan.

"And secondly, we don't believe the city has much of a choice. It's really designed to do a lot of catch-up This just has to be done."

The five-year plan goes into painstaking detail to show how far behind the city has fallen in taking care of its major assets. In the area of roads, for example, the city should be paving 86.6 miles every year but the most it has paved since 2009 is 64.6 miles in 2012. That means, for that five-year period, the city fell 229.2 miles short and, the report noted, the longer roads go without repaving, the more expensive it becomes to repair them.

Only twice in the past 20 years has the city come close to the target, 81 miles paved in 1994 and 91 miles in 1999.

For bridges, the city's public works department estimates that the useful life of a bridge is 50 years. Of the city's 86 bridges for vehicles, 49 percent of them are more than 60 years old.

"In spite of the number, age and condition of bridges, over the eight years from 2007 to 2014, the capital budget has included a total of only $13.3 million for bridge projects," the report said.

Buildings are a bit more difficult to analyze but, anecdotally, council members talk about fire stations with fallen ceilings and public works facilities that are crumbling.

Overall, in the eight-year period beginning in 2005, the report said, the city averaged spending about 33 percent of what it should have on capital projects. That number fell to 10 percent in 2006.

"As a result of this persistent underspending ... a sustained period of more significant investment by the city is required," the report said.

During a hearing on the Act 47 plan last week, Controller Michael Lamb agreed the capital spending is long overdue.

"I think we need a much more vigorous capital program," he said.

A big reason the city is in position to borrow money is that former Mayor Luke Ravenstahl avoided borrowing so that the city is reaching the end of some of its heavy debt payments. Debt service payments are scheduled to fall from about $87 million a year from 2014-17 to $71.7 million in 2018 and $38.2 million in 2019. If the city did no more borrowing, all debt would be paid off in 2026.

As Mr. Lamb put it, "we can almost get the first $50 million for free [without increasing debt service]" because of retiring previous bond issues.

Although the plan calls for spending at least $120 million over four years, that will meet only about 20 percent of the city's needs. The work to identify and prioritize the projects that will move ahead has already begun, with council members developing lists of projects in their own districts.

Mayor Bill Peduto's chief of staff, Kevin Acklin, met last week with department heads in budget, operations and capital spending to discuss how the city will move forward. Mayoral spokesman Tim McNulty said the group is looking at whether the city can save money by relocating some operations or selling off some assets while it waits for approval of the Act 47 recommendations.

The city faces some difficult decisions as it puts together its shopping list.

"The reality is, it's time for tough decisions," Councilman Dan Gilman, who represents the East End. "At your own home, if the roof is leaking, you don't put in a new swimming pool. We have to use the same standard for the city."

It remains to be seen whether the Davis Avenue Bridge will make the cut.

Ed Blazina: eblazina@post-gazette.com or 412-263-1470.

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