Does city's cookie jar have $25 million, or not?

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Last year's pension battle between Pittsburgh City Council and Mayor Luke Ravenstahl's office has evolved into a $25 million mystery over how much money is available to buy police cars, pave roads and demolish old homes.

City finance director Scott Kunka said the city's Equipment Leasing Authority, which he chairs, last week approved the purchase of about 55 vehicles, including 26 police cars. However, he said the city won't order the vehicles until it finds the money to pay for them.

Mr. Kunka said council's 2011 budget -- which diverted about $13.4 million in parking tax revenue to the foundering pension fund, the first installment in a controversial 30-year, $735.7 million bailout plan -- provided no money for the capital fund.

He said the only capital money on hand is about $27 million earmarked for projects in past years but not yet spent. He said he'll study the list of projects to see how much money might be redirected to meet this year's needs.

"We're not sure what the result is," he said.

Council's budget director, Bill Urbanic, provided a different account.

In addition to the $27 million remaining from previously authorized projects, Mr. Urbanic said, the capital fund should hold about $25 million that's not spoken for. He said the money was part of a large capital fund infusion the city made a few years ago and has been tapping annually since.

Mr. Kunka said that $25 million doesn't exist and hinted that council might have to give up special projects, such as Councilman Bruce Kraus' $100,000 study of the South Side hospitality industry, for more pressing initiatives.

The city's $450 million operating budget keeps the wheels of government spinning, while the capital budget -- usually about $50 million -- helps to polish the neighborhoods.

The capital budget is used to pave streets, demolish buildings in troubled neighborhoods, repair city-owned buildings, maintain vacant lots, install bicycle lanes, undertake flood-control projects, light ball fields and perform dozens of other projects. Requests for funds annually exceed the money available.

Councilman William Peduto said council adopted a 2011 capital budget and that various documents reflect the money's existence. He said the confusion highlights the urgent need for a new financial management system.

"When members of council can't get information, then the public is kept in the dark, and it's their money, not the mayor's money," Mr. Peduto said, suggesting the mayor's office is hiding funds to give residents a skewed impression of the city's finances and embarrass council members in an election year.

With a more compliant council, he said, Mr. Ravenstahl might be tempted to bring back his plan to lease parking garages and meters to private investors for 50 years.

Despite pressure from council and two state oversight boards, Mr. Ravenstahl has delayed acting on a proposal to piggyback onto Allegheny County's financial management system. While he agrees the city's system needs to be upgraded, he said he won't proceed until the state releases $9 million from the sale of the Municipal Courts Building.

Besides the $27 million from previous years -- and the $25 million in debate -- the city this year will have about $16.5 million in federal Community Development Block Grant money to spend on capital projects. However, those funds carry restrictions, such as the requirement that they be used in low- and moderate-income neighborhoods.

In an emergency, Mr. Urbanic said, the city also could tap its $35 million fund balance for capital projects.

Mr. Kunka said he is determined to find enough money to buy the police vehicles. Mr. Peduto didn't attend the equipment authority meeting -- he was part of a council delegation in Harrisburg at the time -- but said he was told that Mr. Kunka flatly stated there would be no money to buy the cars.

Council last year rejected Mr. Ravenstahl's proposal to prop up the pension fund with the proceeds from a 50-year lease of parking garages and meters to a private operator. Council passed its own bailout Dec. 31, using 30 years of parking tax revenue.

Mr. Kunka said the city is operating with especially thin margins this year because council took "every last drop" for the pension bailout, the state won't complete the sale of the Municipal Courts Building and the Intergovernmental Cooperation Authority, one of the state-appointed oversight boards, is holding on to $13.3 million in gaming revenue.

In addition, Mr. Kunka said council's budget relies on increased contributions from the parking authority, even though the authority hasn't indicated its willingness to increase parking garage rates to generate the extra money. Mr. Kunka is parking authority chairman.

Mr. Peduto said Mr. Ravenstahl should work with the parking authority to ensure that the additional revenue is generated. "If we run short," he said, "then the responsibility falls squarely on the shoulders of the mayor."

Joe Smydo: or 412-263-1548.


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