Congratulate, but verify: The city is no longer distressed! But it still needs oversight

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One of us is a Catholic nun with the Sisters of Mercy who also ran a college. The other is a union leader who made a living working in the building trades. But we share more things in common than one might think.

The first is that we served together on the Intergovernmental Cooperation Authority -- a.k.a. the city oversight committee. We were appointed by former Gov. Ed Rendell and former House Speaker John Perzel. We served because of our common love for our city and desire to help it regain a solid financial footing. Working with business, labor and nonprofit leaders, two different mayors, City Council, the city controller, the state Legislature, the governor's office and, especially, the Act 47 coordinators, we saw a city begin to move in the right direction.

The second thing we share is our support of the recent findings of the Act 47 team and its recommendation to terminate the city's status as a financially distressed municipality -- while keeping the Intergovernmental Cooperation Authority in existence.

Earlier this week, the Act 47 coordinators sent a report to Secretary Alan Walker of the Department of Community and Economic Development that said Pittsburgh's operating budget is now structurally balanced, with recurring revenues consistently outpacing expenditures. It pointed out that the city government has significantly addressed the legacy costs of pensions, retiree health care and workers compensation. These are all good things that should be celebrated, but there is a third thing we share ...

We agree that this is no time to remove all oversight. There are too many pending obstacles and too much work to be done to assure the long-term financial stability of our great city.

What are some of the obstacles?

The first is pension reform. The city is still paying out much more than it takes in for pensions. And, although the city avoided state takeover of its pension system by pledging parking revenues, this has brought the funding level to only 62 percent of future obligations. Real questions remain about the true asset value of the anticipated parking revenues.

The second obstacle is overall debt. While the debt level has been moving in the right direction, the city issued $80 million of new debt this year and has plans to issue more in 2015, 2018 and 2021. This will make it hard to reduce overall debt to an acceptable level.

A third major challenge is in establishing predictable and robust financial contributions from our major nonprofits. Two recent court rulings -- one regarding what constitutes a true charity and the other regarding application of the state right-to-know law to the agreement between the city and the nonprofits -- add to the complexities of the situation and require clarification.

Finally, there's the issue of collective bargaining.

Both of us believe that city workers should be paid a living wage. We agree that unions play an important role in negotiating on behalf of their members. But we also know the financial constraints that challenge the city and understand the powerful temptations that can influence political leaders. Some city labor contracts have yet to be resolved even as next year's mayoral campaign begins to heat up.

These are some of the reasons we so strongly support the recommendation by Act 47 that the Intergovernmental Cooperation Authority remain in existence for now. And here is one more: The ICA is the city's best partner!

The ICA shares the same aspiration as everyone in the city -- to stabilize the government's finances so that all who live, work, study or visit in Pittsburgh can be assured of a strong city with a bright future. We can achieve this by the ICA continuing to work in partnership with city officials.

The ICA can play a key role with state officials, too, especially as legislators prepare to take up pension reform. The ICA can help the city deal with the nonprofit community. And, by bearing responsibility for accepting or not accepting the city's annual budget, the ICA can help make sure that contract agreements fit within the city's financial capacity.

Pittsburgh has come a long way since declaring financial distress, and we can all be proud of our efforts and achievements. But we have a long way to go. Let's keep the ICA.


Grace Ann Geibel is president emerita of Carlow University. Rich Stanizzo is business manager of Pittsburgh Regional Building Trades.


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