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Calls mount for end of fiscal oversight
Ravenstahl wants to shed Act 47 status
Friday, November 09, 2007

Momentum built yesterday for an end to state oversight of city of Pittsburgh finances, days after freshly elected Mayor Luke Ravenstahl made that a top goal.

At a hearing of the state Senate Urban Affairs and Housing Committee, in Pittsburgh's Council Chamber, officials weighed how the city might shed its Act 47 recovery team, which reports to the governor's administration, and the Intergovernmental Cooperation Authority board, picked mostly by legislative leaders. Together, they have the power to enforce city compliance with detailed spending plans.

"The ICA needs to get out of the picture," said state Sen. Jim Ferlo, D-Highland Park. "After a three-year or four-year track record of significant changes and fund balances that are true I don't think there needs to be oversight."

Act 47 team co-leader Dean Kaplan said that next year he'll submit a plan that shows the city a clear path out of oversight "after a couple of years of adherence."

"Leave now," countered firefighters union President Joe King, who said Act 47 "destroyed unions" and continued oversight would curb contract bargaining set for 2009.

Mr. Ravenstahl said Tuesday that he wants to end oversight. On Wednesday, he said he wants to "ask the state to do an analysis of where we're at, financially" and "see if we do qualify to be removed from financial oversight."

Those comments added urgency to the hearing, one of five that Sen. John Pippy, R-Moon, is conducting statewide to explore revising Act 47 for distressed municipalities.

Mr. Pippy said he intends to get input from governments, unions and number-crunchers and then "come up with legislation that will address some of the issues."

A big issue for unions is that cities never seem to get out of Act 47 status, during which arbitrators need to ensure that contracts conform to the recovery plan. That often means limited or no raises and reductions in benefits.

Fred Reddig, executive director of the Governor's Center for Local Government Services, said in a phone interview that 23 communities have entered distressed status since the 1987 passage of Act 47, and six have gotten out. Among the six, time in the program ranged from three years for Ambridge to 14 years for Homestead.

Of the 17 municipalities now under Act 47 oversight, 11 have been in for more than a decade.

Pittsburgh has met most of the requirements for shedding distressed status, said Mr. Reddig. It has eliminated deficits and begun socking away money, on the way to a $99 million savings account balance by year's end.

The only requirement it hasn't met is winning the coordinators' approval for leaving Act 47.

"We want to make sure that a municipality is not going to relapse," said Mr. Reddig, adding that Pittsburgh has had "a significant turnaround."

Mr. Kaplan said that next year his team will submit "a structure that keeps you in balance over a five- or 10-year period." Within a few years, the city could conceivably graduate from distress.

There has been talk for weeks of a coming City Council resolution calling for an end to oversight. That would have the support of the police and fire unions, whose contracts end in 2009.

Oversight is "choking [the city] to death," said Fraternal Order of Police President James Malloy. It has depressed police salaries, driving young officers into the suburbs, he said.

Mr. King's firefighters took wage and benefit hits. The number of firefighters in the budget has dropped from 904 to 668, and some of those posts are vacant.

"Why do you need a second bite of bargaining?" asked Mr. King. "To fix what? ... Let each individual union negotiate the terms with Luke and his team."

Mr. Ravenstahl's administration stopped short of endorsing a quick end to oversight.

"Any discussion of full recovery must recognize the revenues that have not been realized," said Finance Director Scott Kunka. He said a tax swap approved by the Legislature in 2004 fell short of meeting the city's long-term needs as identified then by the ICA and Act 47 team.

He said the ICA has provided "valuable expertise."

Mr. Pippy said he doesn't "foresee any movement to eliminate the ICA board." It serves as the Legislature's eyes and ears on the city's finances, he said.

First published on November 9, 2007 at 12:00 am
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