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Tax-exempt groups exceed 3-year pledge to city, offer more
Saturday, March 01, 2008

A consortium of tax-exempt groups gave the City of Pittsburgh more than originally promised over three years, and is willing to enter into a new agreement to bolster the city's coffers, its spokesman said yesterday.

The Pittsburgh Public Service Fund, which assembled contributions from some 100 organizations during the city's fiscal crisis, made its last agreed-upon payment Feb. 21, bringing its total contribution to $13.98 million. The Rev. Ron Lengwin, spokesman for the Catholic Diocese of Pittsburgh and for the fund, said the pledge was for $13.57 million, so the fund exceeded expectations by $411,000.

At some points the fund had expected to give $13.25 million, a figure it exceeded by $730,000.

"We're very proud of that, and I think that our original comments in establishing the fund were that even though the nonprofits firmly believe that they already contribute to the well-being of our region in so many ways, nonprofits step in when there's a problem, when there's suffering and need, and that's what they did for the city," Father Lengwin said.

He said he did not know which organizations gave more than originally pledged, as individual entities' payments are confidential.

Mayor Luke Ravenstahl said the city is "grateful for it, and I think it's a result of us being cooperative in city government -- talking with them, and understanding all along that it's a voluntary payment."

The fund will now reconstitute its 12-member board, inviting healthcare, charity, arts and education organizations to volunteer members to oversee it, said Father Lengwin. It will then resume talks with the city on exact terms of a new contract governing another three years.

Father Lengwin said the fund's outgoing board wants terms similar to the 2005 deal with the city. That agreement barred the city from pursuing new taxes or fees against contributing organizations, and gave them credit for payments if they were found to be taxable during its term.

The fund's next board, the mayor, and City Council would have to agree to renew the terms.

A new agreement "is essential to the stability of city finances," said Henry Sciortino, executive director of the state-picked Intergovernmental Cooperation Authority, which approves city budgets and plans.

Father Lengwin could not predict how much the fund would give to the city over a subsequent three years, saying that depends on member groups' finances. The city's long-term plan counts on $4.2 million a year in contributions from tax-exempt entities.

One complicating factor is the role of the University of Pittsburgh Medical Center, which has said it will contribute to the city for one more year but is shifting its focus to the Pittsburgh Promise of college aid to graduates of Pittsburgh Public Schools. It has pledged $10 million a year to that effort, subject to requirements of matching funds.

"Obviously them being the largest nonprofit and the largest contributor does have an impact, but I don't think it will adversely affect any of the other nonprofits' willingness to contribute," said Mr. Ravenstahl.

Some city officials have argued that the city should follow some other cities, like Boston, which have formulas that govern payments by untaxed landowners.

"It's a tough issue, and it's one that we wrestle with repeatedly, and the law is what the law is currently," the mayor said. State law gives the city little leverage to pry money from charities. "As a result of that, I like to take a cooperative approach with them."

Rich Lord can be reached at rlord@post-gazette.com or 412-263-1542.
First published on March 1, 2008 at 12:00 am
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