Sharing financial software with Allegheny County may be a key to the city's effort to balance its books in 2010.

Officials said yesterday that they have reached a long-sought agreement with software giant Oracle to shift the city's accounting processes to county computers. It must still negotiate terms for adding the Pittsburgh Water and Sewer Authority to the shared software platform, and work out implementation details with the county.

Reaching an agreement with Oracle, though, was a key step, leading to dramatic improvements in the city's money management by mid-year, said city Finance Director Scott Kunka.

"The financial reports will be quicker, more readily accessible, and more accurate," he said. "We think we're taking the first step toward a global consolidation of financial systems" that would have many of the region's governmental agencies using the same financial system.

The city has been limping along with vintage mid-1990s financial software. Controller Michael Lamb and the state-picked Intergovernmental Cooperation Authority have been urging an upgrade, and all agreed that a merger on to the county's system made the most sense.

With the ICA's rejection last month of a city budget that depended on $16.2 million from a proposed tuition tax, the financial merger became a necessity. Late Wednesday, Mayor Luke Ravenstahl's administration submitted budget revisions that plug the resulting hole in part with $2 million in savings driven by the better accounting system, and another $1 million in payments from the Pittsburgh Water and Sewer Authority for using the system.

Oracle has agreed to a price of around $2.6 million to allow the city to use an upgraded version of the accounting software the county has now, plus around $500,000 for annual maintenance. Yet to be negotiated is a fee for including the water authority, and an as-yet-unnamed county authority.

The city will pay the tab with part of a $9 million payment it expects from the state for the sale of the Pittsburgh Municipal Courts building. The court functions there used to be run by the city, but are now part of the statewide judicial system, administered by the county, which will own the building.

The rest of the proceeds of the building sale will go toward general capital needs.

Mr. Kunka said the big payoff could come as the shared software helps the city, county and perhaps other entities "compare, back and forth, where there are areas of duplication, where there's overlap," and where functions can be merged.

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