Pittsburgh officials argue for release from Act 47 fiscal oversight
Joe King, president of the Pittsburgh firefighters union, listens to a hearing before the state Department of Community & Economic Development on removing the city from Act 47 and its designation as a financially distressed municipality. The hearing was held in city council chambers.
Mayor Luke Ravenstahl prepares before making remarks at a hearing in city council chambers.
Fred Reddig of the Pa. Department of Community & Economic Development leads a hearing in city council chambers.
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The well-poised Pittsburgh of today is not the same city that shed hundreds of jobs, closed swimming pools and cut services to stave off financial collapse in 2003, Mayor Luke Ravenstahl told a state hearing officer Thursday in arguing for the city's release from about eight years of Act 47 oversight.
Citing balanced budgets, more than $240 million in debt reduction and repeated credit upgrades since he took office in 2006, Mr. Ravenstahl said the city should be released from Act 47 operating constraints and the city's designation as a financially distressed municipality lifted.
"This is a day for us, I believe, to be proud," Mr. Ravenstahl told hearing officer Fred Reddig, executive director of the Governor's Center for Local Government Services.
He called the financially distressed designation a "black cloud" over a city that has weathered the recession without tax increases while pushing forward neighborhood revitalization projects and winning livability accolades from national magazines.
"Based on the facts and based on our budget, we all in our administration believe that the time has come for the city of Pittsburgh to be released from Act 47," Mr. Ravenstahl said.
Council President Darlene Harris, council members Ricky Burgess and Theresa Kail-Smith, firefighters union President Joe King and representatives of the Legislature, business community, the city's bond advisers and the University of Pittsburgh provided a rousing chorus.
"I firmly believe that the city is ready to come out of the shadow of oversight," Mrs. Harris said.
Mr. Burgess, chairman of the Law and Finance Committee, said the city had "met and exceeded" the requirements for exiting oversight, while Nick Falgione, managing director of investment banking firm Boenning & Scattergood, said the city's financial position has improved so much that officials weren't required to buy insurance for an $80 million borrowing this year.
In written testimony, state Sen. Jim Ferlo, D-Highland Park, said, "Despite tough decisions and financial difficulties, Pittsburgh has remained a model for Rust Belt cities on how to modernize an economy and improve the living conditions of its citizens."
Act 47 imposes spending restrictions, such as wage caps for union workers, on distressed municipalities. Since 1987, when the law was enacted, 27 municipalities have gone into Act 47. Only six have come out, according to the state Department of Community and Economic Development.
In 2008, the state turned down a proposal to remove the city from oversight, saying it still had work to do.
In addition to giving the city more freedom in financial affairs, release from Act 47 would have political implications. Mr. Ravenstahl, who runs for re-election next year, would like the opportunity to tell voters that he's leading the city out of oversight.
C. Alan Walker, state secretary of community and economic development, will decide whether to release the city from Act 47 and end the work of overseers Jim Roberts and Dean Kaplan. Mr. Walker did not attend the hearing, which lasted more than three hours.
Mr. Walker is under no timetable to make a decision.
Even if the city exits Act 47, it still will be monitored by a second oversight board, the five-member Intergovernmental Cooperation Authority, set up by the Legislature and then-Gov. Ed Rendell in 2004. There has been no effort to dismantle the ICA, though Mr. Ferlo called it a "money pit" that ought to be shut down.
Dana Yealy, ICA chairman, was among those who support the city's withdrawal from Act 47. While the city still has much financial progress to make, he said, the ICA can handle the oversight role alone.
Councilman Bill Peduto, a prospective challenger to Mr. Ravenstahl next year, was the only speaker who said it's too soon for the city to exit Act 47. He said many of the city's financial improvements have been led by council, not Mr. Ravenstahl, and he noted that dozens of financial recommendations made by the Act 47 coordinators have yet to be implemented by the mayor's office.
Especially troubling, he said, is that the city pension fund, 62 percent funded after a council-led bailout in 2010, is now only 57 percent funded because of market fluctuations.
Controller Michael Lamb, another prospective mayoral candidate, previously has said that Mr. Ravenstahl needs as much oversight as possible. On Thursday, Mr. Lamb called for the city's release from Act 47 but echoed Mr. Peduto's assertion that many of the city's financial improvements originated outside the mayor's office.
"We have been successful at pushing through positive change despite the objection of this administration, and we have been able to stop backward steps like the sale of our public assets and the taxation of college tuition," Mr. Lamb said, referring to the mayor's unsuccessful efforts to lease parking garages and parking meters and impose what he called a "fair-share" tax on university students.
Thursday's hearing was initially scheduled for Oct. 29 but postponed because of Superstorm Sandy.
The proceeding was held at the request of Mr. Roberts and Mr. Kaplan, who last month sent Mr. Walker a letter saying the city should exit Act 47 because of its "great strides toward fiscal recovery." The pair said the city had balanced budgets "with recurring revenues consistently outpacing expenditures" and progress that the city had made controlling legacy costs, such as pension, workers compensation and retiree health care.
First Published November 9, 2012 12:00 am