Stay in Act 47

Pre­serve the city’s progress by keep­ing over­sight

Pittsburgh Post-Gazette - - National -

The city has bounced back ad­mirably since 2003, when a fi­nan­cial cri­sis forced lay­offs, the shut­ter­ing of pools and re­cre­ation cen­ters, and the city’s en­try into state fi­nan­cial over­sight. Now, Mayor Bill Pe­duto wants the spe­cial scru­tiny to end. While the lift­ing of over­sight may pro­vide a psy­cho­log­i­cal boost, the dis­ci­pline pro­vided by the pro­gram is still needed.

As a city coun­cil­man, Mr. Pe­duto pushed for the city’s en­try into over­sight. As re­cently as May 2014, five months after be­com­ing mayor, he con­tin­ued to de­scribe the city’s fi­nan­cial sit­u­a­tion as pre­car­i­ous and wrote a plan for main­tain­ing over­sight for five more years. There is no rea­son to leave now. The city’s fi­nan­cial health has im­proved un­der Mr. Pe­duto, but as any doc­tor will tell you, pa­tients need to con­tinue tak­ing their medicine even after they start to feel bet­ter.

Much re­mains un­cer­tain. Mr. Pe­duto ac­knowl­edged as much in his bud­get ad­dress Mon­day, say­ing the 10 per­cent an­nual fund bal­ances “are still sig­nif­i­cantly be­low” the 16.7 per­cent rec­om­mended by the Gov­ern­ment Fi­nance Of­fi­cers As­so­ci­a­tion. The city con­tin­ues to catch up on in­fra­struc­ture needs — street paving and build­ing main­te­nance, among other items — pre­dat­ing Mr. Pe­duto’s ten­ure as mayor.

An over­haul of the Pitts­burgh Wa­ter and Sewer Au­thor­ity also looms. Will the city be on the hook for any in­fra­struc­ture costs? At the very least, the city can ex­pect to pay more for wa­ter as the PWSA be­gins to in­stall me­ters and keep bet­ter track of how much it pro­vides the city. Ac­cord­ing to one es­ti­mate, ac­cu­rate billing of the city could yield the PWSA an ex­tra $3.5 mil­lion an­nu­ally.

There are other con­cerns, too. The city still has no plan to col­lect pay­ments in lieu of taxes from non­prof­its, the last agree­ment hav­ing ex­pired in 2014. The fail­ure to ne­go­ti­ate a new agree­ment is one of the ad­min­is­tra­tion’s big­gest short­com­ings, though chief of staff Kevin Ack­lin said in an email that the mayor con­tin­ues seek­ing a “part­ner­ship that re­flects the sub­stan­tial in­vest­ment ca­pac­ity of our non­prof­its, uni­ver­si­ties, foun­da­tions and hos­pi­tals to pur­sue our com­mon goals be­yond the city’s bud­get.”

Mr. Pe­duto has talked about in­volv­ing the Big Four non­prof­its — High­mark, UPMC, Carnegie Mel­lon Univer­sity and the Univer­sity of Pitts­burgh — in new hu­man-ser­vice ini­tia­tives but there’s noth­ing writ­ten in stone. His in­ter­est in ex­pand­ing the city’s lead­er­ship into ar­eas such as prekinder­garten and af­ford­able hous­ing poses new fi­nan­cial con­sid­er­a­tions.

While the size of the city’s work­force has shrunk 26 per­cent since 2003, the city has been hir­ing po­lice, fire­fight­ers, build­ing in­spec­tors and other em­ploy­ees dur­ing Mr. Pe­duto’s ten­ure. Over­sight has pro­vided caps on worker pay and ben­e­fits; that’s still a help­ful man­age­ment tool.

The city’s pen­son fund has come a long way since De­cem­ber 2010, when the city ap­proved an emer­gency bailout us­ing 30 years of park­ing tax rev­enue. In 2018, ac­cord­ing to Con­troller Michael Lamb, the city is poised to put more into the fund than it will take out — a huge ac­com­plish­ment. The pen­sion plans are 60 per­cent funded, thanks to higher an­nual pay-ins and strong mar­ket per­for­mance. But there’s still a siz­able un­funded li­a­bil­ity that needs to be mon­i­tored.

Mr. Pe­duto said the end of over­sight should be ac­com­pa­nied by city coun­cil’s agree­ment to cap pen­sion en­hance­ments, main­tain fund bal­ances and limit debt. The city should em­brace those re­forms — while re­main­ing in over­sight. Progress made can be lost again, as Mr. Pe­duto noted Mon­day, and an­other fi­nan­cial dis­as­ter could re­sult in a clamor for a new form of gov­ern­ment.

There are those who may think Ama­zon, which is vet­ting pro­pos­als from Pitts­burgh and 237 other ci­ties vy­ing for the com­pany’s sec­ond head­quar­ters, would pre­fer a city with­out fi­nan­cial chap­er­ones. But if Ama­zon chooses Pitts­burgh, those chap­er­ones — or think of them as friendly un­cles or trust of­fi­cers — would pro­vide sta­bil­ity for the com­pany’s multi­bil­lion-dol­lar in­vest­ment.

The mayor may find a cho­rus of sup­port­ers for ex­it­ing over­sight; Mr. Lamb said he’s sup­ported the city’s re­moval from the pro­gram for five years. But the time isn’t yet right. This is not about knock­ing Mr. Pe­duto’s stew­ard­ship. It’s about mak­ing sure the state has his back as he con­tin­ues try­ing to move the city for­ward.

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