County seeking ways to bolster reserve fund

A pair of As on Allegheny County’s latest financial report card should help balance next year’s budget, county Executive Rich Fitzgerald says.

Mr. Fitzgerald was responding to the recent decisions by Moody’s Investors Service and Standard & Poor’s Rating Services to reaffirm investmentgrade ratings on county debt.

Moody’s last month retained an A1 rating on $63 million in bond refinancing and $130 million in new borrowing planned by the county. Similarly, Standard & Poor’s kept the county’s bond rating at A+.

Keeping those rankings will allow the county to borrow money and refinance existing debt at lower interest rates, a situation that could translate into millions of dollars in savings for county taxpayers, Mr. Fitzgerald said. Reduction in debt service costs is one element in a plan to avoid any county tax increases in 2013, he said.

His administration will present a preliminary financial plan to county council in midOctober. Council has the last word on county spending and tax rates.

“It was very good news and somewhat surprising,” Mr. Fitzgerald said of the decisions by the rating agencies. He and members of council have raised concerns about the size of the county’s fund balance relative to the size of the county budget.

That account, which can be used to pay unexpected or emer-

gency bills, has dropped to less than $6 million, less than 1 percent of the county’s $784 million 2012 operating budget. Financial experts and rating agencies prefer to see that cushion closer to 5 percent, or about $40 million.

The county has been exploring other steps to keep costs under control and seek new non-tax revenues, Mr. Fitzgerald said. They include an already imposed hiring freeze, the possible sale of naming rights for county amenities, and revising fees for county services that better reflect the cost of providing them.

His administration continues to look into possible sale of drilling rights and royalties from Marcellus Shale drilling for natural gas on county land.

“We have a new county manager [William McKain] in place and he is working with department directors to find more efficiencies,” he said. “It’s like family finances: Cut back a little here, collect fees for naming rights, cell towers or Marcellus Shale there. A lot of little pieces can add up.”

Councilman William Robinson, D-Hill District, said he was looking forward to seeing the 2013 financial plan that Mr. Fitzgerald’s team would propose next month.

County Council last year approved a 1-mill, or 21 percent, increase in the property tax rate. Mr. Robinson, who chairs council’s budget and finance committee, had pushed for consideration of another increase for 2013, but he said last week that such a proposal had no support from the administration or his council colleagues.

Mr. Robinson also has noted that raising fees for a variety of services offers a way to raise revenues without tax hikes. The last time the county revised multiple fee schedules it raised an additional $3 million to $4 million, he reminded his colleagues at an August council meeting.

His committee will take a first step toward approving fee changes on Wednesday, when it considers an administration plan to increase charges for services provided by the county’s Department of Real Estate.

Any changes in fee schedules would be considered only as part of a broader look at county spending and budgeting, he said.

Councilwoman Heather Heidelbaugh, R-Mt. Lebanon, has a more ambitious goal for this year’s budget deliberations: rescinding the 1-mill property tax increase approved last year by council.

“I am in favor of an entire package that would look at raising revenues in ways we haven’t considered in 15 years and then rolling back the millage,” she said.

The county needed an additional $12 million to $14 million to close its budget gap, and it might be able to find some of that revenue in revised fee schedules, she said. “It is responsible to look at how much an individual user of government services is paying for a service and whether that covers the actual cost [of providing it],” she said.

“We also might be able to raise some revenue in a capitalistic way in the medical examiner’s office,” she said.

Last week she sent a letter to council President Charles Martoni with a list of 10 multi-part questions about fees for services. “[Are] there services that the medical examiner and the lab could be performing that are not currently being performed to raise revenue?” she asked.

She also questioned whether current fees for expert testimony — in person or in writing — were comparable to what peer municipalities charge.

“If some of our actual costs [for specialized services] are higher than current fees, let’s recover them from the user,” she said.