Pittsburgh makes financial progress

The city of Pittsburgh wants to be taken out from under financial oversight and no longer be designated a financially distressed city for the first time in eight years.

If the city is released of its Act 47 status, city leaders think it would show Pittsburgh is financially stable.

Dean Kaplan, one of Pittsburgh’s two Act 47 coordinators, said he thinks the city has shown enough financial progress to warrant a change.

Kaplan said the city’s progress is most notable in having annual balanced budgets, money being put aside for pension and long-term retirement issues and investments in the capital budget.

“While like many cities, Pittsburgh faces a lot of challenges, we think they can face those challenges without Act 47 oversight,” Kaplan said.

According to Jim Roberts, fellow Act 47 coordinator, the city’s biggest issues are “legacy issues.” Some of these issues include the city’s obligation to pay employee pensions, worker compensation claims and retiree healthcare, Roberts said.

Roberts added that the legacy issues have been a major focus for the Act 47 team since 2009 and Pittsburgh has done an acceptable job by setting up structures and funding to cover these costs.

“The city has made substantial progress in all of these regards in addition to maintaining a positive operating balance over the last couple of years,” Roberts said. “[Pittsburgh] have set-up structures that good governments set up to fund these legacy costs. In our view they have met these standards to leave the program.”

The main focus of any Act 47 oversight is to help a city that typically is in a dire financial situation, according to Roberts.

“Act 47 is designed to come into an absolutely emergency situation,” Roberts said. “Our job is to stabilize the city.”

Kaplan said Act 47 involvement focuses on a city’s annual budget and specific issues, usually in a five-year window, that go with maintaining a balanced budget.

He said many of the potential issues going forward for Pittsburgh like long-term pension issues will require the assistance of the Legislature. A task that the city’s other financial oversight board, the Intergovernmental Cooperation Authority, is better fit to do since the committee is made up of volunteers from each caucus of the state senate and then a final member appointed by the governor, Kaplan said.  

City Councilman Ricky Burgess agreed that state intervention is the next big step for the city in its financial recovery.

“We need state intervention,” Burgess said. “They told us to tighten the belt financially [in the past], but now have yet to get a new vehicle for income.”

Burgess added that Pittsburgh leaving Act 47 “proves we have taken the right steps towards financial security” and a brighter future.

“The mayor has done an excellent job through tough times,” Burgess said. “We have created a financial framework that will help us going forward.

Kaplan said there is plenty of reason to be optimistic for the financial situation of Pittsburgh going forward.

“It signifies the city’s overall financial picture has improved,” Kaplan said. “We would have not asked the Secretary [of the Dept. of Community and Economic Development] to release Pittsburgh if we hadn’t thought their financial performance had improved.”