Friday, November 09, 2007
City Wants State Overseers Gone: Can It Happen?
Various parties—City officials, public sector unions, state legislators representing the City—are beginning to increase their calls for an end to either the Act 47 recovery team, the Intergovernmental Cooperation Authority (oversight board), or both. The elected officials seem to want it as a sign that the City has turned the financial corner, the unions want it to end what they see as draconian control of their wages and benefits.
So can the City get out? Under Act 47, Section 253, the termination of distressed status can come about from a determination by the Secretary of DCED that the factors causing distress are no longer there. The Secretary can either initiate this process himself or by a petition of the municipality. The factors used to consider the termination of the status include the elimination of deficits, the retirement of obligations, and that the municipality has operated with a positive fund balance for at least a year.
Under Act 11, which created the oversight board, Section 204 states that the board shall be in existence for at least seven years, which would extend out to 2011. If the board has approved the three previous budgets and five-year forecasts, then the Secretary of DCED can certify that the authority is no longer needed. The board submits a final report and goes out of existence.
So, is there a track record in the state that could predict whether Pittsburgh—declared distressed in December of 2003 and having the oversight board created in November of 2004—could throw off what it perceives as shackles of state control? There are 17 municipalities, including Pittsburgh, currently in Act 47 status. Some have been in since 1987. Six communities have had their status terminated after being in Act 47, with some in for as little as three years and others in for ten.
There is an oversight board similar to the ICA that operates in Philadelphia and has been in place since 1991. It shows no sign of going anywhere anytime soon, having just received the Mayor of Philadelphia’s 2008 budget and five-year forecast.
It is very premature for the City of Pittsburgh to be out from under state oversight, either from the Act 47 team or the ICA. Showing some real movement toward reducing per capita operating expenses and dealing with long-term obligations would be a step toward the resolution some parties desire.
So can the City get out? Under Act 47, Section 253, the termination of distressed status can come about from a determination by the Secretary of DCED that the factors causing distress are no longer there. The Secretary can either initiate this process himself or by a petition of the municipality. The factors used to consider the termination of the status include the elimination of deficits, the retirement of obligations, and that the municipality has operated with a positive fund balance for at least a year.
Under Act 11, which created the oversight board, Section 204 states that the board shall be in existence for at least seven years, which would extend out to 2011. If the board has approved the three previous budgets and five-year forecasts, then the Secretary of DCED can certify that the authority is no longer needed. The board submits a final report and goes out of existence.
So, is there a track record in the state that could predict whether Pittsburgh—declared distressed in December of 2003 and having the oversight board created in November of 2004—could throw off what it perceives as shackles of state control? There are 17 municipalities, including Pittsburgh, currently in Act 47 status. Some have been in since 1987. Six communities have had their status terminated after being in Act 47, with some in for as little as three years and others in for ten.
There is an oversight board similar to the ICA that operates in Philadelphia and has been in place since 1991. It shows no sign of going anywhere anytime soon, having just received the Mayor of Philadelphia’s 2008 budget and five-year forecast.
It is very premature for the City of Pittsburgh to be out from under state oversight, either from the Act 47 team or the ICA. Showing some real movement toward reducing per capita operating expenses and dealing with long-term obligations would be a step toward the resolution some parties desire.
