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Ordinances for Life After Oversight

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As we touched upon in a blog last week regarding the Mayor of Pittsburgh’s budget address, at Monday’s meeting of City Council four ordinances regarding budget practices for the City were introduced.  All four would amend existing language in the City’s code of ordinances at Title One, Administrative or Title Two, Fiscal.

Below is a brief summary of each:

Capital Budget:  Adds language to handle the reallocation of unspent capital budget money to a reserve fund to be used for the following year’s budget.  This would apply to projects that have spent less than 20% of their budget.  Adds additional duties for the City Controller regarding the close of accounting report.

Operating Budget: Sets a target for general fund balance of a minimal 10% but a goal of 12.5%. Would bring the Controller, OMB office, and Council Budget Office together annually to review and sign off on revenue forecasts for the following budget and for a five year forecast, would deliver quarterly budget reports to City Council, and establishes a City pension formula that takes into account the parking tax money (which in 2018 will double from $13 million to $26 million going toward pensions.

Debt Policy: Goes into much detail about purpose of debt, sets the debt service as a percentage of general fund expenditures to 12% and the overall debt burden as a percentage of assessed value to 3.5 times (these are lowered from 17% and 5 times, respectively).  Adds new language on bond sales, refunding, and maturity of bonds relating to the life of the project.

Pension Enhancements: No enhancements to municipal, fire or police pensions such as eligibility, vesting, payout formulas, and no retroactive enhancements.  No increase to service increments for years of service over twenty.

When we wrote in 2012 about the possibility of the Act 47 team dissolving (which did not happen, but may be happening soon) and keeping the oversight board in place (both the statutes pertaining to Act 47 distress statewide and the oversight board for Pittsburgh underwent legislative changes in the interim) we recommended that

It would be an opportune time to establish specific targets/goals/mileposts for what the state wants and expects the City to look like in five years in several key areas including per capita municipal spending, per capita debt, pension funded ratio, and staffing per 1,000 residents. The City must also be compelled to explore outsourcing, competitive bidding and consolidation of functions to dramatically lower expenses and employee count. Getting specific on goals, mileposts, metrics, or whatever the terminology may be and a specified time frame for achievement sends a clear message to the City what it is expected to accomplish and allows all parties to see how well things are progressing toward the five year objectives.

 

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Allegheny Institute
Allegheny Institute

The Allegheny Institute is a non-profit research and education organization. Our mission is to defend the interests of taxpayers, citizens and businesses against an increasingly burdensome and intrusive government.

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