Pittsburgh Has Host Fee Agreement for 2017

There is a report in the news media stating that Pittsburgh has come to an agreement with the Rivers Casino on a 2017 host fee payment of $10 million, with a promise that Rivers will pay the entire amount, even if the General Assembly enacts a fix for the host fee that results in a payment going forward that results in a lower amount for the City.

In noting the decision the Mayor noted “Ten million dollars is a lot of positions in the budget — it’s over 200 positions in the budget…Obviously, after reducing our workforce by 25 percent [in recent years], a further reduction of that magnitude would take away from our ability to provide services to our people.”

For this coming fiscal year (beginning January 1st) the City is budgeting for 3,131 positions. If the Mayor meant that the 25% reduction was measured from the proposed 2017 total, one would have to go back to 2003 when the budgeted payroll was 4,337 positions, prior to the layoffs that proceeded the entrance into Act 47 and prior to the legalization of slots. That’s roughly a 28% decrease in headcount. On a per 1000 person basis, in 2003 the FTE was 12.9 and in 2017 the FTE would be 10.2, a decrease of 21 percent. Based on the 15 years of audited data 2000-2015 on budgeted positions, only two times has the City had a decrease of more than 100 budgeted positions (2003 to 2004, down 637 positions, and 2005 to 2006, down 321 positions).

The September decision also severed host fee language for counties, including Allegheny County, which under the law received 2% of the Rivers gross terminal revenue, but no guarantee of a dollar amount.