Pittsburgh to State: “Please Release Us” from Oversight
Amid the 2012 budget deliberations comes a not-too-subtle plea from certain City officials that they are ready for the state to remove itself from watching over the City’s shoulders and inspecting its finances. The Mayor’s spokesperson stated "We feel like we can start functioning on our own". The Act 47 coordinator said he "couldn’t put an absolute timeline on [leaving Act 47]" and, by extension, the existence of the separate oversight board.
Recall that in November of 2007 the City petitioned the Secretary of DCED to remove them from Act 47 status. An evidentiary hearing followed and in July or 2008 the decision was rendered to keep the City under supervision. It was agreed that, due to the City’s massive legacy cost problem, an amended recovery plan was needed and that is the plan the City is currently operating under.
With an official DCED designation date of December 29, 2003, Pittsburgh will soon have been in Act 47 for eight years. Twelve other municipalities currently in distressed status have been in longer. Of the six communities that have been removed four came out in less than eight years. Ambridge, in neighboring Beaver County, was in for just three years. The boroughs of East Pittsburgh and North Braddock, both of Allegheny County, made it out in seven and just under eight years, respectively.
In announcing the decision in 2008 the DCED secretary at the time pointed to the City’s pensions, post-retirement health care, debt, and workers’ compensation liabilities as items that needed top priority attention before even considering letting Pittsburgh out of oversight. The City spent all of 2010 focused on the pension part of the equation, and the plan that moved forward was one that beat a state minimum funding threshold, not a long-term solvency plan. They are slowly moving toward a trust fund for retirement health care (there are no assets set aside for that liability), workers’ comp costs are higher than norms, and debt is going to level off so long as the City takes care of capital needs without borrowing. Sounds like there is a lot more work to do prior to release.