At a public hearing on Thursday, Act 47 coordinators, Mayor Luke Ravenstahl and others said the city is ready to be released from Act 47, the Financially Distressed Municipalities Act. Speakers recounted what landed the city its financial distress status in 2003. Back then, Pittsburgh was operating with a debt burden of more than 20% of its operating budget, pools and recreation centers had to close and hundreds of city employees, including police officers, were laid off.
“As we started work in 2004 the city’s cash reserves were very close to exhaustion, I remember spending an enormous amount of time in the early days of the plan doing cash flow analysis to figure out if the city was going to be able to meet payroll, make its pension payments and meet all of its other pension obligations,” said Act 47 Coordinator Jim Roberts.
The first step was to put together a blueprint for the city to exit Act 47. Roberts said Pittsburgh has met many of the requirements needed to be released, and added it’s been the goal of coordinators over the last several years to essentially work themselves out of a job.
“That was often met with a significant amount of skepticism, but I guess what we’re here to say in suggesting the city’s distressed status be rescinded, we’re basically saying we have, in fact, worked ourselves out of a job.”
While most of the people testifying at the hearing agreed that Pittsburgh should be released from Act 47, at least one person said the city is not ready. City Councilman Bill Peduto said many of the financial successes of the city are thanks to Council, and added that he believes the city administration needs Act 47 oversight to keep moving in the right direction.
“We’ve already lived through one crisis with our city’s budget, we’re on a track to recovery, we’re just not quite yet there,” he said.
Peduto recommended revisiting release from Act 47 in 2018. City Controller Mike Lamb agreed with some of what Peduto said, including that the city administration needs oversight. Still, he echoed the majority of speakers in recommended the city be released from Act 47, though he encouraged state coordinators to continue to work with officials here.
“Working together as partners, rather than as overseer and distressed community, I know we can achieve big things,” he said, “and this small step could be the catalyst to accomplishing real financial sustainability for Pittsburgh. I cautiously say it’s time to take this first step, but we still have a long staircase to climb and we need partners like you in Harrisburg to help us up.”
The ultimate decision on whether to release Pittsburgh from Act 47 status will be up to state Secretary of Community and Economic Development, C. Alan Walker, who did not attend the hearing. If the city is released, it will still have to answer to a second panel, the Intergovernmental Cooperation Authority, which was created by the state legislature to help Pittsburgh manage its finances.
