Now that Mayor Bill Peduto’s 2017 budget has been approved by the Intergovernmental Cooperation Authority Board, there are other hurdles to be cleared before it becomes law. They include coming up with at least $10 million in gaming revenue to balance the budget. In his monthly conversation with Mayor Peduto, 90.5 WESA’s Paul Guggenheimer dives into that topic and other aspects of his spending plan.
Their conversation has been edited for length and clarity
PAUL GUGGENHEIMER: Your 2017 budget plan has been approved by the Intergovernmental Cooperation Authority board, that’s part of the Act 47 oversight requirement. What is your reaction to the ICA vote?
MAYOR BILL PEDUTO: It’s actually a lot of things. We have a partner now that we can work with, not work against. We’re both working for the interests of the city. The political agenda that was on the table before has now been eliminated. And we’re able to take care of business, but at the same time start looking ahead at much larger issues like pilots and the ability to actually reform our pension system. And to be able to create a work force for the 21st Century.
GUGGENHEIMER: In the past, the ICA withheld much of the gaming money that it received for distribution to the city. Would you say there is less tension between the ICA and the city these days?
PEDUTO: There’s a ton less tension. There is actually cooperation. We have a new director who’s working with our staff on a weekly basis. The reasons for holding that money before were political and they went beyond the bounds of the legal authority of the ICA. They are allowed to hold the funds when we are not in compliance with the Act 47 five-year plan. But they can’t (do that), because they don’t like legislation that council is putting forward or they want to try to flex their muscle in order to be able just to hold it over the head of the city. So, those days are fortunately behind us and we’re now looking ahead and don’t have to look in the rearview mirror anymore.
GUGGENHEIMER: One of the caveats here is that the city has 120 days to verify it can secure at least $10 million in gaming revenue next year so that the budget is whole. Can the city do that, especially after the state Supreme Court last week struck down the law requiring such payments from places like Rivers Casino?
PEDUTO: Well, first we have to because $10 million is about 2 percent of our operating budget. We need to be able to secure that funding so there’s two tracks. The one track is working directly with the casino in a cooperative agreement to be able to ensure that the $10 million is there and that they’re willing to pay it. The second is working through Harrisburg. In Harrisburg, we already have the assurance of the governor and of key leaders in the legislature that Pittsburgh and all cities will be kept whole to the promise that was made in order for these casinos to operate in the municipalities where they are. We offered an occupancy permit that was based upon that $10 million. We have a commitment from the governor and other key leaders that that $10 million will be there. But at the same time we’re working on a side agreement with the casino to assure that happens. And we don’t have 120 days to do it. We have to have that done by Dec. 31 because we have to have a balanced budget by Jan. 1.
GUGGENHEIMER: What happens if the gaming revenue does not materialize?
PEDUTO: We don’t many options. More than likely, you’ll see a cut across the board basically affecting every department in order to make the two percent reduction that would be necessary. And there really isn’t that much we could do because the costs like healthcare and paying off debt are already fixed. So, it would really affect the operation side of the city of Pittsburgh, the employees and the programming of the city.
GUGGENHEIMER: What would you say are the priorities reflected in this budget which still has to be approved by City Council?
PEDUTO: The priorities are meat and potatoes so it’s public safety and public works. It’s getting the job done for the primary purposes. And then we really started to invest in technology. The system was just a complete mess and it still isn’t really there. Each department has it's own software that isn’t able to interact with any and most of it is obsolete. And so we basically have to let it die on the vine and create a whole new operating system for the city. So, we’re starting to get some world class operations on the tech side that really will lead the country. But we have to do a lot more in the integration of that.