Pittsburgh To Get $18 Million, Ends Battle With ICA

Aug 16, 2016

Tax dollars generated by the Rivers Casino in Pittsburgh will soon start flowing into they city's pension system.
Credit Ted Murphy / Flickr

The fight between the City of Pittsburgh and the Intergovernmental Cooperation Authority, involving millions of dollars in gaming revenues, is over. 

“As far as I’m concerned it’s a clean slate, it’s a new start,” said ICA Board Chair BJ Leber.

Each year $10 million of the taxes generated by the Rivers Casino is earmarked for the city. The ICA had withheld the 2014 and 2015 revenues, saying the city had to first install a new payroll system. The city went to court contending the condition was not valid. 

As part of the deal approved by the board Tuesday, the city has agreed to drop the suit. 

Leber said the deal is representative of board members’ desire to move forward and work closely with the city.

“We were appointed by the governor and legislators in Harrisburg, so we understand that we are an independent body and we are committed to working with the city and helping them make the right decision and move forward,” Leber said. “And we want to do that collaboratively.”

At one time the ICA withheld $20 million. In January, then-ICA Executive Director Henry Sciortino handed the city a check for $2.9 million, but did not release the remainder of the tax dollars plus the accrued interest. Sciortino was later fired by the board and is now under investigation for his handling of state funds. Under Sciortino's lead, roughly 90 percent of the authority’s documentation was found missing or destroyed.

The agreement indicates that $11 million will go directly toward the city’s pension fund and $7 million will go to the city’s general fund, with the intention that it will be used to help cover the city’s $70 million pension payment. 

Mayor Bill Peduto called the deal a fresh start in an interview with WESA last week.

“We’ll be able to start to work together without lawsuits to be able to get Pittsburgh out of Act 47, which is something that’s doable within the next three years,” Peduto said.

The lone “no” vote came from ICA Treasurer Michael Danovitz. He said he could not approve any plan that did not address the chronic underfunding of the city’s pension plan.

“It’s underfunded by upwards of $48 million a year,” Danovitz said. “Until that’s addressed, we should continue to move forward and work with the city to look at alternate funding plans.”

Danovitz said at the least the city should be placing as much into the pension plan as it is paying out to its retirees. The city’s budget assumes there will be an 8 percent return on the investments in the fund, but the program fell short of that mark in 2014 and 2015.

Leber said this is not the end of the debate of the pension fund.

“The $10 million that we get a year from the gaming money, unfortunately, in and of itself is not going to solve the pension problem. So we all agree that the pension problem needs to be resolved, there just might be disagreements on the stand that this body takes in terms of releasing money to that end,” Leber said.

The ICA will still have control over the gaming funds from 2016 when they are made available in 2017. A bill that recently passed in Harrisburg would limit the use of those gaming funds in the pension fund when the ICA is dissolved.

Leber is also a member of the WESA Board of Directors.