Pittsburgh Receives Latest Act 47 Recovery Plan
Pittsburgh’s Recovery Coordinators have submitted a new plan – the third since the city has been under distressed Act 47 oversight – to get the city into solvent financial shape.
In addition to eliminating operating deficits and reducing the city’s debt payments, the latest plan to get Pittsburgh out of commonwealth oversight focuses on beefing up the employee pension fund.
Pittsburgh Act 47 Coordinator Dean Kaplan said the city’s pension board has rightly changed how it evaluates the fund’s status, but that means it’s even less healthy than previously thought.
“They reduced the interest assumption from 8 percent to 7.5," Kaplan said. "They also made some changes to recognize that people live longer. That, in and of itself, is causing an increase in what the city has to pay. Which is, as we said, wise, they should be paying more. Right now the pension is basically treading water.”
The plan says the city has to pay more into the fund.
It also spotlights the need to focus on crumbling infrastructure by assessing and then prioritizing the city’s capital needs.
“We’re calling for the city to borrow two times. But in addition to that we’d love to see the mayor be successful in getting the tax-exempt organizations to contribute more,” said Jim Roberts, Act 47 Coordinator.
He said those funds together could make more of a dent in the city’s capital backlog.
Additionally, the report lays out initiatives that would build up the city’s tax base, increase government efficiency through intergovernmental cooperation and pursue further workers’ compensation reforms.
Mayor Bill Peduto said, in a statement, the amended plan “does not go far enough to address our capital needs and pension obligations.”
City Council must approve the plan before it is implemented.