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Friday, November 9, 2012

City officials testify on releasing Pittsburgh from "financially distressed" status

Posted By on Fri, Nov 9, 2012 at 9:29 AM

Testifying at Thursday's public hearing before state officials who will determine whether the city should be released from its "financially distressed" status, Pittsburgh Mayor Luke Ravenstahl said it was time the city was on its own.

He cited a streamlined workforce, a significantly reduced debt principal, operating surpluses, the fact that the city went five years without issuing new debt and improved bond ratings as proof that the city is on the right track.

"I think based on the facts and on our budget, we believe the time has come for the city to be removed from Act 47," he said.

Only one city official spoke against the idea: Councilor Bill Peduto. "It is the goal of everyone to be out of Act 47, but you don't want to leave it before the city is whole," he said.

He said the city needed to complete its implementation of a new financial management system, fill critical city positions and make a real effort to get payments from nonprofit organizations, who are exempt from paying real estate taxes.

He also said he felt the city has a stronger position under Act 47 to lobby state officials for pension reform.

"Act 47 provides leverage to get pension reform. … If you want to get pension help, you better show a need for it," he said.

Another city official who has said in the past that he thought the city should remain under Act 47 gave his support yesterday. Controller Michael Lamb said that although he has concerns that the recovery plan hasn't been followed and a "real concern about this administration operating without the additional layer of oversight," he agreed that the city should be on its own.

"I cautiously say it's time to take this first step. But we still have a long staircase to climb," he said.

Also speaking in support of releasing the city from Act 47 was the chairman of the city's other oversight board, the Intergovernmental Government Authority, which Act 47 coordinators have recommended should stay.

"The ICA stands ready to go forward alone," said Chairman Dana Yealy.

The state also heard testimony from several of the city's underwriters and financial advisors, who all noted that the demand for the city's bonds by independent investors was evidence that the city is doing OK.

The secretary of the state Department of Community and Economic Development will have the final call on whether or not to release Pittsburgh from Act 47.

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