Office of Mayor William Peduto
Mayor William Peduto Issues Letter to Intergovernmental Cooperation Authority
Mayor stresses shared concerns about city budget, seeks clarity on ICA call for 20% city services cut

PITTSBURGH, PA - Mayor William Peduto wrote a letter to the chairman of the Intergovernmental Cooperation Authority restating his administration’s leadership on cost-cutting initiatives and other budgetary improvements, and seeking the ICA’s assistance in legislative reforms that could help municipalities statewide.

In his letter to ICA Chairman Nicholas Varischetti Mayor Peduto reiterated his administration’s commitment to building a strong payroll management system; its move to reject another system that was more than one year and $1 million over budget; two rounds of budget amendments saving more than $500,000 from the 2014 operating budget; and a Severance Incentive Package to outgoing city employees that will save the Pittsburgh budget more than $5 million over five years.

Those changes to city spending were all implemented in the administration’s first five months in office, and more are on the way. The city’s adoption of performance-based budgeting will further analyze all spending and service delivery by city of Pittsburgh departments, the Mayor wrote. And long-term agreements with large nonprofits to cover their obligations to pay for city needs, but with controls over the spending of such funds, are also planned.

“These efforts are just the beginning of a wholesale restructuring of the entire city government to bring our operations into the 21st century and deliver better, more cost-efficient services to our residents,” the Mayor wrote.

Mr. Varischetti wrote city officials a letter June 2 after the release of the Act 47 Amended Recovery Plan that called for a 20% cut in city services. The ICA chairman’s letter said the city should not seek new funding from nonprofits until it makes such deep cuts to spending.

“Chasing new revenue should not be the first answer to the current problem. Everyone must recognize that current operating costs are 20% higher than necessary. The current excessive cost of managing the City’s operations must be fixed in order to eliminate the structural weakness and compounding problem of spending more than the City can collect,” Mr. Varischetti wrote.

Mayor Peduto called on the ICA to forward its recommendations for such service cuts, and their corresponding budget savings estimates.

“Until we have the systems in place to thoughtfully and deliberately analyze the performance of our departments, programs, and services, indiscriminately slashing our operating budget by 20% would be irresponsible and would likely result in a less effective, less responsive city government,” Mr. Peduto wrote. “However, I am interested to learn how the ICA made this determination and what your recommendations are for which city services to eliminate in order to achieve this level of savings.”

The Mayor also asked the ICA for help in assisting bipartisan efforts on the state level for pension reform and common-sense changes to the arbitration process for public safety unions.

“We need the ICA to be a much stronger voice on these issues. These are the real opportunities for structural change in Pittsburgh and throughout the Commonwealth, and the real drivers of our structural deficits,” the Mayor wrote.

A copy of Mayor Peduto's letter is here and copy of Chairman Varischetti's is here.

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