PITTSBURGH, PA (Sept. 22, 2014) Mayor William Peduto submitted a proposed $505.9 million 2015 city operating budget and five year plan today to the Intergovernmental Cooperation Authority.
“Today is the beginning of the end of Pittsburgh’s financial distress,” Mayor Peduto said.
“A situation has been created of unreal expenses and false revenues that has kept us from solving our problems. Today is a new day and a new era of truth in budgeting, and in the next five years we will finally solve the city’s financial crisis. It will require shared sacrifices from all of us to do it.”
The city’s Office of Management and Budget found real city expenses climbing by $23 million due to past moves to lower the assumption on pension investment returns and to under-budget for public safety overtime, among other issues. At the same time, as reported in the latest Act 47 recovery plan approved in June, the city’s millage rate was miscalculated in 2013, leading to a $35 million loss in real estate revenues over five years. In all the city is expecting $11.7 million less in revenue than was budgeted.
“These types of fiscal illusions artificially kept the city’s expenditures artificially lower than they really were,” said Office of Management and Budget Director Sam Ashbaugh. “This is a new day for how the city approaches budgeting and financial management. It’s truth in budgeting: we’re going to be upfront about the costs of delivering services, and provide for adequate funds for all of our departments as they are needed.”
The 2015 budget solves these issues by means including cutting 75 vacant positions and saving $3.4 million; receiving $10 million more from the Pittsburgh Parking Authority under the 2010 council-controller plan; capping compensation allocations and other requirements of the Act 47 plan, saving $8.2 million; implementing a 5% cut to non-personnel expenses citywide, saving $1.6 million; and a revenue-neutral 0.5 mills readjustment of the city’s millage rate generating $8 million.
At the same time the budget reinvests in critical needs such as 892 police officers, 657 firefighters and 175 paramedics; creating new data analysis positions to support the vision of Acting Police Chief Cameron McLay; increasing funding for the Department of City Planning to strengthen its core functions; transforming the Bureau of Building Inspection to through expanded technology and customer service; and implementing new data-driven management tools for Public Works and other departments.
The ICA has 30 days to review the proposed the budget and five year plan. The administration will submit the 2015 operating budget to Pittsburgh City Council in November.
Monday, September 22, 2014
City of Pittsburgh
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