PITTSBURGH, PA (November 6, 2015) The City’s Act 47 Recovery Coordinators today approved the 2016 budget Mayor William Peduto’s administration submitted in September, and cited the budget’s progress in increasing pension contributions, reducing debt and other goals in Pittsburgh’s Amended Recovery Plan.
Under amendments to the state’s Municipalities Financial Recovery Act, or Act 47, this marks the first year the Coordinators had to review the City’s annual budget for compliance with its Recovery Plan. A letter submitted to the City today by Dean Kaplan of co-coordinators Public Financial Management noted those new statutory obligations and confirmed the “budget as submitted to us on September 22, 2015 complies with the 2014 Amended Recovery Plan.”
The Recovery Plan has five primary objectives for the City to achieve before it can exit Act 47 oversight: eliminate operating deficits; maintain financial reserves; reduce debt burden; fund capital improvements; and increase pension contributions.
In supplemental materials attached to the letter from the Coordinators today, it notes that on the debt, “spending falls to 8.8 percent of total General Fund expenditures by 2020, even with new borrowing planned for 2016 and 2018.”
On pension funding the Coordinators write “the City’s 2016 budget shows the planned contributions to the pension plan through 2020 and they also comply with the 2014 Amended Recovery Plan. The Amended Recovery Plan projections run through 2018 while the City's contributions remain at the higher level through 2020.”
“This approval by the Act 47 coordinators validates the progress we’ve made and our commitment to putting the City on a path to fiscal sustainability,” said Office of Management and Budget Director Sam Ashbaugh. “I want to thank the act 47 team for their hard work, their constructive feedback on improving the City’s financial management, and their cooperation.”
The City’s Operating and Capital Budgets will be introduced next to Pittsburgh City Council on Monday, November 9. As Council may change the budget, the Act 47 team will study it once more after it is approved to again review its compliance with the City’s Recovery Plan.
The 2016 Operating and Capital Budgets were also submitted to the separate Intergovernmental Cooperation Authority in September. Since the authority board did not have a quorum of members and took no valid action on the budgets as required in October, under applicable law the budgets were deemed approved under the requirements in Act 11, which created the ICA.
A letter from City Finance Director Paul Leger on the deemed approval was issued to the ICA’s Chairman Thursday, and a copy is available here.
Friday, November 6, 2015
City of Pittsburgh
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