Pittsburgh officials want Pennsylvania to remove the “distressed” label and they’re tired of the wait.
In a letter to C. Alan Walker, secretary of the state Department of Community and Economic Development, Pittsburgh City Council president Darlene Harris urged the DCED to terminate the city’s status as a financially distressed municipality, a negative image the city has had for almost a decade.
“The continued application of the discredited status undermines our ability to do business as a major metropolitan city,” Harris said.
The city’s coordinators under the DCED’s workout program, known commonly as Act 47, said in a report last fall that Pittsburgh’s finances had improved enough to merit an exit.
“Pittsburgh has implemented a strategy to address its legacy costs of retiree pensions, retiree health care, workers’ compensation and capital needs with funding and management tools to moderate growth,” PFM Group Inc. and Eckert Seamans Cherin & Mellott LLC wrote.
The city pared its debt from $824 million in 2006, when Mayor Luke Ravenstahl took office, to $581 million. Finance director Scott Kunka has projected that amount to drop to $490 million in 2014. The city and its recovery coordinators expect to completely pay off existing debt by 2026.
“We have not made a decision yet on Pittsburgh’s Act 47 status,” DCED spokesman Steve Kratz said late Monday afternoon. “The only timeline is when the secretary and the department are 100% certain. That’s more important than for us to make a decision based on an arbitrary timeline or too quickly.
“We’re in constant communication with the city’s Act 47 coordinators and are reviewing the city’s financial situation internally.”
Pittsburgh, regardless of DCED’s response, will remain under the budget watch of the Intergovernmental Cooperation Authority, which oversees Pennsylvania’s second-class communities. The state categorized its cities by population tiers.
“At a minimum, having the redundancy of two oversight committees continues to be a waste of taxpayer money that could be much better spent on the needs of our communities,” Harris wrote.
Moody’s Investors Service rates the city’s general obligation bonds A1, while Fitch Ratings and Standard & Poor’s assign A and BBB ratings, respectively.