Fiscal oversight board fails to meet, passes Pittsburgh budget by default

November 12, 2018

In likely its last act, Pittsburgh’s fiscal oversight authority did nothing.

The Intergovernmental Cooperation Authority, required to approve Pittsburgh’s budget, did so by failing to vote on it, meaning Mayor Bill Peduto’s $554.8 million proposed spending plan for 2019 passed the city’s last remaining fiscal oversight authority by default.

Reynolds Clark, interim executive director of the Intergovernmental Cooperation Authority, notified the city by letter on Tuesday that the ICA board failed to vote on the budget within 30 days of receiving it as required by law and thus it is deemed approved.

Clark said Wednesday that the board was unable to meet because the state has not funded it since 2017.

Michael Danovitz, the ICA’s longest-serving board member, said the ICA could have sought funding from the city to hold a meeting.

“Money was not the issue,” he said. “They just didn’t want to do it.”

Clark declined to comment on seeking money from the city, and ICA Chairwoman B.J. Leber could not be reached for comment.

Dan Gilman, Peduto’s chief of staff, said the city gave the ICA $37,000 earlier this year to help with operating costs.

“The fact that a body created to promote fiscal responsibility is costing city taxpayers money for no action is pretty ironic” Gilman said.

He added that he didn’t expect the ICA to object to the budget because it maintains fiscal responsibility while funding city priorities.

Pennsylvania in 2004 classified Pittsburgh a distressed city under Act 47 because of chronic deficits, overwhelming debt and underfunded employee pension plans. Under the act, Pittsburgh had to submit budgets to Act 47 coordinators and take other steps based on their suggestions to resolve its financial crisis.

State lawmakers the same year created the ICA, which acted in a similar fashion. Pittsburgh had to submit budgets to the ICA and act on its orders regarding spending and other fiscal issues.

In February, Gov. Tom Wolf and Pennsylvania Secretary of Community and Economic Development Dennis Davin declared Pittsburgh financially sound and released it from oversight, but state legislators have yet to act on terminating the ICA.

The Pennsylvania Senate in June passed a bill introduced by Senate Minority Leader Jay Costa, D-Forest Hills, that would end the ICA, but the House has failed to vote on it.

Clark said the ICA would expire automatically under law in June if lawmakers fail to act sooner. He said the authority would remain in “dormant operational mode” until then.

“Technically, we’re in existence until June of next year,” he said. “We’re just going to wait now until June.”

The budget is subject to approval by City Council. Members are expected to begin budget hearings in November following Peduto’s annual fiscal address.

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