In February, the City of Pittsburgh exited the state’s Act 47 program for financially distressed municipalities 14 years after entering. Now, Pittsburgh City Council, recently returned from summer recess, is facing the first budget season since 2003 without it. They’re also facing a changed dynamic as city departments, bureaus and unions look to council in their bids to free up funding that remained largely frozen under Act 47.
“This year is going to be a complete bonanza, to be honest,” District 8 Councilmember Erika Strassburger said. “I think that anyone who is in a department or any bureau head who has been doing their job as well as they possibly can, I think people feel there are not enough resources for their departments because of the austerity measures put in place with Act 47, which were necessary, but which also meant pay-raise freezes, etc.”
Strassburger added, “I think every department is gonna feel they want to make up for lost time now.”
Tim McNulty, spokesperson with Mayor Bill Peduto’s office, told The Incline that even though the city is no longer under Act 47 oversight, a process that required state overseers with the Intergovernmental Cooperation Authority to sign-off on all budget proposals, the ICA is still involved this year.
“It’s not completely different this year,” McNulty explained of that process, adding, “Due to a some language in the bill that created the ICA, the ICA’s still in existence, so the city will still be sending over an early version of the budget in late September as it has for more than a decade.”
McNulty called this a “vestige of oversight,” one that will disappear by this time next year.
“The ICA bill said the ICA will be in existence until Act 47 goes out of existence or until the year 2019, whichever is later,” McNulty added. In Pittsburgh’s case, it’s the latter.
But council members expect differences this year anyway, with city departments and unions sensing a new opening and looking to lay the groundwork for funding bumps now that the Act 47-era in Pittsburgh is over.
“Certainly there are going to be some departments that want a bump in funds, and some definitely deserve it, but can we get away with not going from $8 million to $12 million in a certain department?” asked District 5 Councilmember Corey O’Connor. “Let’s be smart and fiscally responsible in what we do.”
O’Connor said even with the remnants of ICA oversight this year, the dynamic is already shifting and city government’s sense of autonomy already returning.
“I believe it’s pretty diminished oversight at this point,” O’Connor explained. “I think we can dictate where certain monies go where before [the ICA] could have said, ‘Hey,’ — and I’m just using a general example here — ‘you’re spending too much on this and that, and you should be closing those things and repurposing those funds,’ and now it’s up to us to determine what the actual priorities are, and that’s gonna make things more interesting. It’s also going to give more residents a voice because we were capped for a lot of years on what projects we could spend money on, and now we’re going to be a little more open to doing different things.”
Strassburger said she’s spoken to other members of council and that they recognize the need to maintain some austerity measures and “some level of frugality” in order to avoid “getting ourselves into the same mess we did 15 years ago.”
She added, “But I think everyone will have their own individual priorities when it comes to various departments and projects for their own districts as well. It will take a lot of compromise and hard conversations among council members.”
There’s also the issue of contracts between the city and its unionized workers, contracts Councilmember Darlene Harris said need to be renegotiated.
“What we need to maintain are the people that do the work that touches our neighborhoods, that keeps us safe: paramedics, police, fire,” Harris said. “A lot of our employees are making lower wages than I think they would in other municipalities. An example of that is us losing our police officers. They used to be the highest paid among all the municipalities in Pennsylvania, and now they’re almost the lowest, if not the lowest, in wages.”
Councilmember Anthony Coghill, District 4, echoed this, saying, “it is my hope and belief that we will conduct positive negotiations with our public safety unions in order to assure that those who are on the front lines receive the wages and benefits that they deserve. Suburban areas have been cherry picking our public servants. The administration will need to be competitive and proactive in order to keep our employees in city.”
In District 2, Theresa Kail-Smith has been a council member since 2009, and therefore said she has never seen a budget season without Act 47. Her outlook this year could be described as cautiously optimistic.
“Hopefully we’re more mindful now with what could happen and could occur,” she said. “We have a pretty rigorous budget process in place now with a lot of oversight and accountability, and even though we’re Democrats, some are still fiscally conservative.”
In exiting the Act 47 program, Peduto said financial reforms were working and that the city’s financial outlook had improved substantially in the last decade.
Kail-Smith concluded by phone, “I hope a majority of council realizes we don’t want to go back to Act 47 and will make wise decisions.”
‘Priority No. 1’
The councilmembers we spoke with also said they expect ongoing changes and tumult at the Pittsburgh Water Sewer Authority to be a big issue for council in the coming weeks and months.
O’Connor called the renegotiation of “the 2025 agreement” with PWSA — one that has the authority looking to buy water infrastructure from the city as early as that year — “priority No. 1.” O’Connor said he expects the adding of a new board and governance at PWSA to “all come into place in the next couple of months as well.”
The PWSA is being overhauled following a lead water crisis and a state audit that found “years of mismanagement and conflicted leadership [that] resulted in water quality problems,” the Pennsylvania Department of Auditor General announced in a November press release.
Meanwhile, private companies, including Peoples Gas, continue to look to acquire the water system, a move that has raised concerns among critics of the privatization option, some of them on council.
“I’m not for outright privatization of that authority right now,” O’Connor said by phone. “Rates would go up, we would have to figure out what oversight would be, what boards would look like — it would be a very different process. But, also, having a say is really important to me, and if you’re going to privatize something, you’re going to take the taxpayer out of it and then who controls rates and things like that — it’s a big, big factor.”
Calls and emails to the three remaining members of council and to Council President Bruce Kraus’ office were unreturned.