While companies with a Pittsburgh presence, like Westinghouse and Bon-Ton, file for bankruptcy, Steel City itself is back from the deep red.
Pennsylvania Governor Tom Wolf joined Pittsburgh Mayor Bill Peduto recently to formally announce the city’s release from the state’s financially distressed municipality’s act, known as Act 47, according to the Pittsburgh Post Gazette.
The city has been building its financial solvency for 14 years, turning deficits to surpluses, cutting costs and creating standards for best financial practices, which included setting realistic revenue projections.
State-appointed recovery coordinators, and the legal and financial planning firms that have worked with the city on its financial comeback, reported in November 2017 that city of Pittsburgh has addressed its budget and is on track to make necessary public investments:
The city has strategies in place to address its primary legacy costs — employee pensions, retired employee health care and workers’ compensation — while maintaining its workforce and increasing the necessary investment in Pittsburgh’s infrastructure.”
Also in 2017, the Intergovernmental Cooperation Authority, which monitors and makes decision on Pittsburgh’s budget, asked the state to dissolve it. Sam Ashbaugh, the chief financial officer, said at the time that Pittsburgh’s ability to regain control over its budget will help as it seeks to issue bonds in the upcoming years.
Bankruptcy 101: Reduce Spending
The city’s 2016 Operating Budget included a five-year financial forecast showing substantial improvements in terms of the percentage of total expenditures related to debt service. Pittsburgh is on track to halve the 18.6 percent high it reached in 2013, to to 8.7 percent in fiscal year 2020. While total expenditures increased in the city’s most recent budget, (the city is pledging an additional $22 million in pension contributions) the percentage of total expenditures related to debt service forecast is still on track — 9.67 percent in fiscal year 2021.
EfficientGov has covered the city’s innovative efforts to improve procurement and leverage partnerships to improve transportation and regional planning.
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