PITTSBURGH -- Since Pittsburgh's 2009 budget had to be preapproved by state overseers, City Council members already had a preview of the plan. But Mayor Luke Ravenstahl said the plan does do more to try to improve the city's financial health.

The five-year, $438 million budget plan will dedicate half of the city's $100 million in cash reserves to paying down debts, which is expected to save the city $50 million in interest expenses.

"We are investing in our neighborhood's safety and infrastructure without using a credit card," Ravenstahl said.

Ravenstahl said because the city has been doing more for the past several years to cut city expenses, Pittsburgh is actually better prepared to face the current U.S. economic crisis.

"I would argue that governments like Philadelphia's and government like the state's were probably much more significantly bloated than we are here in the city of Pittsburgh. And as a result, they probably had a lot more fat to cut than we do here in the city," Ravenstahl said.

Council President Doug Shields said the City Council is still reviewing the capital budget plans.

City Council finance Chairman Bill Peduto said the administration should now begin looking at mapping a plan with the City Council and state overseers about getting out of Act 47 distress status with the state. Peduto said Pittsburgh's five-year budget projections warn the city could start eating into what's left of its savings, and enter a new money crunch in a few years.

"Our present five-year plan is a recipe to back into the same situation that we crawled out of. We have to do it in a different way. We have to use this budget as the bridge to the end of Act 47," Peduto said.

"The chief culprit is going to be pension fund obligations. That is the house of fire. As some folks say, this is the number that's going to eat the city alive," said Shields.

What follows is a list of budget highlights released by the city:

2009 CAPITAL BUDGET HIGHLIGHTS

The $438 million budget has already been unanimously approved and endorsed by the ICA, Governor’s Office, and Act 47 team.

The five-year plan maintains a healthy fund balance in excess of 5 percent. The City had previously maintained a 10 percent threshold, but will instead prudently allocate these reserves to pay down debt and address capital infrastructure legacy costs.

We will increase our debt payments to save taxpayers more than $50 million.

We will add more than $27 million to the Mayor's pay-as-you-go capital program, bringing the total investment to nearly $100 million over the past three years to pay for critical capital infrastructure without the issuance of new debt.

The 2009 budget also includes significant investments in BBI. BBI includes an additional $300,000 for initiatives in the Bureau of Building Inspection (BBI) that will be matched by the ICA.

Other budget changes include increasing the City's Pension Fund contribution an additional 5 percent annually. This will put $11.3 million more into the City's Pension Fund by year 2013. The City will also begin making contributions to address its Other Post Employment Benefits liabilities with funding of at least $200,000 per year.

The Mayor's budget and five year plan also cuts 65 vacant positions and puts 40 more officers on the patrol by hiring civilians to take over administrative functions.

Non-union City employees will receive their third consecutive 2.5 percent cost-of-living raise after four straight years without one.

More emphasis will be placed on education and training in the workforce, starting with the City's first-ever BBI class and continuing with mandated performance evaluations for all non-union employees in the long term.

Capital Budget Highlights

Capital budget includes local funding of $44.9 million, which is 5% higher than the original 2008 capital budget.

Over $11 million to pave City streets.

$5 million for building demolition, a 25% increase over last year’s budget.

$5.1 million to modernize our vehicle fleet, continuing our record investment over the past three years.

Funding for additional Splash Zone spray parks ($775k)

Continuance of the Summer Youth Employment Program ($500k)

Funding for the relocation of the Zone 3 police station ($1.5 million, balance will be paid out of building maintenance).

---

Related Links:

• More Allegheny County News
• Add Us To Your iGoogle Or My Yahoo Page
• Download Our Free Desktop Alert For Breaking News

---