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Pittsburgh's recovery plan OK'd
Council votes 6-3 for passage; funding sources still uncertain
Wednesday, July 01, 2009

Pittsburgh got a new blueprint for governing yesterday after two lame ducks switched sides, two political foes pushed toward the same goal, and two powerful unions took body blows.

The passage by Pittsburgh City Council of a new plan under Act 47 for distressed municipalities sets up another challenge: finding $10 million to $14 million a year to shore up the pension fund. Whether that comes from new levies approved by Harrisburg, the long-term lease of city parking garages, fees on hospitals and colleges or a last-resort boost in property or wage taxes must be decided by late September, when the city presents a draft budget.

Mayor Luke Ravenstahl, who helped persuade two of his council allies to flip from no to yes votes, said he'll go to Harrisburg on Monday to try to start discussions that he hopes will lead to extension of a payroll tax on businesses to include nonprofit institutions, or a hike in the $52-a-year tax on people who work within the city to $145.

"If Harrisburg says no to those actions, we have the responsibility locally to find $10 million to $14 million a year, and we will do that," he said.

"This is a critical first step for the city," said council Finance Chairman William Peduto, a frequent mayoral foe who shepherded council amendments into the plan, helping to move votes to the yes column. "It establishes that we will be able to have a balanced budget for the next five years."

In 2004, the initial Act 47 plan passed, with then-Councilman Ravenstahl and Councilman Jim Motznik among its critics.

The sequel didn't generate as much union outrage, and saw council claim a bigger role than the up-or-down vote it got five years ago. This time council presented 42 amendments, of which state-picked lawyers and number-crunchers of the Act 47 recovery team accepted 30.

Council also voted to double a $1,000 bonus -- in lieu of a raise -- coming to all city workers in the first year of their next contracts to $2,000, but not to award across-the-board 2.5 percent-a-year raises that police and some council members wanted.

The state-paid consultants agreed to allow the Greenfield firehouse to stay open, let the city bolster paramedic service in the North Side, and endorse mergers of some city and Allegheny County departments,

Council added, as options for filling the waning pension fund, public parking lot rate hikes or surcharges, fees on hospital admissions and college students, and fees on boaters.

The city is now pledged to work with the Fraternal Order of Police to create "low cost incentives" to attract and keep officers.

But the plan still calls for eliminating from future union contracts curbs on management, despite firefighter fears that the city will slash jobs, reshuffle workers and ignore seniority.

"This city is done. This is an injustice," railed Darrin Kelly, a firefighter and a vice president of the Allegheny County Labor Council, after the vote. "That [plan] is another way to say, 'union busting,' right there."

"When you consider the raises that are included in the plan and an effort to save the pensions of employees, I don't know how in the world you could characterize that as union-busting," said James Roberts, an Act 47 team leader.

Negotiations with police and firefighters have begun, and getting the plan in place by mid-year was critical to capping their contract awards, the mayor said.

Union leaders had the plan on the ropes a week ago, said Councilwoman Tonya Payne, who along with Mr. Motznik turned a teetering plan into a winner.

Leading into last week's tentative tally, some on council were pushing for an 8-1 vote against -- only Ricky Burgess had declared his support -- as a statement that might shock Harrisburg and lead to earnest negotiations. Had that happened, Ms. Payne said, state leaders "would've been over here on hands and knees saying, 'What do we need to do to get this plan to pass?' "

But Mr. Peduto thought the state would ignore any council tantrum, and joined with Bruce Kraus and Theresa Smith to craft amendments, leading to a 5-3 tentative vote on Wednesday for the plan, with Council President Doug Shields abstaining.

Mr. Ravenstahl blasted the amendments then, but Mr. Peduto kept negotiating with state leaders, including Acting Secretary of Community and Economic Development George E. Cornelius, into Monday evening. The cost of the amendments dropped by what the mayor estimated at $10 million to $15 million.

Then came a 7 p.m. Monday meeting of the mayor, state officials, and council members Payne, Smith and Kraus.

"They needed my support, and I was there to give them that support," said Ms. Payne, who was defeated in the May primary. She was glad council won some improvements, and figured her colleagues were "always going to cave" to the state anyway.

The mayor said he, Mr. Motznik and Ms. Payne have had "good relationships over the years, and I really think those relationships and their trust in me and what we're trying to do gave them the comfort in ultimately voting for this."

Mr. Motznik, moving to a district judge seat next year, changed sides.

The revised plan from the Act 47 leaders to council, sent by e-mail in the first minutes of yesterday, came with a letter thanking Mr. Peduto for "tremendous leadership, good counsel and advice."

Yesterday, after a verbal bashing by fire and police union leaders who smelled defeat, council members approved the freshly printed revised plan.

Councilman Patrick Dowd, who voted no, said it would lead to a tax hike. Darlene Harris joined him, saying it shorts neighborhoods and city workers. Mr. Shields, threatening to sue to impose a commuter tax, also voted no.

If Mr. Peduto's and Mr. Ravenstahl's efforts both contributed to the plan's passage, there's no guarantee they'll work together on the next steps, including a push to lobby Harrisburg for new revenue. The councilman launched but aborted a Democratic primary challenge to the mayor in 2007, and there's no love between them.

Mr. Ravenstahl is determined to try the hard sell of getting state approval to tap tax-exempt hospitals and colleges, and those who work in the city, and wants a united council behind him.

But Mr. Peduto wants a percentage-based levy on workers, and comprehensive, statewide answers to cities' pension and health insurance problems.

Mr. Burgess said he prefers to think that the yes votes, rather than the tumult that led up to them, foreshadows the future.

"It shows that the mayor and council, working together, can get things done," he said.

Rich Lord can be reached at rlord@post-gazette.com or 412-263-1542.
First published on July 1, 2009 at 12:00 am