In the past, Pittsburgh residents have had a voice in the capital budgeting process, through a series of public hearings usually held in October and November.
The problem with that model, according to Budget Director Sam Ashbaugh, is that the budget is already drafted and has been presented to City Council and the Intergovernmental Cooperation Authority by that point.
“It doesn’t make sense to have the Mayor release his capital budget and then … hold public hearings to get comment. We want to flip that around,” Ashbaugh said. “The public hearings are going to be held before all projects are reviewed by the (Capital Program Facilitation Committee), which allows Council, the departments, and the committee members to hear opinions of citizens on capital needs.”
Moving public hearings up to June is one of the changes proposed in a bill that would amend city code governing the capital budgeting process.
City Council in 2012 passed the “Neighborhood First Capital Budget Reform Act,” which requires the city to develop a 6-year plan for capital projects and include the public in the decision-making process.
Councilwoman Natalia Rudiak, who wrote the bill along with Councilman Ricky Burgess, said she heard from the city budget office that citizen involvement really can produce results.
“Neighbors from one street in the South Side got together and came to one of the public hearings in Morningside and advocated for slope remediation on their street and they were successful,” Rudiak said.
The bill would also make more explicit the definition of what qualified as a capital project.
“The term capital project will apply specifically and exclusively to various long-lived city assets with a minimum expected useful life of five years,” Ashbaugh said. “In prior years, we may have allocated money for capital projects that didn’t really meet that threshold. They may have been for noteworthy projects but may not have had a lengthy useful life.”
Ashbaugh gave the example of firefighters’ fireproof suits, or “turnout gear,” which used to be paid out of the capital budget but will now be paid out of operating. In fact, he said the Public Safety Director would no longer serve on the CPFC if the bill passes.
“The public safety director was on there because we paid for a lot of public safety equipment out of capital,” Ashbaugh said. “But as you may know, with our 2015 budget, we’ve put those items in the operating budget because they were really operating budget expenses, not capital.”
Ashbaugh also said the bill would tie the source of funding for capital projects to the expected useful life of the project. Typically, those sources include bonds, state and federal grants, and pay-as-you-go of PAYGO transfers from the operating budget.
As Ashbaugh puts it, “you don’t want to take out a 20 year loan for something that you’re going to replace in five years,” and the administration wants to include language in the code that would prevent the city from paying for something such as a computer with bond funds.
But both Ashbaugh and Councilwoman Rudiak defended the use of debt to pay for some large projects, such as swimming pools or bridges.
“That could be a 20-30 year, 50 year investment, and it’s not fair to require only the folks living in the city at this very moment in time to pay for that asset when it’s going to be used by generations,” Rudiak said.
Council will consider the capital budget reforms at their Wednesday committee meeting.
