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Building Innovation is a collection of stories by 90.5 fm WESA reporters about the Pittsburgh region focusing on efficient government operation, infrastructure and transportation, innovative practices, energy and environment and neighborhoods and community.

City’s Financial Oversight Board Authorizes Gaming Money Release

Sarah Schneider
90.5 WESA News

The city’s financial oversight board has authorized the release of the remaining $5.8 million in 2014 gaming funds it has been withholding – with a few stipulations.

The Intergovernmental Cooperation Authority will pay out in two parts: one half if the city agrees to use it for pensions and Mayor Bill Peduto agrees in writing to roll out a board-approved payroll system in January; and the second when the authority verifies that system is being used to their standards.  

“The rest of the long-running dispute can play out in court and in an upcoming state audit,” said board member Michael Danowitz, before making the motion to release the funds at the authority’s quarterly meeting Thursday.

The Peduto administration has argued publicly with the board about withholding gaming money for months. He filed suit against them in July. Last month, the Pennsylvania Auditor General launched an investigation into the board at Peduto's request.

The five-member authority was created by the Pennsylvania legislature under Act 47 to oversee the city’s budget and distribute gaming money allocated to the city by the state. The board is now down to two members, both Republican-appointed.

Board members reiterated Thursday that they want the city to implement an in-house employee payroll system rather than pay to outsource. City Controller Michael Lamb estimates Pittsburgh spends about $800,000 annually.

Peduto has said the payroll system will launch by the end of the year.  

Senate-appointed board chair Nicholas Varischetti, who is also an attorney with Burns White LLC, said he has sent a half dozen letters to Peduto asking to discuss outstanding issues with the 2015 budget as well as the mayor’s proposed 2016 budget, which projects a $517.5 million operating budget. The plan comes with no tax increases and is nearly $10 million more than this year’s budget.

Peduto's office couldn't be reached to confirm any correspondence between Varischetti and the mayor.

Following the motion to release funds, the city’s financial director Paul Leger, a non-voting member of the ICA board, said the meeting was invalid because the board did not meet quorum. Varischetti disagreed.

“It’s sad that once again this mayor and this administration has to go to legal avenues and wasting taxpayer money,” he said. “But we have done our proper due diligence with our legal counsel. We have permission to have this meeting today.”

The board also approved submitting the 2016-17 operating budget of the ICA to the state, and also authorized the chairman to pay for office moving expenses up to $5,000.