PITTSBURGH, PA – Mayor William Peduto’s administration demanded today that the Intergovernmental Cooperation Authority immediately release $11.38 million in gaming funds owed to the City under state law, which will rise to $20 million by the end of the year.
The ICA is withholding the money illegally and inappropriately, and damaging the City’s financial recovery, its taxpayers and its workers. After more than a year of good faith efforts by the Administration to work with the ICA have been ignored, it is demanding that the funding owed the City be issued no later than July 1, 2015.
The unelected ICA board has been holding gaming funds owed the City ever since Mayor Peduto took office in the first quarter of 2014, inaccurately claiming a lack of progress in implementing a new payroll system it required. The flawed payroll system project ordered by the ICA goes back to 2012, and was incomplete and over-budget before the Mayor suspended it and chose a new firm to implement the system.
A third-party fact-finding report commissioned by the Mayor on the flawed project was released in March showing that the previous administration never entered a formal contract with the firm chosen to implement the payroll system, and that its taxpayer-financed costs had ballooned to $1.25 million, which was five times its original budget.
Last year the Peduto Administration ordered an overhaul of the project that is now on budget and on schedule to be completed by the end of this year.
The ICA’s enabling legislation — state Act 11 of 2004 — gives it powers to approve the City’s budget and financial plan and to withhold state funding only if the City does not comply with the financial plan. In December the ICA approved the City’s 2015 operating budget, which relies on $10 million in state gaming funds.
Still, the ICA has illegally and inappropriately continued to refuse to release the gaming funds, including at its last quarterly board meeting in March of this year. The two years of gaming funds will total $20 million by the end of 2015.
In a letter today, City Finance Director Paul Leger demanded that the ICA board vote at its board meeting today to issue the overdue gaming funds owed to the City since 2014, and deliver them to the Finance Department by July 1, 2015.
“Continued refusal to release these funds will further damage the City and has resulted in a revenue shortfall of $11.3 Million to date. It will result in a shortfall of $20 Million by the end of 2015, should you continue this illegal course of conduct. This action is illegal, is causing actual damages and irreparable harm to the City, its residents and its taxpayers, and further threatens the City’s continued financial recovery, which is directly adverse to the ICA’s mission,” Director Leger wrote.
A full copy of Director Leger’s letter is available here.