Justitia, a Creative Commons Attribution (2.0) image from Markus Daams’ photostream

City is due $20 million in gaming funds for 2014-2015, and not a cent has been issued, despite approved financial plans and good faith efforts by Peduto Administration

PITTSBURGH, PA (July 2, 2015) The City of Pittsburgh today filed a legal action to force payment of $11.4 million in gaming funds currently owed to the City, which were contained in 2014 and 2015 budgets approved by the Intergovernmental Cooperation Authority. The funding due will rise to $20 million by the end of this year.

The gaming funds are due quarterly to the City, but the ICA has never once forwarded 2014 or 2015 funding since Mayor William Peduto took office last year. That is despite the ICA approving budgets for both years that rely on $10 million in gaming fund revenue, and despite the Peduto Administration’s efforts to work cooperatively with the ICA over the past 18 months.

“This is money that belongs to the taxpayers of the City of Pittsburgh, to pay for their services and to support the still-fragile financial recovery of our City. The ICA is not only playing political games but has crossed the line into violating state law. Their actions are hurting the City, and I won’t stand for it any more,” Mayor Peduto said.

The ICA’s enabling legislation — state Act 11 of 2004 — gives it powers to approve the City’s budget and financial plans, and to withhold state funding only if the City does not comply with the financial plan. The ICA approved 2014 and 2015 operating budgets and five-year financial plans — both of which contained state slot machine revenue — and the City has complied with the approved financial plans.

The ICA has refused releasing any 2014 or 2015 gaming funds owed to the City despite lacking the authority to do so, citing demands that it install a flawed payroll system project the ICA first required in 2012. The project was incomplete and five times over budget when Mayor Peduto took office in January 2014, so his administration halted work and ordered an overhaul of the system that that is now on budget and on schedule to be completed by the end of this year.

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.

At the ICA’s last quarterly board meeting June 25, the City again demanded the release of all gaming funds owed — following previous requests in May 2014, December 2014, January 2015, and May 2015 — and gave the ICA board a July 1 deadline to forward them. With that deadline passed the City filed its legal complaint today.

The complaint notes the ICA’s withholding of the funds “is contrary to and in violation of their statutory obligations” and will “cause irreparable financial harm by preventing the City from operating within and in accordance with the approved budget and recovery plan.”

The City is seeking an injunction from the Court of Common Pleas ordering the ICA to immediately issue the City all its outstanding gaming funds, plus interest; and to order the ICA to issue other 2015 gaming funds when available later this year.

A copy of the complaint is here.