Mayor Luke Ravenstahl announced today that he is hosting a Mayor's Summit to address the City of Pittsburgh's current pension funding situation as well as the growing pension dilemma in cities throughout Pennsylvania.
Mayor Ravenstahl said, "Pittsburgh is not alone. Cities in Pennsylvania and around the country face the same set of pension problems. The pension problem, which we have seen at all levels of government in the Commonwealth and in local authorities, has become Pennsylvania's version of the national social security problem. Our goal for this summit is to look at the best practices among various cities and develop a workable, realistic plan to address the situation. This summit signals a first step toward creating a solution, not just managing a problem."
The summit will be held on Thursday, April 12 at the David L. Lawrence Convention Center. Mayors and representatives from 17 cities across the Commonwealth, as well as elected officials, including Pennsylvania Representative Dan Frankel, and County Executive Dan Onorato, will attend.
Thursday morning, Mayors and City officials will tour the David L. Lawrence Convention Center and hear updates on the City's, County's and Commonwealth's current pension situations, as well as pension case studies from Eastern, Central and Western Pennsylvania. The afternoon session will be a roundtable and paneled discussion.
Said Mayor Ravenstahl, "By sharing information on the City, County and State levels and working together, we can create solutions to the challenges we face regarding the financial future of our cities."
The Mayor's Pension Summit is made possible by a grant from the Heinz Endowments.
Editors Note: A complete agenda will be available no later than Wednesday April 11, 2007 at 3:30 pm. A list of cities represented and attendees will be available no later than Wednesday April 11, 2007 at 5:30 pm.
The municipal pension funding problem is not new. The State recognized it as far back as 1943. The most recent change occurred in 1983 when the current pension aid system was devised. As a result of the new system, Pennsylvania's contributions toward Pittsburgh's pension plan have decreased dramatically over time. In 1988 Pittsburgh received more than $28 million from the Commonwealth. By 2005, Pittsburgh received only $17.1.
According to Scott Kunka, the City's Director of Finance, the amount of pool didnt decrease; it has grown 83% over that time. "The number of Pittsburgh's employees didn't grow; in fact there has been a drastic reduction, from 4,000 to today's approximately 3,000. What has happened is many other municipalities with sounder pension plans were granted additional pension benefits or increased benefit amounts instead of wage increases, causing their plans to technically become distressed and thus eligible for state aid," said Kunka.
He continued, "In addition, the very act of reducing employees for fiscal stability has a paradoxical effect of reducing state aid. In fact, since Police and fire count for 2 state aid units, reducing the force size has a double effect on aid. The result is wealthy, suburban communities with over 100% funding status, or contributing little or no general fund dollars receiving millions in State aid intended for distressed communities."
The Heinz Endowments support efforts to make southwestern Pennsylvania a premier place to live and work, a center of learning and educational excellence, and a home to diversity and inclusion. Committed to helping its region thrive as a whole community economically, ecologically, educationally and culturally the foundation works within Pennsylvania and elsewhere in the nation to develop solutions to challenges that are national and even international in scope. One of the largest and most innovative independent philanthropic foundations in the country, the Endowments awarded more than $55 million in grants in 2006.
Thursday, April 5, 2007
Office of Mayor Luke Ravenstahl
512 City County Building | 414 Grant Street
Pittsburgh, PA 15219
telephone: 412-255-2626 | facsimile: 412-255-2687