Financial oversight chairman steps down

PITTSBURGH (AP) -- The chairman of a state-appointed authority helping to oversee Pittsburgh's finances stepped down Monday as city council members prepared to introduce a proposal asking for regular meetings with the board.
Jim Smith, a bond underwriter who served less than two months as head of the Intergovernmental Cooperation Authority, said he was pleased with the progress made so far but didn't have enough time to lead the group charged with plotting a recovery plan for the cash-strapped city. He said it was a personal choice to focus on his family and work.
Pittsburgh Councilman Sala Udin and Councilman Doug Shields said they planned to introduce proposals next week calling for regular meetings with members of the oversight board and with Act 47 recovery coordinators.
The new chairman said authority board members have already been assigned to serve as liaisons to the City Council. They would likely handle the responsibility of meeting with City Council should the proposal pass.
The state declared Pittsburgh a distressed municipality last year under a law known as Act 47. The declaration gives the city access to things such as the board's recovery plan, a wage tax on nonresidents and state loans and grants. The city is grappling with a projected $4 million to $6 million shortfall by the end of the year in its annual budget of about $390 million.
The authority and Act 47 recovery coordinators are supposed to work together in devising a five-year plan for the city. The board, however, has been accused of advancing the agenda of suburban Pittsburgh lawmakers opposed to new taxes while the Act 47 coordinators have been questioned about potential conflict of interest with the city.
Chairman
Oversight board member William Lieberman, an insurance broker, assumed the chairmanship Monday. Smith will remain on the authority board working on the city's long-term debt and bond issues.
Passing responsibility from one board member to another could signal a lack of commitment by the five-member volunteer board, one analyst said.
Gov. Ed Rendell, in a statement, said, "We must all be watchful that a change in the chairmanship of the board does not prevent the continuation of the positive work done to date."
Udin expressed frustration at the board's preliminary report released last week, which said the city must make more cuts before the board recommends new taxes. The councilman said because the city has been making cuts for the past five years, the authority should have been willing to propose additional revenue.
While it concluded that the city will need additional money, the board recommended the funds be put into a trust until the city proves it has made enough cuts. In its report, the board largely blamed the city's financial problems on the size of its debt, its pension obligations and the amount it spends on public safety.
The authority board authorized hiring a consultant to look at the city's demographics to see whether the city has too many police officers or firefighters.
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