Pittsburgh Ordered to Renew Talks on PILOT Payments

State overseers have ordered the city of Pittsburgh to renew dialogue with nonprofit organizations on payments in lieu of taxes (PILOTs) with an eye to developing a new public formula for determining the amounts of such payments, the Pittsburgh Post-Gazette reports.

The Intergovernmental Cooperation Authority, which is charged with finding solutions to Pittsburgh's financial problems, approved the city's 2013 budget and five-year plan on the condition that mayor Luke Ravenstahl form a task force by December 31 to examine how other cities handle PILOTS from nonprofits. Although the city cannot compel nonprofits to contribute to the city's coffers, ICA chairman Dana Yealy said in a letter to the mayor that the task force must hold public meetings and submit a report by June 30, 2013, that includes recommendations regarding the "level, length, and form of support from the nonprofit sector to the city of Pittsburgh."

In July, the Pittsburgh City Council approved a round of voluntary contributions from the Pittsburgh Public Service Fund, which comprises some forty tax-exempt organizations, of an estimated $5.2 million to $5.4 million over two years. Another ten to twenty nonprofits negotiated separate agreements that would generate $450,000 to $500,000 in payments to the city this year. In an interview with the Post-Gazette, Yealy called for an end to anonymous contributions, explaining that he wants overseers and the public to know which nonprofits contribute and how much they give, including their in-kind contributions to the city. Last week the Pennsylvania Office of Open Records ordered the city to provide the Post-Gazette with its agreements with the nonprofits in question.

Yealy's letter noted that the ICA may rescind approval of the city's $469 million budget if it does not comply with the directive on nonprofit contributions. The ICA briefly rescinded approval of the 2012 budget because it was concerned the city was not doing enough to negotiate PILOT payments.

Joe Smydo. "Pittsburgh Ordered to Renew Nonprofit Talks." Pittsburgh Post-Gazette 10/17/2012.