Peduto administration upbeat about changes to fiscal oversight board

Pittsburgh officials predicted an end to the acrimony between Mayor Bill Peduto's administration and a fiscal oversight board now that Democratic leaders have appointed new members that the mayor had input in choosing.

During an interview with the Trib eight days before the Intergovernmental Cooperation Authority's board reorganization Monday, Peduto telegraphed that the trio of new members would radically shift the agency's direction.

Denouncing what he called “gimmicks and illegal maneuvers” by the former “out of control” ICA board to withhold $20 million in annual gambling revenues, Peduto said that he is “very optimistic” that would change thanks to conversations his administration had with Democratic Gov. Tom Wolf, state Rep. Frank Dermody, D-Oakmont, and state Sen. Jay Costa, D-Forest Hills, before they made their board selections.

Administration officials said the mayor suggested specific backgrounds for the new members but played no part in choosing them.

“We talked to the leadership as they were choosing them,” Peduto said. “We wanted to have diversity. We wanted to see business experts, someone who had the ability to run a large institution and somebody who knows city government.”

Peduto's office and the board chaired by Nick Varischetti, a Republican, fought for two years over gambling tax revenue totaling $20 million that the board had withheld in an attempt to force the city to adopt an in-house payroll system.

Pittsburgh is suing the board for release of $17.1 million being withheld from 2014 and 2015.

Varischetti declined to comment.

City Controller Michael Lamb said he expects Peduto to drop the lawsuit and the board to release the gambling funds.

“I think the ICA board has been looking to have a more positive relationship with the city, and the best way to have a positive relationship is with a change in leadership,” he said.

The new board selected B.J. Leber, the former chief of staff to the late Mayor Bob O'Connor, as chairwoman and University of Pittsburgh professor Paul Harper as secretary. Former board Secretary Michael Danovitz shifted to treasurer.

“I expect that all the new appointees who have the ability now to control this board, there will be a very strong interest in working with the Act 47 coordinators, the (city) controller, City Council and our office,” Peduto said.

Administration officials welcomed the change in leadership.

“I think now we have an opportunity to have a board that works with us and not against us,” said city Finance Director Paul Leger, a non-voting ICA board member.

Bob Bauder and Carl Prine are Tribune-Review staff writers.