Pittsburgh Budget Strained by Unexpected Litigation Costs

Lawsuits have added significantly to the cost of trying to remedy Pittsburgh’s financial problems, according to preliminary budget figures released by the city’s oversight board.

Unexpected litigation costs totaled $500,000 between February 2004 and December 2005, said Henry Sciortino, executive director of the board, known as the Intergovernmental Cooperation Authority.

Many of the expenses were the result of legal battles between the board and former Mayor Tom Murphy, the Pittsburgh-Allegheny County Sports & Exhibition Authority and the firefighters’ union.

“I think we were forced to spend more on litigation than we should have had to spend,” Sciortino told the Pittsburgh Tribune-Review.

Last year, the board filed lawsuits against the Sports & Exhibition Authority as well as the firefighters union. Its lawyers also helped in a suit against the city and Murphy, who was accused of slashing the Controller’s Office budget.

The board has paid nearly $800,000 to the downtown law firm Reed Smith. Its bills are expected to reach about $900,000 by June, Sciortino said.

Such legal costs, however, have dropped significantly since Mayor Bob O’Connor took office in January, he said.

Murphy did not respond to a message left at his home Friday, the Tribune-Review reported.

The state Legislature created the oversight board in 2004, setting aside $1.75 million for its operations through June. As of Friday, the board had spent $1.39 million. It expects to remain within its budget.

Sciortino said Pittsburgh’s $40 million deficit for 2004 disappeared through board-proposed budget cuts.

The board’s expenses included $250,000 spent on financial studies of the city’s police and fire bureaus, worker’s compensation costs and retirement health care pay.

It also spent about $100,000 on financial audits of the Fire Bureau and the Sports & Exhibition Authority.

Sciortino, the board’s only full-time employee, is paid an annual salary of $168,000 plus benefits.