Tuesday, March 25, 2008
Executive Does Not Oppose Council’s Airport Money Grab
County Council has passed Ordinance 3662-08, which directs the County to go after the Airport Authority for the balance of the County’s supposed $42 million investment in Pittsburgh International Airport, and the Executive has allowed it to become law without his signature. That $42 million has generated a significant amount of controversy since the County first took possession of a $19.9 million distribution from the gaming Tourism and Economic Development Fund.
To summarize: the gaming law set aside $150 million for “debt service, development, and economic development” at the airport. The public record indicates that the entire $150 million was to go for the close to $600 million debt held by the Authority for the airport. A late amendment in the Tourism Fund statute allowed that money to come directly to the County and the Executive, claiming that the recovery of the $42 million debt was something for which he has crusaded for many years, took the initial $19.9 million and used it to fill a 2007 budget deficit.
The ordinance acknowledges the receipt of the $19.9 million and now is after the balance of $22.6 million, plus interest, which at 5 percent since 1987 when the bonds were issued amounts to about $24.8 million. They have 90 days to “make arrangements satisfactorily [sic] to the Chief Executive and County Council”.
One would wonder if the Airport Authority would just inform Council that they can keep the next $44.5 million of the gaming money since, thanks to the legislative amendment, it will be coming to the County first. That would leave closer to $87 million for the retirement of airport debt held by the Authority, well below the $150 million envisioned.
The Executive’s letter describing his refusal to sign the ordinance and instead let it become law without his objection raises some issues, but none related to the issue of whether the $42 million is a debt, public investment, or other. He does note that the ordinance “could be viewed as an attempt by County Council to negotiate a contract” possibly “violating the plain text of the Home Rule Charter”. Why not veto the bill then? If it is a clear violation, then it is the responsibility of the Executive to check the power of Council. Perhaps the illusion that Council is endorsing the recovery of this supposed debt is more important that the Charter.
Now the ball is once again with the Authority. Their solicitor stated that the $42 million “is not a debt. It is clearly set out as an investment”. The ordinance references the Transfer Agreement labeling the bonds as “County Debt”, yet the Airport Authority’s books show no such debt.
As we speculated in previous pieces, since this bill has become law the Airport Authority will almost certainly challenge this in court. Or they will just let the County take its cut of the gaming money for the rest of the debt and interest without rocking any boats.
To summarize: the gaming law set aside $150 million for “debt service, development, and economic development” at the airport. The public record indicates that the entire $150 million was to go for the close to $600 million debt held by the Authority for the airport. A late amendment in the Tourism Fund statute allowed that money to come directly to the County and the Executive, claiming that the recovery of the $42 million debt was something for which he has crusaded for many years, took the initial $19.9 million and used it to fill a 2007 budget deficit.
The ordinance acknowledges the receipt of the $19.9 million and now is after the balance of $22.6 million, plus interest, which at 5 percent since 1987 when the bonds were issued amounts to about $24.8 million. They have 90 days to “make arrangements satisfactorily [sic] to the Chief Executive and County Council”.
One would wonder if the Airport Authority would just inform Council that they can keep the next $44.5 million of the gaming money since, thanks to the legislative amendment, it will be coming to the County first. That would leave closer to $87 million for the retirement of airport debt held by the Authority, well below the $150 million envisioned.
The Executive’s letter describing his refusal to sign the ordinance and instead let it become law without his objection raises some issues, but none related to the issue of whether the $42 million is a debt, public investment, or other. He does note that the ordinance “could be viewed as an attempt by County Council to negotiate a contract” possibly “violating the plain text of the Home Rule Charter”. Why not veto the bill then? If it is a clear violation, then it is the responsibility of the Executive to check the power of Council. Perhaps the illusion that Council is endorsing the recovery of this supposed debt is more important that the Charter.
Now the ball is once again with the Authority. Their solicitor stated that the $42 million “is not a debt. It is clearly set out as an investment”. The ordinance references the Transfer Agreement labeling the bonds as “County Debt”, yet the Airport Authority’s books show no such debt.
As we speculated in previous pieces, since this bill has become law the Airport Authority will almost certainly challenge this in court. Or they will just let the County take its cut of the gaming money for the rest of the debt and interest without rocking any boats.
