Could Munis Create a Second Regional Police Force in the County?

A meeting that was to take place last night between four municipalities in the Allegheny Valley (not a public meeting, but a closed discussion) could possibly open discussions to have another multi-municipal police force in the County (the Northern Regional force is a four municipality police department in the North Hills).  As this blog from June noted, the vast majority of municipalities in the County provide police service “in house” with their own police employees.

So Sharpsburg, Aspinwall, O’Hara and Blawnox will have at least sat down and discussed the possibility.  Who knows how far things will progress: usually turf battles, seniority, community pride, and finances come into play and mergers and consolidations bog down and don’t go much past the talking part.  In all there are about 30 police employees in the four municipalities.

There are possible benefits to joining together: more community oriented policing and investigations handled by the multi-municipal force instead of Allegheny County could be two such benefits.  Whether they outweigh the costs is what has to be considered.

Based on a 2014 LBFC study there were 35 regional (multi-municipal) police departments in the state, and in the fiscal years 2010-11 through 2012-13 there were seven grants awarded to regional police forces through the Department of Community and Economic Development’s Municipal Assistance Program.  The LBFC study found that “loss of control” was the most often cited obstacle for municipalities expressing a desire to move forward with a regional consolidation.

As we have written in the past, if it makes sense for municipalities to combine services and save taxpayers money, by all means they should go for it.  If the latest four communities end up making a go, there might be a possibility that other municipalities will be encouraged to explore combining services, whether they be public safety or some other municipal service.

Transition from State to Local Controlled School Board Begins in Philly

This week a nominating panel will convene to begin a month long process that will end with a list of 27 names that will be given to the Mayor of Philadelphia for a chance at a seat on the reformed nine member school board of directors.  The school board will assume responsibility for the Philadelphia School District, a responsibility handled for most of the past two decades by the School Reform Commission.

There are limitations on who can be appointed to the board (Philadelphia will not have an elected board as all other school districts in the state do).  City and school district employees cannot be candidates, nor can those holding specific elected offices.

At one time Pittsburgh had an appointed school board and there was mention of returning to one fifteen years ago but no change has occurred in its arrangement.

Two Reassessments Are Playing Out Quite Differently

There is an ongoing reassessment of property values in Monroe County where one was last completed in 1989.  That process began when the County Commissioners voted in June of 2016 to move forward with a revaluation and give the task to a contractor to handle the job of reassessing the more than 100,000 parcels in the County.  In the spring the process was in the data collection phase.  In 2016 the County collected $46 million in real estate taxes at a millage rate of 21.25 mills.  .

There is an ongoing court case over a possible reassessment in Beaver County where just before the start of the new year the Court of Common Pleas issued an order directing the County to carry out a reassessment of values, the first since 1982.  This past week the County government made an appeal to that Court (it did not appeal the decision to Commonwealth Court) over the testimony submitted by plaintiffs in the case and on the timeline of executing a contract with a firm to begin the reassessment process.  The County collected $48 million in real estate taxes at a millage rate of 22.2 mills in 2016.

This is not to imply that there is a wholesale geographic difference in how reassessments move forward.  There have been court ordered reassessments out east as well as west, and County government officials have opted to take action to update values without court intervention in all parts of the state as well.  These two examples, however, illustrate two very different approaches if values are updated in coming years: 2019 (which is when Monroe County’s are expected to go into effect) and 2020 (when Beaver County’s would, based on the Common Pleas Court order at present).  By that time, does anyone expect that the General Assembly will pass a law calling for a regular reassessment cycle for counties?

Oversight Board Votes to Disband

By a 3-1 vote the board of the Intergovernmental Cooperation Authority (oversight board) opted to recommend that the General Assembly let the entity dissolve when/if the Secretary of Community and Economic Development lifts distressed status under Act 47.

As we wrote recently, the ICA did not receive an appropriation for Fiscal Year 2017-18 and DCED held a hearing on terminating the City’s distressed status just before Christmas.  Under Act 99 of 2016 the ICA is supposed to be around to the later of the dissolution of Act 47 in Pittsburgh or June 30, 2019.  If the Assembly carries out the wishes of the board it would presumably take an amendment to that legislation.

Mid-Year Budget Briefing Shows Pension Impact

In 2017 we wrote several pieces on the state budget impasse as well as the enacted plan to change the pension benefits for new state and public school employees under Act 5.  The budget for the current fiscal year came together after a spending plan was passed at the end of June, became law without the Governor’s signature in July, and then was completed with a revenue package passed at the end of October.

Thus the state–with the delayed enactment of a revenue plan–is already halfway through the fiscal year that ends June 30, 2018.  Last month the Budget Office released its mid-year budget briefing.  That briefing shows the details of what was enacted for 2017-18 and how much general fund spending has grown since the 2014-15 fiscal year ($2.8 billion in actual general fund spending that year).  The briefing notes that $1.4 billion of that increase resulted from increased contributions to SERS and PSERS, the state and public school retirement systems, respectively.

Slide 10 of the briefing states that Act 5 reforms will “…reduce employer risk” but as our Brief noted ” over the next decade or more, the Commonwealth and school districts will face a continuation of budget problems as they deal with the massive unfunded liability issue. ”  As far out as the projections from the briefing show (2021-22, which would be three years after the Act 5 changes take effect) the general fund share of contributions to both SERS and PSERS are projected to grow $40 million and $408 million, respectively.  The actuarial tables for the plans show slow improvement in the early part of the next decade as new hires join the plans, with not much difference between what would have been the funding status absent Act 5.

Another Court-Ordered Reassessment in SW PA

A ruling last week by the Beaver County Court of Common Pleas orders the County’s Chief Assessor and the Board of Commissioners to “…submit to the Court for approval a written contract entered into the by the County with an independent contractor to provide services to the County in preparation for and completion of a computer assisted reassessment of al tax parcels in Beaver County by June 15, 2020”.  The contract is to be executed by June 15th of this year, assuming the County does not appeal the ruling to higher state courts (the County did not present evidence or witnesses at the Common Pleas level proceedings).  If appealed the case would go to Commonwealth Court and then possibly the Supreme Court.

The Pennsylvania Supreme Court had a role in both the southwestern Pennsylvania reassessments in Allegheny and Washington Counties in the past decade.  The Beaver ruling cites heavily from the Allegheny County ruling in the Clifton case on how a base year can violate the uniformity clause of the Pennsylvania Constitution.  Beaver County has not undertaken a reassessment since 1982 and taxes property at 50% of the 1982 assessed value.  The Court ruled that the base year as applied in Beaver County “..does not and cannot provide for uniformity of taxation for the 96,000 tax parcels…” and held that the plaintiffs in the case had proven there was a lack of uniformity in assessments due to the long time period since the last reassessment.

The ruling also points out that many other states require annual or periodic reassessments.  That has been known for a long time yet the state has to make a change regarding that situation.  There are counties with base years older than Beaver County’s 1982, which the opinion and order notes was the year the state made base year assessments legal.  It will take either an action of county officials, state officials, or a court decision to update these assessments.

Whose Lights Go Off First—Act 47’s or ICA’s?

Recently we wrote about the much improved practices of the oversight board, especially pertaining to the auditing process under the amended terms of Act 11 of 2004. That includes completing an audit and sending it on to legislative committees that deal with the appropriations function.

The appropriation process for the current fiscal year was much less kind to the ICA. There is no amount for the oversight board in the $31 billion general fund budget. Under Community and Economic Development in the line item amounts the appropriation for “Intergovernmental Cooperation Authority—2nd Class Cities” shows a dotted line, a decrease of $250,000 or 100 percent from the FY 2016-17 amount. That amount was much lower than what had been expended in the previous decade when amounts greater than $500,000 were a regular occurrence, but up slightly from the $228,000 annual appropriation the ICA received from FY 2012-13 through FY 2014-15.

The executive director of the ICA noted at the September 28 board meeting “…our appropriation request for the fiscal year ’18 was zeroed out before the budget was approved by the House and the Senate.”

What is the explanation as to why the ICA was not funded? Did the state anticipate that the City of Pittsburgh would be coming out of Act 47 distressed status and that the oversight board could also go? That’s fine, but the 2016 amendments to the ICA statute said that the dissolution of the oversight board by the DCED Secretary would be the later of the Act 47 team’s removal or June 30, 2019. Is the ICA is just supposed to lay low until it reaches its end? It is not clear how if the board and its employee are supposed to function for the next year and a half.

It is certainly an odd situation to have if the intent is for the oversight board to be around in the capacity of an overseer.





Philly Will Regain Local Control of Schools

When the 2017-18 school year concludes on June 30th, 2018, all of the state’s 500 school districts–from the Austin Area District in Potter County (164 pupils in 2015-16) to the Philadelphia School District (204,000 pupils in 2015-16)–will be administered by nine member school boards.  The only difference with Philadelphia is that the board will be appointed by City officials rather than being elected by the voters of the District.

We wrote in mid-November that the School Reform Commission that ran Philadelphia’s public schools since 2001 was taking up a motion to dissolve.  That motion passed, and the decision was then in the hands of the state Secretary of Education. The Secretary “… noted that the district and the city have developed an appropriate plan to transition control from the SRC to a locally-appointed board of education. Board members will receive training, attend SRC action meetings, and form committees to ensure a smooth transition when the SRC officially dissolves at the end of this school year.”

With the dissolution of the SRC comes a rescission of the distress status that came in 2001 but the Secretary noted in his letter to City officials that there will still be issues–pensions, health care, and charter school costs–outside of the District’s control and faced by other districts in the state that will have an impact on the newly appointed board.  The District did receive additional taxing powers in the past several years from the state, including a tax on cigarettes.

Bill Would Let Auditor General…Audit

A bill that passed a state Senate committee this week would amend the current language in the Pennsylvania consolidated statutes to move auditing responsibility for authorities created under the Municipal Authorities Act from the Attorney General to the Auditor General, a move that makes such perfect sense one has to wonder why it has taken this long.

The current language of the Act states the Attorney General “… shall have the right to examine the books, accounts and records of any authority.”  The proposed legislation would change the office to Auditor General, adds “and audit” to the language and would have the authority pays for any costs incurred from the audit.  Existing language on annual reports that to be submitted to DCED and an annual audit by a certified public accountant would not be affected by the legislation.

Since the legislation affects only authorities created under the Municipal Authorities Act if the proposal would become law it would not change the role of Attorney General for authorities crated under special legislation, which would include the Sports and Exhibition Authority, which was an authority that the Allegheny County Controller wanted to audit a few years ago, but it would affect ALCOSAN and the Allegheny County Airport Authority.

Deed Transfer Tax Increase Passes With a Couple of Changes

Pittsburgh City Council approved an increase to its portion of the deed transfer tax, an increase that will take the combined rate to 5% at the start of 2020.  In February of 2018 the combined rate in the City will rise one half of a percentage point, taking it to 4.5% from that date until the end of 2019.  For a home that would sell for $75,000 in the city limits it would have a deed transfer tax bill of $3,000, $3,375, or $3,750 over the next two year time frame depending on when the sale is executed.

The ordinance as passed notes the changes will become effective when the Mayor signs the ordinance and that if a sale was executed prior to the approval of the ordinance it won’t be affected by the changes.

A new section of the ordinance deals with how to analyze the impact of the two step increase by calling for “a review…twelve years after the effective date of this ordinance”.  That means late 2029 or early 2030 for someone to do an analysis under the terms of the ordinance (that does not prevent study of the increase in the interim, just that the City Council or the City Administration would probably not accept official findings until that point).  Who knows why a twelve year time frame was selected (it has been just over twelve years since the last time the tax was increased, so that could be part of it) or if the other bodies that levy a deed transfer tax (state and school district) change their rates in the next decade or so, possibly muddying the impact of the City’s hike.