Is the 911 Relocation a Bad Move?

The Allegheny County Controller is not happy with the process to relocate 911 services from the City of Pittsburgh to Pittsburgh International Airport.  The move will come about through a twenty year lease for a building owned by the County’s Airport Authority, a building about 20,000 square feet bigger than the current location.  The Controller noted that due to the investment in the building the center is presently in there should have been a more transparent bidding process, an assessment the County manager did not agree with.

In a press release the Controller noted  “Much like the recent move of the County Police to the former Parkway Center Mall property, moving the Call Center to the Airport is likely to increase rental costs to the taxpayers, in this case for a facility that was built at public expense to begin with. This move also represents a relocation of hundreds of existing employees from a centrally located facility to the outer fringes of the County. I remain very concerned with the trend of disinvestment in the urban core in favor of more remote locations. The complications of commuting costs and arrangements for many of these employees promise to be widespread”.  According to the County’s 2017 operating budget 911 call center operations are one of five divisions in the Department of Emergency Services and there are 230 “telecommunications officers” who staff the division 24 hours a day, 7 days a week.  There are call takers and dispatchers in the division and we wrote about 911 call volume a few years ago when the state was debating raising the fee on telephone bills that funds 911 services.

But back to the Controller’s take on relocation and its effect on “disinvestment in the urban core”–recall that the Controller’s office put together an analysis of tax exempt property in the County and the resulting loss of tax dollars.  By that metric, if the County moves an exempt property out of the City–where the percentage of exempt property is close to 40%–with about 23% exempt of total value?  And if the other holder of lots of exempt property–the City’s Urban Redevelopment Authority–can turn the old 911 center over to an entity that will pay property taxes, wouldn’t that be beneficial to the City?  There could be a negative effect on getting people to work if public transportation is the primary mode now, but if they are commuting by car there might not be a big difference.

PASSHE Report

The just released $400,000 consultant report from the National Council for Higher Education Management Systems can be dismissed as a huge waste of money. The main findings were that leadership is inadequate, the board is too big and that there is too much focus on institutions and not students. The only truly useful comment was that union contracts are a problem, an unstated recognition that striking professors are not consistent with university education.

 
There are no substantive, specific recommendations for action steps except to say there should be no mergers of the universities.

 
For zero cost to the Chancellor and the system, we offered clear recommendations in a Policy Brief earlier this year. Reorganize program offerings to reduce expensive duplicative degree offerings among the 14 schools. Find a predominantly black university to take over Cheney or have its students transfer to other area schools. The cost to taxpayers to keep it open are simply prohibitive.

 
Ongoing declines in enrollment at many schools have already caused entrance requirements to be dropped or lowered to the point of being meaningless. Annual graduations from Pennsylvania high schools, the overwhelming source of most enrollees, are flat and forecast to drop in the years ahead.

 
PASSHE cannot continue with business as usual, raising tuition for kids who should not even be in college, and kowtowing to faculty unions. Both are anathema to maintaining quality and good order. And certainly not consistent with how an institution of higher learning should comport itself.

Bid to Join Police Union Rejected

A request by City of Pittsburgh police bureau officials at the level of Commander to join the union representing other uniformed police officers was rejected by a vote of the union.

By way of background, here is the breakout of uniformed police staff in the City of Pittsburgh by rank and number of full-time equivalents in the 2017 budget:

Police Chief                 1

Deputy Chief               1

Assistant Chief            1

Commander               13

Lieutenant                  26

Sergeant                   90

Master Officer          356

4th year Officer        272

3rd Year Officer        68

2nd Year Officer       62

That totals to 892 uniformed officers. Along with 163 civilian staff, that brings the Bureau’s total to 1,055.  The number of police officers eligible to reside outside the City in the residency area of 25 air miles by virtue of a Supreme Court decision on an arbitration award is 888 according to the City’s Human Resources Department.

Those would be ranks listed below commander, which the City classifies as managerial positions.  The totals may be a bit different due to budget and actuals (for instance, even with 13 FTEs for commander in the budget, most news articles reported twelve, with one article listing the commanders by name.)  The rejection by the union to have commanders join means that the commanders will be treated as the remainder of the Police Bureau when it comes to the residency requirement.  The remaining employees of the Police Bureau, the other Bureaus in the Department of Public Safety (Fire, EMS, etc.) and the other departments comprising the City government have to reside in the City as a condition of employment.

 

How not to find a Transit system CEO

Pittsburghers for Public Transit have given the Port Authority a list of recommendations regarding the hiring of a new CEO.

 
And what a list it is. They want labor, riders, community groups, foundations, and policy advocates to be involved in the initial screening process. They want finalists to participate in public forums and answer questions. And then they want the new CEO to be someone who “recognizes that mass transit is first and foremost a public good, and not a business out to make a profit.” And the new leader in addition to knowing how to run the transit agency should, “show transparency by including community voices in all decisions; work toward reducing the negative impact that transportation and housing policy can have on low-income communities; have demonstrated skills working with other government leaders and community groups.”

 

Tack that on to the qualifications that PAT listed in its announcement for the full-time position.

 
First of all, mass transit is not a public good. It is a heavily subsidized and publicly supported service. In the case of PAT, it has never made a profit and cannot ever do so. It struggles to stay out of the red even with massive taxpayer support. To raise the issue of profit making is a red herring and a specious talking point. Indeed, the opposite is true. It is very important for CEOs to be cost conscious and work diligently to improve efficiencies while maintaining adequate, timely service. Failure do so in the past produced a disastrous financial situation for PAT.

 

As noted in the news article yesterday, a foundation has provided a grant for helping to defray the costs of the search, which based on an April article was close to $92,000 for the search and $20,000 for expenses.  The Authority board accepted the grant at its June 30th meeting.

 

Ironically, the decision to take foundation money was with the bottom line in mind.  The article notes that the Authority applied for the foundation grant so it did not have to spend its own money on the search.  Hopefully PAT plans on paying the salary and the benefits of the executive once hired out of fare revenues and operating assistance it receives.  What will PAT do with the money it would have spent on the search had it not secured foundation funding?

 
The Port Authority’s cost of providing service has long been one of the highest in the nation, especially on accost of living adjusted basis.

 
Perhaps the “Pittsburghers for Public Transit” might want to look at Turnpike Toll rates that are being raised continuously to provide subsidy for mass transit. Perhaps they might want to consider the costs and work rules induced inefficiencies that exist because of the right of transit workers to strike. Having labor involved in selecting the new CEO is an absurd recommendation.

 
There is a board of directors whose job it is to select the new CEO. Ability to please a diverse audience made of multiple interests by serving up platitudes that make everyone happy is not what PAT needs. Promising to include all community voices in all decisions would cripple the CEO.

 
The CEO working with the duly appointed board will set goals and strategic plans. Where public input is relevant on large, significant service changes, it will no doubt be sought. But for all decisions to go before community groups would be time consuming, controversy inducing disaster.

 
The basic problem with the Pittsburghers for Public Transit group is that they are concerned only with being made happy and forget that the public transit they want must be paid for and that fares cover less than half of operations costs. Some concern for the people being taxed and tolled should be in their thoughts as well. But sadly, that is unlikely to happen.

 

 

 

 

 

 

 

 

 

PAFR Highlights a Challenge Ahead for City

The City Controller’s office released the Popular Annual Financial Report for 2016.  It is essentially a boiled down and condensed version of the Comprehensive Annual Financial Report and highlights the duties of the City’s elected officials, its departments, major financial highlights (where the money comes from, where the money goes), capital projects, fiscal distress and oversight. The Controller’s website has the reports going back to 2009 online.

The PAFR since that year has showed “challenges ahead” for the City.  Every year, from 2009 through 2015, the three challenges were population, pensions, and infrastructure.  In short, attracting population, funding pensions, and maintaining and improving infrastructure were three major issues/challenges according to the City Controller’s office.  For 2016, the city’s water issues replaced population as one to the three main challenges.  Whether that means the Controller’s office feels like population is no longer an issue or that the water system woes have supplanted it is not known.    Back in the winter the Controller’s office released a performance audit of the Pittsburgh Water and Sewer Authority.

Realty Transfer Tax Hike Will Get Hearing Next Week

The proposed increase in the City’s portion of the realty transfer tax (currently 2%, with the school district and the state levying the tax at an additional 1% each) to provide revenue for an affordable housing trust fund will get a public airing next week by City Council.  This blog from May has a lot of details on the mechanics of the tax as it currently exists.

The Affordable Housing Task Force report released in May of 2016 recommended the tax increase as one way to possibly fund a local trust fund, but it also recommended putting any proposal on the ballot for consideration by the City electorate.

Washington County School Millage Rates Adjust

Like the state, school districts started their fiscal year on July 1st.  In Washington County, where the first reassessment since the 1980s has gone into effect this year (reflecting 2015 market value and a 100% ratio of assessed value to market value) taxing bodies had to adjust their millage rates to reflect the updated value and adjusted ratio.  The County and the municipalities did so earlier this year; now the County’s school districts have done the same.

Millage rates range from a high of 15.83 mills in Charleroi to 9.696 in Bethlehem Center.  The average millage will be 12.11 for the 2017-18 school year (by comparison the average millage in Allegheny County’s school millage was 21.2 in 2016-17).  Since values Countywide rose 10.53% the millages last year (which averaged 122 mills) had to be adjusted.  Act 1 of 2006 instructs school districts in a reassessment year to hold tax rates in the year of reassessment to no more than the previous year’s Act 1 index.

Now taxpayers in Washington County have updated values, and adjusted millages for their County, municipal, and school district taxes.

 

PA’s Transportation Funding Ironies

The Commonwealth imposes a special levy on wholesale gasoline—which gets passed to consumers at the pump—to provide funds for building Turnpike Projects.

 
The Commonwealth forces the Turnpike Commission to provide $450 million dollars to the Department of Transportation to heavily subsidize mass transit necessitating heavy annual borrowing that leads to higher tolls to cover the borrowing.

 
Each of these plans boosts the cost of driving in the state: higher gasoline pump prices and steadily increasing Turnpike tolls.

 
Thus, gasoline taxes are being used to fund toll roads where tolls being are pushed higher by need to subsidize mass transit, which in turn, make the Turnpike roads less attractive. Cross purposes anyone?

 
One would have thought that toll roads should be self- funded. Indeed, why should drivers on regular roads pay taxes to maintain those roads as well as pay for roads that will require a toll?

 
As was pointed out in a recent Policy Brief, the non-mainline toll roads in western PA are not generating traffic or revenue adequate to justify their building costs and there is no reputable or persuasive study to show that the economic effects justify their cost.

 

This is especially true in light of the diversion of large amounts of toll revenue to pay for bonds that are being issued to provide money for mass transit.

 
Clearly, since mass transit is a public service provided by government for the general public, its costs should not be borne primarily by motorists and commercial vehicles that are paying taxes to maintain the roads used by mass transit buses that do not pay fuel taxes. Other more broadly based revenue is more appropriate.

 
One also needs to consider the extraordinary costs of transportation infrastructure and services in PA.

 
For instance, the Turnpike Commission spends $50,000 on benefits per active employee. That clearly has an impact on the tolls being charged. Prevailing wage laws drive road and bridge construction and maintenance costs up by as much 30 percent above what they could otherwise be. The Port Authority in Pittsburgh has some of the highest operating costs in the country–and the workers have the right to strike, guaranteeing the Port Authority will never be able to rein in costs as much as they should be able to do.

 
Little wonder PA has gasoline prices about 30 cents per gallon higher than the national average and neighboring Ohio.

 
Sadly, high transportation costs across the board fueled by the inability to deal with the high costs resulting from labor favoring legislation are hampering the state’s economy, and that produces slow growth in the revenue and perpetual budget crises.

 
In Pittsburgh, the North Shore Connector used over a half billion transportation dollars that should have been directed at fixing the traffic bottlenecks around the City and upgrading existing infrastructure. All done apparently, so people can ride free between downtown and the North Shore creating even more unnecessary subsidies.

 
The Commonwealth has a lot of room for improvement in the transportation sector.

City’s Database Aims to Move Property

The City of Pittsburgh’s Finance Department has constructed and launched a webpage that shows City owned property available for sale.  The website is here. Details on the properties are embedded in the page on each property listing.

Back in 2003 we recommended the City move aggressively to auction off property it owned that was not directly related to its core government functions.  That was prior to the days of Act 47, the oversight board, etc.

Based on the five properties on the landing page, they are recent acquisitions of the City, with three from 2015, one from 2014, and one from 2008.  When viewing the properties by map option, with green dots representing vacant land, much of what the city is offering up for sale is that classification.

What Does Future Hold For County Owned Nursing Homes?

An article this week covered the recent sale of county nursing homes in Armstrong and Washington Counties.  The article notes that the number of counties in Pennsylvania “…owning nursing homes is exactly half of what it was in 2014, 18 instead of 36″. The presentation made in Washington County on June 1st to the Board of Commissioners placed the number of counties at 20, noting that Armstrong County was in the process of selling theirs.  Three years ago Butler County sold its nursing home.

The question is whether having county owned nursing homes is a core function of county government.  Obviously, in the counties where sales have occurred, the opinion was no.  Or financial issues arrived at a point where officials were convinced that the service was no longer a core one, or an offer was made by an outside party that did the convincing.

The Allegheny County Chief Executive (speaking to the Kane Regional Centers) said it is, but conditioned it as long as performance is effective and, due to the relative size of the operating deficits of the facilities in the County budget, it is not a concern; the County’s 2014 sunset review said that the County is not mandated by state or federal law “…to establish nursing homes” but “While numerous studies have been conducted that explored alternatives, it was concluded that the Kane system’s ability to serve the elderly poor is extremely effective”; the Institute’s 1997 report on the Kanes stated it was “…not a core function of government”. And while the article today quoted the director of the Allegheny County Kane Regional Centers has never received a firm offer for selling the Kanes, an article from 2012 stated the County “…often hears from parties interested in purchasing the assets of the Kane Regional Centers” but then, as now, the Executive stated there was no real desire to sell them.