First Appointment to Revamped PAT Board

Under Act 72 of 2013, the size of the Port Authority (PAT) board of directors is to increase and the appointment power to the board is to shift from nine appointed by one official to eleven appointed by six officials. Readers can get details here.

It was announced recently that the first appointment to the new board has been made by the Senate Minority Leader. Per the statute, the term of this appointee is to be a four year term with opportunity to be reappointed twice. Other appointments will have shorter first terms so as to stagger times of reappointment going forward.

While much has been written and discussed about the diminished power of the office of County Executive vis-à-vis the makeup of the board-dropping from nine appointments to six, with four of those being "free" selections and two being drawn from lists submitted by community groups-it is worth mentioning the position of the County’s legislative body, the fifteen member County Council, as it relates to the PAT board.

Prior to Act 72, the Council confirmed appointments and was guaranteed one seat on the board. Earlier versions of the Act would have given appointments to the Council, but that was omitted during the legislative process. Now Council will only confirm the two Executive appointments drawn from lists. There is nothing that prevents any of the appointing officials from choosing a Council member to serve on the board. They are all County residents (required of all appointees with the exception of the Governor’s choice) and would seem to meet the background requirements of having experience in finance, transportation, or economic development as a prerequisite for serving on the board. It could even be possible that now or in the future more than one member of Council could end up on the board.

Another Version of PAT Board Bill

As the legislative session concluded, the House took action on a Senate bill that would alter the makeup of the Port Authority (PAT) board of directors. As we wrote in mid-June the original legislation would have expanded the board from nine members to eleven and spread around the appointment powers from all by the County Executive to five by state officials and six by locals, including the Mayor of Pittsburgh, the at-large members of County Council, and one by the Executive.

That proposal was amended and passed by the Senate soon after. The altered version gave the Executive four appointments, with two having to come from a list submitted by community organizations. The County Council caucus of the opposite political party would get two appointments. The at-large Council members and the Mayor lost the appointments they had under the original bill.

Then the House passed its version this week. The state would still have five appointments: one by the Governor, four from the legislative leaders of each chamber. The County Executive would have six appointees: two would be drawn from the lists of community group suggestions and those two would have to be confirmed by County Council. With the exception of the Governor’s appointee, all must be residents of Allegheny County and all must have background qualifications in budgeting, finance, mass transit, etc.

Some new wrinkles in the House version: it would take seven members to "take action on behalf of the authority" and the legislative appointees who are not of the same party as the Executive would have significant power over by-laws, the hiring of a CEO, bonds, and contracts greater than $5 million dollars. The PennDOT study on consolidation and privatization would get an additional ninety days to be completed.

With the differing versions it will take more work after the legislative recess to align the reform proposals.

PAT Union Board Seat?

The former head of the transit union at the Port Authority argues in a letter to a local paper that the union should have a seat on the Board of the Authority. Claiming no group has a bigger stake in the success of the Authority, the union therefore deserves board membership. The former leader is apparently in deep denial about the damage the union has done to the Port Authority’s finances and lack of efficiency.

Here is a reasonable proposal. If the union wants a seat on the board, the Legislature should offer to amend the bill now working its way through the Senate that changes the board appointment powers to include a union member-on one condition. In exchange the union will agree to support a bill to eliminate the power of transit workers to strike.

It is unlikely the union will ever agree voluntarily to give up the right to strike since they view the right to strike as a virtual sacrament of the labor movement. Unions struck armament plants during World War II on the grounds that the right to strike was not to be denied for any reason. Almost all states have figured out that strikes by public employees who deliver key, monopoly provided services cannot be allowed. Pennsylvania just cannot seem to grasp that truth.

The Senator and the County Executive

In a dramatic announcement on March 8th, the President Pro Tem of the Senate revealed his intention to introduce legislation that will restructure the Port Authority of Allegheny County (PAT).  It is important to bear in mind that PAT was created decades ago by state legislation, and as such is a creature of the state and therefore can be restructured by legislation. 




The Senator’s announcement contained a harsh condemnation of PAT as having been a significant strain on state and local taxpayers for “far too long and it is time the legislature address the issue.”  He further singled out the “fiasco surrounding the dismissal of the CEO” as making it clear the County Executive is not moving PAT in the right direction.



The Senator proposes to change completely the way PAT’s governing board is appointed. Instead of all nine members being appointed by the County Executive, the Governor, Legislative Leaders, Allegheny County Council and the Mayor of Pittsburgh would have appointments. The County Executive would have only one appointee to the restructured board.  The Senator stressed that with the increasing funding coming from the state, it is important for state officials to have a voice on the board.  The Allegheny Institute wrote of the relationship of state funding and state appointees to transit agencies in light of efforts to reform the PAT board in 2007 (see Policy Brief Volume 7, Number 9). 



Further, the Senator stated that, “Moving forward all options need to be on the table when discussing options to streamline operations and cut costs…”  To that end, the Senator proposes creating a commission to examine remedies including regionalization, consolidation and privatization of services.


The Senator’s proposed legislation, if enacted, would certainly bring a new approach and possibly major improvements in PAT management and operations. However, major and probably uncorrectable problems will remain if the Senator’s reform legislation stops with the proposals contained in the March 8 announcement.  PAT’s tremendous legacy costs remain and will continue.  And the principal underlying cause of the Authority’s financial woes is not addressed by the reform proposal-namely, the right of the transit workers to strike. Unless and until that right is eliminated, there can be no permanent fix of PAT’s problems.  Every step forward can be reversed in contract negotiations under the threat of a strike.



To be sure, a substantial outsourcing program that reduces the share of transit service under the control of the large transit union will go a long way toward curbing the impact of strike threats but will not eliminate it.



This is not to gainsay the importance of a change in board appointment powers.  With the obvious arbitrary power that can be wielded by on official as demonstrated recently, a state created organization receiving massive amounts of state taxpayer funding to maintain operations simply must be more answerable to state taxpayers.    



There will be push back by the County Executive and his friends in the Legislature.  This will be the time for the business community that has so often sided with PAT in pushing the Legislature and Governor for more state money to support the reforms being recommended by the Senator. If these reforms and the others that are needed are not enacted, the day will surely come when legislators from other parts of Pennsylvania will simply refuse to approve the money requested by PAT and its friends.  Indeed, we might be there already. 



Important changes aimed at restructuring PAT in a manner that will improve efficiencies and lower costs will not come quickly or easily but they should be pursued vigorously.  For one thing movement toward regionalization cannot proceed in a meaningful way until legacy costs, compensation costs and work rules are lowered dramatically at PAT. Nor can outsourcing occur as long as the union retains the ability to block such efforts. 



While optimism must be tempered with realism, it is nonetheless a hopeful sign that the President Pro Tem of the Senate has taken such a keen interest in correcting some of the ills that plague the Port Authority.

Will RAD Funds Be Tapped for PAT?

Call it a strange case of foreshadowing. When the Regional Asset District (RAD) became law under Act 77 of 1993, only a few people other than Legislators would have noticed the curious fact that the language establishing the District and the accompanying one percent sales tax was appended to an act that amended existing language dealing with investigations conducted by the coroner’s office in Allegheny County. 


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Pennsylvania Staggers into the Twentieth Century

The State Liquor Control Board has approved licenses for two local grocery stores to begin beer sales. While this is certainly a positive step for the Commonwealth, it does not exactly shatter the beer distributor system or bring this state on par with others who allow beer sales in supermarkets.

The licenses come with strict stipulations. The stores are only allowed to sell the equivalent of two six packs and the sales must come from café style areas separated from the rest of the store. It amounts to allowing a beer store to operate within a store and does not offer the complete freedom and convenience customers in other states enjoy. But it is a step in the right direction.

Of course this decision is not without its opposition. The Malt Beverage Distributors Association has challenged a similar license granted to a supermarket elsewhere in the state. This challenge has reached the state Supreme Court and is expected to be heard in the spring. Whether or not Pennsylvania’s beer and liquor sales are allowed to enter the twentieth century will hinge on their decision.