Dissolving an Authority

Earlier this summer we wrote a Policy Brief describing the state of affairs between Pittsburgh City Council and the Parking Authority. At the time there were some that were calling to get rid of the Authority altogether, bringing the function "in house", thus eliminating one of the tentacles of City government. That talk has largely died down, but in a nearby large suburb the process of shutting down a Parking Authority has commenced.

Mt. Lebanon has had its Parking Authority since the 1950s, established initially for the purpose of financing and constructing two garages in its uptown business district. According to the municipal manager, the sentiment among a majority of municipal commission members was that "the Authority served to ‘fragment’ local government, reducing the ability of elected officials to control operations in a manner that is most responsive to citizen concerns" and thus the decision to dissolve the Authority was made.

So what happens to the parking facilities, debt, operations, and employees under the arrangement? The municipality will own the parking assets and two other buildings owned by the Authority will be sold after the dissolution. As we pointed out in the Brief, the debt question has to be settled whenever there is a move to end the existence of an Authority, and, according to the manager that debt (around $3.8 million) has been refinanced in the name of the municipality.

The parking function will be dispersed between public works, police, and finance and six of the Authority’s nine employees will become municipal employees when the dissolution is finalized.

Obviously Pittsburgh is much larger in scale and its Parking Authority has more employees, more facilities, and more debt. But if Council members are looking for a small scale case study, they have it.

Authority Figures

Not long ago Allegheny County was discussing dissolution of some of its related authorities, like the Airport Authority and the Port Authority, in order to exert greater control over their operations by bringing them into the County’s organizational chart. Now a member of City Council, noting how the City’s authorities straddle two worlds in which they are supposed to be independent but also seem to be subject to the demands of the City, wants to explore dissolution.

Authorities are quasi-governmental agencies: they can’t tax, but they can issue debt and assess user fees and set rates for the services they provide; their board members are appointed, not elected, and the appointments are made by elected officials; they are supposed to be independent and free from political interference, but that is not often what happens.

As we wrote in a Brief earlier this year the municipality that created the authority can dissolve it as long as there is a clear assignment of any outstanding debt. That’s why the City Councilman wants to start with the Parking Authority: it carries around $100 million in debt, an amount that would have been erased under a long-term lease as proposed by the Mayor.

But there would be a better place to start: the City’s Stadium Authority. It was created to own and operate Three Rivers Stadium. The Authority even admitted years ago that its place in the governing landscape would cease once Three Rivers was demolished. Would anyone be surprised that the Authority is still around, conducting business as a land development agent for the City, almost ten years after the stadium was demolished?

Can County Corral Authorities?

Under a proposed resolution (5836-10) before County Council, several of the County’s larger special purpose authorities would be studied by an independent panel that could then recommend remedial options including dramatic steps such as privatizing the authorities or bringing their functions “in house” into the unified organizational chart.  Considering the services provided by authorities-everything from running buses to providing low income housing and owning airports and stadiums-the financial, governance and operational impacts of such changes would be quite large.

 

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