Tag Archives: Downtown Partnership

Opening BID

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If the legislation passed this week by City Council becomes law, the business improvement district for Downtown Pittsburgh will be extended for another four years through 2016. It has been in place since 1996 (amended six times since then) with a special assessment levied on the land value of commercial properties within the district for "administrative services and improvements". If approved, the BID will have existed two decades when the next term is completed.

The Pittsburgh Downtown Partnership (PDP) acts as the agent for the BID and carries out services related to the District. The renewal of the BID comes one week after the PDP announced its new CEO.

A 1996 study by the Allegheny Institute showed that the initial expenses were slanted more toward marketing/advocacy than cleaning/security, the exact opposite of the situation in other improvement districts around the country at the time. The study asked "if the primary purpose of the BID is to make the downtown cleaner and safer, then why is such a disproportionate share given to marketing, advocacy, and administration as contrasted with the other successful BIDs?" That year $558k of the $1.270 million budget (44%) went toward "security and cleaning".

Has that situation changed? In the PDP’s 2011 business plan the BID expenditure total stands at $1.476m, about 16% higher than 1996. This year, "clean and safe" expenses are $959k, or 64% of total spending. So it is accurate to say that a higher percentage of resources are being devoted to what could be termed the core functions of the BID. "Marketing" was $240k, or 16% of total expenditures.

But comparing the growth rates of these two functions from the PDP budget shows that while "clean and safe" grew 9% from 2007 through 2011 (audited compared to budgeted) "marketing" grew 43% from $167k to $240k. Total BID expense (clean and safe, marketing, housing, planning and economic development, transportation, and administration) grew 13% over the same time frame, from $1.305 million to the aforementioned $1.476 million. All categories were dwarfed by the growth in administration, which nearly doubled from $93k in 2007 to $183k in 2011.

Angst over PAT Funding and Service

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Downtown business and civic leaders are in a panic over the coming cuts in PAT bus service arising out of the transit agency’s near $50 million budget shortfall. The leaders are calling on Harrisburg to come up with money to fill the budget hole. Instead they should be asking why PAT has not asked for significant concessions from its employees. They should also ask why the Authority and Governor Rendell believed for three years that the Federal Transportation Administration would approve tolling I-80 when the plan presented by the state clearly did not meet Federal legal requirements.

The business and civic leaders might also ask why PAT diverted capital funds to the North Shore Connector that could now be used to shore up service temporarily. The leaders could also ask why PAT has felt compelled to keep building huge capital projects requiring large amounts of debt that now has to be paid back and is using up funds that could be used to fill to budget hole.

Months ago the Allegheny Institute proposed a plan under which the state would match each dollar in permanent compensation reductions PAT was able to achieve through wage and benefit concessions. Savings through layoffs-that led to service cuts-would not count. There has been no effort in that direction. PAT prefers to lay people off and the unions prefer to suffer layoffs rather than make any wage or benefit concessions. The senior employees are protected at the expense of the junior workers and transit system users.

But most despicable is that PAT and its unions will not allow private companies or other regional transit agencies to offer bus service to make up some or most of the service reductions stemming from the budget shortfall.

The fault lies not in Harrisburg’s inability or unwillingness to throw more money at the hugely expensive transit agency but in the agency, the unions and the local enablers who have failed over the years to demand accountability or work for changes that could have prevented this day from arriving. Plenty of earlier crises should have awakened them to the reality of transit agency that is financially out of control.