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Wednesday, July 21, 2010

Routeless: Massive Port Authority cuts may be in the offing

Posted By on Wed, Jul 21, 2010 at 10:08 AM

In May, Port Authority CEO Steve Bland said potential budget woes could lead to "draconian" cuts in service. That time may be here. The Port Authority of Allegheny County plans to roll out today a proposal for system-wide cuts. If approved, the cuts would go into effect in January, and would make up for a $47.1 million shortfall.

"It's going to be drastic," says spokesman Jim Ritchie. He says the proposal will affect every route in the system and leave 55 neighborhoods with eliminated or severely reduced service.

The cuts will result in a 35 percent service reduction in bus and light rail service. More than 50 routes will be eliminated, including event services to Steelers' games; the 1F to Millvale; 41G to Dormont; 65 to Squirrel Hill; and the 77A to Oakland Others will lose weekend service, like the 6A Troy Hill and neighborhoods like Lincoln-Lemington and Homestead. Others, like the EBA, will see reductions in weekday and weekend service.

Among the neighborhoods that could see a total service loss are: Banksville, White Oak, the Beechwood Boulevard corridor in Squirrel Hill; Marshall-Shadeland; Franklin Park; Edgewood Town Center; Garden City in Monroeville; and parts of Mount Lebanon around Cedar Boulevard and Old Farm Road.

Base rates for urban and suburban routes, and transfer, will increase by a quarter. The agency is also considering a "premium price" of $4 for express and flyer routes in suburban areas.

In terms of staffing, Ritchie says between 300-500 employees from union-represented operators and maintenance workers to non-represented employees could be laid off.

The plan goes before the Port Authority planning and development committee today then onto the full board on Friday. If approved, the agency will undergo a public hearing process required by law. The changes are slated for January.

PAT officials point to the rejection of a plan to toll Intestate 80 -- revenue already included in Act 44, the state law establishing funding for transit projects -- for the budget shortfall. And even with all of the proposed changes, Ritchie says the plan, at best, is a one-year fix.

"The problem for us isn't the expense of operating the system," Ritchie say. "The problem is the state didn't come through with transit funding established under state law."

Ritchie says agency brass are working with local legislators to re-establish state funding, and transit activists like Jonathan Robison are encouraging riders to contact their own local representatives. Robison fears that if state money doesn't come through and even more cuts come down the pike, "this could mean the end of the Port Authority as we know it."

Friday, July 9, 2010

On controversial Marcellus Shale issue, Pennsylvania may be jumping into the pool

Posted By on Fri, Jul 9, 2010 at 1:23 PM

Exactly a month ago, I wrote about the controversial subject of "pooling" -- a legal mechanism whereby natural-gas drilling companies may be able to remove gas from beneath your property without your consent.

The issue promises to be controversial in Pennsylvania, where gas deposits in the mile-deep Marcellus Shale are attracting considerable interest. At the time I wrote that post, no pooling legislation had formally been proposed in Harrisburg ... but apparently, it's on the way.

In states with pooling laws, once a supermajority of property owners in a given area sign drilling leases, gas companies are given drilling rights to the whole area -- with or without the consent of the people whose land they are burrowing beneath. Holdouts lose the ability to prevent drilling beneath their property -- though they are compensated by the gas companies for the value of gas. As an industry group says, such residents are assured of getting "a check in their mailbox each month" either way.

As an industry spokesperson told me last month, Pennsylvania is the only state with large-scale natural-gas drilling operations that doesn't have a pooling law. But that may change soon. I've received a partial copy of a letter dated last month from state representatives Marc Gergely (D-White Oak) and Garth Everett (R- Muncy), in which the bipartisan pair is seeking cosponsors for pooling legislation here.

To drill effectively, the letter asserts,  natural-gas companies "must be able to form effective and efficient drilling units" -- and those units "must include all of the mineral interests within the boundaries."

How might such legislation end up looking? Those concerned about pooling are circulating a copy of a proposed bill with the letter. I can't be sure if this is the exact bill Gergely and Everett are proposing -- the title is slightly different, for one thing -- but it is consistent with the goals they outline in their letter, and with the overall pooling concept. 

Under the terms of the bill, potential drilling areas will be divided up into "units." Most of these can be no more than 640 acres, and should be "configured generally in a regular square or other rectangular form."  The bill does allow some flexibilty, however -- a unit can be "any size or shape," for example, if the drillier "reasonably believes" the gas beneath it can be extracted by a single well pad. 

In any case, if a natural-gas company obtains drilling rights from three-quarters of property owners (or others with control over the gas) in a given "unit," that developer may gain the rights on "all interests owned and not owned or controlled by that person ... for the development and production" of Marcellus natural-gas reserves. (The emphasis there is mine.)

The bill would create an "Oil and Gas Fair Pooling Office," to monitor the creation and administration of these units, and to adjudicate disputes within them. The bill also protects property owners who don't sign leases from any surface disruptions of their property. In other words, you can have the gas drilled out from underneath you ... but you can't have a drilling well built in your backyard without your consent. 

Gergely and Everett's letter portrays all this as an environmental safeguard. If drillers aren't allowed to get at all the gas in an area, they argue, "[l]eaving recoverable gas in the ground would be a physical waste of the valuable resource. Worse yet, it makes absolutely no sense to require the construction of multiple well pads ... when a single pad may be sufficient." 

The letter also asserts that the law "Allows the greatest number of willing mineral interest owners to realize the value of their resource." (According to the bill, royalties for gas taken out of a unit will be paid "based upon the relative surface acreage of the interests in each unit.")

Folks in a "unit" who don't sign leases have a couple options: They can agree to be treated as if they had signed a lease, or they can elect to be treated as a "non-consenting party" -- in which case they get a share of the profits minus a "risk fee." But as near as I can tell, the drilling is happening with or without them -- right beneath their feet. 

I've got calls into Gergely's office, and will post updates here as events warrant. In the meantime, while I've seen little coverage of pooling from the local press, it has gotten some attention in recent days from media elsewhere.

Tuesday, July 6, 2010

Council debates for hours, misses point entirely

Posted By on Tue, Jul 6, 2010 at 8:34 PM

If you're among the handful of people paying attention to the Great Review Board Saga, you probably know that council voted to delay a vote on replacing five out of seven new members to the Citizens Police Review Board. 

For the most part, though, council spent its day arguing over trivia, while the real issue went almost entirely ignored. Surprise!

I mean, sure ... there was a spirited argument over whether city council President Darlene Harris acted properly when she first took the nominations off the agenda. There was an equally spirited -- and by "spirited" I mean "painfully long" -- debate about whether the nominations should be "tabled," "postponed" or merely "held." The whole thing was a powerful reminder over just how much a marriage of convenience was Harris' ascension to council's presidency in the first place. Lots of bad mojo between Harris and the folks -- Bill Peduto, et al -- whose votes put her in that position.

But I'm going to ignore that debate because very little of it matters. Council did agree to clean up murky language governing review board appointments -- addressing some of the weaknesses first pointed out here last month. But on the five new appointments that precipitated the crisis? Council did nothing except kick the can down the road a couple weeks, deciding to postpone a vote until just before taking its customary August recess.

Harris' move seemed to cheer the board's supporters at council today -- and some bloggers too. Based on what I heard at today's meeting, though, a crisis is still likely on the way.

Here's the problem: Nearly two weeks ago, I wrote the following:

You could probably get council to agree on changing the rules going forward, such that this sort of thing won't happen again. I think it's pretty apparent to all concerned that the existing rules don't make much sense. The problem is that there is so much controversy about what is happening now, with the board members currently on the table ... And I don't see either side backing down. 

Nothing that happened today seems to have changed that. Yeah, council may rewrite its appointment procedures going forward. But in the meantime ... there is still this controversy about the board members currently on the table. (Or rather off the table held postponed.) And fixing rules for future appointees doesn't fix the flawed process that produced the current group.

Harris spoke, somewhat plaintively, of her desire to "to get this council to work together instead of against each other." She said she'd hoped to delay a vote "until things are settled, questions are answered ... and everything appears to be legal."

That's a good idea. But the only way to live up to it, arguably, is to scrap the current appointees and start over from scratch. Council will need to come up with three nominees for each of the review board seats under its purview. (That's not to say that the current crop of nominees shouldn't be on the new list. They just need to have company next time around.)

Anything short of that means council risks a lawsuit from the ACLU, which has already engaged in some sabre-rattling.

"If council votes to confirm the nominees who have been appointed by the mayor, without going through any additional process, then that is problematic," says Sara Rose, of the ACLU. Changing the code for future appointments would be a good idea -- it's one of the things the ACLU has recommended -- but by itself, it won't keep the city out of a courtroom. 

"We are hoping that council will not confirm any individuals who have not been properly appointed," Rose added, "but have not yet decided what we will do if council does."

So unless these appointments are scrapped entirely, council may well be headed to court. Which would be ironic, since part of what seems to be motivating council is a desire to reduce the city's exposure to costly litigation

But from what I can tell, there are still at least 5 votes in favor of replacing the current review board -- Harris and council's mayor-friendly bloc. I didn't get any sense that they were changing their minds today. At one point, for example, councilor Patrick Dowd said, "One of the things that concerns me is that some of my colleagues have said they'd like to restart this process." [ADDED: I should probably clarify that Dowd was speaking about Peduto and Co. here -- so this remark restates the divisions on this issue, rather than suggesting some sort of softening.]

It's worth stating briefly here why this matters.The Pittsburgh Comet makes the fairly obvious point that, had it not been for the review board's G-20 investigation, no one would care so much about it now. Well, sure. On the other hand, had it not been for the review board's G-20 investigation, would council have issued a bizarre resolution urging it to go slow? Would any of this be happening in the first place?

The proposed new nominees came before council last week. They seemed like nice people. All testified that they'd never spoken to the mayor, or anyone on council, about whether they would drop the G-20 matter. Or about anything else, really.

That was reassuring to hear. Somewhat less reassuring, however, was how little the prospective members knew about anything else the board does. During questioning by Doug Shields, nominee Diana O'Brien Martini candidly acknowledged she had next to no sense of how the board actually worked. How did it decide what cases to pursue? she wondered. Did that require a unanimous vote? And so on.

Ordinarily, I'd be fine with a board gaining some fresh perspectives. Boards and commissions are staffed by regular citizens -- good hearted volunteers who are supposed to stand in for the rest of us. The trade-off for that is that there's often a pretty steep learning curve. 

Which is fine, except there has never been more pressure on the review board than there is right now. As Shields pointed out, these review board members are walking into a situation where the board is currently pressing to have the police chief, Nate Harper, found in contempt of court And we're talking about five brand-spanking new members -- on a seven-member board -- walking in with zero experience. Ordinarily, that would never happen: Board terms are staggered to ensure a mix of new blood and old hands. But in this case, council and the mayor allowed current board members to serve expired terms ... such that now they are all being replaced at once.

I don't want to sell Martini or the other nominees short. They seem like good people, and it's unfair to say -- as some members of the public nearly did today -- that appointing these folks is an effort to kill the investigation. I sure don't know what the potential new members are going to do. Based on what I saw last week, I'm not sure they do either. 

So this isn't an attempt to stack the deck, necessarily. But it IS going to shuffle the deck, halfway through the game. That ought to be against the rules.

But that point is getting lost. And I've got a feeling that before this is over, some city dollars will be lost with it.

Thursday, July 1, 2010

Casting lots for the city's lots (UPDATED)

Posted By on Thu, Jul 1, 2010 at 8:17 AM

So today comes the totally unsurprising news that, should the city lease off its publically-owned parking garages, prices will go up. Like, a lot.

To shore up the city's pension fund with a cash infusion, Mayor Luke Ravenstahl has proposed leasing its garages to a private operator in exchange for an upfront sum. Yesterday, the mayor revealed that under that proposal, all-day parking rates Downtown could go up by more than $4 next year, and by more than $10 a day by 2015.

No shock there. After all, why else would private operators be interested in leasing the lots in the first place?

What is surprising, perhaps, is how complacent the early reaction to this news has been -- especially considering the angst parking costs have prompted over the years. 

Let's look, for example, at the evolving perspective of Mike Edwards, head of the Pittsburgh Downtown Partnership.

In the fall of 2007, city council had one of those fits of pique for which it is so well known. Under a financial bailout package worked out with the state, the city had previously reduced its parking tax from 50 percent -- among the highest in the nation, critics wailed -- to 45 percent. In 2007, the city was supposed to lower the tax again, but councilors griped that the earlier savings hadn't been passed onto consumers. So they voted 8-1 to keep the tax rate at 45 percent.

At that time, here's what Edwards told the Tribune-Review, when Ravenstahl vetoed council's action:

Pleased with Ravenstahl's decision, Pittsburgh Downtown Partnership President Mike Edwards said: "Keeping it at 45 percent would have increased costs to the public more quickly. It would have made Downtown less competitive."

A year before that, in fact, Edwards had complained that raising the tax to 50 percent in the first place had crippled Downtown:

Since the tax hike, Downtown office leasing has been stagnant and the number of people coming to the city for lunch or shopping has dropped, said Pittsburgh Downtown Partnership President and CEO Mike Edwards.

"We think that's a pretty good indication that the parking tax has had an effect," he said.

So. If a high tax rate made that much difference in 2006 ... and if simply holding steady on tax rates would have been such a hindrance in 2007 ... you'd think that Edwards would be screaming from the rooftops about the prospect of a $4 increase in 2011. Right?

Or not. Here's Edwards in today's Post-Gazette:

Michael Edwards, president and CEO of the Pittsburgh Downtown Partnership, said he's less concerned with rate increases than with making sure they're well publicized so motorists aren't blindsided. He said he believes motorists will pay higher rates to park in a vibrant Downtown.

"We need to make sure Downtown is the greatest experience it can possibly be," he said.

OK, now he's "less concerned with rate increases"? It's a little hard to understand. Back in 2004, when the parking tax was raised to 50 percent in the first place, the expected impact was $3 a day. Now we're told that leasing the lots could raise prices by triple that amount in a couple years ... but Edwards seems remarkably unconcerned. 

I don't mean to single Edwards out. Because I'm pretty sure he's not going to be alone in having a curious double standard.

Back in 2007, when the city threatened to freeze the parking tax at 45 percent, it outraged Harrisburg legislators like state Sen. Jane Orie. Orie urged a state oversight panel to sue the city to reduce the rate -- "in order to bring fiscal responsibility to the city of Pittsburgh and its taxpayers." Last year, when Ravenstahl brought up the need for revenue again, state Rep. Mike Turzai insisted that parking taxes needed to come down:

Someone who lives in a suburban municipality with a 1 percent levy on a $60,000 salary, and has a $200-a-month lease at a Downtown garage, pays the city more in parking taxes -- $654 a year -- than they pay their home town in wage taxes.

"It has to go down," said Rep. Mike Turzai, R-Bradford Woods, calling it one of the highest parking taxes in the nation.

Here's a prediction: Rate hikes envisioned when the lots are under private control won't cause the same outrage among GOP reps. (Orie has, of course, spoken warmly of the lease plan, and Turzai has commended the mayor's work on the pension issue.) When a private lot operator raises rates, that's just the wisdom of the free market. But for the city to raise a tax? Why, that's a shocking effort to fleece the hard-working people of Pittsburgh.

Of course, it probably doesn't hurt that Alco Parking operator Merrill Stabile -- who benefits mightily from parking-tax cuts and could probably raise rates further once public lots do the same -- donated $3,000 to Orie's campaign last year. (For that matter, we should  mention that Stabile also sits on the Downtown Partnership's board of directors.)

To be fair, Orie had reason to be upset back in 2007. The city was, after all, preparing to welsh on a promise made to Harrisburg. But if parking rates have to go up, we don't need a private operator to raise them: It's one of the few things city officials have proven themselves capable of doing on their own. So why cut a middleman in on the action? Why not earmark the proceeds from a revenue increase so that it can only go to the pension?

The answer seems pretty simple. At this point it's pretty clear that this isn't really about keeping Downtown competitive, or about protecting the suburban commuters Orie and Turzai represent. It's not even really about protecting the city's pensioners. Because shoring up the pension fund is a means to an end, not an end in itself.

UPDATE: As if on cue, council President Darlene Harris has forwarded a letter from Orie and Turzai -- coauthored by Dan Frankel and Jay Costa -- rather forcefully instructing city officials to get on with it. 

"The January 1, 2011 date [for having the pension 50 percent funded] is a firm and final deadline," it says. It "will not be extended to accommodate any delays in funding Pittsburgh's pension."

The letter also points out something I forgot to mention previously -- that state officials will let the city raise the parking tax by a tiny little bit (from 37.5 percent to 40 percent). But by state law, that's only if "the city has leased or sold all of its parking authority garages and that net proceeds from the lease or sale have been deposited into the Pennsylvania Municipal Retirement System."

Which of course just proves the point: For all their bitching about unjust tax rates and the burden on commuters, these legislators don't really care about the price of parking, as long as a desired policy goal (privatization) is achieved.

A case can be made that leasing the garages is the only option at this point ... and the fact that Frankel and Costa -- both city Democrats -- have signed on this letter suggests that's where we're headed. But I'd argue that if we are indeed in that position, it's got something to do with state legislators who've used the city's crisis as a means to an end, rather than as a problem to solve.


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