RAD examines legality of funding Port Authority with tax money
The Allegheny Regional Asset District is hiring attorneys to investigate whether giving the county’s transit authority millions in tax money to avert its latest financial crisis is legal, the RAD director said Wednesday.
Even if the funding plan is legal, detractors say, it is unprecedented and inappropriate and threatens RAD’s future and that of groups it funds.
“Port Authority (of Allegheny County) is spreading its cancer, its illness to a well-run, well-oiled, effective authority,” said Rick Pierchalski, who was appointed to the board by former County Executive Dan Onorato in 2004 and left after new Executive Rich Fitzgerald took office this year.
Port Authority CEO Steve Bland is scheduled to make his case for $3 million in assistance to RAD’s board of directors in a public hearing starting at 2:30 p.m. Thursday in the August Wilson Center, Downtown.
Port Authority officials could not immediately be reached for comment.
The requested RAD money is one key to a plan that enables the cash-strapped Port Authority to avoid eliminating 35 percent of its service and laying off 560 workers. That money, along with $1.5 million from the county’s drink tax, would help leverage $30 million more in state funding.
RAD supports “regional assets” — parks, libraries, stadiums and cultural groups — with half the proceeds from an added 1 percent sales tax in Allegheny County. It has $101 million in requests for next year.
RAD Director David Donahoe said it retained the Downtown firm of Tucker Arensberg to investigate the legality of funding Port Authority. RAD could not use its chief counsel, Downtown-based Eckert Seamans, because the firm also represents the transit agency.
Fitzgerald spokeswoman Amie Downs said RAD’s legal check is “no cause for concern. We certainly hope and encourage RAD to do their due diligence.”
Retired attorney Charles J. Queenan Jr., who played a key role in RAD’s creation in the mid-1990s, said, “It was never contemplated at all that something like this would happen, that politicians would be reaching out and stealing from museums, parks and other cultural amenities.”
A written application from Port Authority seeks funding only for next year, but Fitzgerald says he wants a deal lasting for at least 10 years. Fitzgerald said the deal would not hurt other funding recipients because Port Authority’s money would come from the district’s projected $5 million surplus.
Having to fund Port Authority would drain the account, Pierchalski predicted. He also feared it could spur other agencies to seek funding.
“If I were on the board, I would probably vote against (Port Authority’s request). I just don’t think that’s what RAD was designed for,” said Connie Yarris, who was appointed to the RAD board by then-County Executive Jim Roddey in 2000 and resigned this year. “I say that upfront, but I might have caved under the political pressure.”
The executive appoints four board members, Pittsburgh’s mayor appoints two, and those six members appoint a seventh. The executive and mayor can remove appointees at any time, Donahoe said.
Mayor Luke Ravenstahl initially expressed concerns about the funding plan.
Spokespeople for Ravenstahl and Fitzgerald said they spoke with appointees but insisted no one is being instructed on how to vote.
“I can unequivocally say that I have not had any political pressure from anyone in the county government,” said Paul J. Gitnik, appointed to the board this year by Fitzgerald.
“I will listen to Port Authority’s presentation, evaluate it and take it from there. I’m approaching this with an open mind,” said Vice Chairman Stanley J. Parker, who was appointed by Ravenstahl.
In 1998, former board member Fred Baker resigned rather than support a $13.4 million bond payment for the construction of PNC Park and Heinz Field, which was backed by Mayor Tom Murphy and two county commissioners.
Former member Ralph DeStefano, placed on the board by stadiums project opponent and former county Commissioner Larry Dunn, cast the only dissenting vote.
Tom Fontaine is a staff writer for Trib Total Media. He can be reached at 412-320-7847 or [email protected].