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Republicans to blam for glowing audit |

Republicans to blam for glowing audit

Brad Bumsted
| Monday, May 17, 2004 12:00 a.m

Republican House members unhappy with a glowing legislative audit of the Urban Revelopment Authority’s Pittsburgh Development Fund have no one to blame but themselves.

The Legislative Budget and Finance Committee last week issued its 90-page audit focusing on the thousands of jobs the Urban Redevelopment Authority’s development fund has created and hundreds of millions dollars of property it has moved onto the city tax rolls.

Mulugetta Birru, the URA’s executive director, couldn’t have asked for a better audit.

Rep. Jeffrey Habay, R-Shaler, who sponsored the resolution authorizing the study, conveyed the disappointment of his GOP colleagues who thought the audit didn’t address one of the goals in the resolution – selling the fund. Habay and other GOP lawmakers also felt the audit relied too heavily on information spoon fed to them by the URA.

Some suburban legislators would like the fund liquidated to save $6.2 million per year from the Regional Asset District’s 1 percent sales tax add-on that pays for economic development rather than needed city services or tax relief.

The reason this audit didn’t take a more critical look at the development fund was a result of amendment A4446 to HR 471, approved 197-1 by the House last Dec. 9. The lone opponent was Rep. Ken Ruffing, D-West Mifflin.

The amendment was offered to Habay’s resolution by Rep. John Maher, R-Upper St. Clair.

The language for the amendment came from the URA, according to Chuck Kolling, the URA’s lobbyist. Maher said it went through a series of changes by lawmakers of both parties.

The bottom line: the amendment watered down the resolution.

The amendment essentially did two things. It moved the study from the Joint State Government Commission to the Legislative Budget and Finance Committee.

Very subtly, it also shifted the focus from a study of selling the fund to analyzing the economic growth and job creation. Earlier versions of the resolution called for the study to “outline a proposal for potential sale or transfer” of the fund’s portfolio.

While the resolution that passed still called for the study to look at the “continuation or potential liquidation of the fund” – which the study barely touched on – the emphasis became economic impact. It also directed the committee to take into account financial and legal hurdles to selling the fund.

Maher has said the substance of the resolution wasn’t altered dramatically and that the changes were merely “tone of voice.”

The Tribune Review reported on April 4 that Maher received income last year from Maher Duessel, an auditing firm employed by the URA. He was listed as a vice president and director, according to his financial disclosure statement. Maher Dussel was paid $116,365 by the URA in 2002 to audit its books. The firm won the URA contract through a bidding process.

Maher denied any conflict of interest. He said he isn’t directly involved in auditing of the URA and that he no longer works as a CPA or day-to-day manager of the firm. “I’ve never been involved in the work there (at the URA), even before I got to the Legislature,” Maher told the Tribune Review.

The reason he offered the amendment was because Habay had called him and needed some assistance with the bill, Maher said.

Keep in mind that there are plenty of Allegheny County lawmakers who are pleased with the way this turned out. They think the URA, appointed by the mayor, is a great agency and that the audit did what it should have done.

The project manager for the study said the staff of the Legislative Budget and Finance Committee didn’t have the expertise to do a detailed analysis of the fund’s worth.

But it seems clear that amendment set the tone for the direction of the study.

When Maher offered the amendment, the House speaker asked if anyone else in the Allegheny County delegation wished to be recognized.

No one responded.

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