Thursday, May 21, 2009

Bill Peduto's turn ...

So I don't know how I got on Bill Peduto's press release email list, but I am happy to be on it. He sent out a press release today on his (as Council finance chair) outline of a new five year plan, which is in the form of a letter to Dean Kaplan and Jim Roberts. I believe they were involved in the first Act 47 five year plan. I had decided to post on it at lunch time (since I am at work), so Bram scooped me on this(athough not, as far as I can tell, the PG). Anyway, you can get to the plan at Preduto’s Council web page (link for the plan:

First of all, the timing of the press release is interesting. If Dowd had won Tuesday’s primary (yeah, I know) I would like to think Bill Peduto would have approached Dowd about his plan. The letter is dated April 28th, indicating that it has already been sent, but Peduto could have delayed the public/press release of it until Dowd had had input. The letter indicates a copy was sent to Ravenstahl, presumably on the 28th.

Second, the plan itself is very interesting, very ambitious. Bram mentions Peduto’s final paragraph, which states that the plan can not be like a menu, that is, we can not simply choose easy parts and disregard the hard items. We need to do it all. Yet the “all” is no small matter.

Peduto calls for the State to take over municipal employee pensions and healthcare. That is absolutely huge, and begs a staggering number of questions. The implications for notion of contracts negotiated by municipal unions alone are big. Legally the idea of patching together all the different negotiated pension and healthcare plans at a State level … well, it could be done, but to get any savings a number of unions would have to agree to accept the same plan (or cafeteria of plans). Peduto does suggest having an auditing firm show local municipal retirees what will happen if we do nothing, perhaps as a precursor to reducing their benefits. Of course with modern computing, it would be easy enough to manage a vast array of different municipal health insurance and pension plans plans, although I’ll bet the contracting local health insurance and national pension administrator agencies would not be amused. But then there’s the question of our pension shortfall, how or if would that be made up. Peduto doesn’t say, perhaps hoping the State would volunteer a portion or all of the shortfall.

Peduto calls for a “Functional Consolidation of Municipal Services”. This is an interesting one. Peduto explicitly rejects the notion of the Nordenberg plan, a merger of Pittsburgh City and Allegheny County governments, with the Pittsburgh political government all but disappearing. He complains particularly that there is no explanation about what would happen to City debt in that plan, except to say it would remain with the City (whose residents would (practically) no longer have a voice in what rate they would be taxed at). But Peduto’s alternative has to be a nightmare for residents of Shaler or Brentwood. He proposes bringing certain services for all 130 plus of our neighboring municipalities (and the City) under “countywide” control. This would be for payroll, tax collection, personnel, law and presumably also purchasing and CIS. Peduto does not say this, but Presumably Pittsburgh’s existing systems are already large enough that they could simply be expended cost efficiently and the municipalities and the County government could pay us for our administering these systems on their behalf. I am sure the 130 municipalities will leap to be included in this part of the plan.

There are five other parts to the plan to look at (including our ling term debt), which I may do in a future post when I have more time. But I think you may have an idea of why I think Peduto’s is very ambitious, maybe too much so. On the other hand, if we don’t try to be ambitious, we are more likely to have to look at municipal bankruptcy as our only option.

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