Flaherty Quiet in Defeat

Democratic County Executive Candidate Mark Patrick Flaherty went before his supporters last night without a trace of the sheepish grin he wore during many of the debates this spring. “Rich Fitzgerald ran his race and I ran my race and the voters made a choice and I accept that choice,” said Flaherty.

Flaherty lost to former County Council President Rich Fitzgerald 64,343 to 50,265. He says the rain suppressed voter turnout and Fitzgerald did a better job of getting his supporters to the poling places.

On stage, Flaherty was flanked by his wife and child on one side and his parents on the other. He kept his eyes on an empty lectern as he thanked his volunteers and spoke about the county’s future. “The major issues our county is facing are tremendous financial challenges and the result of this primary didn’t lesson that challenge at all and moving forward we are going to have to work on that all together,” said Flaherty.

Flaherty still has more than 6 months in the County Controller’s office. “We have a very important city/county consolidation to finish of our accounting ERP system that I have been working on for two years so we are going to certainly get that ready and try to finish that for the next controller that comes in,” said Flaherty.

In the short term, Flaherty says it is time to get back to his family. Pointing to his wife Anne and his daughter Deirdre, Flaherty said, “These two completely fulfill my life… Now they get me back.” To that, the small voice of a six-year-old rose up from below the microphone and replied, “Yay!”

Steelworkers and Rich Fitzgerald Join Forces

At Steelworker headquarters this morning, union head Leo Gerard reiterated support for Rich Fitzgerald as the Democratic nominee for Allegheny County Executive, saying he would continue the work Dan Onorato has done to keep taxes down and support for working families high.

Fitzgerald’s opponent Mark Patrick Flaherty has proposed a public-private partnership between the county and companies drilling for natural gas on county land, which would use $4 billion of county assets to secure a higher yield than typical fees and royalties.

Fitzgerald calls the idea a “Republican” subsidy that could be lost if wells come up empty or the price of gas makes drilling unprofitable. As a drilling partner, Fitzgerald says the county would be liable in case of accident or death, and all of these risks would jeopardize the county’s bond rating.

He also questions whether the county could fulfill its role in protecting public health and the environment if it were a drilling partner.

The proper role of government vis-a-vis the natural gas resource, according to Fitzgerald, is to maximize the public benefit through an extraction tax and making sure the industry compensates for the cost of their operations. He says most companies know that would be fair. If done right, he says there will be many jobs created and no need to risk taxpayer funds.

Fitzgerald says the county added 24,000 private sector jobs last year, and the unemployment rate is 2-1/2% below the national average and has been for 38 straight months--the longest stretch since the 1930s.

Leo Gerard says Rich Fitzgerald was an easy choice for the Steelworkers’ endorsement because as president of County Council, he was current County Executive Dan Onorato’s right hand man. Gerard says he wishes Dan Onorato were governor. What's needed at the end of this worst recession since the Depression, according to Gerard, are jobs--not subsidies to an industry already rolling in money

County Jail Exceeds Overtime Budget

Allegheny County Controller Mark Patrick Flaherty says the County Jail spent $2.1 million more than it should have on overtime pay in 2008 and 2009.

Flaherty says the problem stems from an insufficient amount of officers, suggesting that the jail could actually save money by hiring new full-time and part-time employees.

Officers who abuse the Family Medical Leave Act also force their coworkers into overtime hours, says Flaherty. He says jail management should amend its FMLA policies to be stricter.

The Controller says cutting down on the number of inmates could also reduce the number of shifts and posts needed. He says to reduce the jail population, eligible inmates should be sent to alternate housing as soon as possible. Flaherty notes that individuals living in alternate housing cost the county less than those in the jail itself.

Flaherty to Run for County Exec, Fitzgerald Considers a Bid

One soon-to-declare and one possible candidate are praising Allegheny County Executive Dan Onorato who announced today he will not seek a third term in that office.
County Controller Mark Patrick Flaherty, who was expected to run for the county's top post whether or not Onorato sought reelection, issued a statement saying that Onorato has served the people of the county with distinction as a member of Pittsburgh Council, then as County Controller and now as Chief Executive.....
"Dan has been a dedicated public servant. He now prepares to move to the next stage of his career and whether it be in the public or private sector, I wish Dan and his family well."

In the next sentence of the statement to the media, Flaherty said he will formally announce he will run for County Executive at an event in the County Courthouse Courtyard January 19th.

In an interview with DUQ News, County Council President Rich Fitzgerald also praised Onorato..."He's done a great job moving this county, this region forward over the last 8 years." Fitzgerald called it "kind of a sad day because it's going to be a loss for this region not having him at the helm."
Fitzgerald says he's talked with Onorato a few times over the last several weeks and he's not surprised but still called it a difficult decision.......
"Because he has done a lot of good things and I'm sure there's a lot more he would like to do...there are always challenges ahead with the reassessments and with Marcellus Shale and some big issues we need to move forward on."
When asked about his interest in the county executive post, Fitzgerald said today "is not the day to say who's running for what, there will be time for that." But neither would Fitzgerald rule out a run for county executive.
He said he would not run if Onorato had decided to seek a third term.

Extension for County Real Estate Tax Deadline

Allegheny County property owners who are late paying their real estate taxes have been given a bit of a reprieve. Due to the downturn in the economy, County Controller Mark Patrick Flaherty, Treasurer John Weinstein and Sheriff William Mullen announced today they will delay taking legal action against the property owners until September 30. Controller Flaherty says usually liens are filed in August against the properties of owners late in paying their taxes. He says the number of people neglecting the tax for their first time has increased from 3,000 to 5,000 in recent years.
Flaherty says they've delayed filing liens in previous years, and that's proven to be helpful. “It seems that if we give them one last final chance, there is an increase in the payment rate overall.” He says for those who still cannot pay the tax in full, they can get sign up for a payment plan that is approved by the treasurer’s office. If the tax is not paid by this extended deadline, that person will be put on the Allegheny County Real Estate Tax Lien list. As of 2009, there are 46,000 names on that list. The delay in filing liens will allow the property owners additional time to pay without incurring further penalties and costs.

He suggests that property owners go to or call the treasurer’s office to get the tax debt taken care of before September 29.

Audit: Discrepancies with Service Providers

Allegheny County Controller Mark Patrick Flaherty says 6 human service agencies that have contracts with the county are out of compliance and owe the county more than a half million dollars.
Flaherty says they regularly audit the contracts "to make sure that the dollars are spent the way they should be and that taxpayers are getting efficient use of their money for these programs"
Flaherty says the audits showed key compliance issues with Goodwill of Southwestern Pennsylvania, Pressley Ridge, Womanspace East, Next Step Foundation, Community Human Services Corporation and Community Empowerment Association (CEA).

"The most significant disparity was found in Community Empowerment Association’s noncompliance with its contract revealing that the agency owes Allegheny County approximately $304,000 for unsupported service hours and operating expenditures."

CEA is an agency that works to empower the African-American community through jobs, economic development, housing, education and family support systems.

Flaherty says Next Step, which provides transitional housing, education and support to individuals recovering from drug and alcohol addiction, owes the county $64,900 due to an erroneous payment by the Department of Human Services.
According to the audit, Goodwill billed the county for salaries and benefits that exceeded the contract’s allowable amounts by $33,636; Pressley Ridge, a foster care provider, received $31,692 more than net eligible costs; Womanspace East owes the County $4,200 due to improper invoicing; and, Community Human Services (CHS)Corporation owes Allegheny County $23,000 billed for indirect, unsupported costs.

However, Adrienne Walnoha, Chief Executive Officer of CHS says her organization has been working with the County for two months to rectify this situation. "CHS did not inappropriately bill the County for any funds. We received an unqualified independent audit for the fiscal year in question and billed costs as outlined in our contracts."

Flaherty says he's recommending full reimbursement by these agencies

“The reviewed agencies should focus on strengthening their program management, documentation and accountability standards to preclude further disallowances from occurring. The Department of Human Services must closely monitor the terms of its contracts, units of service and other regulations to ensure compliance.”

Flaherty says it's hard to say whether these were just honest mistakes or if there were any intentional actions involved.

County Must Address Short Term Funding Issues

In releasing his annual financial report, Allegheny County Controller Mark Patrick Flaherty says the county can't keep relying on one-time revenue sources to balance the operating budget. Flaherty says the non-repeatable income totaled $35.2 million in 2009, up from $9.4 million in 2005 but down from a high of $41.8 million in 2007. The one-time sources included the sale of the county-owned One Smithfield Building for $11.4 million and a final payment of $10 million dollars for the hosting of a casino.
"I again emphasize the critical importance of long-term planning to reverse the trend of using one-time revenues."
Flaherty says officials must develop long-range plans to address short term issues such as the reliance on one-time sources and the struggle to get revenues to balance the expenditures in the budget, or there will be long-term financial troubles.
Flaherty says he does not support tax hikes in this economy but council and the county executive have to devise plans to increase revenues or cut costs.
He says the county's largest program deficits continue to be unfunded mandates such as the Child Support Enforcement Program subsidy and costs related to Children, Youth and Family services.
"They always start out fully funded but over the years they (state and federal government) find a way to cut funding but still require us to keep the programs."

Flaherty says the county must also come up with a way to make the Kane Regional Hospitals more efficient because expenditures exceeded revenues by $4.9 million last year.

Flaherty did note that the county's reserve fund increased by $700,000 last year to $19.5 million but that's still $15 million short of the recommended 5% of the total operating budget.

County Could Face Major Deficits in the Future, Controller Warns

At the release of his Annual Comprehensive Financial Report for 2008, Allegheny County Controller Mark Flaherty today emphasized the county's need for a long-term financial plan due to the threat of a possible $50 million structural operating deficit in 2012. According to the report, the drink tax netted $27.5 million which lowered 2008's structural operating deficit to about $23 million, but it also shows a steady decline in state funding. He says he expects state funding will continue to diminish while the structural operating deficit will grow.

County pension also faces similar plight. Unfunded pension liability increased $24.4 million from $157 million in 2007 to $181.4 million in 2008.

To counter these projected shortfalls. the controller suggested the county implement a long-term financial plan which could include cutting some county services. He did not comment as to which services could be cut.

On the bright side, Flaherty says the county has not accrued any more debt and its payments have remained the same.

Audit Finds Big Costs Coming at ALCOSAN

The city and county controllers are hoping a newly released audit of ALCOSAN will shed light on a looming crisis. The audit looked at the authority’s efforts to comply with a federal consent decree forcing it to end sewage overflows by 2026. The audit found the authority is facing $10 to $50 billion in infrastructure upgrades to make that happen. County Controller Mark Flaherty says that would be the largest municipal project ever undertaken in Southwestern Pennsylvania. He calls the numbers “mind boggling.” City controller Michael Lamb says if a fairly conservative number of $21 billion dollars is used, residential rate-payers will see an increase of $1,760 a year. He says people do not usually think about their sewer bills but they will when that happens. He says he hopes the audit will serve as a “siren” to elected officials to start lobbying Harrisburg and Washington for help. Without government help the full cost will land on the ratepayers. ALCOSAN Executive Director Arletta Williams says she agrees with the numbers. She says it is hard to make any solid estimates because they are still trying to get a handle on the extent of the problems and the best way to fix them. Williams says the authority cannot save up funds to cover the capital costs, so ratepayers will see big jumps once ground is broken for the upgrades. She says that will come some time after 2016. The audit also looked at ALCOSAN’s contracting practices. The report found the authority has solid policies in place but when there was a deviation from the policy there was often not enough substantive documentation. Flaherty says when the board stepped away from the policies it usually had good reason. Thos reasons were relayed to the auditors but they were often not written down at the time the contract was awarded. Williams says that will be remedied going forward.

Controller: More Reform Needed at PAT

Allegheny County Controller Mark Flaherty says The Port Authority of Allegheny County has a long way to go as it tries to right its financial house. The Controller issued a performance review today comparing PAT to other transit agencies. Flaherty says a statistical comparison to eleven of the most comparable transit agencies found the Port Authority considerably underperforms in operations based on “performance metrics.” And he says that gap is getting “progressively wider.” The controller says the Board of Directors and Management of the Port Authority need to adopt a "cut waste and inefficiency first, cut service last" philosophy. He does admit that since the audit was conducted, “the Port Authority has embarked upon various strategies for improvement.” Among the changes noted by Flaherty is an effort to cut top-level salaries, eliminate management positions, reduce management benefits and adjust service to more efficient levels in striving to control costs and enhance service. A new contract was also signed with mechanics and drivers. The audit went on to point out a need to replace the current fare box system with one based on smart cards. The Authority has also been investigating such a system. Heading in another direction, Flaherty says the Authority needs to address its unfunded retirement costs. He says the authority should drop its "pay as you go" approach. Finally, Flaherty analyzed the Authority's operations regarding the maintenance of its vehicles, operational expenses and bidding procedures. He says the work order system used by PAT is “obsolete.” He says. "It is critical that the Port Authority upgrade the current computerized maintenance work order system to maximize efficiency and ensure that its vehicles are being properly maintained and inspected."

Convention Center Construction Rushed Controller Says

A report by Allegheny County Controller Mark Patrick Flaherty's office shows the construction of the David L. Lawrence Convention Center had issues involving budgeting, scheduling, and contracting.

It found that the county commissioned an estimated $215 million for the new building, but that costs of the construction were closer to $390 million. This was because of the "design-build" plan for the project. 80 percent of the building was planned through architectural design, while the remaining 20 percent was "built on the fly."

Flaherty says the project scheduled poorly as well. The Convention Center began to be booked for events during construction. Flaherty says a "design-build" project should not be subject to rigid scheduling.

Lastly, the report showed a problem with contracting. The Controller says that the building should have been done as an "at-risk" project like both PNC Park and Heinz Field, where the builder bears the risk of maintaining budgeting and scheduling. In the case of the Convention Center, the county bore the risk of any cost exceed the project budget and and problems incurred by missing schedule.

Flaherty hopes the report will serve as a teaching tool for future building endeavors. Currently, the construction of the $300 million new arena for the Penguins is underway. Flaherty says so far that project is following the recommendations made through the report.

City and County Controllers Audit ALCOSAN

Allegheny County Controller Mark Flaherty and his counterpart in Pittsburgh, Michael Lamb, have announced a joint audit of the Allegheny County Sanitary Authority. ALCOSAN is under a consent decree that requires it to comply with new environmental standards. Upgrading the region's sewer system is expected to cost several billion dollars. The controllers say they want to ensure that the bidding process for contracts is fair. They also say they want to make sure that consumers are aware of how the project will affect their rates. ALCOSAN is not receiving any federal or state assistance for the project, and it's warned customers that their bills will jump in the future.

The controllers also say the cooperative efforts that helped ALCOSAN communities negotiate their consent decree supports the idea of more communities sharing services. The controllers would not say yet whether they support a proposed merger of Pittsburgh and Allegheny County.