Monday, March 5, 2007

PAT management a big part of its problem

Pittsburgh PA - In the ongoing saga of the Port Authority of Allegheny County (PAT), the Pittsburgh Business Times has two reports (story 1 story 2) regarding PAT's fiscal crisis and how management has greatly contributed to it.

The big problem is that PAT's management, especially it's upper executives, have perks that even some Fortune 500 companies don't have. The extravagance of these taxpayer funded management perks has helped to literally bankrupt Pittsburgh's transit system.

An audit performed by Pennsylvania State Attorney General Jack Wagner (D) provided solid proof of massive waste in PAT's management, something that PAT officials have long denied. Most of this waste came in terms of lavish pension benefits which created a $28.4 million dollar shortfall yet no attempts were made to curtail the taxpayer funded outlays.

Then, shortly after Wagner's announcement, PAT's Executive Director Steve Bland and County Chief Executive Dan Onorato held a press conference to announce a plan to curtail the pension benefits to save between $5 and $6 million. They both claim in various other news reports that this plan was being worked on long before Wagner's audit but I seriously doubt it. Given that the pension plan has been under media attention for several years now and the standard reply to questions was that there wasn't anything wrong, their plan was more than likely whipped up within the past few weeks.

While the list of items being changed looks impressive, it's not enough. PAT management will still have better benefits on the public dime than many private companies of similar size have in the free market. The simple fact that all this is payed for by the taxpayer, PAT needs to be frugal with the money. This is something that PAT seems not to be able to accomplish given that it sees taxpayer money as free money to waste.

I award Pennsylvania State Attorney General Jack Wagner a Laurel for finally being the first politician that put the blame for PAT's fiscal crisis where it belongs, directly on PAT's self-indulgent and financially abusive management. While a few other politicians have pointed fingers at management, it was mostly rhetoric. Wagner backs his claim with proof which has PAT's management scrambling to finally deal with the issue.

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