Pittsburgh, PA – Port Authority Chief Executive Officer Steve Bland today responded to findings outlined earlier by State Auditor General Jack Wagner.
“The majority of findings contained in the report issued today were made public by the Auditor General several months ago,” Mr. Bland said. “Port Authority has already acted aggressively, even before the original report was issued, to address these issues. Reining in the long-term costs of operations, often described as “legacy costs,” remains a key objective of the current Board of Directors, and has certainly been articulated publicly by this Authority and by County Executive Dan Onorato.”
Among the findings outlined in today’s report, Mr. Bland stated that “State Auditor General Wagner’s most significant finding is that the Port Authority Board has no state appointees despite the fact state taxpayers make the largest contributions to the Authority’s Operating Budget. The makeup of our Board is legislated by the state, and we are prepared to report to any Board the Legislature determines proper – as we have said numerous times.”
In terms of the finding continued from Auditor General Wagner’s interim report that the Authority leave its downtown offices and return to its previous headquarters in Manchester, Mr. Bland said: “We continue to conduct a cost-benefit analysis of a return to our Manchester offices. That analysis includes estimating the cost of rehabilitating the building, paying penalties for early termination of our current lease, future maintenance costs and repayment of federal funds, and our preliminary estimates put those costs in the $10-15 million range – money we do not now have identified. Once this analysis is complete, we will report our findings to our Board of Directors.”
Mr. Bland added that the analysis and ensuing recommendations will reflect what is in the best financial interest of the Authority and its riders today – and will not rehash whether or not the original move was a good idea.
Most findings in today’s report addressed the issue of fringe benefits. On these matters, Mr. Bland stated, “The current Port Authority Board has no control over previous benefits given to executives, senior staff and retirees. The Authority announced nine months ago a broad series of cost-savings initiatives that included wage freezes, layoffs, changes to employee pensions and benefits – initiatives that will save the Authority more than $11 million in Fiscal Year 2008.
“However, it is important to note that these changes only applied to non-represented employees, who make up just 8 percent of the workforce. In that vein, we consider all of these findings to have been implemented by the Authority.”
Several findings were made with respect to the Authority’s major capital projects. Mr. Bland said, “Port Authority follows all aspects of the federally-prescribed planning process for capital projects, which includes extensive public input, federal oversight and years of study, planning, design and engineering. We have no immediate plans to make future capital requests for federal funding of new transit projects and instead remain focused on infrastructure renewal projects like paving repairs to the Martin Luther King, Jr. East Busway and the rehabilitation of the Palm Garden Bridge, which was completed on schedule and under budget this fall.”
Mr. Bland added, however, that limitations in the funding process for major capital projects have helped contribute to budget issues, such as the types of overages observed in the West Busway project, across the nation in light of rapidly escalating construction costs over the past 10 years.
Specific to the findings on capital projects, Auditor General Wagner cited the Wabash Tunnel and South Hills Village Garage projects as being underutilized, and he called upon the Authority to identify measures to mitigate the impact of these facilities on operations.
“It certainly should be noted,” said Mr. Bland, “that savings associated with the Authority’s assumption of all Wabash Tunnel maintenance, effective January 1, 2008, along with revenues derived from the 160-space parking lot adjacent to the facility, are expected to cover all operating costs associated with the facility.
“Futhermore, the recent lease of our South Hills Village Park and Ride Lot, together with revenues from increased parking in the South Hills Village Garage – there were more than 900 vehicles there today – are expected to exceed operating costs associated with the garage.”
These moves toward the self-sufficiency of these facilities were at the direction of the Port Authority Board to identify appropriate public-private partnerships to relieve more of the financial burden of such facilities on the Port Authority.
“We appreciate the State Auditor General’s oversight, including his numerous positive findings that Port Authority complies with procurement laws, regulations and policies; that the Authority complied with recommendations of his prior audit regarding control over non-revenue vehicles and regarding the implementation of a work order system; that the Authority established controls over bus maintenance overtime; and that the Authority has significantly increased advertising revenues,” Mr. Bland said.