Saturday, August 20, 2005

Fund gets $ from nonprofits for bailout of city (too little, too late, too fictional)

Dream on Mayor Murphy. The budget worked upon last year at this time called for this money for this year. Too late. This $5-million was to be here for 2005. The deal is just being cut at the end of August and won't go to city council until September.

Mayor Murphy is making a three year deal as a lame-duck that has around three months of time in the office. Mayor Murphy is out of here, but his ills are going to cripple the region for generations to come. He can't cut a good deal for the citizens.

The deal is cloaked in secrecy. What's up with that. The mayor signed a public document and the public needs to have the wool pulled over its eyes too. We need a pledge as well as the courage to be OPEN and HONEST.

The real insult to injury is the fact that Mayor Murphy pushed the non-profits to expand in the past 12 years. The Mayor's efforts helped put UPMC Sports Medicine onto the South Side Works so that the nonprofit could take valued riverfront property that was to be an extension of the existing neighborhood and new jobs with light-industrial and flex-office space and housing. No.

UPMC is a nonprofit that rents to the Steelers, a private, for-profit company that already got a millions in a public subsidy with the new stadium on the North Side.

Pitt got to move some of its football operations out of Oakland into land that should be fueling the economic future of the region.

Solutions to follow.
New fund makes city rely on charity of nonprofits - Mayor Tom Murphy signed a preliminary three-year agreement Aug. 5 with the newly formed Pittsburgh Public Service Fund, which makes few cash guarantees and is cloaked in secrecy.

The nonprofits are not stupid. And, the nonprofit leaders know that they can't trust Tom Murphy. Furthermore, they know that the deal that they are all signing isn't going to hold up come 2006. The entire saga is shameful. That is why they all insisted that it not see the light of day. The secrecy lessens the blush factor.

Solution: Establish a moratorium on nonprofit footprint expansion. Insist that all nonprofit growth be UPWARDS, out OUTWARDS. Growth needs to be with taller buildings, not rolling wide patches of land in neighborhoods.

A real inventory of nonprofit land is necessary. Then those benchmarks need to be shrunk.

1 comment:

Anonymous said...

New fund makes city rely on charity of nonprofits

By Jeremy Boren and Bill Zlatos
Saturday, August 20, 2005

Pittsburgh has reached a tentative deal with an umbrella group of nonprofits -- including churches and struggling arts organizations -- to help the city out of its financial hole.

Mayor Tom Murphy signed a preliminary three-year agreement Aug. 5 with the newly formed Pittsburgh Public Service Fund, which makes few cash guarantees and is cloaked in secrecy.

The service fund signed the agreement Thursday. The agreement still needs the approval of City Council, which won't be able to vote on the deal until after it returns from recess Aug. 30.

Pittsburgh is so desperate for cash that it built $6 million in contributions from nonprofit groups into its $417.5 million budget for 2005. The nonprofits' expected contribution since has been reduced to $5 million.

The pending deal does not commit the nonprofits to any particular contribution; however, it would cancel some earlier agreements that already have paid the city more than $600,000 so far this year in lieu of taxes.

City Councilman Doug Shields of Squirrel Hill said he will scrutinize the deal because it doesn't guarantee that the city will receive any money. He also expressed concern about a provision that bars the city from revealing how much each nonprofit is giving.

The service fund plans to send letters next week to 800 to 1,000 nonprofit groups, seeking contributions.

"A lot of these nonprofits already exist for the sole purpose of serving the community and the city," said Charlie Humphrey, executive director of Pittsburgh Filmmakers and the Pittsburgh Center for the Arts. "It's a little odd to 'tax' them."

Yet Humphrey is recommending that his board contribute to the fund, which will be kept at The Pittsburgh Foundation.

"These are desperate times," he said, "and desperate times call for desperate measures."

The $5 million anticipated to come from the nonprofits represents the biggest and shakiest piece of a $9.8 million surplus forecast by Murphy.

"When nonprofits hear what the city's surplus is going to be, they wonder: 'Why should we be making these contributions if the city has a surplus?' " said the Rev. Ron Lengwin, of the Catholic Diocese of Pittsburgh, who is the spokesman for the new nonprofit fund. "This is a goodwill offering on our part."

Hospitals and universities have been making payments to the city in lieu of taxes for at least 15 years to compensate for the fact that nonprofits own 40 percent of city land. That puts a huge dent in Pittsburgh's property-tax revenues.

What's unusual about the latest effort is that the Public Service Fund includes groups that haven't made such payments before -- including churches, arts groups and foundations.

"I wonder how parishioners would react to their alms going to pay the city," said city Controller Tom Flaherty.

Arts groups big and small will be pitching in, said Mark Weinstein, chairman of the board of the Greater Pittsburgh Arts Council. He also is general director of the Pittsburgh Opera, which will support the fund. He declined to say how much the opera plans to give.

"The nonprofits need a thriving city," Weinstein said. "We don't exist in a vacuum. As long as they're taking the steps to be on the right foot, we're going to be there for them."

Arts officials, though, say they won't let their contributions endanger their organizations.

The opera had two planned deficits before rebounding this year. Pittsburgh Center for the Arts temporarily shut down last year because of financial problems and now is negotiating a merger with Pittsburgh Filmmakers.

Humphrey said he doesn't know how much Pittsburgh Filmmakers and the arts center will contribute to the service fund.

"I know it's more than a stapler but less than a new air-conditioning system," he said. "It might mean one less thing that gets done or one less thing that gets purchased."

Two local philanthropies -- The Pittsburgh Foundation and The Forbes Funds -- have decided to contribute. But their leaders would not disclose the amounts or how they arrived at them.

"I don't think there's any one way that organizations came up with the figure," said William E. Trueheart, president and CEO of The Pittsburgh Foundation.

The service fund's Web site suggests that nonprofits base their contributions on varying percentages of revenue, payroll or assets.

At least one major nonprofit has decided not to join in.

Pittsburgh Mercy Health System -- one of the largest groups that already is making payments in lieu of taxes to the city -- said in a statement Friday that it won't contribute to the service fund.

"Mercy already provides millions of dollars to this community in direct, uncompensated patient care and in free programs and services," hospital officials said in a prepared statement.

Mercy Health System also pointed out that it's in the eighth year of a 10-year agreement with the city to pay in lieu of taxes. Since 1999, it has given the city $319,291.