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NEWS RELEASE
For Immediate Release
Contact: Steve Halvonik 717 787-1381
Audit Text
Chart: Who Pays to Operate the Port Authority?
Chart: Summary of Port Authority Capital Projects

Auditor General Jack Wagner Says Changes in Port Authority of Allegheny County Board Can No Longer Wait

Change in governance most significant step
toward permanent reform

HARRISBURG, PA., Dec. 3, 2007 – Auditor General Jack Wagner today said the time is now for Gov. Rendell and the General Assembly to overhaul the Port Authority of Allegheny County’s board of directors, saying that a change in governing structure is the most significant step needed for permanent reform.

Noting that Pennsylvania taxpayers provided 55 percent of the Port Authority’s operating funds during the 2004-05 fiscal year, Wagner said the state should appoint at least four members to the transit agency’s nine-member board, to ensure that state dollars are being spent effectively and efficiently.

“At present, the state is, in essence, the principal owner or majority stockholder in the Port Authority, without any voting rights,” Wagner said.

Under the present structure, the Allegheny County chief executive appoints all nine members of the Port Authority board. Under Wagner’s plan, Gov. Rendell would appoint two members, both of whom would be required to be Allegheny County residents. The General Assembly also would appoint two county residents to the board. The Allegheny County chief executive would fill the remaining five seats.

“The state should not occupy the Port Authority’s driver seat, but we ought to at least be permitted on the bus,” Wagner said.

Wagner said that board diversity already exists in other states. In Minnesota, for example, the governor appoints 17 members to the Minneapolis region’s transit board. In Cleveland, mayors, council members and other municipal officials make appointments to the transit board. And in Denver, the public elects the regional transportation agency’s 15-member board.

Wagner is not alone in recognizing the differences in other states and the contrast at the Port Authority. The Allegheny Institute for Public Policy and the Governor’s Transportation Funding and Reform Commission have also reported the serious imbalance that exists between the funding sources of the Port Authority and the board’s makeup.

Wagner’s recommendations are contained in a final audit of the Port Authority of Allegheny County, covering the period July 1, 2002, through August 22, 2007, that was released today. The final audit contained five findings -- three that were contained in three interim reports that Wagner issued last winter as well as two new ones.

In the most significant new finding, auditors said that the Port Authority poorly planned or implemented three of its most important capital projects begun during the past decade, involving the West Busway/Wabash Tunnel; the Stage II light-rail transit modernization and a new parking garage at South Hills Village in Bethel Park; and the North Shore Connector subway extension in downtown Pittsburgh.

All three projects were plagued with time or cost overruns, auditors said.

For example, the West Busway/Wabash Tunnel High-Occupancy-Vehicle Project began in October 1994 with an initial budget of $327 million, with 80 percent from the U.S. government and 20 percent from the state. Approximately $275 million had been spent on the project by December 2004, even though construction had been scaled back considerably with the elimination of a new bridge across the Monongahela River, linking the Wabash Tunnel to downtown Pittsburgh.

The lack of connectivity to downtown has limited commuter use of the Wabash Tunnel, making it hard to justify the project’s cost or efficacy, Wagner said.

Wagner noted that the Port Authority has already responded positively to several of the recommendations contained in the interim reports, such as reforming its management bonus program. However, he said, the Port Authority has still not responded adequately to his recommendation that executive offices be relocated from downtown Pittsburgh to a Port Authority-owned building on the North Shore that continues to have vacant office space. In its latest response, the Port Authority says it is studying that option, but Wagner notes that such a response is simply a tired repetition of previous promises regarding the issue.

Wagner also noted that the Port Authority’s response failed to address his recommendation that under no circumstances should the downtown lease be renewed or renegotiated.

“It’s now time for the Port Authority to stop studying and start moving, and I mean that literally,” Wagner said. “At this rate, they’ll still be studying the current expensive lease by the time it expires, and that’s too late.”

In an earlier interim report, Wagner said that the Port Authority had contributed to its financial instability by spending $15.5 million on prime office space in downtown Pittsburgh.

“With rising gas prices showing no signs of abating any time soon, residents of Allegheny County will increasingly need public transportation to reach jobs, classes or doctors’ appointments,” Wagner said. “The findings and recommendations in this audit offer a roadmap for reforming the Port Authority, so that its riders can be assured that public transportation will be able to serve them when they need it.”

Auditor General Jack Wagner is responsible for ensuring that all state money is spent legally and properly. He is the Commonwealth’s elected independent fiscal watchdog, conducting financial audits, performance audits and special investigations. The Department of the Auditor General conducts approximately 5,000 audits per year. To learn more about the Department of the Auditor General, taxpayers are encouraged to visit the department’s Web site at www.auditorgen.state.pa.us.

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