Lawmakers: More oversight for Pennsylvania’s municipal authorities

    (File image by nekidtroll via Flickr Creative Commons)

    (File image by nekidtroll via Flickr Creative Commons)

    Many of the commonwealth’s roughly 2,000 authorities manage essential public assets like water and sewer systems.

    Basically, local governments create the authorities, appoint their boards and delegate responsibility for assets (airports, stadiums, public parking facilities, water and sewer systems), effectively increasing City Hall’s taxing power and the community’s borrowing capacity.

    To generate money, authorities issue debt, sometimes hundreds of millions of dollars at a time, and increase rates. When customers protest and question cost increases, though, the information to answer them is more limited than it would be for, say, a school district or city government.

    Authorities have to pay to operate and maintain these public assets. Then there are new, stricter water quality standards that require system upgrades many authorities say they’re struggling to finance, says state Municipal Authorities Association Deputy Director John Brosious.

    As for accountability, state law requires authorities to hire a CPA to review their finances every year, as other public entities do, says Brosious.

    But they are rarely given close inspection beyond that. The state Attorney General’s office has the power to investigate authorities and examine their finances while doing so. That’s not an audit in the strict sense, as the review isn’t done by accountants or actuaries and doesn’t adhere to GASB standards, says spokesman Chuck Ardo. 

    Authorities also are not within the jurisdiction of the state Auditor General’s office.

    Auditor General Eugene DePasquale spoke about it during state budget hearings, which wrapped last week.

    “It is the number one complaint I get in my office that I can’t do anything about,” he says.

    DePasquale’s office audits public pension funds, local governments, school districts, even entire state departments and commissions. But not the commonwealth’s 2,000-plus municipal authorities, aside from a handful of the port and transit type.

    Water and sewer authorities do not, however, have to run rate increases past the Public Utility Commission, which vets rate increases by municipalities with customers outside their boundaries and by private companies.

    State Rep. Tina Davis, D-Bucks, was developing a bill last fall that would’ve put authorities under PUC’s jurisdiction, but it hasn’t moved yet. Davis wasn’t immediately available to discuss its status.

    “When you don’t like your legislator, or the governor or mayor, you get to go in and vote against them. People are frustrated they don’t even know who’s on the authority, don’t know how they got put on and when the rates go up, they don’t feel they have any recourse,” DePasquale told KQV last week.

    Water and sewer service rates, for example, have more than tripled in Clairton since 2013, rose nearly 50 percent in Harrisburg a couple years ago and are going up 25 percent in Westmoreland County, starting in April.

    One of Westmoreland’s state senators, Republican State Pat Stefano, will offer up a proposal soon to expand DePasquale’s purview to authorities, his chief of staff confirmed earlier this week.

    DePasquale says he doesn’t know how much that will cost. It could be as minimal as budgeting $100,000 a year to cover any audits of authorities prompted by tips, but would be more expensive if the law were to prescribe audits at a set interval, he says.

    Brosious says the association would need to see the measure and know more details before commenting on it.

    Editors note: This post was updated to correct the original description of the state Attorney General’s office jurisdiction over municipal authorities.

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