That's how Don Smith, chairman of a nascent task force on nonprofits and president of the Regional Industrial Development Corporation, describes the city's relations with tax-exempt nonprofits in light of the lawsuit the city is filing against the region's largest tax-exempt organization -- UPMC.
"The lawsuit that was filed last week ... has certainly dramatically complicated the discussion," he said in a remarks to the Intergovernmental Cooperation Authority, the state-appointed overseer that required the city to create the task force.
Mr. Smith said the suit -- along with legislation in the General Assembly that would require nonprofits to pay payroll and property taxes -- have endangered the ability for the city to broker an agreement with nonprofits on payments in lieu of taxes. "The spirit of openness and collaboration has been wounded," he said.
Last October, the ICA made the creation of the task force a requirement of rubber-stamping the 2013 budget. Mayor Luke Ravenstahl convened the 41-member force in January. It includes public officials and representatives of the region's most powerful nonprofits, including UPMC.
While the purpose of the task force is to create recommendations as to how nonprofits should contribute to the city in lieu of paying taxes, the real end-game is firming up an agreement with tax-exempt organizations to make voluntary payments.
The city's agreement with the Pittsburgh Public Service Fund, a coalition of nonprofits that contribute $2.6 million annually, ends this year. Without an agreement, the city will be left to fill a corresponding hole in next year's budget. The city's five-year plan, which is also scrutinized by the ICA, will also have to be altered.
Mr. Smith said he fears the lawsuit has poisoned the water, making it unlikely the task force will see "a positive outcome." Mr. Ravenstahl's announcement that he would not run for re-election has also created more uncertainty, Mr. Smith said.
"It's hard to get people to the table to make voluntary contributions when there are ongoing efforts to require them to make contributions in the form of taxes," he said.
In the current environment, it may be difficult -- even impossible -- for the city to extract more from the Pittsburgh Public Service Fund.
"I do believe that the nonprofit community was willing to consider increasing their contributions to that fund," he said. "It's very challenging right now to have that discussion when they don't know what other obligations they'll be hit with."
In an email statement from his spokeswoman Marissa Doyle, Mr. Ravenstahl said, "We look forward to reviewing the results of the Nonprofit Taskforce's efforts and hope that all nonprofits will work in cooperation with the ICA and the Taskforce."
When he announced the suit against UPMC last week, Mr. Ravenstahl said he was not planning to take similar legal action against any other nonprofits. Still, said Mr. Smith, the mayor's departure in ten months makes things less certain.
"I believe the mayor completely when he says he doesn't have plans to go after any other nonprofits," he said. "But the nonprofit community doesn't know what the next mayor is going to do in that regard."
Dana Yealy, chairman of the ICA board, said he would have preferred that the mayor approach nonprofits using "the amicable route of using a task force."
"He's chosen to use the adversary process," he said, referring to the city's suit against UPMC. "It's the mayor's call. It's not the ICA's call."
Moriah Balingit: firstname.lastname@example.org, 412-263-2533 or on Twitter @MoriahBee.