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Threatens state takeover if fire union balks at deal

Friday, September 20, 2002

By Timothy McNulty, Post-Gazette Staff Writer

Mayor Tom Murphy threatened to declare the city economically distressed and ask for a state takeover unless the fire union helped the city cut $15 million to $20 million in spending, according to the union's president.

Declaring the city distressed would allow a state overseer to review all city revenues and spending and impose layoffs or new contracts on firefighters and other personnel.

Firefighters Local No. 1 President Joseph King said Murphy threatened the takeover in a meeting last month, but mayoral spokesman Craig Kwiecinski would not comment directly on the conversation and denied interview requests with the mayor.

If Murphy did threaten a takeover, it is not clear whether he is seriously considering it or merely playing high-stakes poker with King, a powerful union head who has tangled with the mayor before.

Whatever Murphy's reasoning, the threat lit a fire yesterday under city union leaders and City Council members, who were looking up copies of the state's "Financially Distressed Municipalities Act" on the Internet.

Kwiecinski said bankruptcy had been raised as an option by a blue-ribbon panel, called "PGH 21," that is studying city finances. The panel's recommendations are due later this fall, and Kwiecinski said it would be "premature to speculate" on the report before it was issued.

The panel has issued no formal recommendations to Murphy, but the PGH 21 public safety subcommittee has issued 15 preliminary plans for saving money, including declaring bankruptcy.

Other ideas include merging the Fire and Emergency Medical Services bureaus, charging cell phone users $1 monthly to support 911 services and changing EMS billing practices.

King said Murphy first threatened a state takeover during a meeting Aug. 20, but he paid little attention. When King later learned that PGH 21 was also considering a takeover, he decided to notify his union's members.

"I know Tom's way of threatening things. When I saw this report, I took it more seriously," King said in a telephone interview.

City Councilman William Peduto, a PGH 21 member, floated the bankruptcy idea to the financial panel. Yesterday, Peduto said a takeover could be one way for the city to avoid raising taxes.

"I'm supportive of it, in case $15 million to $20 million can't be reduced from the public safety budget," Peduto said. "A $360 million budget is enough to run a city this size."

This year, more than a third of the city's $364.7 million budget went to police, fire and paramedic salaries. According to the City Council budget office, fire spending increased 77 percent from 1992 through 2002 and police spending jumped 32 percent during the same period.

Debt service increased 47 percent and health benefits 36 percent in the same period. For such reasons, Murphy and City Council consistently juggle budget shortfalls of roughly $25 million in approving the city's operating budget every year.

In 1996, former Alcoa Chairman and present U.S. Treasury Secretary Paul O'Neill chaired the Competitive Pittsburgh Task Force -- the precursor to the current PGH 21 panel -- which recommended closing some fire stations to cut escalating fire costs.

That led to years of budget battles between Murphy and King. The fights were briefly put aside in May 2001, when the union gave Murphy its endorsement after the Murphy administration agreed to a four-year contract extension for the fire union on the eve of Murphy's Democratic primary matchup with Councilman Bob O'Connor.

With Murphy's latest financial panel at work, the fights are on again.

King issued a four-page letter to fire union members prior to a meeting Tuesday to brief them on the effects of proposed economic reforms.

"Murphy stated that if we don't save $12 [million] to $15 million in the Public Safety Department by the 2003 budget, he has no other alternative but to submit to the governor, under Act 47, to become a distressed municipality," King wrote. "You could very well have a completely new contract issued under the guidelines of Act 47, if the mayor decides to file for distressed municipality."

Even if there is no state takeover, King warned that expensive fire union contracts -- with no layoff clauses and health benefits for retirees -- would be targeted.

Under state law, criteria proving a city is distressed include budget expenditures exceeding revenues for three years running, having a deficit for three years, defaulting on loan payments, missing payrolls and filing for bankruptcy protection.

In a separate statement he released this week, King accused the Murphy administration of failing to properly train firefighters in various rescue methods that might be needed in the wake of a terrorist attack on the city.

Firefighters, for example, aren't trained to do confined space rescue, such as in the case of a building collapse, King said.

He contends that the administration wants to reduce the effectiveness of the firefighters, then eventually make the case for closing community fire stations.

Deputy Mayor Sal Sirabella said the argument had no merit.

Tim McNulty can be reached at tmcnulty@post-gazette.com or 412-263-1542.