Regional group looking at consulting costs
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A politically tied development consultant who doubles as an adviser to the region's top planning agency may have to compete for his $7,000-a-month contract for the first time in 10 years.
The 10-county Southwestern Pennsylvania Commission's deliberations over its contract with John Verbanac -- a quiet powerbroker thrust into the news during last year's mayoral campaign -- have some of its 55 members wondering whether contracting rules are too loose. Pacts under $100,000 aren't subject to formal competitive processes, and there's no rule on how many times an arrangement like Mr. Verbanac's can be renewed without inviting other proposals.
"Things change, and with today's emphasis on transparency and having better contracts, that's something we will discuss," said new SPC Chairman Charles Camp, a Beaver County commissioner. "Hey, look, it's 2010, Charlie's the chair, it might be time to review some of the practices that might prove controversial."
Mr. Verbanac, a Cranberry resident who works for Summa Development, was picked by SPC in 2000 from among several competitors. For seven of the years since, his contract has been for $84,000 -- it was lower in three years. Overall, his contracts total $761,600.
His work is authorized by a paragraph in a three-page SPC board resolution that lists neither his name nor the contract amount. Both his contract and his invoices are one-page affairs that lack any detail about his role or his precise activities.
Several SPC members --most of whom are county commissioners -- say the man and the agency have proved a good match.
The commission fulfills the requirements of federal and state transportation funding rules, building consensus around road and bridge projects. It spends around $12.3 million a year, but also helps allocate hundreds of millions of dollars in federal and state transportation aid.
Mr. Verbanac, a former aide to the late Sen. John Heinz and then to Sen. Rick Santorum, has built a portfolio of political influence that includes a seat on the University of Pittsburgh's Board of Trustees, and a place in Mayor Luke Ravenstahl's New Pittsburgh Coalition. He was pivotal last year in the city's successful bid in the General Assembly to forestall state takeover of its pension fund.
Mr. Camp said Mr. Verbanac has a proven ability to run SPC's behind-closed-doors discussions about the politics of transportation. "John's really good at handling such discussions -- excellent, in fact," he said.
"I can't say that he's given us bad advice, ever," said Westmoreland County Commissioner Tom Balya.
Some members said they knew little about Mr. Verbanac's private interests, or his contract.
"As a very active board member, I will admit to being a little bit surprised at the magnitude of that arrangement," said SPC member J. Bracken Burns, a Washington County commissioner, after learning of Mr. Verbanac's $7,000-a-month bills.
"A monthly retainer arrangement is not an oddity at all" in professional service contracts, Mr. Verbanac said. "I probably facilitate dozens upon dozens of meetings a year."
SPC President James Hassinger said the agency has one other retainer contract, with its law firm, Reed Smith. That is a $12,000-a-year contract, according to an SPC vendor list.
Last year an independent candidate for mayor released e-mails showing that Mr. Verbanac wrote Mr. Ravenstahl's speeches, criticized the Penguins' casino plan while representing a competing slots license bidder, and cried foul when city chief of staff Yarone Zober contemplated shifting state money away from a Hazelwood development site Summa was eyeing.
That site's value would be affected if a contemplated Pittsburgh wing of the Mon-Fayette Expressway is built, and SPC has backed that roadway. Commission members, though, said Mr. Verbanac doesn't appear to try to advance private aims through his SPC role.
"I have not noticed any kind of conflict of interest," said Rod Ruddock, chair of the Indiana County commissioners. "I'm not even sure that I know what John's private consulting work is."
"I pursue development projects as a consultant or as an equity participant," Mr. Verbanac said. "There's no project I've had an interest in that I've discussed with SPC or SPC has discussed with me."
There are a few developers and contractors on the commission who are expected to sit out votes on matters in which they have an interest. Mr. Verbanac is not a member and does not vote.
SPC rules require formal competition for contracts of more than $100,000, but for pacts under that threshold staff must only seek a handful of price quotes.
"I think that the [$100,000] target is too high," said William Peduto, an SPC member and Pittsburgh councilman.
Commission rules don't say how many times a contract can be renewed without a new competitive process.
Mr. Camp said it's time "to re-examine what we're doing, and bring some daylight to it."
Mr. Verbanac's current pact expires at mid-year. "It is up for renewal and he was a bit in the news over the last year," said Mr. Camp. "We might decide whether we want to clarify his contract or maybe broaden it, or we might [invite proposals] and see what's out there on the market."
"Should the commissioners choose to continue to utilize my services, I'd be happy to do so," Mr. Verbanac said. "Should they choose to go another way, that's perfectly fine, too."
Mr. Peduto said the SPC doesn't need anyone in Mr. Verbanac's role. "Ninety percent of the members of the SPC are government officials. We don't need anybody to lobby ourselves."
Mr. Verbanac said he is not a lobbyist, SPC is not allowed to lobby, and Mr. Peduto "obviously doesn't understand the basis of the organization."
Mr. Ravenstahl, a commission member who last year mandated competition for all city contracts, said he wanted the body to stick with Mr. Verbanac.
"From my understanding, and speaking with a lot of the commissioners there who have been here longer than I, the value of John is significant and they're thankful that he's their consultant," the mayor said. "Whether or not that is to change is, I guess, for the SPC to decide, but if I have a vote, I'm voting for John Verbanac."
First Published March 8, 2010 12:00 am