can we be one big happy region?

WINTER
2004
The Magazine of The Heinz Endowments
CAN WE
BE ONE BIG
HAPPY
REGION?
INSIDE: LOUISVILLE’S EXCELLENT ADVENTURE
EXTRA MILE
inside
Founded more than four decades
Our fields of emphasis include
apart, the Howard Heinz Endowment,
philanthropy in general and the
established in 1941, and the Vira I.
disciplines represented by our
Heinz Endowment, established in 1986,
grantmaking programs: Arts & Culture;
are the products of a deep family
Children, Youth & Families; Economic
commitment to community and the
Opportunity; Education; and the
common good that began with
Environment. These five programs work
H. J. Heinz and continues to this day.
together on behalf of three shared
The Heinz Endowments is based in
organizational goals: enabling
Pittsburgh, where we use our region
southwestern Pennsylvania to embrace
as a laboratory for the development
and realize a vision of itself as a
of solutions to challenges that are
premier place both to live and to work;
national in scope. Although the majority
making the region a center of quality
of our giving is concentrated within
learning and educational opportunity;
southwestern Pennsylvania, we work
and making diversity and inclusion
wherever necessary, including statewide
defining elements of the region’s
and nationally, to fulfill our mission.
character.
That mission is to help our region thrive
as a whole community — economically,
ecologically, educationally and
culturally — while advancing the state
of knowledge and practice in the
fields in which we work.
h magazine is a publication of The Heinz Endowments. At the Endowments, we are
committed to promoting learning in philanthropy and in the specific fields represented
by our grantmaking programs. As an expression of that commitment, this publication
is intended to share information about significant lessons and insights we are deriving
from our work.
Editorial Team Linda Braund, Nancy Grejda, Maxwell King, Maureen Marinelli,
Grant Oliphant, Douglas Root. Design: Landesberg Design
About the cover Illustrator Jud Guitteau’s impression of a region without boundary
lines, where downtown connects to suburban neighborhoods under one government,
is a dream for most communities. But in Pittsburgh, financial crisis has softened
political obstacles, offering the first opportunity in decades for consolidation.
4
Faithful Four
As a national debate plays out over faith-based programming,
a tiny Pittsburgh foundation has put heart and soul back into
urban schooling.
12
Border Crossing
Volume 4 Number 1 Winter 2004
Pittsburgh’s City Hall is struggling
to remake itself in the midst of
financial crisis, but many are asking:
“Why stop there?”
22
Louisville’s Big Hit
Louisville’s plan to merge city and county might have struck
out like all the others over the past 50 years if they hadn’t
won over the nonpoliticos in town.
2
3
28
Feedback
Message
Here & There
Faithful Four, page 4
feedback
2
Schools like City High don’t just happen.
They need to be led by people with a specific
plan, and teachers must be carefully chosen
and trained. A school that opens with only a
few weeks’ preparation, and with a randomly
chosen set of teachers, could not perform
as well as City High. This proves the value
of charters, and of The Heinz Endowments’
investing in a year of planning and incubation before opening day.
Paul T. Hill
Research Professor
Daniel J. Evans School of Public Affairs
Director, Center on Reinventing Public Education
University of Washington
From Fall 2003
City High
Chris O’Toole’s wonderful story on
Pittsburgh’s City Charter High School offers
a great alternative for the region’s students,
but it also should be noted that this charter
can be imitated elsewhere.
City Charter High takes advantage of
a truth about teenagers that too many high
schools neglect: They will work hard in a
school that links directly to the real world.
Teens who enter high school far behind, as
many at City High do, bear a double burden.
They must catch up on basic skills while
trying to master high school–level material.
In a highly motivating environment like that
at City High, many of these students succeed.
Without the City High option, 14-year-olds
who are years behind their grade level have
no practical chance of completing high
school or going to college.
City Charter High is a first-rate example of
the new kind of public school that is becoming
more common across America and popular
with families: a small school of choice with
a clear and focused mission; open to all kids;
free from many of the rules that apply to
district public schools; and accountable for
results. It is, as writer Chris O’Toole describes
it so well, “defiantly different!”
City High’s growing pains are similar to
those experienced by many other charter
schools. But as these schools progress, they
are really helping other public schools learn
how they can expand opportunities for young
people. Charters also are pushing public
school to rewrite the rules and set the student
performance bar higher.
Here’s hoping that all those involved in
City Charter’s efforts continue to support it
and help it reach its dream. By doing so,
the school will be helping America reinvent
public education.
Bruno V. Manno
Senior Program Associate for Education
The Annie E. Casey Foundation
Baltimore, Md.
The Republic of Art
After publication of your story about the
wonderful public process that involved artists
and arts organization managers in the
selection of art for Pittsburgh’s new David L.
Lawrence Convention Center, I attended an
artists’ reception at the newly inaugurated
building.
I turned to [fellow Pittsburgh artist]
Burton Morris and said “Savor this. These
moments come only once in a lifetime.”
I hope I’m wrong, but my experience as a
lifelong artist here reminds me how rare these
special moments are. What a wonderful
evening it was—a grand celebration at the
close of a democratic selection process that
honored many artists.
I appreciate the hard work of the Public
Art Committee and the Andy Warhol
Museum, the commitment of the Sports &
Exhibition Authority, the confluence of giving
from The Heinz Endowments, The Pittsburgh
Foundation, and the Hillman, McCune, and
Richard King Mellon foundations. There is
also the generosity of many others unseen
and unsung that contributed to the success of
this initiative. It felt so good to be in a public
place filled with the works of so many artists
I know and admire. I’m appreciative of this
opportunity that was presented to us all, and
I know I’m lucky to be a part of it.
Mark Perrott
(Editor’s note: The writer is a photographic
artist whose studio is located on Pittsburgh’s
South Side.)
message
By Teresa Heinz
Chairman, Howard Heinz Endowment
3
unicipal consolidation is hardly a novel idea in
the Pittsburgh region. In fact, in a commencement
address at Shady Side Academy in 1895—more
than a century ago, in the days before Pittsburgh acquired its
“h”—a young high school student named Howard Heinz called
for the creation of “Greater Pittsburg,” which he envisioned as
“an enlarged, regenerated and unified municipality.”
“To accomplish this,” he said in his speech, “the people of
Pittsburg…and the surrounding districts—those who ought to
compose this greater city who are in truth one community, having
common interests and common needs—must be united into
one great body, because they are all dependent upon Pittsburg
for their prosperity.”
That Howard’s words still have so much currency 109 years
later illustrates both the continuing appeal of consolidation as an
idea and the practical difficulties involved
in achieving it.
For him, the benefits of consolidation
were both obvious and opportunistic: The
world’s great cities—he cited New York,
London and Chicago as examples—
prospered “on account of their size.”
Pittsburgh, he argued, would have, “like
these, immense weight in the business affairs of the country
and of the world if she could gather to her and unite in a
compact whole the contingent towns, with their inhabitants and
their industries.”
Today, as Jim Davidson reports in “Border Crossing,” our
cover story for this issue, the terms of the consolidation debate may
not be as lofty, but they are, if anything, even more compelling.
With the City of Pittsburgh in financial crisis and Allegheny
County also struggling, it seems impossible to justify any longer
their duplication of services and, more broadly, the costs associated
with the county’s fragmentation into 133 municipalities.
In December, the Brookings Institution released a Heinz
Endowments–funded report that pointed to another argument for
consolidation: urban sprawl. Brookings found that land-use
patterns associated with the region’s splintered government have
helped make it “the worst-sprawling large metropolitan area in the
country.” This trend threatens not only the region’s natural beauty
M
and relatively easy commutes, but also the financial health of its
older communities, including suburbs that were long thought
immune to the hollowing-out effects of sprawl.
Confronted with such pressing circumstances, it is tempting to
declare, as Howard did in his commencement address, “Experience
points to consolidation; opposition to it comes from local
prejudices and pride, all too petty to merit serious consideration
in comparison with the results to be obtained.”
But Howard spoke with the exuberant certainty of youth,
whereas we have benefit of the ensuing century, during which
what seemed so obvious to him and many of his contemporaries
never came to pass. In part this is because Allegheny County’s
fragmentation mirrors Pennsylvania’s as a whole; the
Commonwealth is divided into a staggering 2,566 separate
municipalities. Those municipalities still exist because the people
in them value what they represent in
terms of generations of local control,
local schools, tradition and, yes, pride—
priorities that, for them, do not seem
at all petty.
That is not an argument against
consolidation. Instead, it is an argument
for adopting an approach to consolidation
that recognizes and respects the potency of these concerns. Seth
Beckerman’s article in this issue, “Louisville’s Big Hit,” looks at
how one region has been able to make progress on consolidation
by taking such a reasoned approach.
Whether the Louisville model is right for us, or whether
Pittsburgh needs to develop its own model, remains unclear.
But finding the model and the level of consolidation that works
for us must be a top priority for our region’s leaders. While the
prospects for this region that Howard Heinz saw in 1895 were
wide open, the situation now is dire: the survival of our city and,
ultimately, our future as an economically competitive region
are at stake.
In his address, Howard quoted the old adage, “In union there
is strength.” Now more than ever, Pittsburgh needs to acknowledge
the wisdom of those words. It is time for us to accept that we
are, in truth, “one community, having common interests and
common needs.” h
“In union
there is
strength.”
St. Benedict the Moor basketball coach Anthony Horn
huddles up with his seventh- and eighth-graders during
a recent game. “I just want the moral issues to be
instilled in my kids,” says Horn, a 1981 graduate.
“It’s all about that.”
AITH
LONG BEFORE FAITH-BASED
GRANTMAKING BECAME A
NATIONAL CAUSE CELEBRE,
PITTSBURGH’S EXTRA MILE
FOUNDATION WAS
SENDING HUNDREDS OF
INNER-CITY CHILDREN
TO CATHOLIC SCHOOLS.
By Barry Alfonso
Photography by Joshua Franzos
W
hen Anthony Horn talks about his years
as a student at St. Benedict the Moor, he
laughs at the bittersweet memories. “When
I first graduated from here, I was happy to leave,”
he says. “I couldn’t stand the school for the moral
aspect in the teaching. Now I love it for the same
reason. I think I could’ve gone down the wrong road
if I hadn’t gone here.”
In the 22 years since Horn said good riddance to
what he thought was an up tight and preachy little
Catholic school in Pittsburgh’s Hill District, he went
on to earn a computer science degree from Colgate
University, married and started a family. In 1996, he
reconnected with the school at the level of parent
and role model: he coaches the basketball team, and
his two children are students.
St. Ben’s, as it is known affectionately by many
students and alumni, fosters that kind of loyalty.
The school has become one of the jewels in the city’s
Catholic diocesan school system because teachers
and administrators accept no excuses for failing to
learn. Among their 196 students, who come from
some of the most economically depressed neighborhoods in the city, the excuses would be plentiful—
and convincing. Acting as a buffer between the
children and social ills that plague low-income communities is a learning-and-values culture established
nearly a century ago. At St. Benedict, teachers and
students interact like family. Parents make themselves
available to help with tutoring and classroom duties.
In classrooms, teachers manage to fold a
no-nonsense instruction style into a close-knit,
welcoming environment. Students learn to see themselves as individuals but also as members of a
group sharing distinct values and a common history.
Wall prints depicting African family and village life,
for instance, celebrate the heritage of most of the
students. Also, Catholic-school markers are everywhere: There are the uniforms—boys in dress shirts
and pants; girls in blue skirts—and crosses on
classroom walls, statues in hallways, stained glass
in windows.
FUL
5
“THESE FAMILIES WANT
THESE SCHOOLS. THEY
WANT THAT GROUNDING
IN MORAL BELIEFS
THAT EVERYONE SAYS
THE KIDS NEED.”
Ambrose Murray Executive Director, Extra Mile Foundation
6
But what is remarkable about St. Benedict is that the young
students, the intended consumers of all the Catholic religiosity,
are overwhelmingly non-Catholic, and that the funding source
behind this extraordinary pairing is secular. Since 1990, the
Extra Mile Education Foundation, a nonprofit organization
supported by corporations like PNC Financial Services and
philanthropies like The Heinz Endowments, has been dedicated
to making a high-quality education available to inner-city
children, regardless of faith.
“On the surface, it’s highly unusual,” says Extra Mile Executive
Director Ambrose Murray, who manages the foundation’s work
at St. Benedict and three other Catholic schools located in
troubled neighborhoods. “Many philanthropies have rules that
discourage supporting sectarian causes. …We have been able
to make the case that, while these are Catholic schools, they
are educating almost all non-Catholic children. Frankly, even
though they aren’t Catholic, these families want these schools.
They want that grounding in moral beliefs that everyone says
the kids need.”
Extra Mile was created to meet the needs of children most
at risk of falling through the cracks in the public school system,
but it also came to the aid of the city’s Catholic Diocese, which
had been unable to stop enrollments in its inner-city parishes
and schools from plummeting. In late 1988, newly installed
Bishop Donald Wuerl was confronted with the financial crisis
and feared he would have to close the three most seriously
under-funded schools. For decades, St. Benedict, Holy Rosary
in Homewood-Brushton and St. Agnes in Oakland had
provided solid education and spiritual nurturing to mostly
African-American students. Searching for a way to keep the
Barry Alfonso is a freelance writer, author and oral historian at the Senator John Heinz Pittsburgh Regional History Center.
His Billboard Guide to Contemporary Christian Music was published by Billboard Books in 2002. This is his first story for h.
(Above) A change of classes at St. Benedict allows for some
quick conversation among sixth-graders, from left, Keviera
Bennett, Branford Phillips, Julius McGrady, Teraya James,
Keira Lee and Treavor Smith. Left, the face of seventh-grader
Hannah Butler hints at the intensity expected of students.
(Opposite page) Tarai Washington is completely engaged in her
fourth-grade classes at St. Benedict. While students in the
schools served through the Extra Mile Foundation program
wear uniforms, abide by Catholic values–centered rules and see
religious symbols in classrooms, few are practicing Catholics.
doors open, Wuerl reached out to the city’s corporations
and foundations. In 1989, Archabbot Douglas Nowicki, then
the diocesan secretary of education, and PNC Foundation
supporter William Boyd Jr. organized a founder’s group that
included then–PNC Financial Services Chairman Thomas H.
O’Brien and Westinghouse CEO John C. Marous, among
others. The Heinz Endowments signed on soon after the board
of directors was formed, offering challenge grants that helped
Extra Mile attract funding from such heavyweights as the
Allegheny and Richard King Mellon Foundations, and corporations such as Alcoa, PPG, USX and Federated Investors.
Extra Mile quickly became a model of organizational
effectiveness, transcending religion, race and class in an effort
to supply a private-school education to as many needy students
as possible. “It was a personal matter with me,” says PNC’s
Boyd, a non-Catholic, as are the majority of the board members.
“I felt that the inner-city children were so vulnerable that it
just didn’t occur to me that affluent people of the community
wouldn’t come up with the money.”
After more than a decade of steady secular support, Extra
Mile now has an enviable endowment of $13 million, a lean
administrative operation and some of the best business minds
in the city guiding programs and investments. With the addition of St. James School in Wilkinsburg, total enrollment in
Extra Mile schools now stands at 850 children, from kindergarten through eighth grade. Students are predominantly
African-American and non-Catholic. About 65 percent qualify
for federally subsidized lunches; 60 percent are in single-parent
homes. Still, the academic scorecard is one most inner-city
schools would envy, with a 95 percent daily attendance level.
When test scores of students in Extra Mile schools are compared
with the national norms for students from similar socioeconomic backgrounds, Extra Milers score consistently better—
as much as 18 points in reading and seven points in math.
St. Benedict’s school chapel doubles as a quiet tutoring center for
first-grader Alicia Rice and volunteer parent, Cecilia Zamarrita Zoucha.
Parents at Extra Mile schools are expected to be involved with their
children’s studies and activities, but many go beyond their own families
to assist others. Below, Holy Rosary School students, from left,
Bijani Davis, Shahntayla Holiday and Curtis Parker mix it up during
lunch period. Uniforms are a non-negotiable policy at the schools.
8
In the 14 years of the foundation’s support, 834 students have
graduated from the Extra Mile schools.
From the beginning, Extra Mile’s mission was clear. “These
kids deserve a shot,” says Murray. “If this is the way their
parents feel it should happen, are we going to let money get in
the way of this? These schools are not only an [education]
resource; they’re havens and community beacons.”
In fact, Extra Mile schools’ success in directing students to
better opportunities—96 percent graduate high school and
88 percent go on to college, trade school or the military—
makes them powerful forces in their communities. The Extra
Mile formula requires a community of families supporting
schools, and depends on parents being personally and
financially invested. While Extra Mile and the diocese split
the operating costs, parents must pay all or a portion of the
$1,430 annual tuition, depending on financial circumstance.
Often, parents are hired at the schools to meet their child’s
tuition cost. In one case, a husband and wife who signed on
as janitors at St. Benedict to help pay their son’s tuition ended
up exceeding the amount needed and donated the extra
earnings to help pay another student’s way.
Coach Horn says making parents responsible for at least
part of the tuition carries significance beyond the money.
“Once kids know that their parents are actually paying for
them to get an education, they take it seriously,” he says. “With
the public schools, you’re just there.” Parents also are required
to attend report card conferences each school year—no
exceptions—and to assist in school fundraisers.
Still, parents continue to choose the more demanding
Extra Mile route for their children. Carol Iddriss, the mother of
two St. Benedict graduates, was seeking an alternative to the
overcrowded local public school where she feared her children
would be anonymous. “It’s like a family there,” she says of
St. Benedict. “I could go there and everyone would know me.
All the teachers knew each of the students, so they couldn’t act
up.” While she is not Catholic, she found the school’s teachings
of Catholic values worthwhile. “Saying prayers made my kids
feel special,” she says. “But no one forced them to go to church.”
At a time when faith-based education grantmaking has
become something of a lightning rod in foundation circles,
and when Bush administration policies have raised its profile,
Extra Mile may serve as an instructive model. The foundation
has been able to deliver a secular good without requiring
students to follow Catholic religious doctrine.
Foundation support of faith-based, social service programs
has grown in recent years. A study last year by the Roundtable
on Religion and Social Welfare Policy found that 62 percent of
the 50 largest independent foundations did not place restrictions
on faith-based giving. “My sense is that foundations that haven’t
previously funded faith-based programs are re-examining their
policies,” says the report’s author, Jason D. Scott. “But a lot of
these foundations are acting under the assumption that the
funding will go to secular rather than religious activities. The
controversy comes when religious activities are actually funded.”
And foundations are learning that, government hyping
aside, the faith-based imprimatur doesn’t necessarily guarantee
better results. A Ford Foundation–funded study by Indiana
University–Purdue University researchers found that of 2,830
Indiana residents who went through job training programs run
by 27 government-funded organizations, there was no difference
between secular and religious programs in job placement rates
and starting wages. Clients of the faith-based groups, though,
worked fewer hours, on average, and were less likely to receive
health insurance. While that study took up only a narrow slice
of the social services pie, it does point out the need for more
scrutiny. As Robert W. Tuttle, a professor at George Washington
University Law School who tracks faith-based initiatives, told
the Washington Post “Those who think faith-based is better are
going to have to start putting some numbers down to prove it.”
Answers to two key questions for public institutions and
even private foundations like the Endowments, with a broad
public mission, may determine whether a faith-based organization is the best route for an education-related grant. Is a
particular religious group the best equipped, most experienced
candidate for delivering on an educational goal? And if so,
can its leaders manage a program without embarking on a
conversion agenda?
In the Extra Mile schools, the answers are carefully
articulated. “We teach them honesty; to be upright; to be aware
of social justice issues,” says St. Benedict’s Principal, Sister
“WE DON’T WATER
DOWN OUR CATHOLIC
FAITH, BUT WE DON’T
PROSELYTIZE.”
Sister Margery Kundar Principal, St. Benedict the Moor School
10
Margery Kundar. “We don’t water down our Catholic faith, but
we don’t proselytize.”
For Joe Dominic, director of the Endowments’ Education
Program, supporting Extra Mile was not a difficult call. “It was
a given that these schools would be highlighting elements of
belief,” he says. “Our goal was to make sure that these kids
could succeed academically. But the spiritual dimension of
these schools was not an initial problem for us. The main
questions were all on performance. Would the schools deliver
on quality? Would they not just be good to a certain point, but
would they continue to become better?”
One of the Endowments’ education strategies is to increase
the range of school choices available to lower-income families.
“Where you live tends to determine where your child goes to
school,” says Dominic. “Lower-income families don’t have the
flexibility to spend the money on schooling, so they literally
have no choice at all. There are plenty of urban schools that
haven’t done well for years, for decades. Now we’re in a new era
where adults should be able to have better educational choices
for their kids.”
The region’s universities also are involved in promoting
quality education across the board, and have extended programming to Extra Mile schools. The University of Pittsburgh
was an early partner in providing tutoring programs like
Success of All in Reading, thanks to the influence of former
Westinghouse CEO Marous. Carnegie Mellon University has
contributed with My True Voice, an innovative speech and
language arts program offered by the school’s drama students.
“NOW WE’RE IN A NEW ERA
WHERE ADULTS SHOULD
BE ABLE TO HAVE BETTER
EDUCATIONAL CHOICES
FOR THEIR KIDS.”
Joe Dominic Director of the Endowments’ Education Program
(Above) Sixth-grade singers from St. James School in Wilkinsburg
uphold the long-standing Extra Mile Foundation tradition of presenting
a Christmas carol program at the annual Duquesne Club luncheon
held for supporters and staff in December. After the concert, students
scatter to supporters’ tables to share in the holiday meal. At left,
thrilled sixth-grader Brittany Johnson sits next to St. Agnes School
Principal Michelle Peduto.
(Opposite page) Kindergartners Savion Agnew, Lana Macklin and
Myles Swain are beginners in the Extra Mile Foundation system.
Testing and evaluations show that 96 percent of students graduate
high school and 88 percent go on to college, job training or
military service.
Duquesne University has supplied music tutors and developed
a summer computer enrichment program, while Slippery Rock
University has assisted with teaching environmental science.
The University of Pittsburgh also has played a crucial role
in evaluating the schools’ performance. With funding support
from the Endowments, Pitt educators have monitored progress
in the classrooms and tried to pinpoint areas for improvement.
“Getting the schools used to ongoing external evaluation was
something new,” says Dominic. “But when the first external
review pointed out that some of the classrooms weren’t as
successful as they needed to be in helping children achieve in
mathematics, the educators worked hard to improve.”
While grades and attendance can be measured, what’s
harder to assess on paper is moral development, especially
given outside pressures facing most Extra Mile students.
Asked to cite the most important formative lesson he took
away from St. Benedict, Coach Horn settled on his developing
a sense of humility. “I was an athlete and one of the brighter
kids, and I was cocky. But I saw how humble some of the
teachers were, and I saw that was one of the things I lacked.
I found out it was all right to be humble. That helped me a lot,
not only to learn, but to be a better person. I’ve learned to sit
back and listen to other people’s views, to compromise.”
Horn wants his children to benefit from St. Benedict’s moral
influence, whether specifically Catholic or not. “I’ve never had
any problem with that,” he says. “As long as my kids get that
foundation, I’m all right with it. I just want the moral issues to
be instilled in my kids. It’s all about that.” h
As Pittsburgh faces its worst financial crisis in decades, a foundations-funded study goes
13
By Jim Davidson
Illustrations by Jud Guitteau
BORDER
CROSSING
past boundaries to flush out the metro killers: pinched politics, fragmented government and ever-widening sprawl.
t was the evening of Dec. 9 in the cavernous ballroom of
the new International Brotherhood of Electrical Workers
hall, built on a brownfield occupied not so long ago by
Jones & Laughlin’s South Side Works. More than 300 people
had turned out on a bitingly cold Tuesday to hear a parade of
sworn witnesses tell Pennsylvania’s secretary of community
and economic development why Pittsburgh should be ruled
a financially distressed community under Act 47, the state’s
more palatable alternative to municipal bankruptcy.
I
Many in the audience had a vested interest in the proceedings,
especially firefighters and other city employees, past and present.
Some were among the 640 who had been laid off in November
as Pittsburgh Mayor Tom Murphy made a game but fruitless
attempt to balance the city’s 2004 budget. This was a tough
crowd. Yet they would clap for David Roderick, lately the co-chair
of the Public Financial Management commission, who never
heard that kind of applause in the 1980s when he was running
U.S. Steel and shutting down the local mills. The crowd would
Jim Davidson, a former journalism professor and editor at Carnegie Mellon University, is a frequent contributor to h.
His last story, in the spring 2003 issue, was an introduction to the Endowments’ Civic Design Initiative.
14
clap even longer after real estate mogul Howard Hanna III held
up a chart illustrating the property tax bills now being paid by
the new owners of three $200,000 homes—$540 per month in
the city’s North Side neighborhood, $332 per month in the old
suburb of Ross Township and a mere $254 per month in the
new suburb of Cranberry, just outside the Allegheny County
line. City Councilmen Sala Udin and Alan Hertzberg, along
with City Controller Tom Flaherty, all drew similar audience
approval for chiming in with tales of fiscal woe.
There was no applause, however, after Mayor Murphy, the
evening’s first speaker, laid out his financial view. Relentlessly
positive, even in the midst of fiscal crisis, he described Pittsburgh
as a “comeback city…burdened by a tax system of 50 years
ago” and now about to go broke as city officials scrambled to
fund a $440 million budget with less than $400 million in
projected revenues. In his rough-and-tumble political career,
Murphy had won enough votes to be elected mayor three times
and a state legislator eight times before that, but on this night
there was silence as he left the podium, save for the sounds of
squirming in the seats. Murphy, it was clear, was getting precisely the treatment that distressed Pennsylvania communities
get from their neighbors. Not hostility, not sympathy, not a
helping hand, not an offer to sit down and talk about working
together—none of that. Murphy just got the cold shoulder.
That’s the way it is in Pennsylvania. The more a community
appears to be sinking, the less likely its neighbors will be to
throw a lifeline. Public officials recognize that drowning
swimmers have a tendency to drag their rescuers down with
them. Just ask politicians in Scranton, Johnstown, Wilkinsburg,
Duquesne, Braddock, North Braddock, Clairton, Rankin,
Aliquippa and the rest of the 19 communities that have been
granted relief under Act 47 since the law took effect in 1987.
But when a city the size of Pittsburgh is floundering in
a sea of red ink and grasping for Act 47, a lot of uncomfortable
questions bubble up, most of them posed away from the microphones of a public hearing. How does a city with as sound a
basic economy as any other its size in the post-industrial
northeast land in such peril? What are the structural problems
leading to such a collapse, and which leaders have the political
engineering skills to repair the damage?
In a region packed with tiny municipal fiefdoms, which
leaders have the political courage to rethink their boundaries?
Which leaders are willing to think regionally and confront the
long-standing antipathies that have led municipalities to spiral
into insolvency: borough bureaucrats against city hall politicos;
urban against rural; city against suburb; big box development
against central city rejuvenation?
These questions are part of a fierce tug-of-war between
suburban Republican state legislators and Democratic Gov.
Ed Rendell, a Murphy ally and Pittsburgh supporter. The
result, so far, has been something of a win for the pro-city side
—a two-track fiscal reform plan that makes it likely the city
will be allowed to raise new tax revenue, including enacting
a commuter tax. The first is Act 47 designation coordinated
by a prominent local law firm and a Philadelphia municipal
management company. The second, is a governor–legislatureapproved fiscal oversight board empowered to develop a
financial restructuring plan for the city within 60 days.
Lines in the Sand. Under Act 47, the state appoints a fiscal
manager who oversees creation of a recovery plan, and there’s
financial assistance in the form of loan guarantees and, in the
case of Johnstown, authorization to levy a payroll tax on nonresidents who work in the city. The system is built on a philosophy of self-help and at the end of a process that typically takes
10 years, the municipality still finds itself facing dire problems
alone. “If there is one municipality in crisis, they’re an orphan,”
says Karen Miller, executive director of the Pennsylvania
Economy League state office. “You can fix mismanagement
under Act 47. You can’t really fix the economic base.”
The morning after the hearing, the newspapers played up a
new report on Pittsburgh’s finances while ignoring the substance
of the presentations by Murphy, Udin, Hertzberg and Flaherty.
The stories had a line or two about their complaints that the
Pennsylvania Legislature had never seen fit to direct a commuter
tax to the city of Pittsburgh, leaving only a 1960s-era occupation
tax of $10 per head on suburbanites. There was no mention of
the speakers’ complaint that the Legislature has exempted
Pittsburgh’s largest corporations from the business privilege tax
that brings the city about $40 million per year in revenues.
TAXING
PROBLEM
Testimony at a December
public hearing on whether
fiscally troubled Pittsburgh
would qualify for state
relief highlighted dramatic
disparities brought on by
fragmented government.
On property taxes alone for
three $200,000 homes, the
differences are startling:
Ross Township
North Side
15
Cranberry Township
$254
$332
$540
While Murphy had endorsed some of the exemptions in
previous terms, he shook his head at the current inequity during
his address at the hearing. “The neighborhood dry cleaner
pays more than large multinational corporations,” he said. And
Flaherty followed up by pointing out that 26 of the city’s 27
largest businesses are exempt from the tax, and so are jewelers,
takeout pizza shops and other industries that successfully lobbied
the Legislature. In addition, Flaherty said, the Legislature had
sent a clear signal to Pittsburgh’s universities and hospitals that
they could stop worrying about making payments in lieu of
taxes to defray the cost of city services they used. Those payments had been running about $6 million per year, but have
since dwindled to $600,000 and are expected to disappear
altogether. “What people don’t seem to realize is this city is
going to be out of cash,” Roderick said at the hearing, explaining that it takes more than $1 million a day to run Pittsburgh.
Just in attempting to honor a $7 million biweekly payroll, the
city could deplete its $21 million reserve fund before spring.
No one in the hall stood up when a panelist asked if any
state legislators were present, although at least four had sent
written comments for the record. By the next day, however,
legislators Jeff Habay and Mike Turzai, both Republicans
from the Pittsburgh suburbs, reacted with a polite yawn by
characterizing Pittsburgh’s crisis as a creature of Murphy’s
16
own making. In the state Senate, Democrat Jack Wagner and
Republican Jane Orie were plunging daggers into the recommendations of the Public Financial Management Committee
run by Republican CEO Roderick and philanthropist Elsie
Hillman, the grand dame of Pennsylvania Republican politics
and close friend of the Bush family.
The fact that Wagner, a former city councilman, ignored a
recovery plan worked out by Gov. Rendell and Murphy and
proposed his own, and that Orie, the designated broker by state
Republican legislative leaders, was bucking a party luminary
like Hillman, only highlights the fissures across city, suburban
and state boundaries.
The turf standoff grew so hostile, in fact, that the Pittsburgh
Post-Gazette served as a dueling ground, with the normally
moderate Hillman charging that Orie “has left us high and dry”
and Orie firing back in an opinion piece that she would continue
to maintain her “…strong opposition to new revenue sources
[for the city],” meaning that she would protect her constituents
from any hike in the occupation tax, and also toe the line set by
her Senate leadership. State Sen. Sean Logan, a Democrat representing suburban Monroeville, also piled on. “The Hillman
committee are the people who have business with the city of
Pittsburgh, and [are] the organizations or businesses exempted
from the business privilege tax, so I’m not real comfortable in
their numbers and their theories and proposals.”
Even freshly elected County Executive Dan Onorato, whose
governing ground runs through city and suburb, came out
against Act 47. “[It] would be a major black eye for this region,”
he told interviewers on a Sunday morning TV news show. But
he was quick to declare that the time had come for merging
city and county government functions. “At the end of the day,
we will have consolidation completed,” he vowed, and promised
that the city and county would “get to the same page” on the
issue after he took office.
As a result of the hearing, state Economic Development
Secretary Dennis Yablonsky declared Pittsburgh distressed
under Act 47 and chose, no doubt with the mayor’s input, the
prominent Pittsburgh law firm of Eckert Seamans Cherin &
Mellott and Public Financial Management of Philadelphia to
develop the city’s recovery plan. While savings through shared
services and consolidation with the county will certainly be
part of the plan, already Onorato has fixed some boundary
lines around his original consolidation philosophy.
In early January, in the first test of city–county cooperation,
Onorato rejected a proposal to save the city $800,000 by taking
over a police fingerprinting program, as requested in the
pared-down $387 million budget that City Council passed
Dec. 31. In a letter to Murphy, Onorato set the terms for any
form of consolidation, merger or cooperation between the city
and county: Whatever the proposal, it had to result in a true
net savings for city and county, not just a cost shifting from
one government to another. So the tug-of-war over the degree
of consolidation resumes and more questions emerge: Will the
state approve governance and tax structure changes? Will those
reforms ripple outward to other municipalities, or will the
Legislature spurn the state’s second-largest city, leaving it to
manage its decline?
The Wider View. While few answers are emerging from the
political bickering, a project led by two private foundations is
offering some solutions in a state-of-the-state view of land use
and governing. Bruce Katz of the Brookings Institution has
provided a rallying point with a new study, funded by The
Heinz Endowments and the Philadelphia-based William Penn
Foundation, “Back to Prosperity: A Competitive Agenda for
Renewing Pennsylvania.” The study confirms what many
academics, analysts and policymakers already believed, that
Pittsburgh is suffocating under Pennsylvania’s crazy quilt of
fractured government: 670 counties, 56 cities, 962 boroughs,
91 first-class townships and 1,457 second-class townships.
Lay on the 501 school districts, and hundreds more police–fire
departments and water–sewer authorities and it’s a wonder that
any layer of government can function. “Basically a government
structure designed for the 18th century, not the 21st,” Katz said.
Copyright © Pittsburgh Post-Gazette, 2004, all rights reserved. Reprinted with permission.
Three-term Pittsburgh Mayor Tom Murphy waits his turn to testify at
a state Act 47 hearing in December to determine whether the city
qualifies for financially distressed status. Murphy is a supporter of the
eventual outcome: a two-track financial rescue plan that includes an
Act 47 management team and a separate oversight board approved
by state legislators and Gov. Ed Rendell.
NATIONAL BEST
DISTRESSED LIST
While a 1934 federal law enables municipalities to be
declared bankrupt, it has been used only a dozen times,
according to government records — and mostly by
small communities. Bridgeport, Conn., and Camden,
Pennsylvania’s Fiscally Challenged
N.J., are usually cited as the only “sizeable” cities to file
Of 20 municipalities that have sought Act 47
in the past 25 years. The largest municipal bankruptcy
protection — and oversight — since the law was
to date is a county — Orange, Calif., in 1994. That case
passed in 1987, only five have recovered.
stemmed from investment fund managers playing fast
Allegheny County
and loose with financial derivatives. Taxpayers lost
Borough of Braddock — June 15, 1988
many millions of dollars in the scandal.
City of Clairton — Jan. 19, 1988
Other U.S. cities have teetered on the brink of
bankruptcy, but managed to right themselves with
a combination of government bailouts and financial
City of Duquesne — June 20, 1991
Borough of East Pittsburgh — Nov. 13, 1992;
Rescinded Dec. 27, 1999
oversight teams. Some of the recovered face new
Borough of Homestead — March 22, 1993
financial woes:
Borough of North Braddock — May 22, 1995;
Buffalo, 2003
Rescinded April 11, 2003
Under control of state financial oversight board since
City of Pittsburgh — Dec. 29, 2003
summer. (This year, city will be forced to borrow to
Borough of Rankin — Jan. 9, 1989
cover $24 million deficit.)
Borough of Wilkinsburg — Jan. 1, 1988;
Cleveland, 1978
Rescinded Nov. 10, 1998
Defaulted on $15 million in bank loans; recovered
Beaver County
through state assistance. (This year, 250 police,
City of Aliquippa — Dec. 22, 1987
70 firefighters laid off to close $61 million deficit.)
Borough of Ambridge — April 10, 1990;
New York City, 1975
Rescinded April 16, 1993
Federal government guaranteed $1.65 billion in loans.
Cambria County
Philadelphia, 1989 – 1990
Borough of Franklin — July 26, 1988
Oversight board with power over city finances
City of Johnstown — Aug. 21, 1992
created in 1991. (This year, city’s deficit projected
Delaware County
to reach $144 million.)
City of Chester — April 6, 1995
Borough of Millbourne — Jan. 7, 1993
Lackawanna County
City of Scranton — Jan. 10, 1992
Luzerne County
Borough of West Hazleton — March 29, 2003
Mercer County
Borough of Greenville — May 8, 2002
City of Farrell — Nov. 12, 1987
Schuylkill County
Borough of Shenandoah — May 20, 1988;
Rescinded April 16, 1993
17
18
DRAWING
THE LINE
This map of Pennsylvania, taken from a Brookings Institution
report on key issues holding the state back from prosperity,
shows the result of 100-plus years of fractured government:
670 counties, 56 cities, 962 boroughs, 91 first-class townships
and 1,457 second-class townships. “…[A] government structure
designed for the 18th century, not the 21st,” says Brookings
Vice President Bruce Katz.
As hands-on director of the study, and with deep experience
in the workings of politics and government bureaucracy, there
was no one better than Katz to publicize the report’s dramatic
findings at forums around the state. On the morning of Dec. 9,
hours before the Act 47 hearings, Katz spoke before about 200
Pittsburgh community leaders at the Omni William Penn and
laid out some dire conclusions about sprawl, growth, the flight
of young people and weak planning. Underlying all of these is
the fragmented system of municipal government. “To put it
bluntly,” the Brookings report says, “Pennsylvania possesses one
of the nation’s most labyrinthine systems of state and local
government—and that has exacerbated unbalanced growth
patterns and undercut economic competitiveness.” In his public
remarks, Katz made the blunt tone of the report seem charitable.
“You lack a coherent strategy for growth and development,” he
said. “It’s all about politics in this state. It’s not about vision.”
Publication of the Brookings Institution report got the city
talking to a degree that few think-tank studies had in the past.
Katz describes the dilemma facing a state operating under the
double whammy of economic stagnation and rapid sprawl as
it spins its population into low-density townships beyond the
periphery of the state’s 14 metropolitan areas. Pennsylvania,
he says, has been cannibalizing its own population, wastefully
building roads and other infrastructure to serve exurbanites,
rather than capitalizing on policies to revitalize cities, build on
brownfields and otherwise preserve the kinds of amenities that
might stanch its losses of skilled young people and jobs. Katz
calls for Pennsylvania to capitalize on its substantial resources
as a national leader in what he calls “eds and meds”—the
universities, colleges and medical institutions that generate
high-paying jobs for an educated workforce.
The seriousness of the problems and the fervor of the debate
have sparked hopes that this time, maybe, finally, this time,
the region can explore new ways of doing business. Businesses
seeking to relocate have become adept at playing state against
state, region against region, municipality against municipality,
as they seek the best deals in land, loans, zoning and tax relief.
A region with a Balkanized government structure will
inevitably find itself competing against itself—and working
at a disadvantage for states and regions with a more coherent
approach. “How you govern will affect how you compete,”
19
Katz said. “If you govern from 2,565 municipalities, you will
not be able to compete.”
The Heinz Endowments maintains an Economic
Opportunity Program focused on regional growth and
improvement of the regional economy to establish jobs. There
is also an environmental program addressing such issues as
land-use planning, smart growth, transportation and water
issues. Though, in both cases, says Endowments President
Maxwell King, “We find that in economic opportunity efforts
and environmental efforts we’re almost paralyzed in trying
to deal with local government. We look at the complex fabric
and really don’t know where to begin to work with it.”
King says the “inefficiencies and ineffectiveness” of local
government are one of the main stumbling blocks in the
region, along with the poor quality of public education and
the dismal state of diversity. He believes it is critical for the
region to find its own way through the labyrinth. “I’ve come
to believe it’s never going to happen on a statewide level. It’s
not going to happen until one region takes the bull by the horns
and finds a solution, and I believe we can be that region.”
To that end, the Endowments and regional foundation
partners such as the Richard King Mellon and Pittsburgh
Foundations, have been steady funders of government
efficiency improvement efforts, think-tank studies and goodgovernment training programs run by respected grantees like
the Pennsylvania Economy League and the universities. The
Endowments alone has spent more than $1 million on these
efforts since the late 1990s. “Some of the funding is based on
a strategy that better-trained elected officials are more likely to
make policy that doesn’t sacrifice the forest for the benefit of
one grove of trees,” says Endowments Economic Opportunity
Program Director Brian Kelley. “But other funding has gone
to developing solid information on how bad the problem of
fragmented government is in southwestern Pennsylvania and
why people need to be concerned.”
What’s Wrong With Pennsylvania? A great deal of the
foundations’ public education effort has been in highlighting
how much more cluttered Pennsylvania’s municipal landscape
is than most other states.
Maryland, in the 1960s, abandoned its patchwork of tiny
municipalities and made its 15 counties the basic units of
governance, each with authority over schools, police, fire and
other basic services. It’s not unusual for a city and a county to
have the same borders—Philadelphia has long been such a
city. Yet there has been new movement as cities like Jacksonville,
Indianapolis, Charlotte and, most recently, Louisville have
united with their counties through annexation or consolidation.
(See “Louisville’s Big Hit,” page 22.)
Change does not come easily in Pennsylvania. For one thing,
every square inch of the state is contained within an existing
city, borough or township, and there has been little shift in
boundaries since the 1800s when most were drawn. This means
that, as Pennsylvania cities have expanded, they have been barred
from incorporating new land. All of it already was legally
incorporated. And as some older Pennsylvania boroughs and
townships went broke and emptied out, they had nowhere to
turn. Under state law, consolidation is so cumbersome that
few municipalities have attempted it. Nor do municipalities
have the option of simply locking the doors and going out of
business, as they do in many states. In Georgia, for instance,
the legislature passed a law designating seven basic municipal
services—fire, police, schools and so forth—and providing for
municipalities to be dissolved if they did not provide four of
the seven services. When 37 small municipal governments subsequently dissolved, their county governments assumed authority.
“The fact is that all of [Pennsylvania’s] local governments
exist because the state says they exist,” says Dennis McManus,
director of the Institute of Politics at the University of
Pittsburgh. While governments at all levels have an interest in
perpetuating themselves, they may not necessarily have an
interest in the health of their neighbors. It takes courage,
McManus says, for elected officials to reach across boundaries
on behalf of people who aren’t in a position to vote for them.
“Where I see promise is in the increasing numbers of success
stories—even locally—where they’ve reached across the
border and lived to tell about it.”
McManus cites such cooperative efforts behind the
83-municipality Three Rivers Wet Weather Demonstration
Project and the Region 13 Counter-Terrorist Task Force.
20
As new initiatives, they can erect a new layer of governance
that breaks down turf boundaries. Down below, however, the
hard bedrock of fragmented municipalities lies undisturbed.
Retail developers know this, and have managed to build new
developments wherever they see fit—a process King derides
as “playing off the fragments instead of bringing the pieces
together.” In this regard, the Katz report faults the state
Municipalities Planning Code for not requiring zoning ordinances to conform to local or regional plans. In effect, nothing
stands in the way of a developer choosing to build on fallow
greenfields distant from the city center rather than on vacant
brownfields. “Older municipalities are subsidizing their own
decline,” Katz notes, pointing out that Pittsburgh now has nearly
as many jobs as it has residents—97 jobs for every 100 city
dwellers. Yet, aside from a paltry $10-a-year occupation tax
dating back to 1966, nonresident workers pay nothing.
Consolidation Conundrum. Local government merging
might appear sensible and rational, but that doesn’t mean it’s
a straightforward process. It can be accomplished only when
one body is on the verge of collapse, or when the two bodies
are on equal economic footing. “What we ran into in the
Mon Valley,” remembers Miller, of the Pennsylvania Economy
League, “was you would just have a bigger municipality in
crisis.” The more serious the distress, in other words, the
harder it is to consolidate with another municipality.
That’s what happened a decade ago after Franklin Borough,
outside Johnstown in Cambria County, filed for Act 47 distressed status. During the reorganization, Franklin residents
raised the possibility of petitioning Johnstown to take back a
borough that long ago had separated itself from the city. As the
decision ground through the machinery of government, however, Johnstown itself filed for Act 47 status, and the question
of consolidation became moot. The courtship ended with
neither municipality willing to take on the other’s problems.
Municipalities gained a new tool last year that may prove
useful in consolidations. As David Rusk, former mayor of
Albuquerque, N.M., and author of the 1993 critically acclaimed
Cities Without Suburbs, explains in a background paper released
with the Brookings study, House Bill 77 permits citizens of
“multiple adjacent municipalities” to initiate a referendum to
elect a joint government study commission. That body would
be empowered to develop a new home rule charter that includes
structural and fiscal consolidation. In the past, the state did
not permit citizens to take the initiative; instead, they had to
work through their “existing government bodies,” which had
entrenched elected officials dedicated to keeping their power.
Today, however, consolidation is being explored by five
small municipalities outside Johnstown—the boroughs of
Daisytown, East Conemaugh and Franklin, and the townships
of Conemaugh and East Taylor. State law, however, requires
that consolidations be approved by a majority in each affected
municipality—a requirement that militates against any
consolidation as complex as this one. One of Katz’s recommendations in the Brookings report is to change the law so
that a consolidation could be approved by a simple majority
of voters in the entire consolidated district.
One government gift in the Act 47 legislation is an
empowerment for distressed municipalities to collect a commuter tax. In 1994, Johnstown began collecting 0.5 percent of
residents’ pay and 0.4 percent of nonresidents’ pay, gradually
scaling them down in recent years to 0.2 percent for residents
and 0.1 percent for nonresidents. The city has been careful to
direct the money—averaging about $1 million per year—
not toward payrolls but toward the purchase of tangible items
such as a dump truck and a $400,000 firetruck.
The state Center for Local Government Services has touted
Johnstown as a poster child for the salutary effects of Act 47.
In 1993, it was more than $3 million in debt and was running
an operating deficit of $463,000. Nine years later, it had a surplus
of $750,000 and had operated in the black for five consecutive
years, and without raising taxes for five years. Johnstown
adopted a vision statement that reads “Be so good at what we
do that we create compelling reasons for surrounding boroughs
and townships to cooperate,” yet it remains under Act 47 and
faces an uncertain future. Its unemployment rate surged above
8 percent, the highest in the state, following a bankruptcy
filing by Republic Technologies in Franklin Borough and the
shutdown of the Bestform Inc. bra factory and distribution
centers in Johnstown and Windber.
Copyright © Pittsburgh Post-Gazette, 2004, all rights reserved. Reprinted with permission.
Freshly elected and full of promise, Allegheny County Chief Executive
Dan Onorato takes his oath of office Jan. 2, as wife, Shelly, and daughter,
Emily, look on. As the region's top public official, Onorato has promised
an action plan on government consolidation, but longtime members of his
own Democratic Party may prove most resistant to change.
21
Short of consolidation, the merging of government functions
and services is an approach with a built-in appeal: Everyone
wants to save money.
By merging their 911 systems—a cumbersome but ultimately
successful process—Pittsburgh and Allegheny County not only
improved service but expect to save $6 million annually. And
County Executive Onorato is pursuing cost savings on several
fronts, starting with a proposed merger of county police and
sheriff’s departments. The city and county have also taken steps
to do more joint purchasing, spurred by a recent study done
by the Allegheny Conference on Community Development.
The final report estimates that a county–city partnership on
purchasing could save $9 million to $15 million per year.
“Joint purchasing has come out of this,” says Kathryn Klaber,
the Conference vice president who has guided the project.
“We’re identifying areas where people can buy things on one
another’s contracts.”
In terms of consolidation, “I saw what we did as a building
block,” says Klaber. “It’s one small example of where there are
good business reasons for doing this, but we can’t extrapolate
from this to the big picture and a vision of what we’re going to
be in three decades. It would be premature.”
But the Endowments’ Kelley warns, “It has to be more than
‘Let’s buy salt together.’ ”
Beyond Obstacles. As Katz stepped from the podium after
presenting the Brookings report, he was succeeded by
Endowments Environment Program Director Caren Glotfelty
who, along with The William Penn Foundation’s Kathryn
Engebretson and Geraldine Wang, had coordinated its
preparation. “The most important thing,” Glotfelty told the
group, “is what happens next.”
One fate yet to be determined is that of the American city
itself. Many regard the city as a place to work and as a center
for sports and cultural events, but beyond these,
there are no connections. Many think of themselves as living somewhere else entirely.
The Brookings report subscribes to an expansive definition of the city, as an “elastic” entity
whose borders stretch to the far edges of the contiguous suburban neighborhoods. Katz marshals evidence to
show that such cities have fared better economically in the
recent past than cities with inelastic borders. So, it’s a hopeful
sign when a person from Butler or Monessen identifies himself
or herself as being from Pittsburgh, or when that person writes
“Pittsburgh PA” next to a ZIP code from the far reaches of the
county. City residents, for their part, tacitly acknowledge that
Pittsburgh is the place they want to live. As Mark Schneider,
president of the Rubinoff Co., a major developer, said in his
testimony at the South Side hearing, “People will pay a premium to live in a great city.”
As a result of the city’s ongoing fiscal crisis, “people are
going to see the clear advantage in cooperation as opposed to
going it alone, and not only in terms of improving efficiency,”
says Institute of Politics Director McManus. If you can also
show that consolidations improve quality of life, he says, they
may, in the end, prove politically feasible.
The Endowments’ Maxwell King takes it a step further,
believing Pittsburgh’s fiscal crisis and the unprecedented new
conversations about consolidation are markers on a path
leading to the re-establishment of pride in place. “I really feel
the time is perfect for the community to think about this and
act on this. There’s a growing awareness of the problems of city
finances, but there’s also a condition right now that forces us to
confront more important questions about place and identity.
Do we want a healthy, vibrant city? And if we do, what should
the city look like and how should it function in order to serve
the greatest good?”
There is a long list of regions that, during similar periods
of financial crisis, have blown opportunities to redefine their
relationship to a central city and emerge stronger, says King.
“We have an opportunity right now, but history tells us it won’t
last long.” h
By Seth Beckerman
I
22
t took four referendums and nearly 50 years of debate, but last January,
the city of Louisville and Jefferson County in Kentucky became one of
the largest regions in the country to dissolve two overlapping, cumbersome governments and go lean and mean with a single mayor and council.
Now, as Louisville takes the measure of its radical act at the one-year point,
other regions that have dismissed such merging as politically impossible
have a point of light—and envy.
Overnight, Louisville, the hub of jobs and economic development for a
23-county region in north central Kentucky and southern Indiana, grew from
60 to 386 square miles with a population that more than doubled to 694,000.
Metro Louisville is now the 16th-largest city in the nation, a giant leap from
67th in 2000.
When voters approved the merger in November 2000, it was an
unprecedented victory of public will over the political establishment: both
the 12-member Board of Alderman (Louisville’s city council) and the
three Fiscal Court Commissioners (the county’s legislative and executive
body) had campaigned against the merger.
But if upgrades in size and rank were the only results from such a maddeningly complex and politically charged ordeal, it is likely the effort would have
failed. Nonpartisan, good-government promoters like the region’s foundation
community, its news media, its largest university and dozens of civic groups
led the effort to inform voters and shape the new government. While the
new structure falls short of a single, region-wide government—83 suburban
municipalities and 21 fire districts were untouched—nongovernmental
groups were impressed by honest calculations of new efficiencies, higher
levels of service and an enhanced quality of life for all residents.
For Pittsburgh and surrounding Allegheny County residents, who saw
the city’s credit rating fall to junk-bond levels, and watched in horror as a
teeth-gnashing $50 million city budget hole this year was filled by raising
downtown parking taxes to 50 percent, there are many lessons in the
Louisville experience. One of the most valuable may be in the power of
Tom Barr
LOUISVILLE’S
An inside-out merger of Kentucky’s largest city with its county has bucked a decadeslong trend toward increasingly fragmented government. The reward: a slot at the front of
the national metro pack as a municipal consolidation leader.
24
nongovernmentals to help clear away decades of politician
recalcitrance over government merging and consolidation.
With the restructuring approved, the Community
Foundation of Louisville, the second-largest philanthropic
organization in the state, led several regional funders and the
national Annie E. Casey Foundation in a plan to help shape
the new government. The foundations group, which dispenses
scores of millions of dollars in grantmaking in the region each
year, funded and coordinated a two-year study, the Greater
Louisville Project, to assist a regional task force and public
officials in framing the most effective new structure possible.
“If we just paint the trucks a different color, what will we have
accomplished with this merger?” Dennis Riggs, president and
CEO of the Community Foundation of Louisville said in
announcing the project and a $500,000 donation from the
foundations group to support its work.
In January, a year after the startup of what’s become known
as the Louisville Metro Government, Mayor Jerry Abramson, in
his State of the City speech, ticked through a list of efficiencies
and cost-savings achieved under the new structure, enough to
close an $18 million budget gap without having to raise taxes.
(See chart, page 27.) “In fact, I would submit to you that in
several areas throughout our new city we have been able to
enhance existing services,” Abramson said in his speech. He
also pointed to dysfunction from fractured government in
several cities in comparison to Louisville’s improved public
image. “We haven’t seen our city’s credit rating dip, like cashstrapped Pittsburgh,” he told the newly formed, 26-member
council. After showing off Louisville’s new financials to Wall
Street, Abramson said, “…both Standard & Poor’s and Fitch
have upgraded our city’s bond ratings…the very best
compared to the largest cities in America.”
It was the Greater Louisville Project, run by a bare-bones
staff of three part-timers, that plunged into the enormous task
of getting solid, best-practices information and research findings into the hands of decision-makers and then to help build
public support for a merged government.
Riggs’ concern about a rote merger is echoed by Joan Riehm,
one of four deputy mayors in the new metro government.
“My favorite mantra is that our city suffers not from sins of
commission, but from sins of omission,” says Riehm, who
served under Abramson for most of his 13 years as city mayor
under the previous system. The Louisville Project presented a
compelling vision of the strengths and weaknesses of the community, she says, which was an important message publicly
delivered at a critical moment.
While an official public coordination process around
government consolidation has yet to take hold in the Pittsburgh
region, the airwaves, newspapers, boardrooms and dinner
tables are buzzing over the issue. Some of the talk is spurred by
the city’s fiscal crisis and the recent loss of two major department stores in the city’s retail core. Some of it is disgust by the
city’s movers and shakers about why the region, with so many
assets, doesn’t end up on more short lists for company expansions and the like. “There is a better sense than ever before that
our archaic government structure in southwestern Pennsylvania
is holding us back,” says Brian Kelley, director of The Heinz
Endowments’ Economic Opportunity Program. “This is true
both for growing jobs and for retaining the skilled young
people who would do well in them. We’re losing out to places
that got over this hump a long time ago, and it’s a shame.”
During the past three years, the Endowments has been a
government restructuring leader in southwestern Pennsylvania,
donating nearly $1 million to develop a research base and
fund programs that educate public officials on streamlining
government, consolidating and sharing services. In fact, the
foundation borrowed from Louisville’s playbook in partnering
with the William Penn Foundation to commission an unflinching study by the Brookings Institution of what fragmented
government and no-holds-barred land development is costing
Pennsylvania. (See “Border Crossing,” page 13.)
But for any community determined to ratchet up public
expectations, there is instruction from Louisville about being
prepared to deliver through a window of limited opportunity.
Seth Beckerman is a Pittsburgh-based writer who specializes in technology and the economy.
He wrote about The Heinz Endowments’ efforts to create a life sciences industry for southwestern Pennsylvania in last winter’s issue.
A TALE OF
John Wee
Randy McCaffery
ry
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25
Population
Land area
LOUISVILLE BEFORE MERGER
REGIONAL CITY OF LOUISVILLE
CITY OF PITTSBURGH
256,231 (2,000 census)
700,000 (2003 estimate)
334,563 (2,000 census)
60 sq. miles
386 sq. miles
55.6 sq. miles
67th
16th
53rd (2000 census)
City rank by size
“The promise that metro government would make a difference
had to be fulfilled,” says Greater Louisville Project Director
Carolyn Gatz. After voter approval of the merger, the Project
went through a six-month planning process and then bolted
out of the gate with the Brookings report, which offered a list
of five essential tasks of government in a competitive cities
environment. (See chart, next page.)
There were two other initiatives that followed: a series of
“best-practices” forums for government, civic and business
leaders; and governance workshops led by faculty from the
Center for Public Service at the University of Virginia. The
best-practices forums —“lessons from the best-run cities in
America”—were tied to the five touchstones from the
Brookings report. Sessions included speakers from Richmond,
San Jose and Dayton, who emphasized rethinking the traditional relationship between government and neighborhoods,
with cross-functional teams and a focus on citizen training
and customer satisfaction.
They also coordinated governance workshops around such
topics as “reinventing government,” timed to run in the six
months before the new metro council and mayor were elected.
Gatz, the Louisville Project director, says that each workshop
had a different invited audience, depending on the topic.
“In a sense, we became the think tank for the community
and its leaders about what [they] wanted to have happen,”
says Gatz. “People in metro government refer to the mayor’s
26
campaign platform and the Brookings study as their bibles. In
a merger of this size, there is considerable evolution…[but] we
can see that the agenda in the Brookings report and the tactical
and strategic practices from the forums are very much alive in
the metro government….”
Community Foundation President Riggs says the studies
show there is still much work to do. “With due respect to the
[metro] council, in this first year they are learning how to be
a council.” Combining police forces, technologies and unions
is an astronomical task, he says. “The mayor is trying to reach
economies, not be twice as big, but twice as good. The city
and county need to be…something more than the 16th-largest
FIVE
STRATEGIES
“Beyond Merger: A Competitive Vision for the Regional City
of Louisville,” a Brookings Institution action plan for the
newly consolidated Louisville government, lists five touchstones for an ambitious new “competitive cities” agenda:
1. FIX THE BASICS. Fundamentals
drive businesses’ and families’
location decisions. The new city
must vastly improve its K–12 school
system, and get more graduates
into post–high school education.
2. BUILD ON ASSETS. Quality-of-life
and human-capital strengths
are essential for the new city’s
success in a knowledge-based
economy. The places where these
are nurtured — downtown and
university campuses — must be
world-class environments.
3. CREATE QUALITY NEIGHBORHOODS.
For every district, the new city
must provide good services and a
range of housing, transportation
and recreational choices.
4. INVEST IN WORKING FAMILIES.
The new city should strive to lift
all working families out of poverty
and onto the path of self-sufficiency
and wealth-building.
5. INFLUENCE METROPOLITAN
GROWTH . The new city must
protect its centrality and social
health by ending decentralization
and coordinating strict land-use,
infrastructure and housing
development policies for the
longterm health of the region.
city in the United States. It’s one thing to go out and see a
dirty lot that needs to be cut and cleaned, but it’s another to
use a hand-held computer, put the information in the system
and have it done immediately.”
Still, some of the responsibility for making Louisville’s
new government more streamlined and focused is falling back
on the foundation community’s shoulders. One of the more
significant cost-saving measures from the merger has been to
take local government out of community grantmaking. The
average $10 million distributed by the city and county to
nonprofit organizations each year was cut to $4 million in the
merged government budget. “I don’t feel like we’re expected to
make up all this money, because we can’t,” says Jim Davis,
executive director of the Louisville-based Gheens Foundation,
the third-largest in the state. “This puts it back in the laps of
the agencies to increase their development efforts.”
But in general, the foundations are pleased with the results
of the merger. For this year, the Louisville Project has moved
into its next phase with an additional $150,000 in foundations
funding. One of its new charges, says Gatz, is to issue a public
report card on a regular basis assessing the performance of the
new government. “Brookings says we had these assets and these
liabilities… How are we doing on the liabilities and building
on the assets?” Some Louisville Project board members, she
says, view the report card as the community holding itself
and its leaders accountable for promises that have been made.
Often, the most compelling metaphors that describe the
virtues of consolidated government emerge from the details
of workaday functions, as in having everyone talking on the
same channel. One immediate public safety–enhancing change
was to patch former city and county police department radios
together so that the new metro police could communicate as
one force. The ultimate best practice, Riehm says, is to have
all emergency services connected, and a long-term plan is in
the works. Consolidating government isn’t always about
pinching pennies, though. Complete conversion will cost at
least $50 million. Still, it’s one of the most popular new ideas
cited in public opinion polls, establishing value added to the
symbolic measure of slapping the new silver-blue metro
government insignia on pre-merger city and county police cars.
Copyright © The Courier-Journal
THE $19.5 MILLION MUNICIPAL WEDDING PRESENT
$19.5
When Louisville merged with Jefferson County, Mayor
Jerry Abramson, above, and the single legislative
body were confronted with an $18 million budget gap.
Here’s how restructuring helped them close the gap
without raising taxes:
To improve citizen access, Louisville created Metrocall—
a round-the-clock government service center that connects
callers to one of 10 operators who enter the concern or
complaint into a computer system that goes directly to the
affected department. Each call is tracked for follow-up.
It’s just the type of function that Mayor Abramson believes
will radically change cynical attitudes about government.
“If you think of our new government as a new business—a
startup company—consider the challenge,” Abramson said in
his State of the City speech. “We’ve stayed busy 24/7, continuing
to provide seamless services to hundreds of thousands of
customers—our residents—while at the same time working
to improve services, investing in infrastructure, rightsizing
and restructuring our organization and revamping our
product line.”
While the business analogies may be laid on a bit thick,
foundation leaders and others involved in the Louisville Project
agree that a business-oriented philosophy layered into the new
metro government structure has the potential to dramatically
improve service delivery and quality. But the effort is just
beginning. Project Director Gatz points to the five-year learning
curve after the merger of the city and county school systems
in 1975. And the timeline around the city–county merger?
“We’ve just done the first lap,” she says. h
Savings
Action
$700,000
Thinning out executive branch employees
by eliminating overlapping functions between
the two governments.
$100,000
Switching from 89 octane to 87 octane gas
in police cars.
$2,000,000
Moving departments from expensive leased
spaces to government-owned properties.
$700,000
Privatizing security guard, corrections
commissary, youth detention, food service
and custodial workers.
$10,000,000
Cutting 660 positions (about 10 percent of
the total workforce).
Laying off 140 employees but placing them
into a talent pool from which future hires
could be made for six months.
Capping cost-of-living and salary increases
for nonunion employees (33 percent of
the workforce).
Recalibrating future union-contract bargaining
to begin with no wage increase in the first year
of any agreement; standardizing the work
week for all employees to 40 hours.
$6,000,000
Scaling back on grantmaking — from an
average of $10 million each year given to
worthy nonprofits — to $4 million.
$19,500,000
Total Savings
here&there
28
Jud Guitteau
HEINZ EDUCATION FUNDING BRINGS $41 MILLION
IN GOVERNMENT SUPPORT TO AREA
A financial analysis of key education and technology initiatives begun
by the Endowments’ Education Program shows that for every $1 million
in grants spent last year on worthy causes, more than $10 million in
state and federal government funding poured
into the programs.
The Endowments boards approved nearly
$4.3 million in education-related grants last year
for such efforts as computer-based tutoring in
math and reading, improving teacher preparation
in reading instruction, increasing Last Dollar
college scholarship aid for African-American
students and creating a wireless network serving
several neighborhood after-school programs in the
Pittsburgh region. Total funding from state and
federal government sources for the foundation’s
programs during the same period was more
than $41 million.
“Our support represents only a small
portion of what is needed to significantly improve
education quality in the region,” said Gerry Balbier,
senior program officer in Education. “This additional funding not only validates the worth of
these programs, it also sustains them for the long
term. It’s significant, too, that these funds are
spent locally and that they are being directed
into the community in the form of goods and
services, not as part of the operating budget of
some bureaucracy.”
Some of the organizations and their
programs that have benefited from the extra support include the School
Performance Network, which is training teachers and principals to make
better use of student performance data; the Manchester Craftsmen’s Guild,
which runs work–learning apprenticeships for middle-school students;
Power4Kids, a major national remedial reading research project; and 3RC,
which runs a successful computer recycling program.
Joshua Franzos
29
SHADES OF GREEN
behalf of his mother,
Vira I. Heinz
Howard Heinz
Endowment Board
Endowment Chairman
Member André Heinz
Teresa Heinz, who
has the perfect envi-
was recognized for
her efforts to make
ronmental backdrop —
the green-certified David L. Lawrence Convention Center in
Pittsburgh the nation’s leader in green building. The building
Pittsburgh — for his speech to 4,000 attendees of the U.S. Green
has qualified for the Building Council’s gold rating, the only
Building Council’s annual convention in November. Heinz, an
convention center in the world to receive the designation. In
environmental consultant based in Europe, accepted the Green
his remarks, Heinz encouraged builders and designers to see
Building Alliance’s “Shades of Green” award, shown at right, on
green design principles as integral to great architecture.
Endowments Program Officer
Named; Two Others Promoted
Ellen Dorsey, a senior fellow consulting on
environmental health initiatives, has been
hired as a program officer in the Environment
Program, while two other veteran staffers
have advanced to senior status.
Dorsey, the former executive director
of the Endowments-funded Rachel Carson
Institute at Chatham College, also was an
associate professor in political science before
beginning the Environment Program
fellowship last year.
In announcing her appointment,
Endowments President Maxwell King said
Dorsey’s academic work at Chatham,
as well as her experience with
international agencies connecting
quality-of-life standards to a
healthy environment, will serve
the foundation well. “Ellen has
a remarkable background with
organizations that have set
worldwide best practices on
environmental health,” says King. “We’re
counting on her to bring a real-world
sensibility to our environmental health work
in southwestern Pennsylvania, especially in
helping us determine, within a limited
budget, which programs are going to deliver
the most long-term benefits.”
Caren Glotfelty, director of the Environment Program, said Dorsey’s academic
background—she has a doctorate in political
science from the University of Pittsburgh
and was awarded a Fulbright scholarship to
South Africa—will be especially valuable in
developing successful strategies to improve
environmental health in the region. “Ellen
has on-the-ground experience as a manager
of an environment-centered nonprofit group,
which is so important to our credibility with
grantees in this area,” Glotfelty said. “But she
also understands the political dynamics in
Pennsylvania, which are key to so
much of our agenda.”
King also announced two
other program officer promotions.
Gerry Balbier of the Education
section and Mary Navarro of
Arts & Culture have been named
senior program officers, in
recognition of, King said, “the extraordinary
leadership and management skills they’ve
brought to bear on several of the
Endowments’ most important initiatives.”
Balbier, who joined the foundation in
1993 after serving on the staff of the late
Sen. John Heinz, leads the Endowments’
Early Literacy Initiative, a collaborative effort
targeting grants to help increase the percentage of elementary school children reading
at or above grade level. He also manages
funding for community and school programs
that employ technology to effectively improve
teaching and learning.
Navarro, who has been on staff since
1990, leads the Civic Design Initiative,
another cross-program task force with the
mission of promoting high design standards
for the built and natural environment. One of
the most successful Civic Design–connected
programs benefiting from Navarro’s management is the Riverlife Task Force, a 38-member
group of regional leaders tasked by the mayor
with developing best-use plans for the city’s
rivers and riverfronts in an effort to turn
its most valuable asset into a world-class
urban waterfront. Navarro also serves on
the advisory committee for Performing Arts
on Tour, which awards grants to presenters
throughout the region to support the
performances of Pennsylvania-based artists.
T H E H E I N Z E N D OW M E N TS
NONPROFIT ORG
Howard Heinz Endowment
US POSTAGE
Vira I. Heinz Endowment
30 Dominion Tower
625 Liberty Avenue
Pittsburgh, PA 15222-3115
PA I D
PIT TSBURGH PA
PERMIT NO 57
412.281.5777
www.heinz.org
Louisville takes a swing.
pag e 2 2
h is printed on recycled paper using soy-based inks.