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Mark Rauterkus

We went to Cosco in the Waterfront for the first and second time this week. The store is new. It had its first ever open day for the public on Saturday. We are not members, so this oppotrunity to go and buy without paying the $50 fee was attractive.

Cosco is a big bulk buyer. Economy of scale.

My wife put it well. You know, there is a cost savings -- but -- we don't need this many. So, the savings is there over the course of the next few years (like when we purchased plastic forks) -- as we won't need forks for the next decade. But, we'll pay more for the forks today than we would at Giant Eagle -- and we'll have to store the forks while not in use for the years to come.

The economy of scale in terms of city government and county government isn't much at all.

However, I bet it is much better if the contrast is between a small boro and the county. However, a small boro isn't in the market of making stockpiles of supplies just to save a few nickles.

Mark Rauterkus

Question:

What is the difference in the purchase of a police car if purchased by Green Tree, Pittsburgh and Allegheny County? I'd love to see some research.

I'd bet that the margins are next to nothing in terms of real $.

Paul

Problem is that the things governments spend most of their money on, like labor for public services, don't really benefit from economies of scale and in places like Allegheny County where union boot licking is the norm; the increases in scale are more likely to result in higher, not lower, costs.

For example, PPS teachers are the highest paid in the country when adjust for c.o.l. and in the top ten unadjusted. That single group of teachers pay scale is significantly higher than those of surrounding districts and it is also the single largest bargaining unit in the county. Should the county move to a unified county school system it would almost be a certainty that the PPS contract would be the basis for the new system and costs for all county teachers would rise and not realistic at all to expect current city teachers' pay to come down to meet the rest of the county teachers.

The same would be true of labor costs for police, road, water and sewer maintenance, trash collection and probably the biggest cost increase would be for fire service where most of the 900,000 residents of the county outside of the city are currently served by volunteers. Any theoretical cost savings from buying paper towels and toilet paper for a regional government would negated by the need to provide fire and EMS service county wide.

And don't think for a minute the proponents of regionalism aren't fully aware of it and biting their collective tongues to keep from screaming out about all the new union, public service jobs they have to hand out in some future regional government.

Jonathan Potts

I'd question that statistic about Pittsburgh teachers. When I was covering education, back in the late 90s/early 2000s, it was true that the average salary for teachers in all of Pennsylvania was the highest in the nation when the cost of living was factored in. Salaries for the Pittsburgh Public Schools were probably in the top 10, or close to it, for Allegheny County, but they were not the highest. The jewel in the crown of the city schools' teachers contract was that it only took 10 years to get to the top of the scale, as opposed to about 15 to 20 years for many other districts.

Paul

Here's a link to an article in the T-R (a similar one can be found at the PG) from 2005 stating that PPS elementary teachers were 7th highest paid in the nation out of the top 50 cities and number 1 over all in adjusted dollars...

http://www.pittsburghlive.com/x/pittsburghtrib/s_364050.html

Keep in mind this is BEFORE several hundred lay offs over the last two years and union stupidity being what it is the larger number of least experienced, lowest paid (read least seniority) were the first to go while the smaller number of highest paid teachers were retained.

PPS cost per student instruction has soared the last two years as the number of students enrolled has plummeted beyond even the worst projections (declining nearly 6% last year alone) while teachers at the bottom of the pay scale have been laid off by the hundreds.

The average salary of a PPS teacher at the end of 2005 (according the PA department of education) was $63,148 (220% more than the median Allegheny County household income of $28,588) has increased dramatically with the large number of teachers cut from the bottom of the earning scale.

Jonathan Potts

You didn't say they were the top among urban districts--you said the top in the nation, which led me to believe that you were including all suburban school districts as well.

The article to which you linked noted that Gateway, Upper St. Clair and North Allegheny have higher average salaries than Pittsburgh. So if you are worried that salaries would rise to the level of the highest-paying district if we went to county-wide districts (which will never happen) then your gripe is with those higher-paying suburban districts.

I don't know how much money, if any, would be saved by consolidation of services in the aggregate. But the problem lies not so much in the overall cost of those services but the fact that we have communities who simply can no longer provide them on their own.

Jonathan Potts

Some communities, of course, need to reduce the level of services they offer. (Why did Pittsburgh need 32 swimming pools?) Plenty of suburban communities have police departments that are larger than necessary, for example.

Paul Galvanek

"You didn't say they were the top among urban districts--you said the top in the nation, which led me to believe that you were including all suburban school districts as well."

Yes but the T-R article wasn't intended to be the definitive statement on salaries, just a marker of sorts to give an idea where Pittsburgh ranks. One thing that needs to be taken into account is what numbers are being used and who's doing the ranking. The report cited by the TR in 2005 was presented by National Center for Policy Analysis which chose to use salary figures provided by the teacher's unions ... you might have noticed that they say PPS teacher salary average was around $53,000 for elementary and $52,000 secondary teacher but I also included the average teacher salary for the same year from the Pennsylvania Department of Education which puts the number at $63,000. Quite a difference.

The lower number is the result of including only teachers currently engaged in classroom instruction, not those on sabbaticals, other types of leaves or assigned to other duties within the district but not teaching in the classroom. The state's numbers include all teacher salaries paid in that year, regardless what duties they had. The sweet-heart contract that PPS union has results in a much higher percentage of its highest paid "teachers" not engaged in teaching than surrounding districts.
Comparing district to district is not all that easy if you choose to use the union's numbers.

The real issue though is the relative size of the districts. With over 3,900 teachers, PPS teachers and their union dwarf the other districts (NA 616, USC 285, Gateway 290) and in any hypothetical unification it is the PPS contract that would drive salaries, not the others and certainly not the other smaller districts who's teachers earn less.

The same would be true with police, fire and other public services; those contracts and the size of those bargaining units would dictate the contract negotiations of any imagined county wide systems.

Everyone should take time to look at the City of Pittsburgh's budget, see how much impact the cost for public services, health and retirement benefits has had on driving the city to bankruptcy and demand that anyone who talks about regionalization on a large scale explain how having the unions that represent city teachers, police, firefighters and public works employees representing all the county's employees is going to save money...

Because it won't. In the grand regional government that some people envision for Allegheny County it would only be a matter of time before the county is facing bankruptcy for the same reasons the city is - politicians trading sweet-heart contracts to public service unions in exchange for votes.

Paul Galvanek

"Why did Pittsburgh need 32 swimming pools?"

They didn't, the politicians needed jobs to hand out to friends, family and supporters of their campaigns.

Just ask Tom Murphy and the union representing the city's fire fighters how it works and know that Dan Onorato, James Burn and the entire Costa family is drooling at the prospect of someday being able to control all the hiring for Allegheny County's teachers, police, fire, street cleaning and other public works departments.

Mark Rauterkus

Thanks for the wisdom, Paul. Well put.

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