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An "early intervention plan" designed to keep the city from Act 47 "distressed" status is now available for viewing by the general public.

As a public service, Tube City Online, publisher of Tube City Almanac, is hosting the so-called "Delta report" for free download. A PDF viewer such as Adobe Reader is required to view the documents.

At the January and February council meetings, city officials said many of the recommendations in the report are being addressed, including increased enforcement and collection of fees.

The report, compiled last year by Delta Development Group Inc., became controversial in October when a copy was supplied to The Daily News by City Controller Ray Malinchak over the objections of then-Mayor Jim Brewster, who said the document was a draft and should not have been released.

. . .

Malinchak, who is seeking the Democratic nomination for mayor in the May primary, says the portions of the document he provided to Daily News reporter Pat Cloonan had been complete since August and September. He argued at January's council meeting that those sections of the report should not have been withheld from public scrutiny.

The report was released to all members of city council at a public hearing in December. Malinchak's office provided digital copies of the reports to Tube City Online last week.

No editing has been performed by Tube City Online, although the document has been broken into smaller sections so that users may download it more quickly. The report is divided into seven sections, plus three appendices:

• Financial Condition Assessment (PDF, 2.9 MB)


• Financial Trend Analysis (PDF, 1.9 MB)


• Emergency Plan for Current Fiscal Year (PDF, 1.6 MB) (Appendix, 2.3 MB)


• Management Audit/Review (PDF, 2.7 MB) (Appendix)


• Police-Fire Report (PDF, 1.4 MB) (Appendix, 9.7 MB)


• Multiyear Plan Adoption (PDF, 1.3 MB)


• Five-Year Plan Implementation (PDF, 1.0 MB)

. . .

The report concludes that "there is no imminent financial crisis and therefore no immediate need to amend or modify the budget." But it does note that the city faces ongoing shortfalls in revenue, mainly due to its high poverty rate (about 23 percent) and a population decline in every decade since World War II.

Yet several recommendations made by the consultants are likely to be unpopular among residents. The report suggests that McKeesport has kept real estate taxes artificially low compared to neighboring communities, and that those tax rates should be raised.

At one point, the consultants caution Mayor Regis McLaughlin and city council that they should "not avoid tax increases when necessary."

"McKeesport residents, at $888.83 annually, pay far less in total taxes than any other comparable community in Allegheny County," the report notes. "With the exception of the City of Duquesne, McKeesport residents have a far lower actual tax burden than residents in adjacent communities.

Residents of North Versailles Township, it notes, pay "nearly three times" the amount of real estate taxes paid by city residents, even though the per-capita income in North Versailles is only slightly higher than McKeesport's.

. . .

Although the city has been able to balance its budget through the use of one-time moves, such as asset sales or bond refinancing, the consultants say such moves are not viable for the long-term. "Overall, expenses have outpaced revenue at about 1 percent each year, leaving a gap of approximately $1 million annually," the report notes.

The consultants, paid for with the help of a grant from the state Department of Community and Economic Development, recommend increasing user fees and "aggressive activities" to collect delinquent taxes and enforce building codes and other ordinances.

Fees and fines collected for parking, amusement devices and other services are lower than those of comparable communities, the report says, and in some cases, the city is spending more to administer the permits than it collects in fees.

Overall, fees and fines make up only 2 percent of the city's overall revenue --- the lowest percentage among 14 other communities of comparable size to McKeesport, the report says. "It is absolutely critical that the city take immediate steps" to shore up those collections.

. . .

The city's management team, "although strong and experienced," is weak in terms of resources, the consultants say. Their recommendations include:

• Appointing a "Chief Financial Officer": "Considering that the city is a $20 million operation, the absence of a competent, highly trained CFO is a glaring omission."


• Hiring or contracting a personnel or human-resources director: "There have been complaints, grievances and lawsuits filed against the city related to employment practices ... an investment in this area would produce significant savings in the long run."

Although the consultants generally praise the city's police, fire and other departments for doing a good job with a tight budget, they had harsh criticism for the city's building inspection and code enforcement efforts.

. . .

"The lack of code enforcement was identified in every interview and at every discussion with city staff and officials," the consultants write. At six public meetings, "residents voiced their opinions loudly and clearly about issues related to the cleanup of the neighborhoods and the business district."

"Although the Code Enforcement Department is the most critical function in the entire operation for preserving and protecting the neighborhoods from further decline, it has received virtually no attention or resources, based on a review of the budget over the past seven years," the report says.

The report recommends appointment of a full-time Director of Code Enforcement and re-assigning employees to code enforcement, and makes other suggestions, including possible outsourcing of some inspections, or utilizing school crossing guards to perform inspections during off-hours.

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