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Drop in consumer spending means smaller RAD budget

Tuesday, October 02, 2001

By Tom Barnes, Post-Gazette Staff Writer

Reflecting fears about the economic slowdown, the Allegheny Regional Asset District last night unveiled a conservative preliminary budget for 2002 of $74.3 million.

For only the second time in its seven-year history, the asset district is proposing to spend less than it did in the preceding year. The 2001 budget is $75.6 million.

Because nearly all its funds come from a 1 percent county sales tax, a decline in consumer spending makes less money available for the board to give away.

The asset district board will be under pressure from the 88 cultural, recreational, arts, sports and library facilities it funds to increase the budget before it votes to finalize it Nov. 29. The board will hear from those groups during a public session on the budget at 5:30 p.m. Oct. 22.

The tight budget may spell the demise of the county's four bookmobiles, which serve residents in remote areas.

Allegheny County wanted to transfer responsibility for the bookmobiles to the asset district, but the district's preliminary budget did not honor a request for $825,000 to fund them.

In August, asset board member Gerald Voros assailed the plan, accusing county Chief Executive Jim Roddey of trying to dump costs on the asset district to balance the county budget.

Voros, an appointee of Mayor Tom Murphy, said the asset district already came to Roddey's aid last year by taking over annual funding of $1 million for an electronic information network that connects all libraries in the county.

Voros said he feared people would unfairly blame the asset district for shutting down the bookmobiles.

"The county had asked us to seek the money for bookmobiles because its budget is extremely tight," said Marilyn Jenkins, director of the Allegheny County Library Association, which applied for the funds. "It doesn't have the wherewithal to fund them and was hoping RAD could do it."

Jenkins said she isn't certain yet what will happen with the bookmobiles. The service could end Jan. 1.

The county's request for bookmobile funding "came as a little bit of a surprise, especially in a tight year," asset district board member Wesley Blaha said. He said he hoped local foundations would provide funding for the bookmobiles.

"The county has problems, but so do we," Blaha said. "Let's not assume that RAD can pick up [the expense], because we're in a tight spot."

Asset district Chairman Dan Griffin, a Roddey supporter, said county officials should be praised for funding the bookmobiles and the electronic network for many years. The county's financial support for the two activities totaled nearly $14 million since 1995, he said.

Griffin also noted that the asset district has helped city officials with their budget problems by taking over funding for attractions like the zoo, Phipps Conservatory and National Aviary.

A slumping economy is a concern for the asset district, he said. Even when the economy is robust, there's not enough money to fund the nearly $100 million in requests that the asset district receives.

Concerns about consumer spending going stagnant or declining in coming months led the board to forecast tax revenue of $72.5 million next year, about the same as this year.

The remainder of the district's projected income is $600,000 in interest earnings on investments of its $20 million reserve fund, plus $1.2 million from the fund itself.

The reserve fund could take a bigger hit "in the event of a deeper than expected economic downturn or other emergencies," the board said.

Forecasting revenues from the sales tax at a time when people are cautious about spending is a "particular challenge," the board said in a statement.

Sales tax revenues had already begun to slow down before the Sept. 11 terrorist attacks, which are expected to make consumers more skittish.

"We wish we had more time to gauge the impact of recent events on the local economy," the board said. "We can keep our eye on trends over the next two months while the budget is open for public comment."

The district provides both operating and capital funding to organizations. Operating funds for 2002 are slightly increased over the current year but capital expenditures were cut significantly.

For 2002, as in the past, the biggest spending is proposed for libraries and parks: $15.6 million for Carnegie Library, $13.5 million for nine large county parks, $7 million for suburban libraries in the county library association, $4.2 million for four large city parks, $2.5 million for Carnegie Museums, and $1.9 million for Phipps.

The parks money would be earmarked for creation of trails and community gardens, things the public can use for free.

Other parks projects include renovation of playgrounds, picnic shelters and restrooms. Soldiers & Sailors Memorial Hall would get $1 million to continue repairing its facility in Oakland.

In addition, Phipps and the Carnegie Library would be permitted to use some of their RAD operational funds to pay off long-term bond issues for capital improvements.

Phipps wants to build a $4.7 million, 200-space parking garage behind its present facility in Oakland -- part of a $32 million expansion to the flower garden. Carnegie Library wants to use $1 million a year for 25 years to float a $15 million bond issue to pay for improvements to five branch libraries.

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