At an issues forum on Friday sponsored by the Blair County Chamber of Commerce and the Pennsylvania Economy League, David Black of Harrisburg closed his presentation with a computer-generated picture of a Welcome to Pennsylvania sign, with the slogan "We've always done it this way."
The joke refers to matters like the overabundance of municipalities here and the fact that 41 percent of Pennsylvanians live in ones that are in some way financially distressed.
Altoonans are among the 5 percent living in a municipality that is part of the state's Act 47 distressed municipalities program, which the city entered this year.
Speaking as part of the Coalition for Sustainable Communities before city and development officials who share his point of view, Black - CEO of the Harrisburg Regional Chamber - spoke of the challenge of trying to persuade state lawmakers to make changes municipalities need to stay out of the red.
The coalition overcame one of those challenges in July when lawmakers and the governor fixed a hole in Act 47 created by the state Supreme Court in a Scranton case in late 2011.
The court had interpreted the phrase "arbitration settlement" in a way that led it to rule that arbitration awards for public safety workers wouldn't need to conform to Act 47 recovery plans.
Public safety workers' contract talks are subject to binding arbitration because they aren't allowed to strike.
Those awards had become a problem over the years for municipalities because unions had learned to "game the system," according to Black. One of the ways was to ask for twice as much as they wanted, knowing that the neutral arbitrator of a three-arbitrator panel usually split the difference.
Workers also benefited by neutral arbitrators' knowing that statewide unions - the Fraternal Order of Police or the Pennsylvania Professional Fire Fighters Association - would remember and shun them if they ruled in favor of the municipalities, he said.
But the July amendment restored the status quo: That arbitration rulings must stay within the guidelines of recovery plans.
The amendment, however, didn't undo the issue for the City of Scranton, whose workers initiated the Supreme Court case. That city still needed to pay a negotiated $32 million in back pay to its firefighters, based on arbitration awards the city ignored, because they violated the Scranton Act 47 recovery plan.
The coalition wants further reforms, such as public transparency for fact-finding in arbitration cases, Black said.
The unions are opposed.
Middle ground is hard to find, according to Black, who participated in a recent General Assembly hearing.
"You would have thought there were two different pieces of paper," he said about the clashing perspectives on the proposals. "It was enlightening."
Bryson Peterman, president of the city's firefighters union, said, "We have never used arbitration against the system as the bigger stick to get what we want. Municipalities try to turn it into that."
"People, mostly politicians, are saying that firefighters and police somehow force their hand," Peterman said. "[But] there's always someone on the other side of the table who agrees to these awards."
Ultimately, Black wants to reduce the "us against them" mentality, and hopes that unionists and municipalities can work together for the good of both, he said.
Pension reform may be the biggest issue for the coalition, even if it hasn't been foremost with Altoona - yet.
It could get bigger here, according to John Filan, a member of the city's Act 47 consulting team, who spoke at a recent public meeting.
By 2015, the 0.2 percent earned income pension surtax - paid by Altoona residents and non-residents alike - will be insufficient to keep pace with the city's pension funds for police, fire and non-uniformed workers, Filan said.
That will create a pension fund deficit that the already-stressed general fund would need to cover, further aggravating the city's general deficit, said Filan, in the course of outlining the problems the city faces if it doesn't adopt a recovery plan.
There's an out, however, that Filan didn't mention:
Based on state law, the city can raise that pension surtax but cannot raise the capped general purpose earned income tax and property tax, without the help of Act 47.
The main hope of the pension reformers at the state level is a change that would allow municipalities to move from defined-benefit to defined-contribution plans, according to Black.
Allentown is seeking to solve a pension problem by selling its water system in hopes of funding benefits through investment proceeds on the windfall, according to Gerald Cross of the Economy League.
But that is no cure-all, as interest projections may be over-optimistic, Cross said.
Cities tend to fritter away such asset-sale windfalls anyway, said a Johnstown-area representative at the meeting.
The pension problem will grow larger in the public consciousness soon when accounting rules force municipalities to put unfunded pension liabilities on their balance sheets, rather than in footnotes, one attendee said.
Advocates for municipalities can help by doing a better job of "tying" lawmakers to municipal issues, like advocates for school districts have done for school district issues, Cross said.
Too often, lawmakers pay little attention to municipal needs, Cross said.
"Make candidates feel sensitive," when you write them a check, he told business leaders at the meeting.
Messages seeking comment from the city police were not returned.
Mirror Staff Writer William Kibler is at 949-7038.
