HARRISBURG, Pa. — It wasn't the discovery of audiotaped meetings related to Scranton's alleged pension benefit double-dealing that alarmed Pennsylvania Auditor General Eugene DePasquale.
It was how city personnel fumbled along the way.
"Recording public meetings isn't unusual. But we were told there were no minutes, then there were tapes and they were mislabeled," DePasquale said in an interview. "We could not make heads or tails of it. It was weird."
That people who handle such simple matters also handle pension benefits worries him more.
DePasquale revealed on Tuesday that the discovery of the tapes - which adds a Watergate-type aura to the continuing saga - would force a delay in his long-awaited findings into the eligibility of non-uniform Scranton employees who received double pensions in 2002 and in 2007. He launched the review in February.
According to DePasquale, when auditors sought all City Council and pension board meeting minutes, they were told minutes for some of the midsummer 2003 council meetings were not available. Last week, he said, as auditors were completing field work, they found that city personnel had discovered audio tapes of those meetings.
An initial review found that at least one tape was mislabeled and contained a recording of a February 2003 meeting where a resident asked for specific information regarding the retirement incentive offered by former Mayor Chris Doherty.
"We're hoping to finish the report within the next few weeks," said DePasquale.
A message seeking comment was left with Scranton business administrator David Bulzoni. Scranton's pension board for nonuniformed employees just concluded a hearing on the matter.
While Scranton has been the poster child for municipal pension chaos in Pennsylvania - DePasquale has said the city could go bankrupt within two years if it doesn't curb its pension liability - his attention on the unfunded liability of municipalities spans the state. He has labeled 562 municipal pension plans distressed, with a combined liability of nearly $8 billion.
At the behest of Gov. Tom Wolf, DePasquale is chairing a task force on local pension liability with that report also due out within weeks.
"We've got some very good information," said DePasquale, a Pittsburgh native and former state representative who succeeded fellow Democrat Jack Wagner as auditor general in 2013.
One recommendation that could come out is tougher regulation. "The short answer is yes. Probably not for everyone, but for the most distressed," he said.
Gary Lewis, a private-sector financial consultant and former Scranton mayoral candidate, finds DePasquale's efforts encouraging. "Instead of just focusing on a number, he's digging deeper," he said.
Lewis suggested that the Governmental Accounting Standards Board lean harder on states and municipalities to disclose more long-term budgeting, using both carrot and stick and withholding grant money if necessary.
"We're not quite there yet," DePasquale said of the idea. "But we shouldn't dismiss it."
Pennsylvania is also considering several bills to address the state's $53 billion unfunded pension liability, with downgrades from all three major bond rating agencies serving as a backdrop.
"There's very little doubt that this is a big priority," said DePasquale. "There's broad agreement that this is a concern."
The House of Representatives has scheduled the second of two public hearings on Senate Bill 1 for 9 a.m. Thursday at the Irvis Building in the Capitol complex.
The Senate-approved bill would put new employees into a 401(k)-style defined contribution plan while letting current employees stay in the traditional defined-benefit public pension plan and decide whether to contribute more to maintain current benefit levels or take a benefit reduction instead.
"Trying to tackle all the issues in the same year is difficult due to the number of municipalities and school districts in one state," said David Fiorenza, a Villanova School of Business professor and former chief financial officer of Radnor Township, Pa. "This is the one disadvantage to having more than 2560 municipalities and over 700 school districts in Pennsylvania."
Speaking with reporters after Tuesday's meeting, State Government Committee Chairman Daryl Metcalfe, R-Cranberry Township, wouldn't rule out a final bill that merges components of several bills now competition.
Rep. Warren Kampf, R- Paoli, has filed a House bill similar to SB1, while Rep. John McGinnis, R-Logan Township, wants to reduce the amortization periods from 30 years to 20 for the two major state pension funds, the State Employees' Retirement System and the Public School Employees' Retirement System.
"We'll be deciding what should be changed and what shouldn't be," said Metcalfe.
