Allegheny County Controller Chelsa Wagner is threatening to withhold nearly $682,000 from VisitPittsburgh until the nonprofit tourism promotion agency explains why it allocated public funds to Mayor Peduto’s “Undercover Boss” appearance last month.
As part of the CBS reality show, Peduto promised $155,000 to four city employees for college tuition, mortgage payments and startup costs for a new church. Peduto said no public funds would be used, but according to Wagner, VisitPittsburgh was asked to contribute $25,000 toward the gifts.
“The show showed Pittsburgh in a good light,” Wagner said. “However, the representation to all of the Pittsburghers… was that there would be no public money used and what we’re seeing here is that is not true.”
According to VisitPittsburgh President and CEO Craig Davis, the allocation was a promotional strategy.
“VisitPittsburgh is a sales and marketing organization and our job is to promote the city outside,” he said. “And, the opportunity to spend $25,000 to get $650,000 worth of national exposure on primetime television was just something that was an easy business decision for us to make.”
CBS charges more than $65,000 for a 30-second promotion and, according to Davis, Pittsburgh received about 5 minutes of commercial exposure valued at $650,000.
VisitPittsburgh gets more than 80 percent of its $11 million operating budget from the county’s seven percent hotel tax, and about 30 percent of the budget goes towards promotions outside the city.
Davis also said the allocation followed the same course as every other business opportunity and came down to a vote by the board of directors.
“The transparency issue is, for us, not an issue because this is during the normal course of business for us. We get opportunities all the time to promote the city and we buy a lot of advertising around the country,” he said. “This, for us, was a decision that was made no differently than any other.”
While most of the agency's budget comes from the hotel tax a portion comes from other non-tax supported streams.
Still, Wagner said the public should have been involved in the decision.
“This has been a process that has not been available to the public, which might be more defensible if it is, in fact, private donors, but this is public money,” she said. “So, this deserves transparency at the very least.”
Wagner said she will withhold VisitPittsburgh’s December funds until she is given more information on the decision-making process. Davis said he plans on speaking with Wagner today and said the issue should be resolved quickly thereafter.
City of Pittsburgh Communications Manager Timothy McNulty responded to Wagner's decision by saying her action "undermines what integrity is left in her office."
"Unfortunately, the Controller also betrays a basic lack of understanding of her office’s powers. While Controller Wagner announced today that she will 'withhold' county hotel room tax revenue from the promotion agency, state statute requires that the county hotel room tax revenues go to VisitPittsburgh, and it gives the Controller no authority to withhold these county tax revenues from the agency," McNulty said.
