Wednesday, March 31, 2010

Pension Liability Climbs

Pittsburgh Mayor Luke Ravenstahl has called for closed-door meetings with union leaders and City Council members next Tuesday to address the city's sagging pension fund. Today, at the end of the 2010 first quarter, the city's pension liability topped $989 million. However, there is less than 30% of that total actually in the fund.
Both Council President Darlene Harris and Councilman Patrick Dowd say they’re unsure of the aim of Mayor Ravenstahl’s private meetings. Dowd says he’d prefer an open session, convening the public with union leaders, City Council, and the mayor.

Harris says she was told to bring information and a plan for correcting the pension fund for retired city workers.

The mayor has proposed leasing the city’s parking garages for 50 years for $200 million, but Harris says she’s concerned parking prices would skyrocket. She has proposed floating a bond and use that money to get up to the state-required 50% minimum funding of the pension program, and then use revenues from the city owned garages to pay off the bonds.

The pension plan must be funded at least 50% by year’s end to avoid a state takeover. That would likely cause the annual contribution to increase from the current $54 million from the operating budget.

Harris says Council will receive a study on 3 competing plans in mid-June.

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