Thursday, October 7, 2010

Council Issues Subpoena to Mayor

As Pittsburgh City Council continues its debate over how to best use parking assets to shore up the city’s flagging pension fund, it has issued a subpoena to Mayor Luke Ravenstahl to turn over pension fund data by noon Friday. Council President Darlene Harris says the subpoena asks for the data to be sent to the state rather than to her office. Harris says the Pennsylvania Municipal Retirement System requested the data in 2009 and never received it. Council members contacted the fund asking for the data and Secretary James Allen informed them that the numbers were never produced. The subpoena asks for the names of everyone in the city pension fund and demographic data about them including monthly payments, age and sex. Harris says council members are exploring exactly what it would mean to the city if the state took over the city-run fund. The mayor’s office has said that it would be forced to increase payments by more than 25 million dollars a year under a state take over. Council hopes the state will use the data to come up with an exact number of how much it will be required to pay into the system on an annual basis if there is a takeover. Currently the city’s pension program is less than 30% funded and the state has said if that number does not hit 50% by the end of the year it will take control of the fund.
Mayor Ravenstahl has said that if there is a state takeover it would mean annual city payments to the pension fund would increase by as much as $27 million, resulting in budget cuts and/or tax hikes.
Councilman Bill Peduto says neither Council nor the Pennsylvania Municipal Retirement System knows where the mayor got the $27 million figure. Peduto says they need the subpoenaed information so as to determine an accurate figure. Peduto added that it wouldn't be a state takeover but rather the city's pension fund would be managed by the Retirement System which already manages 900 other pension funds.

Council has given itself till the end of the month to come up with alternatives to the mayor’s plan to lease the parking assets for the next 50 years to J.P. Morgan Asset Management and Connecticut-based LAZ Parking, for more than $450 million. Harris says the tight time line forced council to go the route of a subpoena rather than relying on a letter to the mayor’s office. However, Harris says she also sent a more friendly request directly to the mayor’s office.

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