Pittsburgh City Council has reached a deal that it feels will keep the City’s pension program from being taken over by the state while at the same time not issuing any new debt or leasing any city assets. The plan calls for an increase in parking rates at garages and meters and then promises that increased revenue over the next 30 years to the pension fund. City Controller Michael Lamb says he has spoken to the Executive Director of the Pennsylvania Public Employee Retirement Commission and has received approval for the plan. PERC is the body required by law to set the value of all municipal pension funds. If the PERC sets a value of the Pittsburgh Pension Plan below the 50% funded level the state will force a takeover of the pension fund, if it exceeds the 50% mark, Pittsburgh will be allowed to continue to manage its own fund.
Lamb estimates the higher rates would generate about $880 million dollars over the next 30 years and he says it should have a present-day value of more than $220 million. That is roughly the amount needed by the end of the year to bring the pension fund up to the 50% level. Controller Michael Lamb is to meet with a representative of the public employee retirement commission later today to come up with an exact value that can be added into the pension fund.
The plan needs the support of Mayor Luke Ravenstahl and the Pittsburgh Parking Authority. Mayor Ravenstahl has not yet taken a stance on the bill. Mayoral spokesperson Joanna Doven says, "The Mayor today will be meeting with legal and financial experts with the City and the Parking Authority to discuss the viability of the plan. After all facts are discovered, the Mayor will comment further."
The Mayor has appointed all of the members of the Parking Authority Board. Councilwoman Natalia Rudiak is a member of the Authority Board and says the package of bills includes a payment plan that gives the Authority enough money to do its job.
Council members stress that the rate increase that will be phased in over the next several years are much lower than the rate increases that would have been seen if the city would have leased the parking assets as had been proposed by Mayor Ravenstahl.
Councilman Bill Peduto says this is a much better deal than issuing a bond or leasing assets. “There is nobody who is making money off of it, there is no interest to be paid, this is the least expensive plan for the people of Pittsburgh,” says Peduto. The councilman estimates that the city would have had to pay $500-600 million in interest under the Council/Controller plan and would have allowed the leasing company to take $2.4 billion out of the city under the Mayor's.