The city's actuaries today uncovered a mathematical problem with Pittsburgh City Council's pension bailout, forcing officials to redo the legislation with little more than a day left to forestall state takeover.
Council approved a plan Wednesday to dedicate about $414.7 million in parking tax revenues over 31 years to the pension fund, an infusion of value that officials believed would be enough to avert state takeover.
But the city's actuaries, brought in this morning to review the plan, thought otherwise, firefighters union President Joe King, a city pension board member, said.
Instead of overriding Mayor Luke Ravenstahl's veto of Wednesday's plan, Mr. King said council must redo the plan, submit it to Mr. Ravenstahl for another veto and then override the new veto.
Under state law, the pension fund, now 29.3 percent funded, must be 50 percent funded by midnight tomorrow to avoid a takeover.
In passing yesterday's plan, Mr. King said, council miscalculated the "net present value" of the future stream of parking tax revenues.
And if the calculation isn't accurate, state officials have said, the 50 percent funding level would be missed, and the fund would pass to state takeover.
According to information Mr. King provided, council will revise the bailout plan to take about $735.7 million in parking revenues over 31 years, instead of the $414.7 million.
Officials are eager to avoid a pension takeover, which would lead to drastically higher pension payments and the threat of tax hikes, layoffs and service cuts.
Joe Smydo: firstname.lastname@example.org or 412-263-1548.