A new pension bailout proposal emerged Friday with three city council members announcing legislation that would create an "infusion of value" -- but not cash -- into a languishing fund rapidly headed for state takeover.
"This is just another plan that we're putting forward," council President Darlene Harris said. "Sooner or later, the mayor is going to like one."
Mrs. Harris, Patrick Dowd and Natalia Rudiak plan to introduce a bill Tuesday directing Mayor Luke Ravenstahl to renegotiate the terms of a 1995 revenue-sharing agreement with the city Parking Authority.
Under the current arrangement, the authority receives virtually all parking meter revenue. Under the bill to be introduced next week, all revenue from increases in meter rates -- scheduled to begin taking effect in March -- would be committed to the city pension fund through 2041.
At Mrs. Harris' suggestion in May, the city increased fines for various parking violations, including expired meters.
The city traditionally has used fine revenue for a variety of purposes, but under the bill to be introduced Tuesday, all revenue from fine increases would be dedicated to the pension fund through 2041. Council members in the spring talked about dedicating fine money to the pension fund; the new bill would formalize that arrangement.
Mr. Dowd, Mrs. Harris and Ms. Rudiak also plan to introduce legislation Tuesday that would direct city Controller Michael Lamb to determine the potential value of 30 years' worth of meter and fine increases to the pension fund.
There are already some hints as to what the additional revenue would be.
Council and Mr. Lamb previously released a report in which they said gradual increases in meter rates could generate as much as an extra $6.1 million next year and an extra $17 million or so annually by 2040. Also, the city's 2011 budget projects about $6.7 million in parking fine revenue next year, up from $5.6 million this year.
The Intergovernmental Cooperation Authority, one of the city's financial oversight boards, meets at noon Monday to vote on the budget. Some officials said they expect ICA to reject the budget and accompanying five-year financial plan because of concerns about revenue assumptions.
The new legislation is the latest twist in the debate over how to use the city's parking assets to help a pension fund that's only 27.5 percent funded and headed for state takeover if it isn't at least 50 percent funded by Dec. 31.
Until now, council and Mr. Ravenstahl have focused on infusing a large amount of cash into the fund to avert a takeover. In the scenario unveiled Friday, the three council members hope that an "infusion of value," as Mr. Dowd called it, would be enough to avert a takeover.
Mr. Dowd said he and his colleagues would pledge a "regular stream of revenue, fixed by ordinance," to the pension fund, believing that would forestall a takeover.
At least two more bailout plans are in the works, Mrs. Harris said, declining to give details Friday. She and Ms. Rudiak said council wants to give Mr. Ravenstahl as many options as possible for averting a takeover.
Mr. Ravenstahl reacted to the council members' proposals with frustration.
"At the last minute, their attempt to throw anything against the wall just to see what sticks is not helpful, it's irresponsible," he said in a statement. "We are almost out of time."
Mr. Ravenstahl proposed leasing city and Parking Authority facilities -- in all about a dozen garages, 30 metered lots and 7,000 on-street meters -- to private investors for 50 years. He'd use at least $220 million of $452 million in lease proceeds to avoid a pension fund takeover.
Council rejected that plan, largely because of concerns that neighborhood business districts would be harmed by the meter rate increases Mr. Ravenstahl included in the plan to entice investors.
Council and Mr. Lamb advanced their own plan to sell the city's share of parking assets -- the Mellon Square garage, five lots and the 7,000 on-street meters -- to the Parking Authority for $220 million. The money would be used to avert a pension fund takeover.
Under that plan, the authority would have bought the city properties with a bond backed by parking rate increases that would have been more modest than those Mr. Ravenstahl proposed. However, council and Mr. Lamb said the rates still would have generated significant sums for the pension fund. After council passed the plan, the Parking Authority declined to study it, partly because it would involve new debt.
While the authority's position stalled the sale of city assets, Mr. Dowd, Mrs. Harris and Ms. Rudiak said other parts of the council-controller bailout, including parking rate increases, remain in force.
Hourly meter rates now range from 50 cents to $2, depending on the neighborhood. On March 31, when the first increases under the council-controller plan kick in, meter rates will range from 50 cents to $3. Rates in various neighborhoods will continue to increase in future years, although by 2015 the overall range will remain 50 cents to $3.
In a related matter, Councilman Bill Peduto sent a letter to the ICA and other state overseers Friday, recommending rejection of the mayor's budget and five-year plan. He said the $10 million surplus in the 2011 budget should be applied to the pension fund and also faulted Mr. Ravenstahl for including a $20 million contribution from nonprofits in the five-year plan.
Mr. Peduto has been working on soliciting $20 million in nonprofit contributions to help the pension fund but has announced no commitments. Mr. Peduto, council's finance chairman, said he never intended for the $20 million to be a "phantom revenue" in a general financial plan.
Joe Smydo: firstname.lastname@example.org or 412-263-1548.