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Mayor wins friends in bid to keep pension plan
Thursday, September 03, 2009

In a bid to keep control of Pittsburgh's struggling pension fund, Mayor Luke Ravenstahl today met with around a dozen state House members and won their agreement to his request for a two-year reprieve from a threatened state takeover.

"My delegation is prepared to support the mayor's effort to exempt the city for the next two years," said Rep. Dan Frankel, D-Squirrel Hill, as he and the mayor emerged from the hour-plus meeting in the City-County Building, Downtown. "What we saw was very credible information, and everybody's speaking from the same place."

Separately, Gov. Ed Rendell said he thought Pittsburgh "should be given time to meet the 50 percent [funding] threshold,'' and avoid takeover, but added that he didn't know if that was possible at this stage of the legislative process.

"I know the mayor has some good plans to meet that 50 percent level, but opening the bill for that amendment would open it up for other amendments and the bill could fall of its own weight," he said.

The legislation would also give Philadelphia a 1 percentage point boost in its sales tax, something leaders of the state's largest city have said they need next week. Mr. Frankel said any amendment designed to give Pittsburgh a two-year reprieve from takeover has to win prompt consensus from House and Senate leaders if it is to have any hope.

The Senate has approved the legislation, but would have to concur with any amendments.

Philadelphia officials say they need the House to approve the bill -- as currently written -- on Tuesday, and then have the governor sign it by next Friday, to avoid laying off 3,000 municipal workers, including up to 1,000 police.

Also at the mayor's meeting were City Council President Doug Shields and City Controller Michael Lamb, and their agreement with the mayor made a big impression on the lawmakers, Mr. Frankel said.

Mr. Ravenstahl presented charts to the legislators showing how Pittsburgh's payments into a state-seized pension pool would spike, rising from the $45 million the city is putting into its pension fund this year to $70 million or more, the mayor said. Another option would give the city eight years to ramp up to a much higher contribution level -- but then at an amount that would cripple the city, according to the mayor.

He also presented the effects of his own plan, under which the city would lease public parking garages, put hundreds of millions of dollars in proceeds into the pension fund, and continue to make higher-than-required payments into its fund.

Last month, the city's pension fund contained around $280 million, or 31 percent of the $899 million it should. Mr. Ravenstahl showed projections indicating that under his plan, the fund could be a healthy 85 percent funded by 2037.

"The numbers don't lie, and we stand behind them," said Mr. Ravenstahl. "It avoids any major tax increase. It avoids any major service reduction."

Mr. Frankel said the delegation would now ask the Pennsylvania Municipal Retirement System to verify the city's projections. PMRS would take over the city's fund under the proposed pension legislation.

"I would like the Pittsburgh problem [regarding the pension bill] to be cured, but I'm not sure it can be," said Mr. Rendell. "Once the bill is opened for an amendment about Pittsburgh, there could be an avalanche of other amendments.''

He said he knows some unions don't like the bill but added, "If the bill came to me in its present form, I would sign it.''

Rich Lord can be reached at rlord@post-gazette.com or 412-263-1542.
First published on September 3, 2009 at 1:57 pm