Pittsburgh City Council members renewed concerns yesterday about a proposed lease of city parking garages as a way to prop up the troubled pension fund, saying they want to continue examining other options.

Robert P. Strauss, professor of economics and public policy at Carnegie Mellon University, warned that the deal would be a "fire sale lease" if the private operator were allowed to raise rates as much as it wanted.

He said the private operator's take depends on whether it boosts rates by, say, 5, 10 or 15 percent, and how much it pays in interest on its own debt. Speaking at one in a series of forums Councilman William Peduto has scheduled to discuss the pension crisis, Dr. Strauss estimated that an operator could profit either modestly, or, at the extreme, to the tune of some $1.9 billion over 30 years.

Scott Kunka, city finance director who is also parking authority chairman and executive director of the pension fund, said the leaseholder won't be allowed to raise rates willy-nilly. Rather, he said the lease agreement would spell out rate increases and establish rates for different parts of the city.

"We will go neighborhood by neighborhood," he said.

In a separate meeting yesterday, the pension board announced that better stock market returns have boosted the fund in recent months. But it still has less than one-third of the funding it should have to cover future obligations.

At year's end, the fund held about $287.5 million, and it has since climbed to about $296 million, Mr. Kunka said.

That's up from $261.5 million at the end of 2008, but still just 32 percent of the fund's official long-term obligation of $899 million -- a figure expected to rise to $1 billion when it is recalculated this year.

Last year was "a very good year," said Scott Abel, an Atlanta-based analyst with Mercer Investment Consulting, which handles the city's pension fund portfolio.

Mayor Luke Ravenstahl has proposed leasing the parking garages so the city could come up with at least $200 million needed to quickly shore up the pension fund. Mr. Kunka emphasized yesterday that $200 million is not the estimated value of the lease agreement; he said he's keeping estimates close to the vest to keep prospective bidders guessing, but acknowledged that the agreement could net more than $200 million after debt on the garages is paid off.

Council members said they're aware of a pressing need for a big infusion of cash, but Mr. Peduto and others said they're not sold on the lease plan, which also may include surface lots and garages.

"The mayor's right: We have to solve the pension problem," Councilman Patrick Dowd said. "Does this actually solve the pension problem?"

Council President Darlene Harris said leasing the garages would mean one fewer asset for the city to leverage if financial needs worsen in the future.

"Once assets are gone, they're gone," she said.

Mr. Ravenstahl said people have "taken shots at" the parking lot lease concept. "But the reality is, what's your option? What's your solution? If we don't come up with $200 million, or thereabouts ... our pension fund is taken over by the state. That's the reality of the situation."

Mr. Peduto said the options include a sale, a lease, keeping the garages and raising rates and a revenue-sharing arrangement with a private party.

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