Council overrides pension veto
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Pittsburgh City Council beat the midnight deadline with eight hours to spare Friday, pushing through a pension bailout package that it said would avert a potentially devastating state takeover of the city pension fund.
The override culminated months of passionate debate over how the city should boost a pension plan that's been underfunded for years. The drama reached a climax this week as council debated four bailout proposals in the run-up to Friday's deadline.
In the end, council voted unanimously to dedicate about $735.7 million in parking tax revenue to the fund over the next 31 years, a pledge that officials believe will be enough to ward off the state. Council also voted to transfer $45 million in debt service reserve money to the fund.
Council members Ricky Burgess and Theresa Kail-Smith, who voted against a bailout proposal earlier in the week, voted for the final version Friday. Mr. Burgess said he still had concerns about the approach but hoped to avoid a takeover, which Mayor Luke Ravenstahl warned would bring crushing pension payments, higher taxes and service cuts.
Without giving an opinion of the bailout plan, the Intergovernmental Cooperation Authority, a state-appointed board that oversees city finances, met Friday and approved the funding shifts necessary to implement it. The Act 47 team, another group of overseers, gave its approval in a letter.
The pension fund, 29.3 percent funded at the end of the third quarter, had to be at least 50 percent funded by midnight Friday to avoid a takeover.
Officials believe that the net present value of the 31 years of parking tax revenue will be about $252.7 million -- a figure that, combined with the $45 million in cash, will boost the fund well above the 50 percent level.
However, the city won't know for sure until the state Public Employee Retirement Commission, or PERC, reviews the city's figures and decides whether to give its blessing. That may not occur until fall.
"We did not want to go into state takeover," council President Darlene Harris said. "We had to come up with something."
First Published January 1, 2011 12:00 am
