Math problem sidetracks Pittsburgh pension bid
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Pittsburgh Councilman Doug Shields takes his glasses off and rubs his face on Thursday during council's deliberations seeking a solution to the city's pension crisis.
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A mathematical problem prompted Pittsburgh City Council into a hurried revamping of its pension bailout plan Thursday, a process that may be completed only an hour before today's midnight deadline for averting a state takeover.
Council President Darlene Harris implored Mayor Luke Ravenstahl to cooperate -- ironically, by vetoing the new plan as soon as possible today -- so council can override the veto and make the bailout a law by midnight.
"The mayor will continue to cooperatively veto various versions of council's pension-related legislation as they evolve and are presented to him," Mr. Ravenstahl's chief of staff, Yarone Zober, said in a reply read aloud to council.
Council approved a plan Wednesday to dedicate about $414.7 million in parking tax revenue over 31 years to the pension fund, an infusion of value that officials believed would be enough to prevent a state takeover. Council intended to override Mr. Ravenstahl's veto of that plan Thursday, making the bailout a law well before today's midnight deadline.
But the city's actuaries, brought in Thursday morning to review the plan, raised red flags.
The pension fund, now 29.3 percent funded, must be 50 percent funded by day's end to avoid takeover.
The actuaries feared that council overestimated the net present value of the future stream of parking tax revenues. If the calculation isn't correct, the 50 percent funding level would be missed, the fund would pass to state control and the city couldn't take back the three decades of parking tax money dedicated to the pension fund.
The actuaries' determination sent council into a flurry of activity.
Council overrode Mr. Ravenstahl's veto of the original plan, then introduced legislation that would take $735.7 million in parking tax revenues, instead of $414.7 million, over the 31 years.
First Published December 31, 2010 12:00 am
