Mayor's parking lease plan rejected by council
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After more than two hours of harsh words, including allegations of bullying from both sides, a divided Pittsburgh City Council took an initial vote Wednesday to shelve Mayor Luke Ravenstahl's parking lease plan so it could focus on other ideas for addressing the city's pension woes.
The main alternatives are allowing the state to take over the pension fund, or a plan, advanced by various council members and city Controller Michael Lamb, to sell city parking assets to the parking authority for $220 million and pump that money into the pension fund. The council-Lamb plan is intended to avert a state takeover.
Having declared the mayor's plan a non-starter 24 hours earlier, a council majority moved Wednesday to remove it from the table so it wouldn't be a distraction during continuing talks about the pension problems. The state has said it will take over the fund, now 27.5 percent funded, if the funding level isn't at least 50 percent by year's end.
"We need to get this dead lease plan off the table now so we can start to figure out what the real solution is going to be," Councilman Patrick Dowd said.
The discussion will continue today when Jim Allen, secretary of the Pennsylvania Municipal Retirement System, attends council's 10 a.m. post-agenda meeting to discuss a takeover scenario.
Council voted against four bills that would have authorized a 50-year lease of city and parking authority facilities to private investors for nearly $452 million.
A second, final vote on the bills is scheduled for Tuesday. While a change of mind is possible, council members left little doubt about how they -- and their constituents -- feel about the mayor's plan.
"At this point, I think it's irresponsible to actually entertain a plan that has been universally panned by the citizens of Pittsburgh," said Councilwoman Natalia Rudiak, the first to call for a vote.
Councilman Bill Peduto said not a single constituent in his district has expressed support for the lease. "I've never been in a situation where 100 percent of my constituents were opposed to an issue," he said.
Voting against the four bills were Mr. Dowd, Ms. Rudiak, Mr. Peduto, Bruce Kraus, Doug Shields and council President Darlene Harris. Ricky Burgess voted for the bills, and Theresa Kail-Smith abstained. R. Daniel Lavelle voted against one bill and abstained on the others.
Down if not out, Mr. Ravenstahl's office continued to call a parking lease-pension bailout the "only solution on the table and the best plan for the residents of Pittsburgh." Mr. Burgess called his colleagues "bullies" for voting against the lease, saying they want to squeeze Mr. Ravenstahl into supporting an alternative.
He called the council-Lamb option a "Pinocchio plan" because it has no life. Among other deficiencies, he said, it would require the consent of a parking authority that hasn't had a chance to review the proposal, let alone endorse it.
Mrs. Harris said she wouldn't agree to lease the parking assets "for one minute" and asserted that officials "don't have to sell ourselves to investment bankers" to solve the pension problems. Although she later declined to give specifics, Mrs. Harris complained of heavy-handed lobbying by lease supporters inside and outside of government.
"It's been intense, and I'm sure it will get more intense before Tuesday," she said.
Mr. Burgess said colleagues who voted against the lease effectively voted for a state takeover of the pension fund.
Mr. Ravenstahl has said Mr. Allen's agency would increase the city's annual pension payments by as much as $27 million, forcing the city to raise taxes and cut services. Mr. Burgess said the increases could top $30 million, leaving the city destitute and looking "like Detroit."
"We won't be able to tear down the crack houses in our poor neighborhoods," he said. "We won't be able to cut the grass in our poor neighborhoods."
Using data the mayor's office provided last week, the Pennsylvania Municipal Retirement System is making its own calculation of the city's potential financial obligations under a takeover. While Mr. Allen may provide some insight today, the review won't be completed for two to three weeks.
Mr. Burgess, Mr. Lavelle and Ms. Kail-Smith argued that no plan should be removed from the table until the state evaluation has been completed. Mr. Burgess also asked for council to take the time to consider his own alternative -- using revenue from a parking lease to stabilize the pension fund and then voluntarily turning over fund administration to PMRS.
Mr. Ravenstahl proposed leasing city and parking authority facilities -- together about a dozen garages, 30 lots and 7,000 on-street meters -- to investors led by J.P. Morgan Asset Management and LAZ Parking.
Critics assailed the plan for various reasons, including the length of the lease and parking rate increases that Mr. Ravenstahl proposed to make the project palatable to investors. Mr. Dowd, Mr. Peduto and others said the increases would hurt neighborhood business districts.
Under the council-Lamb plan, the city would sell its share of the parking assets -- the Mellon Square garage, five lots and the 7,000 street meters -- to the parking authority for $220 million. The authority would float a bond to buy the assets and use an increase in parking rates -- a more modest hike than the mayor proposed -- to pay back the debt. The authority would operate its own assets and the city's under conditions imposed by council.
However, Mr. Burgess and Mrs. Kail-Smith said the plan faces various obstacles, such as the mayor's opposition to new debt.
First Published October 14, 2010 12:00 am