Sale of parking could aid other projects
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Pittsburgh Mayor Luke Ravenstahl's proposed lease of parking garages and meters, billed as a way to boost the troubled pension fund, also could provide the financially strapped city with money for infrastructure upgrades and capital projects.
Mr. Ravenstahl wants to lease the parking assets to a private party for 50 years, a deal he says would generate at least $100 million to cover parking authority debt and $200 million to pump into a pension fund that's at risk of state takeover at the end of the year.
City officials hope the deal will fetch far more than $300 million, but they haven't publicly said how much more because they don't want to influence prospective bidders.
Mayoral spokeswoman Joanna Doven said Mr. Ravenstahl would want input from City Council and the public on how to spend any proceeds over $300 million. However, she said initial ideas include allocating the added proceeds among the pension fund, infrastructure improvements and capital projects.
The lease proposal has received a rocky reception in council, with some members questioning the wisdom of leasing public assets for 50 years and doubting the deal's prospective benefit to the pension fund. If council approves the deal in the end, members are likely to tangle on how to use any proceeds above $300 million.
"I think some of it should be spent on infrastructure. I think some of it should be spent on the pensions," Councilwoman Theresa Kail-Smith said.
The city needs money to pave roads and repair bridges, it needs equipment to complete that work and it also needs money for more police officers and for savings, said Ms. Kail-Smith, who heads council's public-safety committee.
Councilman Ricky Burgess, who in recent months has called for more city investment in troubled neighborhoods and worked with Councilwoman Natalia Rudiak to refine the capital-budget process, said he'd like to see some of the money spent to pave streets, clear abandoned lots, demolish dilapidated houses and otherwise beautify neighborhoods.
"It ought to go into the heart of the community," he said.
However, Ms. Rudiak and Councilmen Bruce Kraus, Bill Peduto and Doug Shields, all of whom have raised objections to the lease plan, said any added proceeds should go into the pension fund. Mr. Shields said a parking lease shouldn't be turned into a "gravy train."
Councilman Patrick Dowd said the money should be allocated to the pension fund, used to retire debt or spent on a capital project so big that it couldn't be tackled with a normal 30-year bond issue. In other words, he said, the project must be worth giving up parking assets for 50 years.
"I don't know that there are any projects on the books that would equal that magnitude. It can't be a little bridge or a playground," he said, insisting the money not be frittered on officials' "pet projects."
The pension fund is less than 30 percent funded, according to data city officials provided March 31. Mr. Ravenstahl said $200 million would get the funding level to 50 percent and stave off a state takeover.
Under a takeover, he said, the city would be forced into higher annual pension obligations that could be met only with big tax hikes or service cuts. The city's minimum annual pension payment now is about $45 million, and a takeover could increase that requirement by $30 million, he said.
First Published August 11, 2010 12:00 am