Published in: The Globe
Originally published: October 26, 2010
By Kalea Hall and Katie Janicik
Pittsburgh City Council members voted to accept the council-controller plan at the City Council meeting on Tuesday allowing the city to avoid a state takeover.
The council-controller plan will provide a solution to the pension crisis by selling the city's parking facilities to the Pittsburgh Parking Authority. Some members feel it will not work but know a compromise is needed to come to a decision by their deadline of Nov. 1.
"[Council]President [Darlene]Harris said ‘Don't ever vote for privatization,'" Councilwoman Theresa Kail-Smith, District 2 representative, said at the meeting. "Maybe there is a compromise somewhere."
The Council nixed Mayor Luke Ravenstahl's plan to fill the city's pension fundduring a City Council meeting on Oct. 19, and again at a meeting on Oct. 25. Ravenstahl defended his plan to privately lease the city's parking assets, including city owned lots, garages and meters.
The Council opted to reject Ravenstahl's plan due to the term of the lease, the increase in parking rates and reservations about private ownership.
Now, the counsil-controller plan may be the only alternative to a state takeover. Under this plan, the City of Pittsburgh will sell its parking facilities to the Pittsburgh Parking Authority for $220 million in order to fund 50 percent of the city's pension by the Jan. 1, 2011 and avoid a state takeover. The Pittsburgh Parking Authority, which will have to obtain bonds in order to fund its purchase, will have to use increased parking rates as a means of financing the bonds. Councilwoman Natalia Rudiak, representative of District 4, said the council-controller plan will kepp parking assets under public control, limit parking rate increases, it will allow the city to pursue economic development strategies and provide capital funds necessary to modernize the current parking garages.
"This is the only alternative plan; not voting for it is voting for a state takeover," Rudiak said at the meeting.
Councilman Rev. Ricky Burgess, District 9 representative, is worried about the Parking Authority borrowing such a large amount of money in order to buy the city's parking assets. If the Authority fails to pay back the debt, it could fall back onto the residents of Pittsburgh.
"When this plan first came out I said it was a Pinocchio plan, because it was not a real plan, just as Pinocchio is not a real boy," said Burgess. "The council-controller plan is not a plan but a risky scheme. The Parking Authority can't legally assume this much debt."
Other members of City Council hope Ravenstahl will allow a compromise. Councilman William Peduto, a representative for District 8, who voted for the council-controller plan, said he understood the concerns Ravenstahl has over the "tax-exempt status of the bonds and the bond deal" that will accompany the Parking Authority's purchase of the parking assets. Being that Peduto said he thinks Pittsburgh's pension plan is one of the top 10 worst pension plans in the state of Pennsylvania. It is crucial that the city does not simply invest money in a broken system.
"What we have to consider is what the best longterm option is," Peduto said. "The option that we have is not to lease or borrow; it is to live within our means."
Because the Parking Authority and Ravenstahl have yet to accept this plan, City Council will meet on today to further discuss the issue.
"I wish we would realize maybe this is not the plan, maybe the mayor's plan isn't [the plan]; we need to compromise," Kail-Smith said.