Alternative parking plan gets the nod

City would sell assets to parking authority to bail out ailing pension fund

Pittsburgh City Council gave initial approval to its alternative pension bailout plan Wednesday, setting up a final vote Tuesday but drawing criticism along the way from Mayor Luke Ravenstahl.

The plan calls for the city to sell its parking assets -- the Mellon Square garage, five lots and about 7,000 on-street meters -- to the city parking authority for $220 million. It also calls for the parking authority to float a 30-year bond to buy the city parking assets and repay the debt with parking rate increases.

The parking authority would have to approve the deal, and Councilwoman Natalia Rudiak, an authority board member, plans to introduce legislation there at a meeting Monday. Officials said they'd like to garner the support of Mr. Ravenstahl, but he opposes new debt.

Council would use the $220 million to boost the pension plan's funding level, now 27.5 percent, to 50 percent by year's end. That bump would be enough to avert a state takeover of the fund.

Voting for the plan were council President Darlene Harris, Ms. Rudiak, Patrick Dowd, Bruce Kraus, R. Daniel Lavelle, Bill Peduto, and Doug Shields. Ricky Burgess voted no, and Theresa Kail-Smith abstained.

The preliminary nod came 24 hours after the same seven-member majority voted down Mr. Ravenstahl's proposal to lease city and parking authority assets to private investors for 50 years. He wanted to use proceeds to boost the pension fund and avert a fund takeover, which he said would dramatically increase the city's annual pension obligations and force the city to make tough choices about tax hikes and service cuts.

Preliminary approval of the alternative -- developed by council and city Controller Michael Lamb -- also came just a day after the authors held the first comprehensive public discussion about it. Mr. Ravenstahl called the preliminary vote the "height of hypocrisy" because council clamored for transparency during the nearly two years he developed his plan but is pushing its own forward at top speed without public input.

Council said the alternative grew out of Mrs. Harris' months-old proposal for a bond issue instead of a parking lease. Officials also said the alternative was based largely on public comments at hearings that were held to debate the mayor's plan, discuss the pension crisis and consider alternative pension bailouts.

Council rejected the mayor's parking lease because of the length of the agreement, concern about private management of parking assets and the parking rate increases that the mayor included as part of the $452 million deal. The alternative calls for lower parking rate increases than the mayor proposed.

If the city's parking assets are added to its own, the authority would operate about 12 garages, 30 lots and the 7,000 on-street meters. On Wednesday, council members made clear that they envision a better-operated, friendlier, more innovative parking authority.

"We have to start running it like a business," said Mrs. Harris, who inserted amendments that would require the authority to make technology and customer-service upgrades, seek city approval of any move to generate revenue through advertising and undergo an efficiency study next year.

Other council members also cited room for improvement.

"We're the Flintstones living in the age of the Jetsons," Mr. Peduto said, noting that some cities allow drivers to purchase parking time by cell phone and change meter rates remotely as demand rises and falls.

Mr. Peduto, who doesn't believe a state takeover would be as dire as the mayor indicated and might be a good thing for the city, suggested bringing in a company like LAZ Parking Ltd. to operate the authority. LAZ was part of the team that offered $452 million for the parking lease that council rejected.

Mr. Peduto also suggested the possibility of voluntarily turning over the pension fund to the state, after stabilizing it with the $220 million cash infusion.

Joe Smydo: jsmydo@post-gazette.com or 412-263-1548. Staff writer Rich Lord contributed.

First published on October 21, 2010 at 12:00 am