PITTSBURGH (KDKA) – There are only a few days left until the state is set to take control of Pittsburgh’s pension fund.
On Tuesday, some members of City Council made a last-minute proposal to avoid that action.
It’s a plan that involves higher meter and parking rates.
To avoid state management of the city’s pension, state law requires the city to come up with $220 million by the end of the year.
Mayor Luke Ravenstahl wanted to privatize the city garages and parking meters, which would have caused a big jump in rates.
City Council rejected that idea and offered an alternative plan that kept city ownership, but involved new debt.
Mayor Ravenstahl rejected that plan, but a new idea was offered on Tuesday.
As the clock ticks down to the new year, some members of City Council tried a last-ditch effort to avoid a state takeover.
“This plan meets the mayor’s criteria to create no new debt, receives commitment to work with the unions involved, and assures a plan of success,” City Council President Darlene Harris said.
Harris, City Controller Michael Lamb and a majority of City Council members unveiled the plan that, they say, state pension officials have signed off on.
The idea is to commit the revenue from higher parking rates and meters directly into the city’s pension fund.
“If we were to dedicate revenue, whether it be parking revenue or any other revenue, to the pension fund over a term of years, could we add up that value and then discount it back to a present value calculation?” Lamb said.
In other words, Lamb said higher parking and meter rates for the next 30 years, that are dedicated to the city pension fund, would substitute for that $220 million up-front payment the state requires to avoid a takeover.
“There’s nobody who is making money off of it. There is no interest to be paid. This is the least expensive plan for the people of Pittsburgh,” City Council Finance Chair Bill Peduto said.
Proponents say that is because it avoids the higher taxes that might be likely under a state takeover. However, since it involves the Parking Authority raising garage rates, Mayor Ravenstahl must sign off on it too.