Buses, Parking & Pensions (Oh my!)

There's probably many good reasons why I'm not the head of the Port Authority of Allegheny County... the most obvious of which is my well documented, if unusual, collection of Smurf Erotica... but slightly less well known is my ability to see an opportunity when it's staring me in the face. I, of course, am speaking about the proposed sale of the City's parking assets to fund the ailing pension system. Steve Bland is missing a golden opportunity here.

Now, if I'm head of PAT I'm doing one of two things:

First, I'm out in front of the public, news cameras, reporters, random people with nothing else to do, talking about how good this plan will be for you. And, of course, by "you" I mean "me". For, you see, I'd bet that despite the apparent elasticity of demand for parking, I'm guessing that increased parking rates are going to happen, and are going to drive(!) people to taking public transit, solving my own budget problem.

Or alternatively, instead of the Pittsburgh Parking Authority buying these garages and meters, as in the Lamb plan, I'm making a play to buy them myself. Now, you're probably saying "the Port Authority already has a budget deficit of it's own...I mean you just mentioned it in the last paragraph for Pete's sake." While that's true, and shame on you for pointing out my flaws, (1) this would be a capital investment on PAT's part, (2) there's already precedent for PAT owning parking garages, and (3) doing stupid shit has never stopped PAT in the past.

OK, so if PAT owned all these garages, what would they do with them? Well, if you've watched Who Framed Roger Rabbit?, you'll know the answer.

No, I'm not talking about wanting to nail the animated chick with the huge... bike racks. I mean the insidious plot of Judge Doom: buying the trolley line so he could dismantle it in favor of a cars and superhighways. Only this would be the opposite of that.

And there you go! Two problems solved: pension gets partially funded and PAT eliminates a competitor to it's business model. And maybe we'd rid ourselves of the cartoons in City Council while we're at it.

Of course, there's a big obvious flaw in the plan: something tells me that the Port Authority doesn't have a supervillain on staff.

"Yet," he says, twirling his mustache.

City Council to Sell Free Parking Space on Monopoly Board

In preliminary meetings today, Pittsburgh City Council tentatively agreed to sell the Free Parking space on its monopoly board in order to pay for incurred pension liabilities.

Councilman Doug Shields, who chairs the Committee on Land Use and Economic Development, said that the decision was a hard one, but needed to be done.

"For years, we've had this asset sitting there and no one really knows what to do with it. Most people just pass by it to get to Kentucky Avenue in Shadyside, or on their way to S. Atlantic Avenue in Friendship. It's there and we need to do something with it."

The Free Parking fund has been historically underfunded and has been the subject of debate between council and previous administrations. Former mayor Tom Murphy had long diverted payments of fees and taxes into development funds, while council had mandated that those payments go directly into the Free Parking fund. During the brief O'Connor administration, the Mayor sided with Council, and this arrangement has not been changed.

The Murphy Administration also sold the City of Pittsburgh waterworks to the Pittsburgh Water and Sewer Authority, in order to develop both the Park Place area of Point Breeze and to fund a pedestrian boardwalk along the North Shore. Rents in those areas have quadrupled since the development of two new hotels.

R.U. Pennybags of Parker Bros. L.P., a financial consulting firm, said that the move is shrewd, but involves some risk.

"Basically, the City Council is offering an outside agency the opportunity to collect fees for the City. Ironically this would be more in line with the Murphy arrangement, than Council's. Still, there may be push back from citizens who have been dreaming for a home on Pennsylvania Avenue and are counting a roll of the dice to get some extra funds. The Mayor will have to explain why these people won't be able to afford a place for their Scotch Terrier, to hang their hat, or for their oversized boot."

Final passage of the bill is expected next week after the Mayor passes "Go" and collects his salary.

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In other news, former Councilwoman Twanda Carlisle has successfully thrown her third set of doubles, and will be released to a halfway-house on Baltic Avenue in Arlington.

The Pension in the Room is Palpable

And then there's this:

Pittsburgh Councilman Patrick Dowd and city Controller Michael Lamb this morning proposed transferring ownership of city parking garages to the financially strapped pension fund.

Mr. Lamb said the proposal was evolving, and it wasn't clear whether some or all of the garages would be part of the deal.

The plan was billed as a more viable alternative to Mayor Luke Ravenstahl's proposal to lease all parking garages -- and potentially surface lots and meters -- to a private entity and use the proceeds to shore up the pension fund.

Now, aside from the obvious flaws (the fact that the Pension Fund runs the pension fund, not garages; the historical mismanagement of the pension fund at that; the asset "swap" for the Parking Authority would be a loss on their books; etc.), the major flaw of this whole plan is that the City isn't thinking broadly enough. There are literally thousands of things that the City could be selling in order to fill up the pension fund:

Delinquent Taxes - Right now, the City sells them off to Jordan Tax Services, GLS, Capital Assests, or any other collection agency for an up front chunk of cash, while the collection agency tried to squeeze money from dead beats. But, rather than tossing those liens down a caulis negris, the City could give the delinquent tax liens to the Pension Fund and have *them* sell it off to the collections agency.

Asphalt plant - When I think of Pension Fund, I immediately think of skidding out on a slick road and then cracking my front end off of a 12 inch deep pothole that's been left unattended for years.

City Vehicle Fleet - If you're a middle manager and you need a City car, it'll cost you $8 for the hour. The downside is that, in order to lower future costs, the Pension Fund may decide to cut break lines in the hopes that you'll "remove yourself" from the pension pool. (Actually this would probably be no different than driving a Toyota now.)

The City-County Building - If the City leases it back from the pension fund, for the City it would come under the month budget, and not under the capital account.

Water Lines - Nope, wait we've done that.

Yarone Zober - A nice boy like him would probably fetch a decent price on the open market, and he's probably big enough for a couple of good steaks and a few stews. (Although, honestly I like my meat a little more lean.)

The Pension Fund - The City could have the Pension Fund sell the Pension Fund to the Pension Fund, take the write off for the loss and then purchase it back at a discount.

Or alternatively, as I've suggested before: we take the whole fund, go over to the Rivers Casino when table games open up and bet on black.

Things I'm Not Quite Sure About pt. 2

I'm not quite sure about the proposal to sell or lease Pittsburgh's parking garages to a private firm in order to provide cash to fund the ongoing pension obligations.

So the primary reason to do this, of course, is to offset the huuuuuuge deficit we have in the pension fund, about $600 million or so right now, based on my hasty math. That amount is bad and it's eating into the City's ability to do other stuff or lower local taxes, depending on which side of the economic coin you favor.

Now, the problem is that the pension obligation isn't really going down (well, unless there's a culling of the the retiree population). A pension obligation will continue into the foreseeable future, so a one time sale will provide a one time influx of cash. This will balance the budget in the short term, but will not necessarily be a sustainable solution.

I suppose there's a long term solution if the City wisely invested this money in the stock market (*snicker*) or some sort of (*chuckle*) investment bank or (*guffaws*) municipal credit default swaps. (*wipes tears from eye*) But seriously folks, they might as well just invest in Hummel figurines.

Let's step back a second. Is this kind of sale even really legal? Isn't the Parking Authority a separate legal entity? Isn't its obligation to its own bond holders and not the City's? I can't really wrap my heads around what amounts to parents telling their kids to pay the parents' credit card bills. Maybe it's just me.

And finally, I'm not the kind of person that believes that the government should own everything, but what the parking tax debacle has taught us is that the private market understands that the price of parking in Downtown is sticky. When the tax went down, prices in private lots stayed up; only the Parking Authority (after political pressure, admittedly) reduced their rates. So, I can see some advantage to keeping some measure of control on these prices for the public good.

Again, I'm not quite sure of all this and I hope folks that understand this kind of stuff more than me will be able to work it out. (*snicker*)