The idea to lease Pittsburgh’s parking assets in order to fund the city’s pension plan is still alive -- and now on its way to Harrisburg.
Councilman Ricky Burgess wrote a letter to Governor Tom Corbett, asking him to allow Pittsburgh’s state overseers (the Intergovernmental Cooperation Authority) to lease the city’s parking garages if Council does not do so by the end of the year.
The District 9 Councilman says under the parking lease plan, Pittsburgh’s pension plan could be fully funded in 17 years. Burgess was the only Council Member to support the lease plan proposed by Mayor Luke Ravenstahl.
Burgess also introduced legislation today that would set up an independent panel of actuaries and accountants to determine the balance of the pension fund.
That panel would also decide whether Council’s December 2010 infusion of parking tax revenue into the pension will save it from being taken over by the Pennsylvania Municipal Retirement System.
Burgess says Council won’t make the tough choices necessary to fix the city’s pension problem, so he’s asking Pittsburgh’s state overseers to make that choice instead.
Showing posts with label pensions. Show all posts
Showing posts with label pensions. Show all posts
Tuesday, May 31, 2011
Tuesday, May 24, 2011
Audit: Pgh Pension Plan Needs Funding Now
Pennsylvania Auditor General Jack Wagner is releasing an audit of Pittsburgh’s pension plan for police, firefighters, and non-uniformed city workers today.
The document says the plan is only 34% funded, or $650 million short of its total $990 million, as of the last day of 2009.
Wagner says although City Council has already implemented a “bailout plan” that would divert parking tax revenue to the pension fund, that ordinance has not been adopted by the Pittsburgh Parking Authority.
Wagner says the city must boost its total pension assets to the halfway mark before September 1, or the Pennsylvania Municipal Retirement System will likely force the city into making higher yearly payments -- no matter where the money comes from.
“It may be done with parking revenue; it could be done with increased taxes; it could be done by the city cutting services in one area,” says Wagner.
Wagner says in the meantime, the continuing pension gridlock is creating problems.
“The image of Pittsburgh is very important, and the longer this discussion ensues, the more negative impact it has on Pittsburgh in a real and a perceived way,” says Wagner. “In a real way in terms of the bond rating [dropping].”
Wagner says Pittsburgh’s pension fund is one of the worst-off in the state, and funding it to 50% will be only a small step in covering the $650 million deficit.
The document says the plan is only 34% funded, or $650 million short of its total $990 million, as of the last day of 2009.
Wagner says although City Council has already implemented a “bailout plan” that would divert parking tax revenue to the pension fund, that ordinance has not been adopted by the Pittsburgh Parking Authority.
Wagner says the city must boost its total pension assets to the halfway mark before September 1, or the Pennsylvania Municipal Retirement System will likely force the city into making higher yearly payments -- no matter where the money comes from.
“It may be done with parking revenue; it could be done with increased taxes; it could be done by the city cutting services in one area,” says Wagner.
Wagner says in the meantime, the continuing pension gridlock is creating problems.
“The image of Pittsburgh is very important, and the longer this discussion ensues, the more negative impact it has on Pittsburgh in a real and a perceived way,” says Wagner. “In a real way in terms of the bond rating [dropping].”
Wagner says Pittsburgh’s pension fund is one of the worst-off in the state, and funding it to 50% will be only a small step in covering the $650 million deficit.
Wednesday, January 5, 2011
Council Tells Controller to Update Pension Board
Pittsburgh City Council members want the City Controller to make a formal presentation to the board that oversees the city’s pension funds to make sure the members understand the value of what is being dedicated to the program. As 2010 came to a close, council settled on a plan to add $45 million in reserve funds to the pension program and at the same time dedicated more than $700 million in parking tax revenues over the next 31 years. The belief is that the funds have a large enough present-day value to boost the pension program to the 50-percent funded level and avoid a state take over. The bill calls for a two-step process. “It requires the Controller to make a calculation of the present value of the revenue dedicated in the ordinances “and with the Council President make a presentation to the board,” says Councilman Patrick Dowd.
Dowd stresses that the Council and the Controller are not obliged to make the presentation. He calls the move “house keeping,” “dotting the I’s and crossing the T’s” and “an effort to be respectful.”
The board and its actuaries will set a value of all the assets in the fund as of December 31st, including the new revenue stream, in the coming months and then submit it to the state for final approval. If the fund falls short of the 50% level it will be taken over by the state and the assets will be handed over to the Pennsylvania Municipal Retirement System. It is expected that the PMRS will call for much higher yearly payments than the city is currently making.
Dowd stresses that the Council and the Controller are not obliged to make the presentation. He calls the move “house keeping,” “dotting the I’s and crossing the T’s” and “an effort to be respectful.”
The board and its actuaries will set a value of all the assets in the fund as of December 31st, including the new revenue stream, in the coming months and then submit it to the state for final approval. If the fund falls short of the 50% level it will be taken over by the state and the assets will be handed over to the Pennsylvania Municipal Retirement System. It is expected that the PMRS will call for much higher yearly payments than the city is currently making.
Saturday, January 1, 2011
Pension Bailout Enacted
Now it's up to the Pennsylvania Employees Retirement Commission (PERC)whether to sign off on a bailout plan approved by Pittsburgh Council Friday in an attempt to avert a state takeover of the city pension fund. State officials said they would take over control of the pension fund unless it was at least at 50% of its $990 million obligation to retirees and current workers. Prior to passage of this legislation, the value stood at 29.3%. Council beat the deadline of the threatened takeover by several hours by approving a plan to invest an additional $45 million toward the fund and dedicate nearly $736 million over 31 years from parking revenues.
Mayor Luke Ravenstahl, who preferred his own plan to lease parking assets for 50 years but definitely wanted to avert a state takeover, quickly vetoed Council's plan. Council within the hour then overrode the veto shortly before 4 p.m. thereby enacting the bailout measure.
Councilman Bill Peduto called it the best plan of all the proposals that have been put forward.....
"There was no way to not have to put money in there. We were being told we have to get to 50%. So, we tried to find the least impact way of doing that. We also provided the funding for that which is the parking rate increases."
PERC will now examine the bailout plan but might not approve it for several months.
Mayor Luke Ravenstahl, who preferred his own plan to lease parking assets for 50 years but definitely wanted to avert a state takeover, quickly vetoed Council's plan. Council within the hour then overrode the veto shortly before 4 p.m. thereby enacting the bailout measure.
Councilman Bill Peduto called it the best plan of all the proposals that have been put forward.....
"There was no way to not have to put money in there. We were being told we have to get to 50%. So, we tried to find the least impact way of doing that. We also provided the funding for that which is the parking rate increases."
PERC will now examine the bailout plan but might not approve it for several months.
Friday, December 31, 2010
New Pension Plan Ok'd By Council
In meetings on Friday, Pittsburgh City Council have preliminary and final approval to a pension bailout that they hope will avoid a state takeover of the city's pension plan. Their deadline for it to become official is midnight on December 31st. After the mayor vetoes the plan, City Council will meet to override the veto and it will become official.
Bill Peduto says this is the best plan of all of the plans that have been proposed. "There is no way to not put money in when we're being told that we have to get to fifty percent so we tried to find the least impact way of doing that. We have also provided the funding for that which is the parking rate increases," he said.
The Intergovernmental Cooperation Authority approved amendments to the city's 2011 budget and five-year spending plan that would allow parking tax money to be diverted to the pension bailout plan on Friday morning. $45 million from a trust fund was placed in the city's pension fund.
Council plans to put $735.7 million in parking tax revenue into the fund over 31 years.
Bill Peduto says this is the best plan of all of the plans that have been proposed. "There is no way to not put money in when we're being told that we have to get to fifty percent so we tried to find the least impact way of doing that. We have also provided the funding for that which is the parking rate increases," he said.
The Intergovernmental Cooperation Authority approved amendments to the city's 2011 budget and five-year spending plan that would allow parking tax money to be diverted to the pension bailout plan on Friday morning. $45 million from a trust fund was placed in the city's pension fund.
Council plans to put $735.7 million in parking tax revenue into the fund over 31 years.
Thursday, December 30, 2010
Pension Drama Drawn Out to the Last Second
On Thursday, City Council has revised the very pension they proposed on Wednesday after a veto from the mayor but still before the December 31st at midnight deadline to come up with a way to keep the city's pension from a state takeover. The city's actuaries uncovered a mathematical error with the pension bailout proposed on Wednesday so additional funds will be placed in with a plan in taking out additional debt in 2018.
Council Member Bill Peduto said this latest plan is the best of all of them and should have been initially proposed but council was given incomplete information by the state as to how they should have gone about proving they had the necessary 50 percent of the pension fund secured.
"The plan that is being pushed today has the least negative impact. There's a negative impact with all of them this one has the least negative impact with the amount of money that is being used out the budget. In other words, it has the least amount of taxpayer money involved with it," he said.
City Council will meet at 1pm on Friday to vote on the new plan. They will send it over to the mayor's office at which point he will be able to veto it again. City Council will then meet again at 11pm where they will override the mayor's veto.
Council Member Bill Peduto said this latest plan is the best of all of them and should have been initially proposed but council was given incomplete information by the state as to how they should have gone about proving they had the necessary 50 percent of the pension fund secured.
"The plan that is being pushed today has the least negative impact. There's a negative impact with all of them this one has the least negative impact with the amount of money that is being used out the budget. In other words, it has the least amount of taxpayer money involved with it," he said.
City Council will meet at 1pm on Friday to vote on the new plan. They will send it over to the mayor's office at which point he will be able to veto it again. City Council will then meet again at 11pm where they will override the mayor's veto.
Pgh Council's Pension Numbers Are Off
Instead of voting to override Mayor Luke Ravenstahl's veto of a their plan to bolster the pension fund and avert a state takeover, Pittsburgh Council this afternoon went behind closed doors to try to hash out a re-worked plan. That's because the numbers in the Council plan, approved on a 7-2 vote Wednesday, are off. That's according to Councilman Ricky Burgess and Joe King, president of the Firefighters' Union.
So now, Council has to devise a new proposal, pass it and send it to the Mayor, who will likely veto it because he still favors a leasing of city parking assets, and then override the anticipated veto....all before 12:00 a.m. Friday night. That's the deadline for the threatened state takeover of the pension fund unless it is at least at 50% of its obligation.
So now, Council has to devise a new proposal, pass it and send it to the Mayor, who will likely veto it because he still favors a leasing of city parking assets, and then override the anticipated veto....all before 12:00 a.m. Friday night. That's the deadline for the threatened state takeover of the pension fund unless it is at least at 50% of its obligation.
State: City Pension Bailout Not a Done Deal
Pittsburgh Council will vote this afternoon on whether to override Mayor Luke Ravenstahl's veto of the latest plan to bolster the city's pension fund and avert a state takeover of the fund January 1. But Pennsylvania Public Employees Retirement Commission Executive Director James McAneny says the plan still needs to be approved by the state.
If the city's pension fails to cover 50% of its obligation to workers and retirees by midnight Friday, the state will take control of the fund. The fund is currently at 29.3%. Council and the mayor have sought to avoid that outcome because it will mean a rigid payment schedule for the city that could spell higher taxes and reduced services for residents. Wednesday Council voted 7-2 to "irrevocably" dedicate $414.7 million in parking tax revenues over the next 31 years...or about 14 million a year... for the pension fund." Ravenstahl quickly vetoed that measure, saying it was flawed and risky. McAneny agrees that it's risky - "There's a very good chance of over-estimating the value of a future revenue stream. One thing that I've tried to warn the city about repeatedly is that they take care they don't dedicate a revenue stream for the next 30 years and then not have it be sufficient to get to the 50% funded ratio."
He says he has neither seen, nor approved city council's latest plan, "I've never been able to make a commitment as to what the value of a future revenue stream would be." McAneny says when the clock strikes midnight Friday the city can't do anything more to try and right the pension fund and the state will begin to analyze whether council's latest plan will in fact bail out the pension. In the rush to find a solution, McAneney says it should be noted that this problem was a long time in the making, and that the city should have been putting more money into the pension all along, "that's why they're in the position they're in."
If the city's pension fails to cover 50% of its obligation to workers and retirees by midnight Friday, the state will take control of the fund. The fund is currently at 29.3%. Council and the mayor have sought to avoid that outcome because it will mean a rigid payment schedule for the city that could spell higher taxes and reduced services for residents. Wednesday Council voted 7-2 to "irrevocably" dedicate $414.7 million in parking tax revenues over the next 31 years...or about 14 million a year... for the pension fund." Ravenstahl quickly vetoed that measure, saying it was flawed and risky. McAneny agrees that it's risky - "There's a very good chance of over-estimating the value of a future revenue stream. One thing that I've tried to warn the city about repeatedly is that they take care they don't dedicate a revenue stream for the next 30 years and then not have it be sufficient to get to the 50% funded ratio."
He says he has neither seen, nor approved city council's latest plan, "I've never been able to make a commitment as to what the value of a future revenue stream would be." McAneny says when the clock strikes midnight Friday the city can't do anything more to try and right the pension fund and the state will begin to analyze whether council's latest plan will in fact bail out the pension. In the rush to find a solution, McAneney says it should be noted that this problem was a long time in the making, and that the city should have been putting more money into the pension all along, "that's why they're in the position they're in."
Mayor Vetoes Pension Bailout Bill
Pittsburgh City Council is to vote this afternoon on whether to override Mayor Luke Ravenstahl's veto of the latest plan to bolster the city's pension fund and avert a state takeover of the fund January 1.
The State Public Employees Retirement Commission is set to manage the city's pension fund unless it is at 50% of its obligation to workers and retirees. The fund is currently at 29.3%.
Council Wednesday voted 7-2 to "irrevocably" dedicate $414.7 million in parking tax revenues over the next 31 years...or about 14 million a year... for the pension fund. Council members Ricky Burgess and Theresa Kail-Smith voted "no."
Earlier Wednesday, Council gave tentative approval to dedicating the Emergency Services Tax....the $52 annual commuter tax.....for the pension fund. But officials with the Public Employees Retirement Commission questioned the legality of that set aside. That's when Council okayed using the parking tax revenues instead.
Mayor Ravenstahl quickly vetoed that measure. The mayor had 10 days to sign the bill, let it become law without his approval or veto it, but by that time the state would have taken over management of the pension fund.
In vetoing the measure, Ravenstahl said the proposal contained "numerous potentially fatal flaws." The mayor says the plan represents "value" (future tax revenues) but doesn't have the immediate cash needed to bring the fund up to the 50% level.
Commission executive director James McAneny told the Post-Gazette that he approves the concept of infusing "value" into the fund but warned Council not to cut it too close to the 50% mark.
The State Public Employees Retirement Commission is set to manage the city's pension fund unless it is at 50% of its obligation to workers and retirees. The fund is currently at 29.3%.
Council Wednesday voted 7-2 to "irrevocably" dedicate $414.7 million in parking tax revenues over the next 31 years...or about 14 million a year... for the pension fund. Council members Ricky Burgess and Theresa Kail-Smith voted "no."
Earlier Wednesday, Council gave tentative approval to dedicating the Emergency Services Tax....the $52 annual commuter tax.....for the pension fund. But officials with the Public Employees Retirement Commission questioned the legality of that set aside. That's when Council okayed using the parking tax revenues instead.
Mayor Ravenstahl quickly vetoed that measure. The mayor had 10 days to sign the bill, let it become law without his approval or veto it, but by that time the state would have taken over management of the pension fund.
In vetoing the measure, Ravenstahl said the proposal contained "numerous potentially fatal flaws." The mayor says the plan represents "value" (future tax revenues) but doesn't have the immediate cash needed to bring the fund up to the 50% level.
Commission executive director James McAneny told the Post-Gazette that he approves the concept of infusing "value" into the fund but warned Council not to cut it too close to the 50% mark.
Wednesday, December 29, 2010
Pension Drama Continues
After a lengthy meeting on Thursday that followed a year of lengthy meetings surrounding the topic, Pittsburgh City Council members voted for a pension bailout proposal that would devote the city's commuter tax to the existing fund so the city can avoid the December 31st deadline for a state takeover. The city will not be able to touch $13 million dollars they make from a commuter tax annually for the next 31 years and will have to raise that money from parking increases.
Ravenstahl said the plan was slated to fail and would only lead to higher taxes and service reductions and repeatedly stated that he would not approve it. In an effort to work along with city council, he agreed to veto the proposal so council could override it and meet the deadline. All council members voted in favor of the plan except for Ricky Burgess who abstained from voting.
"I don't want state takeover but council has put us in this position by not doing the plans that are workable. At the ninth hour without any due diligence, without any research, plans we are putting something to the wind that we don't even know will work. Its jumping off the cliff blindfolded with the hands tied behind the back. I don't like state takeover but at least I want to protect the city's resources," he said to reporters after the vote.
Ravenstahl said the plan was slated to fail and would only lead to higher taxes and service reductions and repeatedly stated that he would not approve it. In an effort to work along with city council, he agreed to veto the proposal so council could override it and meet the deadline. All council members voted in favor of the plan except for Ricky Burgess who abstained from voting.
"I don't want state takeover but council has put us in this position by not doing the plans that are workable. At the ninth hour without any due diligence, without any research, plans we are putting something to the wind that we don't even know will work. Its jumping off the cliff blindfolded with the hands tied behind the back. I don't like state takeover but at least I want to protect the city's resources," he said to reporters after the vote.
Tuesday, December 28, 2010
Council to Vote on Pension Funding Plan
Pittsburgh City Council has reached a deal that it feels will keep the City’s pension program from being taken over by the state while at the same time not issuing any new debt or leasing any city assets. The plan calls for an increase in parking rates at garages and meters and then promises that increased revenue over the next 30 years to the pension fund. City Controller Michael Lamb says he has spoken to the Executive Director of the Pennsylvania Public Employee Retirement Commission and has received approval for the plan. PERC is the body required by law to set the value of all municipal pension funds. If the PERC sets a value of the Pittsburgh Pension Plan below the 50% funded level the state will force a takeover of the pension fund, if it exceeds the 50% mark, Pittsburgh will be allowed to continue to manage its own fund.
Lamb estimates the higher rates would generate about $880 million dollars over the next 30 years and he says it should have a present-day value of more than $220 million. That is roughly the amount needed by the end of the year to bring the pension fund up to the 50% level. Controller Michael Lamb is to meet with a representative of the public employee retirement commission later today to come up with an exact value that can be added into the pension fund.
The plan needs the support of Mayor Luke Ravenstahl and the Pittsburgh Parking Authority. Mayor Ravenstahl has not yet taken a stance on the bill. Mayoral spokesperson Joanna Doven says, "The Mayor today will be meeting with legal and financial experts with the City and the Parking Authority to discuss the viability of the plan. After all facts are discovered, the Mayor will comment further."
The Mayor has appointed all of the members of the Parking Authority Board. Councilwoman Natalia Rudiak is a member of the Authority Board and says the package of bills includes a payment plan that gives the Authority enough money to do its job.
Council members stress that the rate increase that will be phased in over the next several years are much lower than the rate increases that would have been seen if the city would have leased the parking assets as had been proposed by Mayor Ravenstahl.
Councilman Bill Peduto says this is a much better deal than issuing a bond or leasing assets. “There is 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,” says Peduto. The councilman estimates that the city would have had to pay $500-600 million in interest under the Council/Controller plan and would have allowed the leasing company to take $2.4 billion out of the city under the Mayor's.
Lamb estimates the higher rates would generate about $880 million dollars over the next 30 years and he says it should have a present-day value of more than $220 million. That is roughly the amount needed by the end of the year to bring the pension fund up to the 50% level. Controller Michael Lamb is to meet with a representative of the public employee retirement commission later today to come up with an exact value that can be added into the pension fund.
The plan needs the support of Mayor Luke Ravenstahl and the Pittsburgh Parking Authority. Mayor Ravenstahl has not yet taken a stance on the bill. Mayoral spokesperson Joanna Doven says, "The Mayor today will be meeting with legal and financial experts with the City and the Parking Authority to discuss the viability of the plan. After all facts are discovered, the Mayor will comment further."
The Mayor has appointed all of the members of the Parking Authority Board. Councilwoman Natalia Rudiak is a member of the Authority Board and says the package of bills includes a payment plan that gives the Authority enough money to do its job.
Council members stress that the rate increase that will be phased in over the next several years are much lower than the rate increases that would have been seen if the city would have leased the parking assets as had been proposed by Mayor Ravenstahl.
Councilman Bill Peduto says this is a much better deal than issuing a bond or leasing assets. “There is 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,” says Peduto. The councilman estimates that the city would have had to pay $500-600 million in interest under the Council/Controller plan and would have allowed the leasing company to take $2.4 billion out of the city under the Mayor's.
Monday, December 20, 2010
Firefighters Get Court Delay
The Pittsburgh Firefighters Union has asked a judge to postpone a hearing on its request to stop the state from taking over the city’s pension fund. Union attorney Joshua Bloom says now that the City Council has rejected what looks like the last opportunity to fund the pension up to the 50% level by the end of the year, the union is looking to take up the issue in the new year.
Pennsylvania Act 44 requires the city to turn its pension fund over to the Pennsylvania Municipal Retirement System if it does not make a payment of approximately $220 million by year’s end. The suit asked the judge to force the city to raise taxes enough to keep the fund under local control. The union says local control is required under the union’s contact.
Bloom says the union no longer wants to take that tack. However, Bloom says the union still believes act 44 is unconstitutional as it applies to the pension fund, “Also Act 44 is unconstitutional in that they singled out the city of Pittsburgh. The city of Pittsburgh is the only municipality across the commonwealth that is required on a mandatory basis to turn their pensions over to the state and there was absolutely no reasonable basis to single out our city.”
Bloom says the hope is that the city can find a way to avoid the take over some time in 2011. “We are asking the mayor and City Council to save our city,” says Bloom, “and what I mean by that is if the pensions are not adequately funded by the end of the year and the state takes over the pensions the payment schedule that will be mandated by the state will cause looming bankruptcy and we believe this city will suffer the same fate as Detroit.”
Pennsylvania Act 44 requires the city to turn its pension fund over to the Pennsylvania Municipal Retirement System if it does not make a payment of approximately $220 million by year’s end. The suit asked the judge to force the city to raise taxes enough to keep the fund under local control. The union says local control is required under the union’s contact.
Bloom says the union no longer wants to take that tack. However, Bloom says the union still believes act 44 is unconstitutional as it applies to the pension fund, “Also Act 44 is unconstitutional in that they singled out the city of Pittsburgh. The city of Pittsburgh is the only municipality across the commonwealth that is required on a mandatory basis to turn their pensions over to the state and there was absolutely no reasonable basis to single out our city.”
Bloom says the hope is that the city can find a way to avoid the take over some time in 2011. “We are asking the mayor and City Council to save our city,” says Bloom, “and what I mean by that is if the pensions are not adequately funded by the end of the year and the state takes over the pensions the payment schedule that will be mandated by the state will cause looming bankruptcy and we believe this city will suffer the same fate as Detroit.”
Wednesday, December 15, 2010
Pension/Parking Plan Dies Again
Pittsburgh City Council has once again rejected a plan to lease parking assets to LAZ Parking. Councilman Ricky Burges gathered only two yes votes for his compromise plan at a meeting Wednesday.
Mayor Luke Ravenstahl had hoped to lease the garages and meters for 50 years and then use the upfront proceeds to bring the city’s pension plan up to the 50% funded level in order to avoid a state takeover. Council members rejected the deal and then moved a proposal to do a garage swap and bond issuance with the Parking Authority to shore up the pension fund. Still others on the council think a state take over may be the best option.
The Burgess plan shortened the length of the lease from 50 to 40 years, lowered the fee increase schedule for parking meters in neighborhoods, included revenue sharing and allowed the city to benefit from advertising on and in the garages. He feels his plan addressed all of the concerns voiced by the community and by council members. He says he is willing to work up to the last minute to find a solution. Councilwoman Theresa Smith says council should not leave the building until it finds a way to fix the pension problem.
Councilman Bruce Kraus says any lease deal will continue to fail to get five votes because there are at least five council members who will not allow the city to sell or lease any public assets. “So if we are truly interested in resolving our pension issue… Stop it. Nobody wants it. Can we stop it now and start doing what we need to do to resolve our pension problem,” says Kraus. Councilman Bill Peduto says he will not give up control of one of the few revenue streams available to the city he likened it to “selling the cow rather than the milk.” He says cities across the nation are finding “wall street firms” swooping in to pickup assets. “Do you think they are doing this to help cities pension plans and to help cities get through tough budget times? Then you think that check cashing places are out there to help poor people,” says Peduto
The revised lease fell on a 5-2 vote with two abstentions. LAZ Parking CEO Alan Lazowski says he is not ready to walk away from the deal and promised to meet with any council member to get a deal done before the end of the year. “We have spent millions of dollars in pursuit of this deal, we have thousands of man hours in this deal,” says Lazowski, “We owe it to our company, to our 6,000 employees, we owe it to the infrastructure world that is looking at this deal to say this is important for cities across the country.”
Lazowski says he feels his firm has been very responsive to every suggestion made by council members and he reminds them that he was only responding to a Request For Proposal from the Mayor’s office when he first tried to lease the parking assets.
Council members Smith, Dowd and Burgess says they will work to find a way to prevent a state take over of the pension plan but all three know time is running out to meet the December 31st deadline.
Mayor Luke Ravenstahl had hoped to lease the garages and meters for 50 years and then use the upfront proceeds to bring the city’s pension plan up to the 50% funded level in order to avoid a state takeover. Council members rejected the deal and then moved a proposal to do a garage swap and bond issuance with the Parking Authority to shore up the pension fund. Still others on the council think a state take over may be the best option.
The Burgess plan shortened the length of the lease from 50 to 40 years, lowered the fee increase schedule for parking meters in neighborhoods, included revenue sharing and allowed the city to benefit from advertising on and in the garages. He feels his plan addressed all of the concerns voiced by the community and by council members. He says he is willing to work up to the last minute to find a solution. Councilwoman Theresa Smith says council should not leave the building until it finds a way to fix the pension problem.
Councilman Bruce Kraus says any lease deal will continue to fail to get five votes because there are at least five council members who will not allow the city to sell or lease any public assets. “So if we are truly interested in resolving our pension issue… Stop it. Nobody wants it. Can we stop it now and start doing what we need to do to resolve our pension problem,” says Kraus. Councilman Bill Peduto says he will not give up control of one of the few revenue streams available to the city he likened it to “selling the cow rather than the milk.” He says cities across the nation are finding “wall street firms” swooping in to pickup assets. “Do you think they are doing this to help cities pension plans and to help cities get through tough budget times? Then you think that check cashing places are out there to help poor people,” says Peduto
The revised lease fell on a 5-2 vote with two abstentions. LAZ Parking CEO Alan Lazowski says he is not ready to walk away from the deal and promised to meet with any council member to get a deal done before the end of the year. “We have spent millions of dollars in pursuit of this deal, we have thousands of man hours in this deal,” says Lazowski, “We owe it to our company, to our 6,000 employees, we owe it to the infrastructure world that is looking at this deal to say this is important for cities across the country.”
Lazowski says he feels his firm has been very responsive to every suggestion made by council members and he reminds them that he was only responding to a Request For Proposal from the Mayor’s office when he first tried to lease the parking assets.
Council members Smith, Dowd and Burgess says they will work to find a way to prevent a state take over of the pension plan but all three know time is running out to meet the December 31st deadline.
Tuesday, November 16, 2010
PA House Okays Pension Overhaul
The Pennsylvania House has wrapped up its two-year legislative session.
The chamber passed a pension reform bill and a measure expanding the right to deadly self defense in its final votes.
165 lawmakers voted for the pension overhaul, despite concerns from top Republicans and Democrats the measure violates the state Constitution by addressing two issues at once because it included a provision for a fiscal oversight office.
Democrat Dwight Evans of Philadelphia, the House Appropriations Chairman, argued the pension bill was unconstitutional because of the fiscal office provision....
"Why take the chance, Mr. Speaker? Why take the chance and put it in the hands of the courts? In my view, just one person, why take that gamble?"
Some Republicans said they wanted to wait until next year to pass a broader reform, but Cumberland County representative Glenn Grell argued for immediate action.
"Every new legislator who joins us in December, and every new state employee who comes to join the Corbett Administration, will be grandfathered into the current expensive system, and we will be even further behind in bringing these pension funds to a more stable financial status."
The measure increases the retirement age and vesting period for future public employees. It also decreases retirement benefits, and increases the amount of money an employee pays into his or her pension fund.
Governor Rendell said will sign the pension overhaul legislation.
The House also overrode Rendell’s veto of an education bill. A Senate Republican spokesman says Senate leaders will “discuss the possibility” of coming back to vote on the measure.
The chamber passed a pension reform bill and a measure expanding the right to deadly self defense in its final votes.
165 lawmakers voted for the pension overhaul, despite concerns from top Republicans and Democrats the measure violates the state Constitution by addressing two issues at once because it included a provision for a fiscal oversight office.
Democrat Dwight Evans of Philadelphia, the House Appropriations Chairman, argued the pension bill was unconstitutional because of the fiscal office provision....
"Why take the chance, Mr. Speaker? Why take the chance and put it in the hands of the courts? In my view, just one person, why take that gamble?"
Some Republicans said they wanted to wait until next year to pass a broader reform, but Cumberland County representative Glenn Grell argued for immediate action.
"Every new legislator who joins us in December, and every new state employee who comes to join the Corbett Administration, will be grandfathered into the current expensive system, and we will be even further behind in bringing these pension funds to a more stable financial status."
The measure increases the retirement age and vesting period for future public employees. It also decreases retirement benefits, and increases the amount of money an employee pays into his or her pension fund.
Governor Rendell said will sign the pension overhaul legislation.
The House also overrode Rendell’s veto of an education bill. A Senate Republican spokesman says Senate leaders will “discuss the possibility” of coming back to vote on the measure.
Monday, November 15, 2010
Pension Reform Passes
A bill overhauling Pennsylvania’s public pension system is headed to Governor Ed Rendell’s desk.
The chamber voted 165-31 to pass a measure increasing the retirement age and lowering pension benefits for future state and public school employees.
Earlier in the afternoon, the House upheld the measure’s constitutionality on a 128-68 vote.
Opponents had said the Senate violated “single subject” guidelines by inserting language creating a legislative fiscal office into the measure.
Governor Rendell has voiced support for the pension bill.
The chamber voted 165-31 to pass a measure increasing the retirement age and lowering pension benefits for future state and public school employees.
Earlier in the afternoon, the House upheld the measure’s constitutionality on a 128-68 vote.
Opponents had said the Senate violated “single subject” guidelines by inserting language creating a legislative fiscal office into the measure.
Governor Rendell has voiced support for the pension bill.
PA House Back In Session For 1 Voting Day
The Pennsylvania House will spend this afternoon and evening casting their final votes of the two-year legislative session.
DUQ's Capitol Reporter Scott Detrow says lawmakers may pass a measure overhauling retirement benefits for future state employees.
The pension bill increases the retirement age and lowers benefits for future state and public schools workers, but keeps a defined-benefit system in place, instead of switching over to a 401-K-like defined contribution system.
The measure passed the House with overwhelming support this summer, but two factors may lead to a different outcome today.
First, the Senate inserted language creating a new legislative fiscal office into the bill, angering House Democratic Leaders.
Secondly, Republicans won back control of the House on Election Day, and many conservatives want to pass a pension overhaul with more drastic changes than this bill contains.
Votes are also expected on measures expanding the right to self defense, changing language in Megan’s Law statutes, and altering state food safety guidelines. Neither the House nor Senate have any more voting days scheduled this month.
DUQ's Capitol Reporter Scott Detrow says lawmakers may pass a measure overhauling retirement benefits for future state employees.
The pension bill increases the retirement age and lowers benefits for future state and public schools workers, but keeps a defined-benefit system in place, instead of switching over to a 401-K-like defined contribution system.
The measure passed the House with overwhelming support this summer, but two factors may lead to a different outcome today.
First, the Senate inserted language creating a new legislative fiscal office into the bill, angering House Democratic Leaders.
Secondly, Republicans won back control of the House on Election Day, and many conservatives want to pass a pension overhaul with more drastic changes than this bill contains.
Votes are also expected on measures expanding the right to self defense, changing language in Megan’s Law statutes, and altering state food safety guidelines. Neither the House nor Senate have any more voting days scheduled this month.
Saturday, November 13, 2010
Conservative Group: Pension Bill Thwarts Reform
A conservative think tank is urging the Pennsylvania House to vote against legislation that aims at overhauling future state and public employees' pension plans in Pennsylvania.
Matthew Brouillette, president of the Commonwealth Foundation, claims the measure will thwart real reform....
"Governor-elect Tom Corbett has committed to pushing a defined contribution pension system, the same that you find in the private sector. Organized labor knows that they're going to have to enter into the fiscal realities that the rest of Pennsylvanians and Americans have been dealing with for years."
Current union state and school district employees have defined benefit pensions that are based on a multiplier of their salaries. Under defined contribution, the pension is affected by the investment markets.
Brouillette claims the measure that will be voted upon Monday will not save money. But it does reduce the multiplier factor for new employees and extends the vesting period from 5 years to 10 years of service.
Senate Republicans did amend this bill so that in a market downturn, if the pension system does not meet its investment goals, part of the loss would be borne by the employees.
Matthew Brouillette, president of the Commonwealth Foundation, claims the measure will thwart real reform....
"Governor-elect Tom Corbett has committed to pushing a defined contribution pension system, the same that you find in the private sector. Organized labor knows that they're going to have to enter into the fiscal realities that the rest of Pennsylvanians and Americans have been dealing with for years."
Current union state and school district employees have defined benefit pensions that are based on a multiplier of their salaries. Under defined contribution, the pension is affected by the investment markets.
Brouillette claims the measure that will be voted upon Monday will not save money. But it does reduce the multiplier factor for new employees and extends the vesting period from 5 years to 10 years of service.
Senate Republicans did amend this bill so that in a market downturn, if the pension system does not meet its investment goals, part of the loss would be borne by the employees.
Friday, November 12, 2010
Frankel: Pension Reform Bill..A Good 1st Step
Pennsylvania House members return to the Capitol Monday to vote on pension reform legislation. House Democratic leaders reversed course and re-scheduled the vote after rank and file lawmakers ripped the leadership for canceling the last 5 voting days in this legislative session.
State Representatives will be voting on a Senate-amended House bill that would overhaul
future state and public school employees’ pension plans in Pennsylvania. The amended measure scales back benefits and increases the retirement age for incoming workers.
Representative Dan Frankel of Pittsburgh says it's an important piece of legislation but he understands there are people who don't think it's adequate for what needs to be done....
"It rolls back the pension enhancements that were passed in 2001 and it creates an ability to smooth out the increased pension payments that are going to have to be made by the state and the school districts so they won't have the full impact that will devastate the budgets of the state and school districts.
Senate Finance Committee Chairman Pat Browne, who amended the House bill, says a big problem with Pennsylvania’s current defined benefit plan is the fact the state bears the brunt of the cost, when the markets fail like they did in 2008.
He concedes unions and many Democrats don’t want to switch to a defined contribution system, where employees pay the price for underperformance. Under Browne's amendment, if the system doesn’t make its investment goals, part of that loss would be borne by the employee.
Many Republicans had called for a full switch to a defined contribution system. Democratic Representative Frankel says the state can't wait...."The sooner we get this (2001) legislation replaced with the more reasonable pension benefit that new employees will be receiving (the better). If you wait, you're going to add on to the problem we created."
Frankel expects the bill to be approved.
The measure also extends the vesting period for a new employee from the current 5 years to 10 years.
State Representatives will be voting on a Senate-amended House bill that would overhaul
future state and public school employees’ pension plans in Pennsylvania. The amended measure scales back benefits and increases the retirement age for incoming workers.
Representative Dan Frankel of Pittsburgh says it's an important piece of legislation but he understands there are people who don't think it's adequate for what needs to be done....
"It rolls back the pension enhancements that were passed in 2001 and it creates an ability to smooth out the increased pension payments that are going to have to be made by the state and the school districts so they won't have the full impact that will devastate the budgets of the state and school districts.
Senate Finance Committee Chairman Pat Browne, who amended the House bill, says a big problem with Pennsylvania’s current defined benefit plan is the fact the state bears the brunt of the cost, when the markets fail like they did in 2008.
He concedes unions and many Democrats don’t want to switch to a defined contribution system, where employees pay the price for underperformance. Under Browne's amendment, if the system doesn’t make its investment goals, part of that loss would be borne by the employee.
Many Republicans had called for a full switch to a defined contribution system. Democratic Representative Frankel says the state can't wait...."The sooner we get this (2001) legislation replaced with the more reasonable pension benefit that new employees will be receiving (the better). If you wait, you're going to add on to the problem we created."
Frankel expects the bill to be approved.
The measure also extends the vesting period for a new employee from the current 5 years to 10 years.
Council, Mayor Spar Over $45 Mill
Pittsburgh Mayor Luke Ravenstahl has asked city council to approve a plan to use reserve funds to pay off old debt and then issues new lower interest bonds but some council members are less than will to go along with the idea. As much as $45 million has been built up in reserve in recent years and had been earmarked by council to help pay off old debt or to shore up the pension fund. The administration is now asking council to use a portion of the money to pay down non-callable bonds through a tender offer and place the rest in a special account that would be used in 2012 when the city has its first opportunity to call the bonds. At the same time the mayor wants to issue 45 million dollars in “Build America” bonds. The “Build America” bond program is part of the American Recovery and Reinvestment Act and the federal government will pay 35% of the interest on the bonds. The proceeds from the bonds must be used for infrastructure projects. The non-callable bonds carry a rate of 6.5% and City Finance Director Scott Kunka says the new bonds would carry substantially lower rates.
The request upset several members of council. Councilman Bill Peduto says the city may need the money to either pump up the pension fund to lower minimum annual pension fund payments in the future or to get from 2016 when pension payments spike to 2018 when the city’s debt service payments drop. Councilman Patrick Dowd voiced many of the same concerns at a council meeting earlier this week. “This account… could potentially play a roll in being the solution to the pension problem,” says Dowd, “I understand that [the mayor’s office wants] to transfer funds and issue new debt to retire old debt, and I understand all that and I support that concept, but I do not support that absent our larger goals and strategies.”
Other council members questioned the mayor’s commitment to lowering the city’s debt. In recent weeks the mayor has rejected the so-called Council/Controller plan saying he will not issue any new debt. The Council/Controller plan involves selling city owned parking meters, surface lots and one parking garage to the Pittsburgh Parking Authority in return for $220 million. The money would then be used to boost the pension fund. To make that payment, the Authority would have to issue new bonds. City Finance Director Scott Kunka says the difference is that council wants to issue new debt and the mayor wants to refinance debt.
The mayor’s office says the proceeds from the Build America bonds would be used to “keep the capital program going.” In recent years the city has been using a pay-as-you-go approach to capital improvements.
Patrick Dowd asked for a three-week hold on the legislation, “while we find a solution to the pension problem.” Kunka argued that he needed the approval sooner or the tender offer would expire. Councilwoman Natalia Rudiak complained that the Ravenstahl Administration is always coming to council “at the least minute.” “Everything is rush, rush, rush,” says Rudiak. Council eventually decided to hold the legislation for two weeks. Kunka thinks he may be able to keep $7 million in tender offers alive until then.
The request upset several members of council. Councilman Bill Peduto says the city may need the money to either pump up the pension fund to lower minimum annual pension fund payments in the future or to get from 2016 when pension payments spike to 2018 when the city’s debt service payments drop. Councilman Patrick Dowd voiced many of the same concerns at a council meeting earlier this week. “This account… could potentially play a roll in being the solution to the pension problem,” says Dowd, “I understand that [the mayor’s office wants] to transfer funds and issue new debt to retire old debt, and I understand all that and I support that concept, but I do not support that absent our larger goals and strategies.”
Other council members questioned the mayor’s commitment to lowering the city’s debt. In recent weeks the mayor has rejected the so-called Council/Controller plan saying he will not issue any new debt. The Council/Controller plan involves selling city owned parking meters, surface lots and one parking garage to the Pittsburgh Parking Authority in return for $220 million. The money would then be used to boost the pension fund. To make that payment, the Authority would have to issue new bonds. City Finance Director Scott Kunka says the difference is that council wants to issue new debt and the mayor wants to refinance debt.
The mayor’s office says the proceeds from the Build America bonds would be used to “keep the capital program going.” In recent years the city has been using a pay-as-you-go approach to capital improvements.
Patrick Dowd asked for a three-week hold on the legislation, “while we find a solution to the pension problem.” Kunka argued that he needed the approval sooner or the tender offer would expire. Councilwoman Natalia Rudiak complained that the Ravenstahl Administration is always coming to council “at the least minute.” “Everything is rush, rush, rush,” says Rudiak. Council eventually decided to hold the legislation for two weeks. Kunka thinks he may be able to keep $7 million in tender offers alive until then.
Thursday, November 11, 2010
House Will Vote On Pension Reform
House Democratic leaders have reversed course, and will now hold a voting session Monday. Top Democrats had planned to come back and vote on a pension overhaul and other measures after the election, but suddenly canceled remaining voting days on Friday afternoon.
Dozens of rank-and-file Democrats protested. Many, including Bill DeWeese of Greene County, blamed Appropriations Committee Chair Dwight Evans for the cancellation.
"It was unilaterally Dwight. No doubt, no doubt."
One member said Evans felt threatened by a section of the pension bill creating a new legislative fiscal office.
Evans’ spokeswoman, Johnna Pro, disagrees.
"The Appropriations Chairman has no authority to cancel a voting session. That is the role of the Leader and the Speaker."
Berks County Democrat Thomas Caltagirone says Evans was threatened by the pension bill.
"The pension bill has a provision for fiscal oversight in there. That makes him extremely nervous."
Speaker Keith McCall has now informed members a voting session will take place on November 15th, at one o’clock.
A Republican spokesman warns the pension bill might not have as much support as it did before, though – saying members of both parties might vote no, thinking they can write a better bill next year, when Republicans take control.
Dozens of rank-and-file Democrats protested. Many, including Bill DeWeese of Greene County, blamed Appropriations Committee Chair Dwight Evans for the cancellation.
"It was unilaterally Dwight. No doubt, no doubt."
One member said Evans felt threatened by a section of the pension bill creating a new legislative fiscal office.
Evans’ spokeswoman, Johnna Pro, disagrees.
"The Appropriations Chairman has no authority to cancel a voting session. That is the role of the Leader and the Speaker."
Berks County Democrat Thomas Caltagirone says Evans was threatened by the pension bill.
"The pension bill has a provision for fiscal oversight in there. That makes him extremely nervous."
Speaker Keith McCall has now informed members a voting session will take place on November 15th, at one o’clock.
A Republican spokesman warns the pension bill might not have as much support as it did before, though – saying members of both parties might vote no, thinking they can write a better bill next year, when Republicans take control.
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