Bondage gets Council’s Immediate Thumbs Up

The plan was unveiled just yesterday. That was swift.

Where is the outside, independent and expert analysis of the 30-year plan‘s figures and assertions? Where are the 4,726 community public hearings? Who was advising Mr. Lamb and the bill’s sponsors on this matter? Won’t somebody please think of the children? (Post-Gazette)

22 thoughts on “Bondage gets Council’s Immediate Thumbs Up

  1. Anonymous

    I guess the 250k study didn't provide them with the answer they were looking for?

    I guess rate increases aren't city-killers now?

    Reply
  2. MH

    I'm going to stop reading your blog if you keep allowing comments from people who don't employ standard capitalization.

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  3. Bram Reichbaum

    Rachel – It was yesterday; give some us time to grieve.

    But mmmm, yes, some would be nervous of this chapter in Pittsburgh's history being revisited and recontextualized over the course of years, yes?

    Can you imagine if, say (picking from amongst the names out of a hat) Patrick Dowd continues along his current trajectory and becomes mayor, and expands this agenda of clinging to governmental control, appeasing public-sector unions, reactive financial policy and resisting fundamental change — all along with this new knack for legislative hardball?

    This could be the moment to which much gets traced back — and Ravenstahl's credulous soft-pedaling of the jewel of his pragmatic NextGen agenda, the infrastructure lease, will have enabled it. Woe, woe! What devious radical reactionary shanghai'd him, his brightest lieutenant and the spokesleader of the organized corporate community this October, anyway?

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  4. Anonymous

    Unicorn Milk?

    I was robbed of expression:

    PASTE: MEDIA RELEASE

    Comet Blog Censorship!

    Tim McNulty From P-G Remembers when I blocked Tom Flaherty Motion To include Art Gilkes, the Solicitor from buying into pension fund.

    Tom's argument was “we can include, who every we wish.'

    Tim was a bulldog, attended every hearing while I served as John Sibbet's proxy.

    Dowd treads on path that will capitulate him into obscurity.

    He seeks to prove that Pension funds are mismanaged. Staff for various funds are not eligible for pension.(?)

    An employee is entitled to benefits, an elected official is not employed.

    Dowd, deserves nothing in way of pension…

    monk

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  5. BrianTH

    It seems to me an event of this magnitude merits some post game discussion.

    That said, I'm glad at least this deal is moving forward so far–I am still afraid nothing at all will get done.

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  6. InsideAgitator

    I'm with you, Brian TH. Afraid nothing will get done yet the meter for the lawyers, bankers, consultants, accountants, etc. is still running! Anyone have any idea how many billable hours have brought us to this point?

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  7. MH

    I'm glad the Ducky Tours guy gets to decide the future of parking in Pittsburgh. His guides make you yell “quack” at people on the North Shore, which is so much nicer than what Nuttings people have made me yell.

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  8. Anonymous

    This was the Council Presidents plan. It has been fully vetted by Council's scholar people and 27 public hearings.

    And then the Controller found a way to borrow money cheaper with tax exempt bonds instead of Harris's pension bonds.

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  9. Bram Reichbaum

    My own skepticism has less to do with the money-acquisition end of the plan (including legal matters) so much as the revenue generation so as to pay it back end of the plan. It seems like we are asking the PPA to implement a whole lot very quickly, some of it ill-defined, and I'm not sure how to evaluate the plan's projections. I saw there was a reference to something in the FSG study but haven't cross-referenced that yet. To my experience anything propelled along this quickly is bound to be somewhat rose-tinted.

    I'm also wondering over the wisdom of busting our humps to get to what might turn out to be 40% or worse funding, and what exactly anybody is gaining (including rank and file police and fire fighters) by even seeking to avoid PMRS management if we CAN stay ahead of it.

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  10. Anonymous

    In the end, these plans all come down to the cost of capital. A public entity can always do better than a private entity in lowering the cost of capital. A private entity may be a better parking lot operator but the initial investment is more economically viable under council's plan.

    The plan should have been to let the Parking Authority borrow the money and then hire LAZ to run the system.

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  11. BrianTH

    I'm not sure it is true that a public entity without taxing authority (and without their liabilities being guaranteed by an entity with taxing authority) can in fact always do better than a private entity when it comes to cost of capital. Particularly not when the revenues implicitly backing the promise to repay are risky, and the public entity has no ability to diversify its assets but the private entity does.

    There is also the issue of the winner's curse: I think there is a good chance the City set up the auction in such a way to generate a winner's curse, including defeating the typical recommended antidote to the winner's curse with the two-round bidding process. If that is true, then effectively the City could have been taking some money out of the pockets of the pre-existing investors in the winning coalition. Not exactly a nice thing to do, but a win for the City.

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  12. Bram Reichbaum

    My impression was that one reason we could trust LAZ to have done those $400+ million worth of facility improvements — a curious number right? Just about exactly their initial investment? — was because they could write it off (or a portion of it [I feel kind of like Kramer here — “they just write it off!”]) as a business expense for tax purposes. And that's something the public entity CAN'T do. Public has certain advantages, private has others — hence the theoretical attraction of P3's.

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  13. BrianTH

    To be fair, I think Anony's plan (public entity borrows the money, private entity operates the asset) is precisely the sort of PPP which is designed to capture the benefits of the tax laws which favor public borrowing and private expenditures.

    I just wonder if the public borrowing part really works out in practice in this case, since the deal apparently would be structured to isolate the City itself from exposure. Or to put the point in a more depressing way, I wonder if the Parking Authority really would be able to borrow at reasonable rates unless the City offered some guarantees to the lenders.

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  14. Anonymous

    BrianTH,

    The Parking Authority has a better bond rating than the city and the likelyhood is that the bonds would be insured. Of course you pay for that but it's probably worth it.

    Reply
  15. BrianTH

    I don't think the Parking Authority's current bond rating would matter much with its debt load increasing so radically under this plan.

    Anyway, of course for some price you could reduce the risk to the lender, either with higher interest rates or by purchasing insurance from a third-party. But all that would have to go into the cost of capital calculation, and again I am not sure that in this case, that would favor the Parking Authority over a private entity with the ability to diversify.

    Reply

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