Getting Ready to Rumble, while Reflecting on the “Weekend News”.

I’ll handle this. You take the long way.

At 1:00 PM today, City Council President Darlene Harris will gavel in a special meeting which was called by Mayor Luke Ravenstahl by his own right, to discuss a possible state takeover of the city’s authority to manage its own pension funds…

Likely, and possibly backbreaking, budget cuts that would go along with that…

The Harris-Dowd-Rudiak bill presently under consideration which purports to successfully and safely avert that state takeover…

And, unavoidably, on occasion, the Mayor’s rejected parking lease proposal (though expect his rivals to spend more time than him on this subject). There will also probably be trial balloons floated for wholly new or adjusted plans and gambits.

This will all be LIVEBLOGGED by me if I can get a signal in that venerable old room. It will also be cablecast though not webstreamed, so as Don King would say, call your local cable operator, and make sure you’re getting City Channel 13.

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On Sunday, the Pittsburgh Post-Gazette led off its front page with what was unarguably a political analysis piece (if not an opinion piece) posturing somewhat as a news story.

This was the method it selected to frame a forthcoming discussion about the full scope, magnitude, and alarmingly significant proximity of Pittsburgh’s fiscal nightmare and what if anything whatsoever can be done about it. The prior piece on the meeting in Saturday’s paper also became catalogue of political assertions, spliced and edited together for maximum drama, passable humor and a certain effect.

I hope the coy score-settling is out of everyone’s system finally, and that everybody can check their interpersonal and interoffice drama, not to mention long histories, at the door. I hope the local MSM in the coming days will be suffused with context from economics experts, prominent state officials, disinterested business people and individuals who understand Pittsburgh’s unique and uniquely untenable financial position inside and out. The endless armchair psychoanalysis of our mayor by his direct political rivals, for example, and assumptions based off of assumptions about what might develop serving as story hooks and leads — that all may have outlasted its conceivable utility, that is, utility for exposition rather than for legitimizing one’s unique impression of politically charged moments.

Rich Lord is a special guy to this blog. His talent is enormous, yet conjoined with so much stagecraft and such extravagantly directed suspicion, he better resembles a blogger at times. Clearly that’s a compliment but with stakes this high it’s just an alarming observation.

If Lord were to be offered a regular column on the opinions page of the Post-Gazette, and were he to accept it, that would be super fantastic — cheers would go up from all corners of this region, and I would be sponsoring the parade. If he were to start writing and getting paid for his own editorial-friendly web presence on PG+, which is only $2.99 per month and packed with content already, that would be just one more reason to join.

Until then, however, I think the public might better be served by placing an experienced, well-educated, fresh set of eyes — and preconceptions — on this narrowly urgent set of issues. There must be something Marcellus-related happening today. Sometimes if you’re too close to too little for too long, you become a part of the story.

62 thoughts on “Getting Ready to Rumble, while Reflecting on the “Weekend News”.

  1. Anonymous

    Bram in Post:

    “Rich Lord is a special guy to this blog. His talent is enormous, yet conjoined with so much stagecraft and such extravagantly directed suspicion, he better resembles a blogger at times. Clearly that's a compliment but with stakes this high it's just an alarming observation.”

    To which I reply (MSM) via email:

    PASTE:

    To: MSM (In response to Comet Blog opinion: Rich Lord)

    As a past Representative, Elected by the Employees, I was wondering why I have not heard opinions from currentElected Reps. concerning either proposal, on Parking for Pensions.

    Many folks I know are disappointed that only 'paid' Elected
    Officials have voice in process…

    Municipal Employee Pension Fund, President John Sibbet, owes Pension Fund Contributors an opinion on Mayors and Councils plan.

    Monk

    Past Vice President (Employee Representative)
    City Of Pittsburgh Municipal Employyes Pension Fund
    Board of Directors

    Reply
  2. Anonymous

    Anon 4:32…unprecedented, in politics?

    Kindalike?

    Rudick ” “Universally Panned”

    Ohhhh, Pleeese.

    Bram is onto something…

    monk

    Reply
  3. Anonymous

    For a moment…Let's talk Mayor Murphy. Bond Issuance…

    He did so with support of MSM. They liked approach!

    Non-Fixing, Internet Bid…

    If I recall, he did twice…a test drive of $55 Million and $210 Million.. Should add up to $265 Million…

    In Books $255 Million.

    Current money on hand less bonds…will buy you dog and coke at PNC PARK.

    We need real money, not promise of future…

    Unlike Council, Pension Fund Contributors are willing to shack up with Luke.

    Concessions will follow is Mayor prevails…

    Rank and Foul! Backs Scotty (Kunka) and Staff!

    monk

    Reply
  4. C. Briem

    If you care. there were two issuances… $36 mil (1996) and $256 mil (1998) for total of $292 mil. or in inflation adjusted dollars a bit of $400 million in todays dollars.. so twice what is being talked of going into pension fund with the parking asset lease.

    If we “need real money”, then why the investment in 'illiquid' assets as both city and state agree are included in the pension fund. Some big inconsistency in that.

    Lots of confusion in the finance and the rhetoric. But it is important to note that the 1990's pension bonds were general obligation bonds the city was on the hook for. As best I understand, what is being proposed would be revenue bonds that only claw back to future parking revenues. Even if the purpose of the funds raised was for pensions.. they really are not 'pension bonds' as the term is used. Makes a big difference.

    Reply
  5. MH

    The 3:37 comment, taken with what I've seen in this and other threads, makes me even more supportive of a state takeover regardless of selling bonds or parking.

    Reply
  6. n'at

    For any serious consideration Rich must first author a review of something created by another of same name, à la Tony Norman.

    Reply
  7. Anonymous

    C. Briem said:

    “Even if the purpose of the funds raised was for pensions.. they really are not 'pension bonds' as the term is used. Makes a big difference.”

    Splitting Hairs…

    Debt: Costs! No, difference….

    ouch!

    monk

    Reply
  8. Anonymous

    I saw that. The slides are quite dramatic. Unfortunately, the whole thing is based on a series of flawed assumptions which were pointed out during the meeting. Excessive use of exclamation point and font size, while entertaining, does not change the facts.

    Reply
  9. Bram Reichbaum

    I didn't catch the flawed assumptions — some debatable ones perhaps, worst-case vs. best-case scenarios, a continued unknown regarding taxability — but remind me of the flawed ones.

    Reply
  10. Anonymous

    ok, i watched the video. A couple things are more clear to me. One, I am warming up to Peduto's plan. Second, Rudiak is a complete moron. God help all those that elected her.

    Reply
  11. Anonymous

    A couple things are more clear to me. One, I am warming up to Peduto's plan. Second, Rudiak is a complete moron.

    …said the commenter who refers to a state takeover as a “plan”

    Reply
  12. Anonymous

    Rudiak is a wonderful rep. on Council and I take offense to such an incendiary word as “moron”. It's not even applicable to her. I find her smart, bright, hard working and thoroughly engaged in real dollars and cents matters of this debate. She is formatible and will respond with reason and facts. Unlike Rev Burgess who comes down from on high from the pulpit to proclaim and put words in everyone elses mouth to tell (distort) what you've just said. His is always the higher calling and he baits and insinuates until everyone is on their last nerve. The talking points he used yesterday were obviously provided by the mayors office (no coincidence that they both brought up the city of Harrisburg). Rudiak also is onto the Rev's horrible choice of words such as, stillborn, snake oil… I'll continue this later I have to go. Meetings on….

    Reply
  13. Anonymous

    Anon:

    I agree that folks can disagree without resorting to namecalling.

    I think anyone who follows, in earnest, municipal issues in the Commonwealth would not only be well aware of Harrisburg's struggles, but would be painfully aware of the 3 year-long slugfest between their City Council and their previous Mayor and their then-City Council President and now-Mayor.

    It is ironic that you take offense to the Harrisburg reference because in Harrisburg's case, as now in Pittsburgh, both cities falling off of the cliff seem to be the result of Council rejection of a mayoral initiative while providing no viable alternative that satisfies the issue at hand.

    It is probably only prudent that the two cities be compared, because in both cases the same behavior pattern has emerged.

    If you don't like the reference, I assure you that you like the outcome and its' consequences even less.

    Reply
  14. MH

    As much as I enjoy the surrealism of watching two people are apparently engaging in sustained debate while using the same name, would it hurt to pick a false name so that somebody else can see who is who. I'll suggest “Ted” and “Rex,” but really almost anything works.

    Reply
  15. MH

    Rex says,

    It is ironic that you take offense to the Harrisburg reference because in Harrisburg's case, as now in Pittsburgh, both cities falling off of the cliff seem to be the result of Council rejection of a mayoral initiative while providing no viable alternative that satisfies the issue at hand.

    Harrisburg is falling off a cliff because of a single bad decision made years ago. It should go bankrupt and I don't really understand how it would benefit anybody (excepting elected officials, bond holders, and people who want to sell bonds) to sell assets to avoid going bankrupt.

    Reply
  16. Rex

    MH,

    If Harrisburg goes Act 47, the state will decide, not Harrisburg, if the City can even initiate bankruptcy proceedings, but ultimately, as Chris Briem has said many times, few municipalities will be allowed to enter bankruptcy as long as they have the ability to tax its' own residents to recoup any potential shortfalls.

    Reply
  17. MH

    So far, the only thing the state has done for Harrisburg is lend it just enough money to not go under until the next governor hits town. And Pittsburgh's plan is just enough money to keep the pensions funded until the people who sold the assets are out of office.

    I don't think a local government in either city can tax its own residents enough to pay the debt and win the next election. And, given the geographic size of Pittsburgh, I don’t think you can raise local taxes much more without having people move out to the suburbs in numbers to sufficient to offset any gains from higher rates. Whether that states wants it or not, something is going to crash sooner or later. Pittsburgh, as currently constructed, is not a financially viable entity.

    Reply
  18. MH

    If Pittsburgh did get extra money, they'd blow it to fix Kevin Quigley's driveway instead of looking at streets where taxpayers live. Basically, I like the idea of parking garages because it takes years to fritter away an actual building.

    Reply
  19. Rex

    MH,

    True, 5 members of Council face the voters next year.

    The voters aren't going to go for massive tax hikes OR massive cuts, in an election year.

    But the City MUST adopt a balanced budget.

    Reply
  20. BrianTH

    The state can direct a financially-distressed city to make its debt/pension payments, and leave it to the city to decide whether to increase taxes or decrease services in order to make those payments. Neither of those options may be popular with the relevant city's elected officials, but the state can probably count on voters to blame those elected officials, and not the state itself, when they are forced into making the choice. Which indeed seems to be working so far.

    Reply
  21. Bram Reichbaum

    In general, although the taxability issue was an interesting surprise (I'm relieved for the Mayor's sake there really WAS an interesting surprise), my #1 concern about the Council-Controller plan didn't get addressed: is a very simple rate increase all that is necessary (and has the math, which may not be linear, been checked well), or will the PPA have to improve management / operations in some defined way of which it is capable? Democratic party governments may be incapable of raising this concern, but that doesn't mean it doesn't exist.

    Reply
  22. Bram Reichbaum

    Anons 10:05, 10:15 – In as much as people are claiming there are certain kinds of intelligence, I guess there would have to be as many styles of unintelligence. I'd say most people who opened a newspaper to find a Mayor calling a Council's plan “irresponsible” and calling a public meeting to “expose it to the withering light of day”, probably should have shown up expecting and prepared for a debate. In as much as the Mayor was questioning past (political?) statements made about how long fiscal and legal due process on a bond deal takes, that qualifies him as taking part in both intelligent conversation and public spectacle at the same time. Compare walking / chewing gum.

    During Act II, I did appreciate the waving around of Rudiak's early letter to the Mayor and the persistent questioning on why it never received a response. It evoked every other major public dispute between the Mayor and Council, ever — eventually it descends into, “But why then do you never meet with me / return my messages / send me flowers?” At this point already there's surely something to that criticism, although apparently both Dowd and Burgess have more special privileges than most others.

    Reply
  23. MH

    or will the PPA have to improve management / operations in some defined way of which it is capable?

    Weren't they the ones that got mocked for employees who wouldn't spread salt during the big snow?

    Reply
  24. Bram Reichbaum

    MH – Yes. One might also mock their not knowing how very many meters were broken until LAZ went around the city and counted for them. (And by “their” I mean the public sector trying its best to run a business as a business, not the PPA or any of its sterling individuals in particular.)

    Reply
  25. Bram Reichbaum

    And a note on what was called “political rhetoric”: there are economists who argue that tax cuts and spending increases amount to the same thing. But try telling a citizen that new spending on a new program “really amounts to a tax cut for you!” It will not work and for fine reasons.

    Similarly, a person may take out a loan to start or expand a business — but can that person really go around saying, “I'm not really in DEBT, because my loan payments are backed by future revenues from this business I'm starting / expanding?”

    To call what some are calling the Council-Controller Plan “the Debt Plan” is not some bizarre, offensive, irresponsible maneuver. Not any more than calling something once called “the Fair Share tax” a “Student Tax”.

    Reply
  26. MH

    To call what some are calling the Council-Controller Plan “the Debt Plan” is not some bizarre, offensive, irresponsible maneuver.

    I agree. The mayor should veto it and let the state take over.

    Reply
  27. Anonymous

    But, to suggest that this debt adds to the city's debt load is also not accurate. The Mayor says he opposes all debt but during his term has increased debt at every authority including the parking authority, PWSA, URA, ALCOSAN, SEA etc…

    Reply
  28. MH

    The PG is reporting that only four of the council members are committed to the plan, but I have no special information on that.

    Reply
  29. MH

    Anon at 3:17:

    Your second sentence in no way supports your first sentence. I suppose you could say that the council plan doesn't add to the city's debt load because we already owe the money in the pension fund.

    Reply
  30. Bram Reichbaum

    MH 3:18 – On a related note, it's entirely possible that some council members' recent increased interest in the State Takeover comprises a bluff, or perhaps a calling of what they perceive to be the Mayor's bluff. It's so hard to say.

    STRAP YOUR BOOTS ON, PUBLIC WORKS AND PUBLIC SAFETY!! Major storms with very major winds are predicted. A nice opportunity to avert any possible concerns over any lacks of preparation or communication.

    Reply
  31. MH

    or perhaps a calling of what they perceive to be the Mayor's bluff.

    That would be my guess as the mayor did everything but plagiarize “Left Behind” to paint a scary scene. Too bad the local elections are off-cycle because otherwise we might get somebody to make a YouTube video where they shoot at a parking garage.

    Reply
  32. C. Briem

    It's veto-proof at Council, but still requires Parking Authority approval and administrative execution.

    Just in case anyone has any doubts on that. The governance of the Pittsburgh Parking Authority is the board of the Pittsburgh Parking Authority. Period.

    I suspect there would be no problem with them issuing a bond without city approval, given the term of the bond did not exceed its current charter as previously approved by the city.

    They are under no obligation to do anything either the mayor or city council direct. Control, as it were, of the city over the PPA is effected by the power to appoint said members of the board and not anything else.

    Reply
  33. MH

    Sometimes I think I should comment using a blogger profile with an e-mail address. Sometimes I think it is best I don't leave my e-mail address where just anybody can see it.

    Reply
  34. Conservative Mountaineer

    @Bram..

    It's veto-proof at Council, but still requires Parking Authority approval and administrative execution.

    Aaaahh, another attempt to assert that *any* government ageny or authority has the intellect to make an informed and intelligent decision. The PPA and any other authority is governed by political hacks that couldn't run a lemonade stand in 90 degree weather at the County fair.

    This will not end well. Why? Because NOONE will address the root problem – the City promised more than they deliver.. more than the City residents can pay in taxes.. more than the commuters want or able to pay, whether that be parking taxes, payrolls taxes, etc. The paradigm has shifted. Too many public-sector employees have yet to realize – the train ride is over.

    Pittsburgh, as a City, is dead. Good. They voted 70+ years for cronyism Democrats. The residents deserve what they get.

    Don't even think those of us outside Pittsburgh will ever assume any obligations of the City's decay.. ditto as a State taxpayer.

    Reply
  35. Infinonymous

    CM

    I acknowledge that decisions of Democratic officials have wrecked Pittsburgh.

    I also am smart enough to recognize that this is better than when Republican officials make decision that destroy countries (Iraq) and damage the United States in the process.

    How about you?

    Reply
  36. Conservative Mountaineer

    @Infinonymous..

    Aaaaahh.. the 'change the subject' ploy. Nice try, but I'm not playing. You and others continue to rule-out any solution that does not address the root problem. Ergo, the problem will never be solved. Enjoy your ride to the bottom while those of us who can leave the region do leave the region.

    Reply
  37. Bram Reichbaum

    @ CM – If you were on subject, you'd be talking about what the city should do now, this month, to pay down its enormous contractual obligations coming due — not what it should attempt during coming collective bargaining sessions to make sure this isn't replicated 40 years from now (as though arbitrators won't rule in favor of the unions anyway).

    But I'll indulge your subject as well – the “root of the problem” is that manufacturing jobs went abroad, the city shrank to half the number of taxpayers it used to rely upon … and all its pensioners moved to the suburbs to collect city checks, pay taxes to their suburbs and complain that the city can't afford to pave its streets properly and its schools seem too “inner city” anymore to be bothered with.

    Reply
  38. Anonymous

    Debt is ok if used for the right purposes. In the credit world, one entity that is solvent incurring debt to pay the debts of an insolvent related entity is called a fraudulent transfer.

    Reply
  39. MH

    Lately, the credit world has been putting debt owed to it by insolvent entities onto the feds and keeping the rest, so the credit world can go pound sand.

    Reply
  40. n'at

    The city needs a debt authority or a finance authority, like the state; we don't need more money or to reduce the pensions, we simply need to slice up the debt into small enough pieces so that we can scatter it to the four winds. Cant pay what others cant find.

    Reply

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