Clutch Moment for Darlene Harris?


Picture it: City Hall, January 4th, 2010.

Robert Daniel Lavelle and Natalia Rudiak have been sworn in as freshmen members of the Council, and then Darlene Harris elected its Council President. Mayor Luke Ravenstahl sits in the background, with something of the look of a UFC fan during the 3rd act of a ballet recital. Council President Harris mounts the dais to deliver her speech.

“I look forward to working with this mayor,” she says at one point, turning to look him in the eye. And, given the fact that she won her presidency in a surprise bid on the strength of four votes that had until moments ago been futilely pledged to Councilman Bill Peduto (Ravenstahl’s sharpest critic on the Council) she repeats it, switching up the emphasis. “I will work with this mayor.”

Notice she didn’t say she’d enjoy it, or get very much thanks for it, or that it’d be easy or pleasurable. But she said she’d do it.

$60 million per year worth of public assets are on the chopping block during the next two weeks, and there seems to be only one practicable avenue remaining for keeping them public — though several side streets along this avenue may still be open. I like to think she’s a bit like me; we don’t take sides, unless it’s the North Side. We’ll soon see if this compromise leader can deal, dance and bend effectively enough to engineer a minimally acceptable solution for all parties involved.

23 thoughts on “Clutch Moment for Darlene Harris?

  1. Infinonymous

    December 31 is an illusory deadline (for the public, not for the cream-skimmers desperate to get cash at closing).

    “$60 million per year in public assets are on the chopping block [because of no privateering]” is a faulty assertion.

    A half-baked, time-pressed deal would be especially foolish — even without many of the important and unanswered questions about procedure, personnel and pricing associated with the LAZ-JP Morgan proposal.

    Mrs. Harris seems unlikely to falter, although she is emphatically the privateers' target at vote five, following Patrick Dowd's donning of the number four jersey.

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  2. Bram Reichbaum

    Infy – December 31 is a legislated deadline. There would be some time until the takeover is fully implemented, but it would have to be un-legislated in that copious 500+ member body. Also if you read the letter by Pgh's own delegation (Orie, Frankel, Costa and Turzai), you will see it reiterated very forcefully that Jan 1, 2011 is a “firm and final deadline”.

    It seems criminally foolish to gamble real money against those realities, but I suppose if the notion of “flexibility” catches on it could shore up an understandably uneasy 5th vote or get an elected official through the May primaries. So nice work there.

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  3. Infinonymous

    Some might consider relying on a comprehensive, open, long-term, carefully reasoned process to reach a solution — an approach that recognizes that a momentary compliance with a moving-target 50%ratio is no solution — to be foolish.

    Some might consider relying on the likes of Luke Ravenstahl to avoid having the city get swindled out of its lunch money, yet again, by his pals to be foolish.

    We'll let the grand juries address the “criminally” part.

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  4. BrianTH

    Here is how the current law works:

    If on January 1, 2011, the fund is under 50%, the fund must be transferred to the state and the alternative actuarial assumptions will take effect.

    However, the report on where the fund stood as of January 1, 2011, is not due until September 1, 2011. The actual takeover occurs on September 18, 2011.

    So there will be some period of time in 2011 where the City can lobby the state to change the law and prevent the anticipated takeover. But there won't be an opportunity to change the outcome under the current law.

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  5. BrianTH

    By the way, in addition to carefully constructing the bidding process to maximize the final bid, it might have been a good idea to commission an independent valuation of the proposed lease, just to make sure the City wasn't getting “swindled”.

    Too bad no one thought to do that–I am sure it would have prevented all this snarky, conspiratorial speculation about the financial merits of the winning bid.

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  6. Bram Reichbaum

    Infy –Momentary compliance with a moving-target 50% ratio” … oh this is getting rich. The deadline and the threshold were the only things that got city officials to feign seriousness about funding its pensions for even a short period … and the revenue-sharing and increased parking tax should have addressed your “momentary” hang-up. Which, by the way, I would accept in a heartbeat over “critical lack of any compliance”.

    The rest of what you suggest is starting to smack of a governmental boycott of tackling big civic issues until we get a new mayor in 2014 (if then). Faction of No, anyone?

    BrianTH 12:09 – Har.

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  7. Infinonymous

    This deserves a longer exposition elsewhere, but the irregular procedures, access-to-information questions and lack-of-transparency issues alone should compromise the result in the eyes of any knowledgeable observer.

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  8. MH

    If on January 1, 2011, the fund is under 50%, the fund must be transferred to the state and the alternative actuarial assumptions will take effect.

    This is where you lose me. This highlights something rarely mentioned by lease supporters. Much of the “pain” of the take-over comes from just being honest about likely returns and payouts. We should let the state takeover before we fix it.

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  9. BrianTH

    One nice thing about this issue is that it has generated approximately 1000 different variations on the Perfect Solution Fallacy (aka Nirvana Fallacy) for future logicians and policy-makers to study. In fact the rate of production of such fallacies increased remarkably with the delivery of The Financial Study Which Must Not Be Named, and got another bump up with The State Official's Report Which It Would Also Be Really Politically Inconvenient To Name.

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  10. Bram Reichbaum

    MH – I don't have much of an answer for that. It's one reason I was for lease + takeover … at least until I saw the numbers under takeover still seemed fairly repugnant.

    It's possible that it's unnecessary of PMRS to place us on a “glide-path” to 100% pensions funding … for our city's purposes 70% might be healthy enough. The 30% remaining might be filed more comfortably under the Generational Social Contract.

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  11. MH

    that it has generated approximately 1000 different variations on the Perfect Solution Fallacy

    No, that is insane. I know from messy solutions and I know how things get blocked by duplicitous calls for “improvement.” This is not that type of a situation. The stock market has collapsed twice in the past ten years. Real estate has crashed. Employment has crashed. And of it made worse because people who are supposed to be controlling risk decided they could have an easier life if they assumed good times don’t end. Going forward without plausible actuary work is like changing the light fixture without cutting the power. You might not get shocked, but if you do, you can’t expect anybody to call it bad luck.

    … for our city's purposes 70% might be healthy enough.

    That makes sense. I agree that 100% is too stringent and private plans are not held to that standard. I remain, however, a stickler for it being 70% of a plausible number.

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  12. BrianTH

    This highlights something rarely mentioned by lease supporters. Much of the “pain” of the take-over comes from just being honest about likely returns and payouts. We should let the state takeover before we fix it.

    First, as an aside, I will remind you that I personally think the lease deal is a good idea regardless of how it interacts with the pension issue.

    Second, assuming the state's asset valuations and actuarial assumptions are indeed likely to prove more accurate (which is at best a probabilistic claim), you could still prefer a delayed payment schedule in the hope that before you would actually have to make bigger payments in the future, a reduction in future liabilities would occur.

    In other words, being completely indifferent as to whether or not the payment schedule is accelerated would seem to depend, among other things, on the implicit assumption that there is no hope of a future reduction in pension liabilities. Which is an odd implicit assumption to have if you are also pushing the idea that a state takeover would in fact be a prelude to a comprehensive pension fix–most people would assume that such a fix would actually include a reduction in future liabilities.

    Of course the very phrase “We should let the state takeover before we fix it” raises some interesting questions. In particular, that phrase would seem to imply that the “we” in control of whether the state takes over also has the power to fix the pension problem subsequently. But of course it is the state, not the City, which has that subsequent power.

    So one might suggest that the phrase should be “We should let the state takeover before they fix it.” But I could see why one would not want to write such a phrase, given that it reveals an assumption about the state's future actions that is likely not entirely warranted.

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  13. BrianTH

    I know from messy solutions and I know how things get blocked by duplicitous calls for “improvement.” This is not that type of a situation.

    Of course it is exactly that type of situation.

    You don't like the management of the pension fund, including the lack of transparency and (at least arguably) unduly optimistic financial assumptions. I'm fine with your identifying those as problems worth addressing.

    But the argument in favor of the lease doesn't actually depend on the lease fixing those problems. And insisting that the lease shouldn't be done UNLESS it fixes those problems, regardless of its other merits, is EXACTLY the Perfect Solution Fallacy.

    Indeed, you can promote both doing the lease AND having the state takeover, if that is really want you think would be best–that is as simple as only contributing enough from the lease proceeds as of January 1, 2011, to get the fund to 49%–you could even dump in the rest afterwards, and the state will still be taking over on September 18.

    As I noted above, for people who are assuming a future reduction in liabilities is actually possible, and who care about the City's taxpayers and stakeholders, that plan doesn't necessarily make sense. But it certainly makes more sense than insisting the lease somehow inherently precludes a state takeover.

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  14. MH

    And insisting that the lease shouldn't be done UNLESS it fixes those problems, regardless of its other merits, is EXACTLY the Perfect Solution Fallacy.

    That's absurd. Local government* has done all it can to hide this body and as soon as it is out of the news, the whole thing goes into the wood chipper with Steve Buscemi.

    *State government also, but they have more trouble hiding stuff, what with two parties and all.

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  15. BrianTH

    I have no idea what your metaphors mean anymore–probably because you are using them to obscure, not illuminate, the actual logic of your claims.

    But as far as I can tell, you are still insisting that by ensuring local officials take the blame for the upcoming pension-related pain, your plan will have made a fix of the pension problem at a state level more likely. I think that is clearly backwards reasoning (how would making the wrong people accountable induce the actual responsible parties to take action?), but I am just repeating myself as well in pointing that out.

    Or maybe you really think the only thing that matters is getting better actuarial assumptions, no matter what that means for the City's taxpayers and stakeholders. I seem to recall you once claiming to care about such issues, but maybe I am mistaken, and really you are just a fan of proper accounting practices.

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  16. MH

    You should rent Fargo. Or maybe I should. On reflection, I think maybe it was the kidnapped wife who got put in the wood chipper.

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  17. BrianTH

    Big fan of Fargo, incidentally. I'm pretty sure it was Carl, not Jean, going into the woodchipper (so I think you were right the first time).

    The problem is, as far as I can tell, in your metaphor the local officials are Gaear, the City's residents are Jean, its taxpayers are Carl, and the parkers are Wade. The state is Jerry, and even though he is eventually caught too, everyone else is still dead.

    And the parking lease proceeds are left buried in the snow somewhere.

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  18. Anonymous

    I can't help but wonder – since Harris seems frequently to wrap herself in the Labor mantle – has she checked with Labor recently regarding Peduto's Takeover Plan?

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  19. Bram Reichbaum

    I don't know if Labor as a whole knows what it should make of all this. I think they do get the sense that the mayor's frameworks are offering the requisite amount of cold hard cash on hand for sure — whereas the Council's proposals have seemed variously and comparably strange, tenuous or risky, but probably not “utterly implausible.” So many are still in “pox on both your houses” mode.

    Darlene's mindset as we approach midnight has me confounded as well. I feel the only way it computes is if you take what Infinonymous wrote in comments #1 and #3 of this thread (and over in his own space a while back) as sort of the “internal spin” on the issue — “Don't worry, the takeover won't happen, the deadline isn't really real, we can bargain with the Legislature and do this our own way in a relaxed fashion.” Problem is, as I point out in comments #2 and #6, I think that is an illusion woven precisely to keep folks genuinely uneasy with the takeover on the reservation.

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  20. Anonymous

    Yeah, take over is a great idea. I mean really, Turzai and Orie don't want Pittsburgh to suffer or anything……they will do lots to help our financial condition. Idiots.

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  21. Anonymous

    This mayor is incompetent, disinterested and vindictive. No one is going to work with him. Why? Because you can't work with a snake like that.

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