… I mean, like, in a good way?
*-UPDATE, POST-GAME: “Mr. Lamb said revenues from increased garage and meter rates could total nearly $900 million over 30 years,” provides the P-G, along with “Council President Darlene Harris and members Patrick Dowd, Bill Peduto, Natalia Rudiak and Doug Shields said they’ve received the state’s go-ahead…” (See also WTAE, Janelle Hall)
So this would be akin to a voucher good for approaching $30 million a year towards our pension obligations … does anyone know what would our annual MMO’s look like under this plan? Because the reason to avoid the takeover is to prevent our annual payments from skyrocketing too badly — seems to me this would first need to be judged on that basis. (Also have to account for continued facilities maintenance and operations at the Parking Authority w/o access to that revenue.)
Original post follows:
seclusion. They’ve been working like cats and dogs.
And wait, is the Controller a presenter or an
invitee? It’s clear the Mayor is an invitee but…
ANALYSIS: Council floated something a lot like this a while ago, but kept holding it without much further discussion. One drawback to the idea would seem to be that you probably can neither invest nor accrue interest from pledged future revenue — but it’s better than nothing. Another drawback is at least some assumption of risk — but life is risk, no? Considering where we are in the conversation, the only salient concern might be whether or not the state legislature plays ball and will acknowledge a municipally-legislated I.O.U. as a paid account.
The Trib’s Bill Vidonic adds: “Mayoral spokeswoman Joanna Doven said Ravenstahl hadn’t seen specific details on the plan.”
Missed this: the Allegheny Institute provides a superlative and concise backgrounder, for its first two and a half paragraphs. Then they veer into a polemic which is in part reasoning, in part inoperative bluster, and in part a discomforting echo of the same cognitive dissonance over which Null Space has been getting queasy.
Tuesday December 29? Does she mean Wednesday the 29th, or Tuesday the 28th?
It means they're using the PWSA's custom build calendar software.
(Usually when I screw-up like that, the day of the week is right and the date wrong.)
Anon 11:20 – Erp. They mean tomorrow, the Tuesday 28th, as was written in the covering e-mail.
Gee…promising to pay over 30 years is a lot different than coming up with 220 million by week's end!!!
You have few links to anyone elses blogs,and this is quite boring since you said you were quitting sometime back. The pension stuff is simply a game of chess, has been. Those who are really responsible won't take the blame and those who are left are recipients of the fall out.
Then I'm sorry that your web browser is stuck on my page, that you're bored with it while you're reading updates after 1:00 in the morning, and that 2 links to material on other blogs in a post isn't enough for your novel standards. And maybe the game is best played as chess but they've clearly been playing hockey.
Thank you drive through.
So – now Council is trumpeting parking rate increases as the solution? Aren't rate increases the reason we were supposed to abhor the lease deal? This constitutes a 180 degree turnaround, right?
I still prefer the idea of the big payment from LAZ, who then has to upgrade the system to make money from it. They'll be taking on more debt on order to accomplish those needed upgrades, of course.
Rate increases were the initial reason to object, absolutely Minuteman — but in fairness that's LONG been refined down to rate increases that would “go to JPMorganshahl”.
Aren't rate increases the reason we were supposed to abhor the lease deal?
No, retiring at 50 is the reason Minuteman.
I dunno.. they underlined and bolded the Dec. 29 part. There is a certain Zen to it.
C. Briem – Zen? As in, we will fund the fund with no-funds? We will avoid the takeover by allowing the takeover to avoid us? What is the sound of one branch governing?
The reason to abhor the takeover / find a way to make a large cash infusion — and this has always been the case — was that annual payments to the pension fund would otherwise increase by $30 million or nearly 50% in the near term; and by $100 million or over 100% in the long term.
It looks like I can't make it to the press conference today (cue the rejoicing) but if I could, my main question would be what will our annual MMO payments look like in the near term and in the long term under this scenario. It's not like we'd be depositing a couple thousand Woodrows into the pension fund (as would have occurred in either the LAZ deal or the Council-Controller plan) thereby letting our money managers attempt to earn their 8.5% annual rate of return on it and hopefully getting away with 6%. That is if I'm not out here flunking finance forever.
The lease would have been far preferable, but this is probably better than nothing, and probably better than the Council-Comptroller plan–all assuming the state plays along.
But I agree it remains to be seen exactly how the pension-fund accounting will be affected. I also wonder if it would be possible to buy back this IOU in the future.
Zen… as in there is a Tuesday December 29th in 2015 I do believe.
but it is probably best to stop overquantifying. Jan 1 will start the cycle for new actuarial numbers and when they come out we will learn again that all the current presumptions are biased toward the optimistic. Therein lies the problem, and the solution eventually. Again, Zen.
I don't see how an IOU differs from what we have now. Also, why city/authority rates only? Wouldn't a broader parking tax be more even across the city? (Given who owns parking in Oakland, maybe ignore that last question.)
This solution is not only bad, it is moronic. To begin, it is not new, as pointed out earlier. Further, the present value of the projected funding stream at 6% interest is roughly $82 million. FAR less than the LAZ proposal – either of them. In addition, the money won't be “in the bank” and truly compounding as would a cash infusion now. I don't think the State is that stupid, well…., nah, they aren't. Anyway, this is once again pure chicanery from a bunch of boobs who have no business running a used car lot yet making important financial decisions for the City. Council is so dead set on teaching the Mayor a lesson that they are killing our City. Shame, shame, shame.
the Allegheny institute piece sounds like what I wrote under your clusterfrack piece…just the same if the state accepts this offer, then the jokes on them!!
Anonymous 10:07:
Anyway, this is once again pure chicanery from a bunch of boobs who have no business running a used car lot yet making important financial decisions for the City.
and the Mayor is more qualified how? what was his job before he won his council seat? didn't he sell knives door to door?
ANON 11Am
the boobs on council will do anything to foil the plans of the boob in the Mayors office.If we're gonna dedicate the revenue stream for 30 years,why not sell the assets and get out of the parking business…shrinking gov't??
I believe that selling the parking asset outright is the best idea, I think it will become less valuable down the road, and the city will become less and less able to derive revenue from that asset, because of crumbling garages and antiquated ticketing systems. $450+ million today is a lot more going forward.
Personally I favor a change of the vehicle commuter paradigm towards public transportation and bicycle usage. I hope against hope that the SUV tank driving, tax eschewing, self-centered commuter packs up with Darryl Metcalfe and emigrates to the Amazon. As such, get the pile of money up front…
I personally think there is a nontrivial chance of a huge technology-driven dropoff in parking demand in the next 20-30 years. That is among the many reasons to favor a lease or sale–someone else would be taking that risk.
But somehow the idea has gotten planted that parking facilities are the bestest investment ever, and the City would be foolish to give them up at any price.
By the way, remember that mini-scandal about investing in illiquid assets in the pension fund? I wonder how IOUs from the City would be classified in terms of liquidity.
But all that said–still better than nothing.
Sorry, the mixup in the date is something I can't get past. It is a bad omen.
Nothing in particular to worry about – an error typical of that office
Personally I favor a change of the vehicle commuter paradigm towards public transportation and bicycle usage.
You try moving even one toddler on the 61c during rush hour or on a bike when it is ten degrees out. Assuming the middle class avoids proletarianization, you'll still have lots of private cars. They could be much more efficient or driving shorter distances, but parking will be needed.
Bram you state “the only salient concern might be whether or not the state legislature plays ball and will acknowledge a municipally-legislated I.O.U. as a paid account.”
Does a “municipally legislated IOU” from a city that is considered fiscally distressed by the same “state legislature” have a snowball's chance in hell of getting ok'd by said state legislature??
I would doubt it, but you should never rule out Harrisburg going for stupid.
The article has the Councilors stating we've already “received the state's go ahead”, but it's unclear how definitive is that. Does that just mean it's just fine by PMRS and DCED? Or does it mean we've received assurances from Turzai et al? Be aware “I.O.U.” is a bit of a misnomer, since we don't owe anything to the STATE, we owe our own pension fund — which the state for a time took an interest in seeing funded.
Bram,
This may be hard to fathom…
My other Nic-Name is Neo.
Went to visit the Oracle several times…
…he is also referred to as the Professor.
I asked many months ago, “how will Luke's plan work out?”
He said, “what the Mayor wants, the Mayor will get.”
Never a doubt in either mind that, Pittsburgh…would prevail.
monk
This is going to be like the I80 toll thing again. “We had it fixed, but the higher ups broke our phony plan.”
Blue Pill or Red..
We have a choice!
Higher taxes for City Residents or tapping revenue steam that lies outside City Proper?
monk
(someone mentioned 50 year of age retirements)
I also understand why City Residents find 50 year old retirees hard to swallow.
Fire and Police.
…given that they expect so much from taxpayer…
It confounds that reciprocal arrangement is not in effect!
They do not contribute to Social Security, they profit at our expense….
Unfunded liabilities reflect as much…
We work till 65 years of age to support Heroes, retiring @ 50.
Whose taking care of who?
monk
I prefer taking a child on the bus when it is otherwise convenient and not overly-crowded–you can interact with them safely (and it is safer in general).
But in any event, you don't actually need to have a reduction in the use of cars to have a massive reduction in the demand for paid parking. For example, if you combined carsharing with automated cars to create an on-demand, door-to-door service that was cheaper to use than owning and operating your own car, you could greatly reduce the number of cars per people, and even more greatly reduce the need to park idle cars in places where parking was scarce.
There is no guarantee that will happen, but also no particular reason to assume it won't–wireless carsharing already exists, and people are currently developing automated cars. So, it seems to me rather foolish to rule out the possibility this will all happen with 30 years, which is a long time as these things go.
Darlene Harris played the ultimate trump card and showed what an astute polititian is capable of when they can reach out. It is obvious that Harrisburg was willing to find alternatives and solutions that the ridged Mayor would not entertain. His way or no way was his plan.
What is so laughable is that for the first time Rev Ricky is concerned with parking rates!!! What a switcheroo considering that he threw everyone under the bus who cared about rates. Po' folks didn't care what Shadyside & Sq. Hill paid to park, but now that's the problem with the plan?
Darlene Harris called them at there own game and won!. Exposed for the phonies they are. What a pleasure to see there backs to the wall. Widdle Wukie can't deliver because he's a fraud and inept!
This is rich!
Hey Brian TH:
Call a Cop or Fireman next time you need a ride…
Lexus, in part is paid with monies normally paid to Social Security…
This is a huge issue!
monk
Anon:3:40
You sound like Monk on Steroids!
Anon 3:40 – Harris played the ultimate trump card? Are you kidding? Maybe if you believe in unicorns and ridiculous proposals. Are you from Spring Garden or something? That is what is wrong with this City – politics over substance. Too many people that have no idea what they are talking about making decisions. Gotta love the old waiting until the last second and trying to ram something through game that council is playing. Fortunately, the Mayor will step up and put an end to these games.
Anon 4:07, if you were watching council this morning you might have learned that Kunka and Zober have known the details of this plan since last Thursday and that their office has basically been refusing to participate in the discussion since then.
Does the mayor even show up for work anymore?
Those that serve public (Cops and Firemen) can do so by contributing to Social Security.
Cops and Fireman should not be exempt…those served are best served, by those that share: equally!
Hoping new Gov. will enact law that requires contributions by all public saftey personnel to Social Security. Pension allocations offset accordingly…
Reduce unfunded liabilities, accross the Commonwealth….
monk
Anon: 4:24 Said:
“Does the mayor even show up for work anymore?'
He does…
monk
PS: Didn't see you @ drive threw… 🙁
Guess we will all see the Mayor in the morning in City Council chambers.
Everyone is requested to be on time…can't wait