Pittsburgh Pension Costs

[BrianTH]

Incidentally, Council wasn't pushed by popular opinion, it was pulling popular opinion along. Various Council members immediately savaged the parking plan in the press, and throughout the process they kept coming up with new arguments to oppose the plan (which was necessary because many of their original arguments got voided by events such as their own financial consultant coming out with a report demonstrating that the proposed lease was a good deal financially).

In short, you can't blame the angry mob for your actions if you are the one who summoned up the angry mob in the first place.

[caroline2]

In one of these public forums -- which, incidentally, they didn't have at all on the plan they actually implemented -- what the council members should have done is asked the people who were so outraged at paying market rate for parking what $220 million worth of city services they'd like to see cut instead. Because that is what we're talking about.

[robrobrob]

Does anyone know if the Parking Authority thows off any money? If so, how much? In order to determine if the Mayor's idea was a good one or not I would think you would need to know how much money the Parking Authority throws off a year.

[BrianTH]

Originally Posted by robrobrob

Does anyone know if the Parking Authority thows off any money? If so, how much? In order to determine if the Mayor's idea was a good one or not I would think you would need to know how much money the Parking Authority throws off a year.

As I recall, it wasn't operating at any notable surplus. It also had about $100 million in debt. The Mayor's plan would have paid off that debt as well as making a large contribution to the pension fund, and also would have required a variety of maintenance, repair, and technological upgrade projects to be paid by the operator.

The plan Council actually went with required raising rates and pledging those increased revenues to the pension fund. The parking debt will still have to be paid too, and somehow the money for doing maintenance, repair, and upgrades will also have to be found (although I suspect they just won't do as much of that stuff).

[robrobrob]

This is apparently just another example of how "government" is not run like a business. I think what had people so upset with the Mayor's plan was that involved selling a city asset which in theory produces revenue and will continue to do so in the future.

As an alternative, couldn't we just hire an management company to run the garages and pay them a percentage of revenue? Could Alco Parking, for example, turn a bigger profit?

[BrianTH]

Originally Posted by robrobrob

I think what had people so upset with the Mayor's plan was that involved selling a city asset which in theory produces revenue and will continue to do so in the future.

Originally people were upset that parking rates would be going up, but it turns out that happened anyway. People were also skeptical about whether the City would get a good deal, but then Council's own financial analyst said the winning bid was a good deal. Otherwise, I don't actually think many people have a deep philosophical committment to operating paid parking as a public service, but once views were entrenched and yet the good financial arguments were eliminated, that is what they had left to argue.

As an alternative, couldn't we just hire an management company to run the garages and pay them a percentage of revenue? Could Alco Parking, for example, turn a bigger profit?

That is exactly what the Mayor's plan entailed: a lease to a private operator, with the City still retaining ownership and getting a percentage of revenues. The City just got a large part of that revenue payment upfront, which is what would allow it to pay off the debt and make a big pension contribution, and also limited the City's exposure to revenue risk.

[Pghuser]

Originally Posted by robrobrob

This is apparently just another example of how "government" is not run like a business. I think what had people so upset with the Mayor's plan was that involved selling a city asset which in theory produces revenue and will continue to do so in the future.

Exactly.