Folks at Pitt and CMU must be all, #headdesk#, but at least the Council is acknowledging it ain't all that scholarly itself.
Council gave Finance Scholars Group preliminary approval Wednesday to analyze ways to generate money for the city's ailing pension fund. The study will look at the mayor's proposal of a long-term lease of the assets to a private company; the outright sale of parking facilities; privatizing the Pittsburgh Parking Authority with revenue sharing; transferring the parking assets to the pension funds; and issuing bonds. (Trib, Adam Brandolph)
$250,000 paid for with the budgetary equivalent of couch-cushion money. Happens all the time (helps to be in the majority though).
As to the mayor's lease proposal, the vetting of which by the city's Finance department and transactional middlemen at Morgan Stanley received precious little acclaim:
In a letter Wednesday to pension fund solicitor Frederick Frank, Mr. Dowd said he wants council and the public to have an immediate look at a draft of the agreement that would spell out lease terms, including operating requirements and parking rate increases. Mr. Ravenstahl has offered only to make documents available sometime this month.
With Mr. Ravenstahl demanding a final vote on the lease plan in September, Mr. Dowd said, council needs information as soon as possible.
"This isn't a one-page document," Mr. Dowd said. "This is going to be hundreds of pages of complicated legalese."
Mayoral spokeswoman Joanna Doven said the draft agreement can't be provided to council because it's still being written. (P-G, Joe Smydo)
Cataclysmic deadlines is our specialty.
*-BACKGROUND: Some history on the dispute over the parking assets is HERE. It shows the mayor's concept has still other supporters. The paramount thing is to select a solution that will work for Pittsburgh.
From your link, a key question:
ReplyDeleteHarrisburg council members questioned the logic of leasing away, for 75 years, an asset that generated $4 million a year -- and could bring in more. Council, according to Mr. Miller, wanted an answer to a simple question: "What is some outside entity going to do to make more money that we can't do ourselves?"
One thing it can do potentially is provide a whole pile cash up front, without actually going into debt for it. Useful if we're trying to avoid the state pensions takeover imminently and not spoil our debt payment drop-off in 2017.
ReplyDeleteAnother thing it can do is put the endeavor in the hands of people who manage parking infrastructure for a living, rather than the gov't characters like David Onorato and Art Victor who run it presently.
And so, by extension, a final thing it can do is satisfy some Republicans and some in the corporate community who would like this as a concession before supporting our bid for new revenue streams. This is the general idea as I understand it.
One thing it can do potentially is provide a whole pile cash up front, without actually going into debt for it. Useful if we're trying to avoid the state pensions takeover imminently and not spoil our debt payment drop-off in 2017.
ReplyDeleteTaking an upfront pile of cash in exchange for an asset that is worth much more is shortsighted.
Another thing it can do is put the endeavor in the hands of people who manage parking infrastructure for a living, rather than the gov't characters like David Onorato and Art Victor who run it presently.
Not sure what getting at here, Do you honestly think we are better off with our parking infrastructure (an asset) in the hands of a Morgan Stanley spinoff?
@MML - "Taking an upfront pile of cash in exchange for an asset that is worth much more is shortsighted." It could be that decades of intense mismanagement together with the recent brutal legislation out of Harrsiburg made it incumbent on us to shorten our sights at least somewhat. There is a crunch to deal with this year. "Do you honestly think we are better off with our parking infrastructure (an asset) in the hands of a Morgan Stanley spinoff?" I'm only suggesting that there are few strong arguments for being enthused about the status quo. Do I think private sector jagoffs could do a more efficient job than the public sector jagoffs to which we are accustomed? It's possible. And don't forget if we need to make compromises with Republicans to get the taxing authority we need out of Harrisburg, eventually we'll actually have to make compromises with conservatism itself.
ReplyDeleteThe plan has its internal logic, is all I'm pointing out. It would be all too Pittsburgh to flush a workable concept down the drain based on the politics involved.
Are you really suggesting that we should follow in the footsteps of Chicago?
ReplyDeletehttp://www.chicagoreader.com/chicago/features-cover-april-9-2009/Content?oid=1098561
Anon 7:14 - First, it doesn't look like Chicago was confronting the same set of variables as is Pittsburgh. It was looking for spending cash; we insuring against a state takeover of still more public assets while wooing a psychotic Legislature. Its mayor (according that link) sought unaccountable money "not subject to the same oversight as the rest of the budget". This mayor believe it or not is seeking money with FAR MORE strings attached that normal budget dollars -- it would all immediately go to erase Parking Authority debt and then fill the pension fund.
ReplyDeleteSecond, it's not clear this has anything to do with Chicago. Sure the investment bank involved is the same one, but there are only five (four?) in existence out there. There is every possibility Pittsburgh could learn from Chicago's experience and build into this deal some appropriate protections. Then we could be the new model. It's worth holding fire until we see what comes back from the table. It's not clear going deeper into debt is a superior idea, nor that the other concepts are legal and practicable. Also not clear to me we could score a commuter or non-profit payroll privilege tax with any other option.
I know, it's counter-intuitive, but sometimes you've got to roll the hard six.
You read part two and three, right?
ReplyDeletehttp://www.chicagoreader.com/chicago/one-billion-dollars/Content?oid=1123046
http://www.chicagoreader.com/chicago/the-parking-meter-fiasco-part-iii/Content?oid=1127436
Let me summarize Part Two for you:
ReplyDeleteWhen Daley administration officials announced in December that they were leasing out the city's parking meters for nearly $1.16 billion over 75 years to a consortium of investors headed by Morgan Stanley, they assured the media and anyone else who asked that this was a great deal for taxpayers in economic hard times.
Yet not three months later administration officials inadvertently revealed to an alderman that the potential revenue from the meters was as much as four times more than what the city got for them.
Again I will ask the same question: What is some outside entity going to do to make more money that we can't do ourselves?
Without an asset you do not make money. You are proposing that we hand over they keys to one of the Pittsburgh's primary assets (a revenue producer) and then roll the dice in hopes of Harrisburg allows us to tax commuters or non-profits. That is not going to happen. We are outnumbered.
Besides, Republicans believe in being self-sufficient and taking care of your own problems. They are not going to feel sorry for the City of Pittsburgh and grant us concessions because we ignorantly handed away one of our key assets to Morgan Stanley and their investors. This is a problem that we need to handle on our own.
Following in the footsteps of Chicago, Luke Ravenstahl or Rev. Burgess is not the answer Bram.
The outside entity has the luxury of waiting 40, 60 or more years to accumulate a return. It appears we have forfeited that luxury, what with all the accumulated decades of repeated slapstick incompetence. As to whether we'd be "rolling the dice" with Harrisburg on achieving structural change, I'd suggest asking Rep. Mike Turzai and Sen. Jane Orie about what's possible if our local pols surrender their death-grip on the parking cherry -- yes, hopefully having learned some things from the Chicago experience as well as some things from places where transactions such as these have worked better.
ReplyDeleteThe outside entity has the luxury of waiting 40, 60 or more years to accumulate a return. It appears we have forfeited that luxury,
ReplyDeleteNot true.
what with all the accumulated decades of repeated slapstick incompetence.
Bram, you can't make reference to incompetence and then, in the same breath, suggest that it is in the public's best interest to hand over a revenue producer to Morgan Stanley for pennies on the dollar.
I'd suggest asking Rep. Mike Turzai and Sen. Jane Orie about what's possible if our local pols surrender their death-grip on the parking cherry
I don't care what Turazi and Orie have to say. The city already has the ability to tax commuters via the parking garages. You are suggesting that it give that right away to Morgan Stanley's investors and then hope that they grant it back to us.
Simply put, it is a weak position to take and only benefits private interests.