Friday, October 15, 2010
PMRS: City needs $220 million to $300 Million to get to 50% Funding.
As its parking lease deal lies peacefully in a coma, Pittsburgh's path to achieving 50% municipal pensions funding levels may be getting steeper -- at least if it feels a desire to get there by year's end.
The only other really salient feature of yesterday's Council meeting in Pittsburgh not already mentioned below or to the right was when PMRS Secretary James Allen indicated that the city's pensions might be $220 million short "at the low end" or up to $300 million short "at the high end" from 50% funding levels -- depending upon how actuarial data just sped to PMRS headquarters in Harrisburg turns out.
$220 million is the figure which to date has been widely reported and referenced when dealing with satisfying the requirements of Act 44.
"The Legislature saw a train wreck coming with the Jan 1, 2009 numbers," Allen said, and it was thereby motivated to pass the Act last autumn -- which requires that Pittsburgh's fund management be handed over to PMRS if it does achieve 50% funding by Dec 31, 2010. Evidently the Legislature did not see those numbers definitively, yet rather intuited a general "train wreck" sense of them at the time.
Allen said the actuarial calculations will be completed "within three weeks". Three weeks from the date of that statement will be Thursday, November 4.
Mayor Ravenstahl has said that in order for the lease transaction to be completed by the end of the year and the funds deposited, City Council would have to vote to approve it by the end of October. The $452 million lease and plan would be able to meet the worst-case $300 million shortfall scenario, though only with a less-than-anticipated $60 million cushion to allocate as the city chooses.
At this moment the lease has one declared affirmate vote (Councilman Burgess), two other fairly likely affirmative votes which abstained during preliminaries due to a dearth of information on the overall pensions situation (Council members Lavelle and Smith) and six presently pledged to vote against.
On Tuesday, Council members Dowd, Harris and Rudiak advanced the framework of an alternative plan to reach 50% funding by the end of the year which entails a bond issue, to be backed by parking rate increases more modest than under the lease. The bond would be issued either through the City or the city's Parking Authority, though each faces its own hurdles. It is not known yet to what degree a "high-end" shortfall figure like $300 million would impact the workability of that plan-in-progress, which also has enjoyed the support of city Controller Michael Lamb.
Councilman Peduto has been most vocal in recommending that the City eschew all attempts at hustling to reach 50% pensions funding by the end of the year, and rather accept fund management by PMRS. Councilman Dowd expressed a hesitancy to do that at yesterday's meeting, citing the fact that Pittsburgh itself does not have any direct representation on PMRS's board -- though that is something "which might be negotiated in the future."
Mayor Ravenstahl returns from a trip to Shanghai, China and Seoul, S. Korea this weekend.