Instead of quietly meditating over the true meaning of Columbus Day with their families and loved ones, several members of Council are exploiting today's holiday in gross spectacles of financial and political strategery.
Ricky Burgess tossed a new concept onto the table: lease the parking spaces as read, plow the whole overage into the pension fund, and then have the state assume pensions management anyway. Getting involved with PMRS and Act 44 with higher pension funding levels at the outset would significantly mitigate the necessary cost increases.
This may be the most excruciatingly responsible plan long-term -- but it also makes the state takeover appear presently ascendant as the most likely outcome, and the parking lease appear a bit in jeopardy by comparison. And please note that calling this the most "responsible" plan does not make it remotely likely, as it serves up what some will consider to be the double indignity of sacrificing the City's grip over both functions at once.
Meanwhile, Bill Peduto held a press conference touting the merits of the state takeover via Act 44 even under the City's present, low-riding pension funding levels -- apparently without yet having received any details back from the state pursuant to that absolutely crucial information just delivered to it on Friday.
Mr. Peduto said the city could meet higher payments, whatever they may be, with increases in parking rates, permits and "five or six other small menu items." (P-G, Joe Smydo)
Also, I need to point this out, because I feel aspects of the spin are starting to resememble Reconnect the Historic Street Grid Between Downtown and the Hill proportions:
Mr. Peduto said there's no need to bring in a "middle man" such as the J.P. Morgan-LAZ partnership and give up the $2.4 billion in revenues that a council study estimated that the parking garages and meters will generate over the next 50 years. (ibid)
*-CORRECTION: According to pages 23-28 of the FSG study, the garages and the meters combined may in fact generate net revenue (or in their words, "Free Cash Flow") of a hedged, approximate $2.35 billion. The Comet regrets the error and the accompanying sarcastic tone in Number One above. Numbers Two and Three still hold if we're suggesting sacrificed revenue under a lease deal, and implicitly, getting to enjoy anything like it under the alternatives.
None of which is to suggest that opting for the state takeover is a ridiculous idea. I just can't abide a crooked picture frame, or crooked picture framing.
Council President Darlene Harris has proposed that the city float a pension bond -- backed by parking rate increases -- to boost the pension fund. Mr. Lamb has floated his own plan that would require the parking authority to float a bond issue, also backed by parking rate increases, to help out the pension fund. (P-G, Joe Smydo)
These plans would have the City dodge a state takeover this year by borrowing just enough money (along with some real parking rate increases) to reach the necessary level of funding, without seeming to provide any potential for avoiding the same outcome in 2013.
City Controller Michael Lamb said details will be provided this week. (ibid)
If Mayor Ravenstahl had said something similar at this point, we would have merrily canceled for him his return flight from Shanghai.
The state takeover may well turn out to be more than acceptable; the big lease is not a bad deal if you are in to that kind of thing; and doing both together could potentially provide some hard-earned advantages as well. We've yet to learn of any similarly convincing reasons to pursue the Scrape and Borrow method, so logic dictates it's pretty close to being bounced from the bracket.
*-UPDATE: You know -- I should have known -- I could be speaking too soon. Logic may not dictate anything.
Pursuant to what was said at a public hearing this evening, the City could very well settle on an answer only to the narrow question "How do I get through the next couple of months?" ... one which involves inviting the Parking Authority to take on a great burden of debt in addition to the debt it already carries (which it may well refuse to do) or asking the City to do the same (which its Mayor has explicitly and frequently promised the voters to refuse to do) ... one which delays a state takeover through PMRS (which may not be so bad unless you personally enjoy exercising what would be PMRS's discretion to invest funds) but only for a couple years until the same specters of a state takeover are likely to arise again, that is unless parking rates are raised to about the same levels we are presently bemoaning (only in exchange for lesser and slower returns). And that money we scrape and borrow together will be immediately deposited into the sinking pension fund (a la Mayor Murphy in 1998) and invested on Wall Street -- which some warn darkly is unwise and dangerous as a part of the Mayor's plan -- but is just fine if it is gathered dearly from other sources.
All because, when you tear away the bunting, some members have a deep and abiding faith that the infrastructure lease must be a dirty pay-to-play swindle despite a comprehensive lack of evidence, and/or that keeping all things which are run by City government City-government run forever is always preferable even while the economic advantages of doing so are vanishing before our very eyes. In other words, CHANGE IS TERRIFYING.
MORE / AGAIN: P-G, Trib.