Thursday, November 4, 2010

A Time for Solutions, or a Time for Recriminations?


So how is it we're going to avoid a state takeover -- which would cruelly inflict upon us one of the very best performing of the many hundred pension fund investment groups in Pennsylvania, instead of presently, one of the very worst -- without revisiting a parking partnership with a private company, which we're told today will "destroy our city" even if we renegotiate rates to match those usually only about 15% lower already in the Council-Controller plan, which contained little to entice the Parking Authority?

OR, MORE LIKELY: Make no mistake -- we are now 98% likely to be taken over. There's simply no time left to implement anything even if the impasses are magically dissolved. But 80% of what you are now hearing, and will hear in coming weeks, is simply political theater to determine who receives majority blame from politically crucial public sector unions.

So who do you blame? I blame the residents; specifically, the twos upon twos who attended City Council's neighborhood public hearings, and offered nuanced advice on how to manage Pittsburgh's long-term financial problems. Sometimes they even filled out very neutral City Council surveys, in person or over Twitter, so perhaps they chimed in frequently as well. If only a slim fraction of as many residents had showed up to offer input on the plan to close Schenley High School in order to deal with the School District's own considerable financial problems, perhaps their comments would have been held in equally lionized esteem.

MORE: Tribune-Review, KDKA (screwy popup), Post-Gazette

*-UPDATE: This has been making the rounds -- what the MMO's would look like under infusions of $330 million and $228 million plus parking tax proceeds (so, under various varieties of a restructured P3).

56 comments:

  1. Who knew Doug Shields could be useful?

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  2. Wow, Robert Mangino is holding some great interviews on KDKA radio ... but he doesn't seem to recognize that the City can still relatively easily make $30M to $60M annual pension payments per year, as it has been doing, after any species of cash infusion.

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  3. When are Burgess and T. Kail-Smith going to wake up and realize that their lease plan is dead? They only have three votes max.

    It's either the Peduto plan or the Council-Controller plan.

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  4. Well those numbers are pointless.

    $68 million dollars plus taking on the Parking Authority employees that will no longer be employed by the Parking Authority but cannot be fired = $72 million. The evil terrible state takeover number that the City had to sell its soul to avoid.

    Bunch of damned retards

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  5. TED:

    Sounds like the vote totals Dowd, Harris, Kraus will get in 2011 after they let the City take over and what Rudiak and Peduto will get in 2013.

    Have fun with that.

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  6. Who do I blame?

    Certainly, some of the blame has to go to Joe King, Murphy and the firemen who manipulate the OT system right before they retire.

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  7. The Parking Authority killed the Council-Controller plan. I guess that leaves Peduto's "plan" (which is a plan in the same sense that Nero had a plan when the smoke alarm went off).

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  8. Anon @ 9:46

    Way to make your case by insulting people with genetic problems.

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  9. Hey Rex:

    Answer this one:

    How can Ravenstahl tell the public that he is against new Authority debt when this JP Morgan deal occurred while he was mayor?

    Do you think it is right to mislead the public about where you stand on the issues Rex? And why is Luke always pushing questionable deals with JP Morgan Rex?

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  10. The Parking Authority killed the Council-Controller plan

    Yeah, Got to love the fact that Luke Ravenstahl appointed the guy who drives a boat down Grant Street and quacks at people to do the difficult financial and legal analysis necessary to keep our city afloat.

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  11. How do firemen "manipulate the OT system right before they retire"?

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  12. Financial analysis showed the lease was the best option . . . that is why Council had to try their luck with Mr. Just Ducky. Who, strangely enough, also seemed to think overleveraging the parking assets was a bad idea (strange that a business owner would have an opinion on such subjects).

    Next up? Ouija board. SOMETHING has to give Council the answer they want to hear, right?

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  13. Firemen pensions are based on total salary not base salary so overtime is counted in their pension benefit calculations. Many of them double out in the final years of working so as to drive up their pension benefit. It's called "Spiking". It adds significant cost to the pension system.

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  14. Is the fact that the mayor rarely comes to work, helpful of hurtful in this dicussion?

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  15. TED:

    So your solution to having ONE overleveraged Authority (PWSA)is to now have TWO overleveraged Authorities? (PWSA & PPA)

    In hindsight (and unfortunately, since the steps necessary to execute the bond deal were approved unanimously BOTH by Council and the PWSA Board) I don't think anyone would recommend that course of action again.

    Although given the situation that put PWSA in the hole in the first place (acquiring debt it couldn't pay to keep the City from falling off of the cliff) and the decade and a half of grief PWSA has endured as a result of the last risky scheme, I don't see who in their right mind would suggest as sound fiscal policy for the City to repeat the same mistake.

    Misleading people on the issues? I'd be very careful before opening THAT Pandora's Box? Or have you forgotten that most everybody in politics makes the mistake of not remembering what they said last week? And MOST of it is stored in digital media. Just a thought.

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  16. Shouldn't the first step be ti fire the city's actuaries? How did they get their numbers????

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  17. According to the state's actuaries, the City's actuaries were only off by 0.2%.

    The industry standard deviation is 5.0%.

    It isn't the actuary's fault no one believed the Mayor.

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  18. Just so I'm clear here...

    We're all upset that the state wants us to actually fund the pension plan?

    Give me a break.

    It's a shitty situation, but at least we're actually looking at the elephant in the room. It's not like if we avoid state takeover, we suddenly don't have the obligation to pay this money.

    These are worst-case predictions - something we should have been doing all along. Instead, we've been patting ourselves on the back for tossing an extra million in here or there and acting like that is making any difference.

    So I applaud the residents for saying quit it with the cover-up bullshit. Let's not sell our parking garages just to be in the same damned situation in another 10 years.

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  19. It isn't the actuary's fault no one believed the Mayor.

    No, it's the mayor's fault nobody believed the mayor. I certainly don't intend to start trusting him.

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  20. The underfunded pension plan is only a result of the real problem.
    The real problem is the pensions being paid to the fire, police and municipal employees.
    Pittsburgh need to reduce the pension benefits paid out.
    They could also replace the pensions with 401k plans at a much lower cost.

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  21. Illyrias-

    1. Language! (Actually, it wasn't so bad, but I want to avoid an arms race here.)

    2. The best argument I've heard for going into a takeover (also echoed by Mangino) is that we can't trust future leaders to actually put the necessary money into the fund, so we need to ensure the state contractually forces us. That does make perfect sense, except we won't nearly be able to afford the MMO's in a few years, which are...

    3. Real. I'm not sure where you picked up that those are "worst case scenarios" (unless I misunderstand), but those are the actual costs we will receive on actual billing statements to get us to 100% in 30 years, which is the unalterable mission of PMRS.

    4. Nonetheless, I'm interested to hear your solution, as I assume leveraging the lots with a bond against 30 yrs future revenues would be as bad as a lease, if your concern is the money will drain and leave us where we started. I suspect it might be A) go into a takeover now and then B) start throwing lump sums into the account somehow when the politics change so as to lower future MMO's, but to me that falls into the "political nonstarter" category.

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  22. Anon 1:13 -

    1. Yes.

    2. Unfortunately, changing benefit arrangements in the future won't do anything to change our contractual obligations to past and previously hired employees. So the present crisis still begs for a solution.

    3. The changes of the kind you suggest need to be negotiated in collective bargaining, and I believe there are both legal hurdles and practical hurdles related to unsympathetic arbitrators -- but I agree tackling the outflow end is an indispensable part of the sustainability project. And I agree (implicitly, I think) it's not likely enough that anyone will even attempt to make that tackle.

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  23. And now I'm reading that Bill Peduto is suggesting that PILOTs (payments in lieu of taxes) can help here? I'm starting to think that Bill believes we have a few years (not weeks) to solve this problem.

    The first snowflakes are falling today...how will snow removal go in Shadyside this winter when the city is cutting public works and safety employees by the dozen after the takeover?

    Details are being glossed over; only question is how - deliberately or accidentally?

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  24. Bram
    Firefighters and police can retire at 50, therefore, they receive pensions for 15 years prior to all other municipal employees. Why?
    Can't this be changed? Can the city? Can the state legislature?
    The payouts are the root of the problem. If you don't reduce the payouts you can never fully fund the pensions.

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  25. It is State law that Police and Firefighters can retire at the age of 50 with 20 years of service.

    It is state law that when contract negotiations go to binding arbitration, the City can pick one arbitor and the Union can pick two

    It is state law that the City has no control over its own parking tax, and can only increase it a specified amount if it does a specific thing, and can only use that increased revenue to fund a specific expenditure

    So much for 'Home Rule' municipality meaning 'home ruled'

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  26. Who has the power to change that state law?

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  27. At this moment, all the state-level Republicans who feel like incurring the wrath of police and fire fighters all across the state in order to please Democrats in Picksburgh wield that power.

    Don't take this personally, Anon 3:22, but I'm really starting to wish I could code in a harsh, Family Feud style buzzer to go off every time someone begins to type words which suggest state government might become useful on a subject matter. Our time would be better spent praying to Odin, or organizing toward secession and forming a new Commonwealth along the lines of Power of 32.

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  28. Does anyone have an inkling of how difficult it is to recruit, hire, and retain police officers in the city? Good folks are not exactly lining up as things stand right now...

    I'm continually amazed at the tendency for folks to suggest that we can easily reduce forms of compensation for these people. When a routine call in Stanton Heights can go so horribly awry, who are we to piddle over their pensions? You may choose to do so, but will they agree and make it easy for you? People who give a toot about Public Safety will tell you in no uncertain terms that we are understaffed as it is.

    As for potential Public Works cuts...if you can't connect the dots on this, you'd better pray for a warm winter...

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  29. Here's a (not so) novel thought (that any 20 year-old attempting to balance a household budget can arrive at):

    let the state takeover - it can't be disputed that they're better equipped to manage a healthy pension fund, can it?

    then, instead of only contributing the state-mandated minimum in the initial years, contribute more - voila, the amount to be paid in the latter years won't be as high as 150 million

    yeah, we all get that 30 million today extra is a lot of money, but it's a bit less than 150 million tomorrow, even doing the future value calculation, no?

    instead of jetting around the planet picking up chicks, stay home and work on negotiating longterm, meaningful arrangements that will reduce future exposure

    stop spending tax dollars on trash cans and URA initiatives that may be nice, but not in years you are crying poormouth. In other words, pay down the credit cards, stop spending on new projects that your puppetmasters want you to hurry up and push through before the general public wakes up and votes you out of office. THIS is why the taxpayers aren't to blame and no one wants to give the nod to selling off public assets.

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  30. Dear Minuteman - when this anonymous poster took the last Police test, I was in a room with 700 other testers. The fire test was double that.

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  31. TED:

    Depends on whether you live on E. Carson Street or E. Agnew...

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  32. Rex:

    Good point. There are problems elsewhere.

    Specifically, in communities who turned to JP Morgan when they where desperate and needed quick upfront payments.
    Why does Ravenstahl insist on exposing Pittsburgh to JP Morgan for the next 50 yeas?

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  33. TED, they did submit the highest bid.

    I suppose we could explore the legality of releasing all future city RFP's to read, "JPMorgan and all other investment banks need not apply."

    And not for nothing, the City designed the agreement, not JP.

    On another subject, anyone else noticing that the arguments about what is Pittsburgh's best course of action are becoming even more resentfully ad hominem? Aligns with my thesis that this is all about assigning political blame from here on out. It takes a hard-working imagination to conflate perhaps too-fancy trash cans and the acceptance of an invitation to China and Korea with decades in the making, BILLION-dollar pension issues. I think hardly anyone besides Anon 3:58 is of the opinion any longer that all we need to do to solve this is to shop at Costco, cut our own hair in the mirror and disconnect the cable.

    Although we could save money on rent if we got sent to prison for allocating federal & state economic development and CDBG money on pension payments.

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  34. Snark-based political commentary is all the rage these days. It is great for making sure nothing ever gets done.

    Hypocrisy intended.

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  35. TED:

    I think you commence your argument from an improper premise, and yes, I'm being generous here. No one who has given this any real thought fails to see the risks inherent in forgoing decades of potential revenue-generating capacity relative to our public assets.

    That's simply not the case. Now you can accuse the Mayor of a possible lack of creativity if you so desire, and maybe that's even accurate. But I would caution you to stop short of outright apathy for the need to have revenue-generating assets or the inherent political benefits to those with the power to appoint key decision makers to their governing bodies.

    A mindless hack would never trade , for the remainder of his/her term as Mayor, the political influence inherent in or the campaign finance benefits from the short-term control of a public Authority which generates significant revenues.

    Clearly the nexus of this whole question, "Do we relinquish control (not ownership) over this asset for 50 years " isn't one any establishment Democrat comes to answer in the affirmative easily.

    Clearly another mathematics must be at play here. I'm no municipal finance expert, but hell, since everyone else is claiming to be, I'll try also.

    Council's "foregone" revenue woes under a lease scenario amount to an at-best difficult-to-substantiate fear of losing some $2.4Billion in net revenues.

    The Mayor's now well-substantiated fear of drowning if we don't recapitalize the Pension Fund by year's end amounts to $2.4 Billion in "where the hell do my taxpayers come up with this kind of extra cash" in 30 years?

    It's already clear that Pittsburgh taxpayers are on the hook for at least $2 Billion in amortized pension mandates over 30 years, how can it possibly be in the public interest to double that?

    "Float the bond at PPA, you say?"

    That's right, let's borrow $500 million (asset acquisition + capital obligations) which will cost us almost triple that in debt service and hope the debt service doesn't destroy the PPA.

    Not prudent in the best of times.

    Even if I take your argument that we are conceding to JP Morgan some $2Billion over 50 years, it still doesn't add up to what we lose by doing nothing.

    And at this late stage in the game, who goes around shopping completely unvetted proposals when the stakes are already this high?

    What if the bond's proponents are wrong?

    Did you ever ask yourself that question?

    Or are the bond's proponents more worried about achieving short-term political gains with little or no regard for the consequences?

    Given all of the facts in moderation, I'd have chosen the lease too, unless no one worries about how we deal with the $700M in GO debt, the $500M in unfunded OPEB mandates and don't even get me started with the ALCOSAN/PWSA/COUNTY federal consent decree to implement an LTCP to handle our CSOs.

    Anyone this shortsided, well, obviously isn't now and perhaps should never be, responsible for the outcomes here or the lives of other people.

    Swallow pride and philosphy, lease the parking assets, put the pension issue to bed and start focusing on the other elephants at the zoo.

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  36. Rex:

    It seems that you are dramatically inflating the numbers to support your argument for the lease plan.

    It's already clear that Pittsburgh taxpayers are on the hook for at least $2 Billion in amortized pension mandates over 30 years, how can it possibly be in the public interest to double that?

    The pension obligations already exist. They do not double if we choose one plan over another.

    That's right, let's borrow $500 million (asset acquisition + capital obligations) which will cost us almost triple that in debt service and hope the debt service doesn't destroy the PPA.

    The council controller plan calls for borrowing roughly half of that. Anyone who took the time to review it would know that the debt service and capital obligations are well covered by increased parking rates.

    Swallow pride and philosphy, lease the parking assets, put the pension issue to bed and start focusing on the other elephants at the zoo.

    The lease plan would not put the pension issue to bed. Neither plan will. However, there is a major difference between the two: When the elephant awakes under the lease plan, and we go under state control, the revenue generated from our parking assets will have been forfeited to JP Morgan for the next 40-50 years.

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  37. Rex (to TED, 1 of 3)November 6, 2010 at 6:33 PM

    I was starting to worry that I ran you off of this thread (or at least out of rational counterarguments). I was wrong about that, and I was wrong ONLY about that, and the fact you’re still in the game is so much the better.

    Now so much to comment on, and so little space, so where, then, do I begin?

    “It seems that you are dramatically inflating the numbers to support your argument for the lease plan.

    The pension obligations already exist. They do not double if we choose one plan over another.

    The council controller plan calls for borrowing roughly half of that. Anyone who took the time to review it would know that the debt service and capital obligations are well covered by increased parking rates.”

    Normally, I would attack each of these in series, but I made a terrible mistake of my own in my previous post, which I will correct here.

    In my previous post, I made a logical assumption that your premise was essentially woe upon, as you state in your reply, “forfeiting public assets”.

    Even, as has been stated by some members of Council, the alternative (and essentially rational basis) reason for this transaction is to place in the hands of one agency the responsibility for parking, it still falls on the deaf ear of one even more important fact:

    The proponents of the now-famous “Scrape-and-Borrow Plan, ver. 3.0 have actually fooled themselves into believing that it will work the way that they SAY it will merely because they SAY it will.

    Now, I know the immediate and natural response to this will be, “Well, if we had just STUDIED it, we would know, and now we’ll never know.”

    Well, two factors belie this unimpressive and quite frankly, given the severity of the moment and the temerity with which the alternative was proffered, the professional obligation to back it up with more than the promise of various members of Council and various Council staff clicking their heels together three times with their eyes closed saying, ‘I wish it were so, I wish it were so, I wish it were so!” I don’t care if those ruby slippers were made of diamonds and stamped “DeBeer’s” just saying so doesn’t make it so, Dorothy, no matter what the Glenda the Good Witch may have told you along the Yellow Brick Road.

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  38. Rex (to TED, 2 of 3)November 6, 2010 at 6:37 PM

    Answer me these questions:

    1. Do you have a letter of credit from a qualified lender willing to lend us $230 million?

    2. Do you have a letter from a bond insurer willing to insure the bond issuance?

    3. Do you know why the PPA’s current bondholder requires that a certified parking consultant certify any projections and determines, independently, what the net revenues that would be available are?

    And then assuming we get past those questions, answer this one:

    If we are essentially divorcing the parking issue from the pension issue, and one puts themselves squarely in the shoes of the PPA, what possible benefit is there to gain for them by quadrupling its debt to bail out the City to purchase assets they already control the revenue on?

    If I am being asked solely as the PPA to consider this proposition, it wouldn’t have taken me 15 minutes to send it back to Grant Street.

    Ah yes, but I digress.

    Your constant and unceasing contention that neither plan would solve the problem is entertaining, but until and unless you can bring the “Scrape and Borrow, ver. 3.0” past a point where you can provide serious answers to very real questions, you’re being intentionally disingenuous by claiming that either plan would avert the takeover.

    Until you do that much, you can at best assert that the lease would avert the takeover crisis and only IF IF IF IF IF IF IF IF IF IF IF IF you could do more than merely pull the “Wizard of Oz” on us and hope we believe in fairy tales also.

    Otherwise, your reliance on the statement:

    “The council controller plan calls for borrowing roughly half of that. Anyone who took the time to review it would know that the debt service and capital obligations are well covered by increased parking rates.”

    Says who? You? BrianTH’s Ouija board? (that was a good one, btw)

    That’s heresay, a statement not substantiated by anything factual you can present to the public. And by anyone, you mean “anyone but bond counsel, bond insurer and bond underwriter, let alone bond issuer.”

    Oh, and I reviewed it, I’m still trying to figure out how exactly one reconstructs a $100 million parking garage $3 million at a time, let alone three of then in the same 30-year timeframe, and do so cheaper than the private industry.

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  39. Rex (to TED, 3 of 3)November 6, 2010 at 6:39 PM

    You never answered the following questions:

    “And at this late stage in the game, who goes around shopping completely unvetted proposals when the stakes are already this high?”

    “What if the bond's proponents are wrong?”

    “Did you ever ask yourself that question?”

    “Or are the bond's proponents more worried about achieving short-term political gains with little or no regard for the consequences?”

    But since you haven’t, I’ll just go back to the central point of my previous post.

    You stated:

    “It seems that you are dramatically inflating the numbers to support your argument for the lease plan.”

    Your proposed solution is tantamount to a takeover, in which the City’s taxpayers are on the hook for $3.6B dollars. Under a lease that pays in $220M, and captures the extra parking tax $$$, we pay $1.9B over the same 30 years. And even IF (BIG IF) your plan WAS executable, it would still cost the taxpayers almost $500M more over 30 years, while bankrupting the Parking Authority, but I guess that’s merely pencil dust.

    The only drama involved in the display of those numbers is the fact that you keep claiming that Scrape-and-Borrow, ver 3.0 is a real plan, and in the right fairy tale, I will really believe you, as a means to avoid facing the reality that no one wants the lease, but it is the only option we have time left to do.

    Had those who think as you do on Council had their thinking caps on, or a calendar in front of them, say, back in June, then perhaps we would have a menu of options to choose from. But you denied yourselves and the rest of us that by waiting until the last minute and attempting to sell a bootleg copy of a rerun.

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  40. It's possible I was a bit too brusque with the commenter that suggested the State could become inclined to alter things to taxpayer's benefit / workers' detriment.

    Following a trail started by a quirky video on Null Space, I came upon a blog post at the Commonwealth Foundation which suggests that Chamber of Commerce types and, well, conservative think tank types are going to push Corbett et al to make 401(k)'s legal, do away with arbitration and create "tax breaks for urban development". That is, so long as the state "quits" throwing money at the municipal pensions problem.

    Who knows, between that agenda, threats of a mandated takeovers and incentives for privatization, we might all Ayn Rand our way out of this mess.

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  41. Bram:

    It would be useful, given the fact that generally, today's younger emolyees are less likely than their parents and grandparents to stay at a job for 20-30 years, that their retirement benefit be fully portable. That's simply responding to changes brought forth by the modern workforce.

    And yes, if it weren't a bunch of cut-and-spend Republicans suggesting it, I'd be more jubilant about tax breaks for urban development. But it sounds like a tax giveaway to let a new class of wealthy developers and speculators buy heretofore undesirable real estate and get tax breaks for widescale displacement of every Republican's favorite demographic, the urban poor.

    And instead of ending arbitration altogether, how about amending Act 111 so that the arbitrator is legally obligated to consider a municipality's ability to pay?

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  42. And instead of ending arbitration altogether, how about amending Act 111 so that the arbitrator is legally obligated to consider a municipality's ability to pay?

    What do they base arbitration on now? I was once in AFSMCE (something like that), but that was in another state and I didn't go to the meetings.

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  43. The anti-city folks posting here haven't seemed very receptive to the news that the state reform would actually be needed to give cities the ability to resolve their pension problems--but who knows, maybe the politicians they elect will be more receptive.

    By the way, portability is good, but so is pooling longevity risk. Defined contribution plans as currently structured don't do the latter. What all workers, private and public, really need is something that combines the portability of defined contribution plans with the risk-pooling of defined benefit plans.

    Which is completely possible, but again it would require moving past the typical talking points.

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  44. Pooling longevity risk while allowing portability is a good idea, but it would require completely re-working the entire retirement system*, probably including Social Security. The only way to pool that risk while keeping portability is either to make a nation-wide pool or have some kind of Super-SS that applies if you get to 80 or 85 or something (e.g. you could plan your pension fund with the assumption that if you live that long, you'll be supported by the super plan.)

    I think that is a bit more than "moving past the typical talking points."

    *It would be easier to do that for public sector employees only, but they already have a fair bit of portability and pooled longevity risk if they stay in the public system.

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  45. Rex:

    I believed you actually knew what you were talking about until you asked the following:

    1. Do you have a letter of credit from a qualified lender willing to lend us $230 million?

    2. Do you have a letter from a bond insurer willing to insure the bond issuance?

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  46. TED:

    Why?

    Because I asked the questions out of order?

    LOL!

    No rational person douces with gasoline and lights a match to almost half-a-billion dollars of desperately needed cash without a shovel-ready, verifiable backup plan.

    And as for your attempt to trivialize the questions, regardless of my use of simplification, you still can't answer them.

    But that leaves this question:

    Where is your counterargument?

    You're beginning to disappoint, TED.

    I've come to expect better of you.

    ROTFLMAO

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  47. I'm reminded here of somebody on special teams doing a huge dance after a routine tackle. Like maybe the Cabbage Patch. ;)

    On the topic of public retirement benefits, combining portability to and from the private sector and pooling risk seems like an inherent challenge, but maybe not an insurmountable one. To the Innovationmobile!

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  48. To the Innovationmobile!

    It runs on biodiesel and whale flatulence.

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  49. No rational person douces with gasoline and lights a match to almost half-a-billion dollars of desperately needed cash without a shovel-ready, verifiable backup plan.

    They have one Bram. If Luke (and the PPA board) were to give it serious consideration it, you would know that.

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  50. So annuities provided by insurance companies already pool longevity risk--and as an aside, annuities can provide relatively favorable rates of return in comparison to a safe withdrawal rate from an individual retirement portfolio, despite the pretty high administrative and management costs in the existing insurance industry, which demonstrates the importance of risk-pooling.

    So here is one idea (in broad outline). Employers fund standardized retirement units for employees as part of their compensation, with the exact cash contribution required of the employer for a given unit being calculated using standardized actuarial tables as applied to the relevant employee. This standardization is required so that employees understand the value of their retirement compensation, and don't have to be financial wizards to figure that out for themselves. You could also allow things like delayed vesting and such.

    Employees can then direct those units be allocated to any of one or more insurance companies that have qualified to participate in this program. These insurance companies are regulated tightly for things like cost ratios, and they are also required to participate in a secondary risk-pooling scheme with each other. If you like, you could include non-profit or government-run options among the choices (if this is sounding familiar, it should--there are only so many ways to run a broad-based insurance scheme like this).

    Then an individual employee can move between employers, and their accumulated units go with them. At retirement, they simply convert their units into annuities. They can also convert only some of their units to annuities and let others ride, if they want to semi-retire.

    In other words, it looks just like 401Ks, except the investment options are limited to these heavily regulated, competing annuity programs, which in turn are also risk-pooling with each other. The overall effect is of one big risk-pooling scheme among all employees, but it is portable, voluntary, and has a competitive element.

    Or you could just create one big voluntary annuity program run by the federal government, and have employers contribute standardized units on behalf of their employees to that. That would probably be more efficient, but the politics might be more difficult (again, this should sound familiar, because this is just reinventing the wheel).

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  51. The Parking Authority board gave the Council-Controller plan at least as much serious consideration as Council gave the lease plan. Given that their mandate is limited to the parking system, you can't really blame them for not wanting to triple the Authority's debt without getting an equivalent infusion of new capital to upgrade the system.

    And maybe they actual read Council's own study, which demonstrated why this was a worse plan for the City anyway.

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  52. Oops, bandl was me (accidentally put a word verification where my name should go).

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  53. with gasoline and lights a match

    I've previously proposed, I think here, that we insure the Civic Arena for what we need and then call this one guy I've heard about. Two birds, one stone.

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  54. TED:

    I actually think Bram was referring to me.

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  55. I was, TED.

    I guess my first question as to that other avenue is, what'd be in it for the Parking Authority? I'm a little skeptical that to purchase the assets for exactly as much as the pension fund requires "gives them a larger voice in parking policy" actually means anything.

    The cover page of the CC plan also reads something like, "We recognize that the Mayor and the Parking Authority are two independent bodies with their own decision making responsibilities," and I'm wondering how you think that is supposed to play out IRL.

    Then I'm wondering much of the stuff REX pointed out, particularly how to rehab facilities on a $3 mil drip at a time, but yada...

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