Thursday, December 23, 2010

Thursday: Anatomy of a Clusterfrack

Yesterday's Post-Gazette article did a pretty good job summing up the gist of Tuesday's marathon 7-hour City Council meeting, marking-up the city's 2011 annual budget.

But the one critically important feature left unwritten was:

Voting for the amendments were Mrs. Harris, Bruce Kraus, Bill Peduto, Ms. Rudiak and Mr. Shields. Voting against them were... (P-G, Joe Smydo)

Those five members were the five consistently least compromising in terms of entertaining any permutation of Mayor Ravenstahl's parking deal as a solution to the city's pension problem. They were also the same five who voted at the beginning of the year to elect Councilwoman Darlene Harris as the body's president over Councilwoman Theresa Smith. The no-votes were in the opposite camp on both scores.

So at least 2010 has a lovely matching pair of bookends.

What occurred in those several dozen budget amendments can be accurately described as providing neighborhood groups and initiatives (in those five members' districts) with the critical funding necessary to do important work that had been deferred for years and years, often despite repeated assurances: community and recreation centers, senior centers, youth programs, business district improvements, neighborhood master plans, and blight removal.

All of that can also be just as accurately described as pet projects comprising "reelection insurance" to those five Council members who are likely to be challenged by the assembled forces of mayoral allies, the city and county Democratic party, and any labor groups and other constituencies outraged over the city's failure to stave off a state takeover. Of course, along with reelection insurance comes the camaraderie of victors divvying up hard-earned spoils.

During deliberations, viewers literally heard "Won't somebody please think of the children?" tearfully employed on multiple occasions. And the story of each individual amendment, taken in isolation, was 100% legitimate on that very basis; in some cases these groups had been promised very humble forms of civic support since the Caliguiri administration, and had simply fallen on the wrong side of Act 47 cuts or mayoral political whims past and present. Yet taken together and in context, the many amendments were just as much a textbook example of pet projects being allocated in those districts whose political representatives are holding a slim but surprisingly firm majority on the Council opposing this mayor.

Flip sides of the same coin.


The next stage of this particular mini-drama involves the mayor's line-item veto -- one drawback of Council having passed all the mark-ups by only that 5-4 margin.

Now, budget hawks of Pittsburgh take heart: none of the items in those amendments would actually swell the size of the city's gross annual expenditures. It was all paid for with matching cuts elsewhere in the budget.

In several cases, the trade-offs made common sense -- the cost of a specific named demolition project was taken out of the city's yearly allocation for building demolitions, for example. But in what seemed like a whole lot of cases -- particularly the community development projects -- the allocation came out of one of several accounts in the Urban Redevelopment Authority (URA). Even "personnel" in at least one case.

This mayor, as all Pittsburgh mayors, is fond of his URA.

So Mayor Ravenstahl could veto all the amendments, which might bring with it the collateral PR advantage of being able to say he "acted on principle" -- but in addition to throwing gasoline on our present civic inferno, these vetoes would not necessarily restore funds to his own submitted line-items. It might just take the money out of the spending budget on both ends and in entirety, if Council doesn't eventually allocate it towards something -- and government oughtn't quite be allowed to grind to a standstill.

Or he could choose to not veto any of them -- perhaps cooling intergovernmental relations a titch -- and then he could hand over the keys to the mayor's office while he's at it. So we're pretty likely to see a Solomonic splitting of the vetoes somewhere around 50% of the group, although with only a modest reduction in outrage and further drama.


All of which is to put off discussion of the fact that we're 9 days from the state pensions takeover deadline and despite the furious work and alarmed advocacy of various civic parties, we don't seem to be any closer to a break.

Council's majority bloc has most recently demonstrated its solidarity against any form of business deal involving the LAZ and JPMorgan ownership group (which is the only one we can deal with if we're even going to pretend to honor the proper process for these things before the deadline). So in tennis terms you might say it's ad-Harris.

In any consideration of what the mayor's next move ought to be, one needs to keep a few facts in mind:

1) The "Council-Controller plan" was kept a state secret for the better part of a year, under a fairly flimsy pretense of its advocates being "cooperative", while the Mayor's plan marinated in in full public scrutiny as one plan that would definitely raise parking rates sky-high.

2) The very day the Council-Controller plan was unveiled to the public, six (6) members of Council unloaded fire on the mayor's parking plan and on Mayor Ravenstahl himself in the loudest, most alarming, most vicious, least walkable-back way possible, while the mayor was off the continent, and demanded his plan be erased from consideration prior to discussion of their own.

3) Upon returning to Pittsburgh, the mayor did what anyone in that situation would be expected to do, and vilified the stuffing out of the Council-Controller plan right back in return.

4) Other than the Council-Controller plan, all of the other ideas floated by the Council majority are pretty goofy. *-CLARIFICATION / UPDATE: Or sound pretty goofy. You know.

5) In the ensuing months, the mayor's plan was modified in several ways, bringing the rates way down to Earth (at the cost of reducing the payoff) and even, in one modification, actually taking many of the "public assets" off the table so Council could do its Council-Controller thing. So as I see it, although neither faction deserves to win the Nobel Prize in Compromise, the mayor's side at least merits a table at the reception ceremony more so than the Harris majority.

Now, what can I say. Very little.

In 20-20 hindsight, the smart play for the Mayor might have been to fight for the lease deal through Thanksgiving, and then find some pretense for giving in, gaining a say in Council's vision, and declaring a victory. I for one never anticipated that five Council members would actually, at the end of all things, prefer the state takeover to a less-preferable but cleanly viable solution.

In 40-40 hindsight, the optimal play for the Mayor might have been to even more assertively explain his case for his parking deal to the public over all those long and dreary summer months, to begin with an RFP prescribing lower rates at the outset instead of having to be bargained down later, and definitely to horse-trade some of those irritating Council members' votes with the very kinds of initiatives they are now demanding via budget amendments, not to mention for political support or at least non-interference.

What the best play is now, I don't know. I don't fracking know. I just hope people are bargaining constructively and creatively is all.


  1. you lost any cred you had left with this one, reichbaum.

  2. If the Mayor ordered the Parking Authority to approve the Council-Comptroller plan, would they do it?

    That seems to be a key assumption of many of the players, but at least in theory, the Parking Authority can make its own decision. And the decision it made makes perfect sense for a public authority whose mandate is parking, not saving everyone else's bacon.

  3. Nobody has a plan that doesn't involve the Parking Authority saving everyone else's bacon.

  4. True, but the lease plan (and variations thereof) would also have been good for the parking system itself.

    The only way the Council-Comptroller plan makes sense is if you think it is OK to sacrifice what is in the best interests of the parking system for the sake of helping out the City financially. Most people in the City likely think that, and for that matter I do too. But can the Parking Authority do that?

    Again, the same issue isn't presented by the lease, because the parking system is a beneficiary of that deal.

  5. True, but the lease plan (and variations thereof) would also have been good for the parking system itself.

    Good for the parking system, but it would really cut the authority of the parking authority, most especially their ability to hire people.

    Also, this is a pointless line of discussion. The parking system isn't some group with civil rights. To the extent it has interests separate from the city government as a whole, that represents local political ass-ness.

  6. to those five Council members who are likely to be challenged by the assembled forces of mayoral allies, the city and county Democratic party, ...

    Given that all five are part of the city and county Democratic party, this seems a bit over-reaching. Unless the Politburo or whatever they call it has really kicked them out.

  7. Well, it is relevant because the Parking Authority actually has veto power over any plan involving the parking assets. So figuring out what they would be willing to do or not do seems rather important, no?

    Specifically, again I gather the assumption in some circles is that if the Mayor told them to accept the Council-Comptroller plan, they would. I am less confident that is actually true.

  8. The Authority is governed by a five member Board (the "Board"); appointed by the Mayor of the City of Pittsburgh to serve without compensation for staggered terms of five years at the pleasure of the Mayor.

    The above quote is from the authority's web site. "At the pleasure of" usually means they can be replaced by the mayor at will, but I'm not a lawyer.

  9. MH:

    Does not any board with a fiduciary responsibility have the legal obligation to consider whether or the impacts of a desired act would seriously hurt their organization's ability to conduct business?

    Specifically, you're suggesting that the parking Authority should have borrowed $330 million ($220 to bail out the City's pension and an additional $110 million to pay off their current bondholders - because short of paying them off the Authority could borrow no new money) when the revenues to be generated by the parking rate increases would likely have generated a $110 million shortfall on the debt service over 17 years, especially when Council's best answer for that question was, "We think this will work, we THINK the revenues will be sufficient, we THINK the bonds SHOULD be tax-free" and then said "Don't take our word for it..."

    With most of the bond insurance agencies themselves going bankrupt, who would insure a bond of this nature? Without bond insurance, the City would likely have had to guarantee the debt, leaving the City's taxpayers on the hook for the debt (which isn't working too well in Harrisburg at the moment).

    And just the mention of this Plan in the press sparked a very nasty letter from the Authority's current bond insurance agency insuring the current debt (as in --um, wtf do you think you're doing and how exactly do you plan on paying off this new debt and how exactly will you do the necessary capital improvements if you borrow this new money, and, this is really important, WHERE IS YOUR PROOF?)

    We have to stop talking about the Council-Controller Plan as if any financial professional has averred to its' veracity, because no such testimony exists.

  10. Yep, I checked the law, and the appointing authority can remove the Board members at will.

    So that does seem how it could play out--if the Mayor ordered the Board to approve a plan and it refused, he could fire the people voting against and appoint people who promised to vote for.

  11. Specifically, you're suggesting that the parking Authority should have borrowed $330 million ($220 to bail out the City's pension and an additional $110 million to pay off their current bondholders - because short of paying them off the Authority could borrow no new money)

    I'm not suggesting that. This got a bit sidetracked. I'm just suggesting that the Parking Authority isn't really an independent actor. Nothing beyond that. I remain opposed to any filling of the pension fund outside of some set of pension reforms.

    From my point of view, the only benefit of the council's plan would come if we defaulted on the bonds. The people who buy the bonds are entitled to think differently.

  12. Of course the Parking authority does what the mayor wants, how naive are you people. I know for a fact that one of the so-called independent authority board flipped at the request of the mayor the day before the vote

    Ps, are you sure you don't mean the "assembled forces" of the mayor and pnc bank"?

  13. Anonymous 10:39 am - At which points exactly? I thought it was pretty even-handed. Though that might not be the kind of credibility you're after.

    Well, the indented five points weren't SUPER even-handed in themselves, I'll grant you -- that's because I sensed there was an uneven presumption growing that it should be be super easy for the mayor to cave in at this point and "be the bigger man". A little history lesson in how Council contributed to this cold, hard impasse was warranted, if only to make certain he gets the proper amount of credit if he breaks it.

  14. Bram, was your use of "Solamnic" some kind of Freudian slip birthed of a long-repressed adolescent fascination with the Dragonlance pulp fantasy genre? Or did you mean to say "Solomonic"?

  15. F-Dzerzh - Yes it was that absolutely. Probably weary of feeling so like Sturm Brightblade.

  16. MH 12:24 - Nah, seriously! Three among them were not the party-endorsed candidate on their initial elections, and may not have ingratiated themselves to that august body since. Others who had earned the endorsement in the past may find things a little choppy.

  17. Darlene Harris is a disgrace.

  18. All will tremble in fear before the people who live on streets without potholes and who usually manage to send a flyer listing who you should vote for in the primary if you bother to vote in the primary and you didn't toss the flyer with the Val-u-Pak coupon book and the thing that looks like a credit card bill but is probably "checks" that cost $50 from the first if you used one.

    Meh. I'm sure it matters for some districts, but Ravenstahl didn't even hit 50% in my area.

  19. MH:

    Of course not. You live somewhere between CMU and the Homestead Grays Bridge!

    Merry Christmas!!!

  20. Merry Christmas from the cheap part of the 14th Ward.

  21. this thread evokes the fairytale of new york, perhaps...

    cheers from the drunk tank!

  22. I just wish Bram would at least try to find some other sources on the fifth floor.

  23. Of all the possible sources on the 5th floor, I find City Channel Pittsburgh to be the most reliable. ;)

  24. If you only watch the city channel then you see like 1/10th of the story.

  25. The mayor wants no new debt . Council wants to retain city assets; therefore no lease, no sale. That is except to the parking authority with the creation of new debt. No deal there. Five on Council are willing to allow a state takeover. The mayor and the unions are opposed to that. Dowd says he wants to keep the pension plan in city hands and city assets in city’s hands. The Service Operating agreement would have done that. Shields and Rudiak sat in the back of council chambers chatting the day the Burgess Plan was presented! They never spoke openly at that meeting. If the Mayor’s in favor; Bill Peduto is against. Kraus says his constituents are opposed to the lease deal with the increasing rates. Well that was toned down. Smith is willing to compromise. Lavelle seems to be also. Harris seems like the person to go after to get the swing vote for any deal on the table. Shields and Peduto have been involved with council for 15 years each if not longer. Where’s this issue been? Blaming Wall Street and comparing them to vultures solves nothing. The non-profit community wants none of this and there will no $$ forthcoming. There are no white knights waiting to come to our rescue. The state takeover without some advanced $$$ to mitigate the increased municipal contribution while be especially burdensome on the back of the public. Services will get hit; taxes will be increased. Maybe a city council populated by a few career politicians and a handful of novice community based activists isn’t up to making the hard decisions needed to run a major city. Those decisions include allowing parking rates to increase and the public making rational decisions about that increase. Whether it’s to take the bus, ride their bike or car pool. I don’t even think owning parking is something the city should be doing. Sure, council doesn’t want to give up the revenues because spending taxpayer money is their raison d’ĂȘtre. Short of a post Christmas miracle, it looks like it’s a state takeover. I have to ask, the pension will be in receivership, the city is under Act 47 oversight with an independent board adding to the misery. Is the next step for a city with a still shrinking population, and an ever increasing financial debt, municipal bankruptcy?? And then unloading the pensions???Hmm, sounds like a plan.

  26. This too shall pass. All of the above will soon not mean anything. Darlene Harris isn't anyone's weak link. Luke Ravenstahl is a foolish young man.

  27. where'd the beast from the east go...back into hibernation??

  28. Thought better of sounding the comment at this time. Enjoy your privileged cryptic bonus knowledge.

  29. When the squirrel of Canada wears a leather corset, the beast of the east will go into a coma because he ignored the warning label on the Viagra bottle.