The Issue: The long-discussed proposal to privatize the city's parking garages and meters finally has a high bidder. A company comprising financial firm J.P. Morgan and LAZ Parking -- the controversial firm that runs Chicago's 36,000 parking meters -- will pay just shy of $452 million to lease the parking assets for the next 50 years. The mayor wants Pittsburgh City Council to approve the lease agreement by Nov. 1, thereby infusing about $200 million into the city's pension fund and avoiding a state takeover of it at year's end.
Why it's a good idea: The parking lease would stave off the state's takeover of the extremely under-funded pension fund. The pension fund is currently about 27 percent funded and must be 50 percent funded by the end of the year. If the state takes it over, the city will be forced to pay about $30 million a year into the pension fund. The Ravenstahl administration warns that will result in steep service cuts, including reductions in safety services. Once the pension fund is replenished, and existing debt on parking lots is paid off, the city will still have $120 million left over.
Why it's not a good idea: While $452 million is a lot of money -- and worth more than the assets' present value -- a study commissioned by city council indicates that over the next 50 years, the city's parking assets will bring in more than $2.3 billion. Also, under the lease plan, parking rates are going to be raised considerably. Some, including city controller Michael Lamb, have suggested that the city keep its parking assets, raise the rates itself and use the revenue to bolster the pension fund. Other alternatives include floating a bond issue, or simply letting the state take the fund over.
What's next: With the financial data surrounding the mayor's plan revealed, Councilor Pat Dowd says council can now get to work trying to decide the best course of action. "We've got more options and opportunities than ever before to solve this problem," says Dowd. "What the mayor's plan gives us is a starting point, and now we can move on from here ... mull over all of the alternatives, listen to what the public thinks and make a choice based on what's best for the city." Dowd says the public will have ample opportunities to speak out on the issue: "Everyone has an opinion on this issue, and so far they haven't been shy about letting us hear them. I get them in my office, at the grocery store, and the other day, while I was outside working in my yard."
According to Council President Darlene Harris' office, a public hearing will be held on the issue in mid-October. Additionally, plans are in the works to organize nine more public meetings in each councilor's district, although those dates have not been set.