Pittsburgh’s City Council gave preliminary approval Wednesday to a $220 million borrowing plan for the Pittsburgh Parking Authority that would help keep the city’s pension system out of state control.
Council members approved the bonding initiative in an initial vote with seven members in favor, one against, and one abstaining, according to city clerk Linda Johnson-Wasler. Mayor Luke Ravenstahl has said that he does not support the borrowing plan, but a seven-member vote overrides any potential veto of the proposal.
The council could hold a final vote next week. The bonding plan needs authorization from the Parking Authority’s board for the borrowing to move forward. That could be difficult as Ravenstahl’s finance director, Scott Kunka, is chairman of the agency’s board.
The initiative involves the Parking Authority selling up to $220 million of bonds to buy city-owned parking assets from Pittsburgh. The city could then use money from the asset sale to boost its retirement fund to at least a 50% funding level. The city’s pension system is nearly 30% funded.
The council Tuesday rejected Ravenstahl’s plan to lease the city’s parking system to a private developer for 50 years in return for an up-front payment of $451.6 million.
Pennsylvania will take over any municipal retirement fund that is not at least 50% funded on Jan. 1. It will place those systems within the Pennsylvania Municipal Retirement System, which is run by the state.
Ravenstahl believes that such a move would increase Pittsburgh’s minimum annual pension contributions by $30 million as the state uses a lower assumed rate of return for pension-fund investments.
Regarding a separate bill, the council withdrew Councilman Ricky Burgess’ measure to place the city’s pension system into the Pennsylvania Municipal Retirement System.