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Tuesday, December 28, 2010

The pension debate: This is why we can't have nice things

Posted By on Tue, Dec 28, 2010 at 5:32 PM

For a minute there, the blogosphere was all a-twitter: Could there be a solution to the city's massive pension crisis after all? Could council president Darlene Harris have found the answer that has evaded the city all these months?

Answer: Probably not. 

True, council did come up with a plan: It involves raising parking rates at garages and parking lots owned by the city, and its independent Parking Authority. That money would be pledged over 30 years -- an irrevocable agreement backed with the city's "full faith and credit" -- in hopes that it would fund 50 cents for every dollar the city owes on its pension obligations. That would be enough to avoid a Jan. 1 state takeover of the pension. And unlike Mayor Luke Ravenstahl's plan -- which involves leasing the garages outright to a private operator -- council's option would keep the assets in public hands.

And yes, finance director Scott Kunka did manage to create some confusion when he appeared before council today. Kunka, who also chairs the Parking Authority, told council that while the mayor "cannot endorse this plan," he also "will not stand in council's way."

Which sounded good at first. But then three thoughts occurred to me. 

The first was: "Hmmmmm ... here we are, considering a controversial bill at the very end of the year. And the Ravenstahl administration is saying it won't really advocate against the measure. What could possibly go wrong?"

Second: To my ears, Kunka was suggesting that Ravenstahl intends to let the legislation become law without his signature. Be advised, legal scholars, that by the terms of the city charter:

"If the mayor fails to sign or return legislation to council with reasons for disapproval, it shall become law as of its effective date, ten days after submission to the mayor."

So if you believe that Jan. 1 really is the absolute holy-shit drop-dead deadline for the city to get to 50 percent funding, it's already too late. Ravenstahl could run out the clock without even trying. (Personally, I don't really buy the Jan. 1 deadline -- but it's certainly made for lots of drama!)

Thirdly, and most importantly ... Ravenstahl doesn't actually have to veto the bill to kill it. All that's necessary is for the Parking Authority to not take any action.

During his marathon session with council today, Kunka argued, repeatedly, that council could approve Harris' bill without the Parking Authority doing anything. Kunka's theory, as near as anyone could follow it, was that while the bill anticipated using 30 years of increased parking revenue, it pledged the city's "full faith and credit" to provide the promised money. If the Parking Authority came up short, the city would be obliged to find another source for the cash. So it needn't have the Parking Authority's support at all.

That's an exceedingly legalistic point, and one that further confused today's council debate.  "It's just their way of walking away from this plan," city controller Michael Lamb, who has tried to come up with alternate funding proposals, told me. "The only way it works is if the Parking Authority raises its rates."

Kunka made it abundantly clear that the Parking Authority has no plans to do so: It can't pledge revenues in advance, he argued, because doing so would interfere with pledges made to bondholders who the authority already owes.

Lamb contests that interpretation, arguing that there are always work-arounds for that sort of problem. Still, Kunka's resistance can't come as a surprise. Hell, the Parking Authority refused to even study a previous alternative to the mayor's plan. And one of the authority board members who was willing to study it abruptly left the board shortly afterward. So is it any wonder that Kunka seemed unimpressed by today's proposal?

In fact, a part of me suspected that this whole thing might be a set-up. Had Ravenstahl's adversaries on council merely hatched a last-minute plot to embarrass him, and make themselves look good, by offering a "solution" he'd never go for?

After all, there was a lot of talk from council today -- especially from Patrick Dowd, who once ran against Ravenstahl -- about how the mayor couldn't be bothered to talk to council, though he was on-hand for today's PR activities related to the Winter Classic hockey game. Could this all have been an attempt to play into the perception that Ravenstahl is, well, less than entirely engaged by his work?

Lamb doubts it, and says councilors had some reason to think this might work. He says that the proposal was discussed during a Dec. 23 conference call involving councilors, state officials, and two administration officials: Kunka and mayoral right-hand guy Yarone Zober. At the time, Lamb says, the mayor's people seemed open to the idea, though they made no promises. "Yarone is very careful about saying, 'We'll have to talk to the mayor about this,'" Lamb says. "But they sounded very interested. At least momentarily, it created the sense that this was something we could do."

But even as the Jan. 1 deadline approached, councilors complained repeatedly, they heard nothing from Ravenstahl or his office -- not until Kunka made his appearance today. Harris herself was especially livid.

"I've worked with five mayors," she said. "[W]ithin a week I could get a meeting with Caliguiri, I could get a meeting with Sophie [Masloff], I could a meeting with Tom Murphy ...  [But] as president of this council I can't get a meeting with the mayor on one of the most important issues facing this city."

Kunka rejected such accusations, noting that council had repeatedly opposed the mayor's efforts to compromise on his own plan. Councilor Theresa Kail-Smith, who frequently backs the mayor, called the charge "disingenuous": "We have had some meetings" with the mayor, she said. "We've just disagreed."

Debates like this are a big part of the reason I've tried to avoid this whole issue over the past few months. And by meeting's end, tempers had clearly frayed. Kunka got into a shouting match with Natalia Rudiak. Bill Peduto alleged that Ravenstahl might be ginning up an outcome in which Harrisburg takes over the pension fund, and leases the parking garages anyway. 

Who you blame for the impasse, I suspect, depends on where you stood on the mayor's original proposal. But either way, what we're all seeing here is a public process that has simply collapsed. The plan council proposed today was never a solution to the pension problem: Councilors themselves admitted as much. It basically was a plan to meet a trumped-up, arbitrary state deadline with a trumped-up accounting trick. 

And arguably, that's all the state deserves. Today's multi-hour debate -- with round-and-round arguments about whether the city could count on Parking Authority revenue -- arguably needn't have happened at all. In a sane universe, the city could have raised the money simply by hiking the parking tax that everyone pays-- at city-owned lots, authority-owned facilities, and privately-operated sites as well. (If you're gonna dun commuters, why only go after those using the public lots?) But the city can't raise the parking tax because state legislators, in their infinite wisdom, largely took that power away from the city. (By state law, the only way the city can raise parking taxes, is by leasing the authority's garages -- a clear attempt by Harrisburg to dictate an outcome.) That leaves city officials arguing over how many angels can fit on a parking meter. 

As for the mayor? Early on, I thought he made a strong case for his own plan. And council hasn't always covered itself with glory here. But if council is sometimes less than the sum of its parts, we also have a mayor who apparently doesn't know how to add up to five.

During today's debate, councilor Ricky Burgess faulted council for waiting until "the eighth hour" to bring the legislation to a vote. Fair enough. But at least they were still working that late. Watching Kunka dodge and weave today, and hearing repeated complaints of mayoral disengagement, I found myself wondering: Has Ravenstahl already knocked off?

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