A Post-Gazette news report said the announcement by Harris comes as city officials scramble to find a way to meet Pennsylvania state law’s requirement that the pension program be at least 50% funded; it is now 29.3% funded. The city needs $220 million to get to the 50% funding threshold, according to the news report.
Citing an anonymous source, the Post-Gazette said the proposal Harris is expected to unveil calls for the city and the parking authority to pledge revenue from parking rate increases to the pension fund for about 30 years. Council members and City Controller Michael Lamb previously estimated that meter and garage increases could yield as much as $822 million by 2040, depending on debt service.
According to the newspaper, Mayor Luke Ravenstahl would have put at least $220 million of parking lease proceeds into the fund, and most of council’s efforts also focused on raising $220 million cash. However, council members now hope that the state would accept pledged revenue instead.
The Post-Gazette said the city paid about $56 million into the pension fund this year. A state takeover would put the city on a strict path toward 100% funding, with required annual payments jumping to $86.3 million by 2013 and $160 million by 2030.
The pension crisis included impassioned debate about privatization and the future of a financially troubled city with council and the mayor accusing each other of short-sightedness and irresponsibility, the newspaper said.