Wednesday, March 03, 2010

Parking Asset Plans for Pension Funds -- Folly and Folly Squared

The Public Plan transfers ownership of some garages now a part of the Pittsburgh Parking Authority to a private pension fund for government workers. Then with the new garages, the pension fund can use on-going revenue for the pension fund needs.

This plan, by Patrick Dowd of Pittsburgh City Council (one of nine) and Michael Lamb, City Controller (I ran against him for that post), is put into contrast with the plan from the Mayor, Luke Ravenstahl. The mayor's plan calls for a lease of the parking garages, something that I've been speaking against for some time. It would be better to sell the garages and not do a long-term lease.

The city gave a long-term lease to the guy who operated the ice rink in the park on the South Side. That lease didn't work out well for the residents. The roof fell in on it -- literally.

The city gave a long term lease to the Pirates and Steelers for their use of Three Rivers Stadium. That building is long gone but the public still owes tens of millions on a building that isn't there any more. Go figure.

The city gave a long-term lease to the Penguins for the Civic Arena. Now the Pens, renters, are moving out, and they insist that the building that they don't own be torn down. What renter tells a landlord to tear down a building they used to live in?

Pittsburgh gave long term leases to the Pittsburgh network of Carnegie Libraries -- and that hasn't even worked out well. Library branches have closed. The library can't do fix ups as they don't own the buildings. It is a mess.

The city should NOT do any long term lease deals. Period.

Selling is another matter and presents a much different and much better outcome for the city, for the residents and for the next owners.

City Paper Link

Local accountability is nice. However, there is no accountability with an authority. None. The authority board members are not elected nor do they face retention votes. The accountability resides in elected offices.

Furthermore, the pension fund is not a public entity. The pension fund is a private fund for those that were once public employees. The steelworkers have a pension fund as do teachers, gov workers and others have private 401K funds.

So, if a bank goes broke should we give it a parking garage and call it even?

A neighbor has a hard time paying her bills. Can the city designate five parking meters along East Carson Street for her? Can she get an on-going revenue stream by taking the quarters out of those parking meters?

The Dowd and Lamb plan is better than what Ravenstahl suggested. But it is still a matter of the lesser of two evils.

I wait for news and details of the plan from its authors. Will they tell us if these parking garages that are now owned by the public authority and are going to be transferred in ownership to a pension fund become a taxable revenue stream for real estate taxes for the city, school board and county?

Owners of private parking garages pay property taxes on the real estate. The pension fund should own the garages and the city should send them a tax bill that gets paid every year. The treasury should make a long-term income stream based on the value of the land and building of these garages.

What too about the parking taxes?

The city parking tax has been a nightmare. For years I've said that the parking tax should be moved to a much lower level, say 10 or 15%. But, dropping the parking tax should happen after the Parking Authority was liquidated. The parking tax throughout the city should drop by a huge factor. That is the relief that should be part of the plan too.

A transfer of the ownership to the pension fund as proposed means a deed transfer. So, does this mean a deed transfer tax payment? I expect so.

I think that the deed transfer tax sucks. But it is here. And if it is something that you'll pay when you buy and sell a home, then it should be something that they pay when they expand their property holdings too.

If the new owners pay both the deed transfer tax and the real estate taxes into the future, then we are on the right pathway. Neither of these are mentioned in the Dowd and Lamb slide show. They are the ones who should be keeping their eyes on the cookie jar, cash drawer, public treasury. I feel as if they are doing a shell game with the public's attention.

I'd suggest that once a deal is done and the properties are transfered, then the next adjustment is with the parking tax. Put the parking tax to 15% once all of these new entities and transfers are resolved and operational for 6 months.

Allow for the Parking Authority to have a management contract for the new owners of the garages for no more than five years. Then, four or five years into the future, the owners of the garages and the management contractors can renew the terms of their contract, or not.

Sunset is a great word that those on Grant Street should use in every discussion they have.

Don't insist that the parking authority be un-accountable to the new owners. Give the freedom and flexibility to the new owners to do what they wish with their properties. Sunset the management by the Parking Authority for the properties now owned by the pension fund. That should be no more than a five year deal. Renewal, or not, should be a factor between the new owners and the management -- not some hatched plan from council from years ago.

The Dowd and Lamb plan is far better than what Mayor Ravenstahl put on the table. But some changes and more details from Dowd and Lamb plan should be made before it beats my plan of complete liquidation.

A few more notes are in the comment section of the SlideShare site as well as Patrick's Facebook page.

1. Transfer ownership means a deed transfer. Will there be a deed transfer tax paid on the total value of the properties that are transferred? I hope so. Say so.

2. Owners of property pay real estate taxes. What taxes are paid here? What are the assessments?

3. Sunset the management contract with the Parking Authority. Don't legislate what others should do with their properties.

I think it is a benefit to make dramatic decreases in the role of the Pittsburgh Parking Authority. For years I've said, "Let’s liquidate the Parking Authority." Without a Parking Authority, then policy decisions are done by those who are elected. That is who should do policy decisions. The Parking Authority is UN-Democratic. No Parking Authority Board Member comes up for a retention vote before the citizens.

Past and present city leaders are always fishing for one-time pay offs. This is another one-time windfall -- in a long series of them. By the way, how much does the public still owe on Three Rivers Stadium these days? Past Pittsburgh politicians sold the sewer lines for pete's sake.

Call ’The Private Plan’ the ’Ravenstahl Plan’ (or draft 1 of Ravenstahl Plan).

It is absurd that the Mayor’s Plan would forbid the Pittsburgh Parking Authority from building new parking facilities. So stupid. The only thing that would be more foolish is building more parking garages with public money -- like past city leadeers did so many times in the past.

Both Lamb and Dowd should be more concerned for the building of a regular revenue stream for local government too. Worry about the taxpayers, not your pensions. The regular revenue stream for CMPTF should be from the workers on the jobs now. This plan is to build a NEW, extra revenue stream.

Long-term economic stability is a but a dream here. Wave those red flags high when the plan hypes long-term and economics yet alone 'stability.' Will this plan create world peace too?

Local control is nice -- but this is really GOVERNMENT CONTROL of development options. I would much rather have GOVERNMENT CONTROL government functions and not have government play the role of development czar. Development should be driven by private investment money.

No comments: