Monday, June 30, 2008
Underway with no way on
What if today or some point before completion this all falls apart. It's almost too painful to think about. It would be one thing if this had all happened earlier, but Barden can't back out now financially and the site as everyone is prone to report has 'steel rising'. The white elephant potential is pretty high.
If the license is ever actually revoked the first result would be endless litigation. Barden suing the gaming board and others, subcontractors suing contractors, contractors suing Barden, parties I can't even conceive of suing each other. It's not like anyone else is going to step in and get the license and proceed ahead anytime soon. What if the competitive bidding out of the license has to start from scratch?
Then the financial consequences. For Barden it would be disastrous. For a lot of local subcontractors it would not be fun. Then there is the city which since Act 47 plan forward has written into its budget anticipated casino revenue to keep the city afloat. That won't be there, nor will any community contributions in the Hill District or elsewhere. Then there is the new Arena. This is so slim that it doesn't deserve to be called a silver lining, but there is a bit of a pewter lining. Remember all the haranguing over how to get the new arena financed once Isle of Capri didn't get the casino license? If Barden had proposed building an arena himself the way the Isle of Capri folks did, then the revocation of the license would put the whole arena project dead in the water. However, Barden's role is indirect the way it all played out. The core financing in the form of $7.5 annually is indeed slated to come from him, but he isn't really involved in building it. So who does bear the risk of the arena project.
One answer is the Sports and Exhibition Authority (SEA) because THEY ALREADY BORROWED THE MONEY. That raises lots of questions. If the Barden money stream does not start flowing in as expected, what happens? It is not an immediate problem in that they have some built in debt reserves built into the offering.. Also I assume payments for construction of the arena are not due 100% up front and instead will draw down the bond proceeds on some pro-rata basis. They have been making payments on the bond since November.
Nonetheless, at some point once construction accelerates, the arena will eat up all or more of the bond proceeds and without casino payments this could get interesting. The bonds are essentially revenue bonds backed by all the revenues of the SEA. I have not had time to read through the bond statement entirely, but the bonds are insured which is curious unto itself a bit for revenue bonds. But it gets a bit weirder in that the revenue backing the project are not limited to the revenues specifically tied to the arena, to include the Barden payments, rent or other sources.. but all the SEA revenue. At least that is my reading. So before these bonds could default to bond insurers it seems the holders have claims against most SEA revenue. The problem then becomes that the SEA needs a lot of that revenue for other projects. So even though the bond explicitly says that there is no clawback liability to the state nor any political subdivision (i.e. the city or county) it is not that simple.
Since the SEA is a creature of the city and the county I bet there are costs that would be their responsibility if all other revenues go toward required bond payments. So instead of the whole project providing a pretty serious revenue bump for the city, it could become a net cost.
And if you really want the Dr. Doom perspective on all this (above was the rosy part)... Go to the bond statement I linked above. I didn't realize this until now, but the SEA bond for the arena looks to me to be a variable rate bond. These variable rate bonds have proven to be pretty disastrous for a lot of public entities in the last 6 months... For example read about UPMC's experiences with some variable rate bonds. Anyone have any more insight on that? The only reason I put this last and not first is that I don't have sufficient information to know if the SEA has hedged out the variable interest rate risk with swaps or something else. If they did, this might be a non-issue. But it's something I would be looking into if I were an intrepid financial reporter though.
update: I still don't have any first hand info on what hedging the SEA did for this bond, but according to Bond Buyer last year when they were setting this up:
The $247 million of variable-rate bonds are immediately going to be swapped to fixed rate, so the authority will know exactly what its debt service and swap payment obligations will be, DiMartini said. The deal will include a SIFMA swap for the tax-exempt portion, and a LIBOR swap will be used for the taxable portion, he said. "You're trying to find the balance between variable and fixed that gives you the lowest cost of borrowing," Conturo said.
I still wonder a bit what they did in the end, but it looks like they at least planned to hedge the variable interest rate risk going in.
Sunday, June 29, 2008
Looking at that map, I wonder whether Somerset or Bedford County, either independently or together, are the biggest destinations of New York City trash in the country. New York turns out to to be the largest exporter while Pennsylvania is both the largest importer, and net importer of municipal solid waste. You may wonder why it's legal to dump your trash in somebody else's state, but the lawyers will tell you about this little thing called the Commerce Clause.
Sam had some insightful observations when I posted that map earlier . Someone ought to look into what the impacts, economic or otherwise, are of the trash economy in Kersey, PA which is the the largest location obvious in the northwestern part of the state.
Saturday, June 28, 2008
Bike on through to the other side
The theme said "Bike on through to the other side" and pointed people toward this site: http://www.thealleghenies.com/
Friday, June 27, 2008
Meet the Wagners (of California)
The really sad thing is that the City of Pittsburgh wishes its pension funds were in as good a shape as Vallejo's. The stock market turmoil in recent months must be pushing down Pittsburgh's already depleted pension fund. You have to wonder how much stress it can handle before winding down to a pay as you go system.
Note that the Wagners makes specific mention of their health benefits, the cost of which must be accounted for systematically in California. Go read the City of Pittsburgh's financial reports and see if you can find what the total health care liability is. At least there is no need to worry about Pittsburgh seeing its health care reserves drain away due to the stock market declines of late.
Thursday, June 26, 2008
Blue on Blue
While that is going on, the media is catching on that the Majestic Star financing mystery may be reaching its climax. I will just point back to what I said in some previous posts 1) Don Barden and Gary and 2) Where in the (financial) world is the Majestic Star. To me the key question is not whether he gets his financing or not. I wonder whether the interest rates he appears to be forced into at this point make the casino a viable business venture no matter. Nobody has really looked at that in depth.
All in the casino project for Pittsburgh is something on the order of a $800 million dollar project. According to the news accounts of deliberations in city council yesterday, they spent 2.5 hours discussing a $10K legal fee. Looking at that in terms of dollar per minute and using some advanced ratio analysis it means city council should spend the next 22 years (working 24/7) on casino related issues.
There is this news that the Post-Gazette has made a bunch of changes on its web site. I took the time to listen to the video introduction from the Editor in Chief. The problem was, what do you get first but an advertisement you have to sit through. Who has time for that? I am having a problem figuring what all is new on the site I have to admit, it really looks all the same to me... but I am sure I will figure it out.
Lots of symbolism in the news that USAirways is now even cutting back its Pittsburgh-Harrisburg flights. Given long term cutbacks in Amtrak and the potential foreign ownership of the turnpike, I think there is a conspiracy afoot to split the Commonwealth of Pennsylvania into two states.
I have to admit that I have had a hard time calling the bottom for the airline industry in Pittsburgh. Every time I think the bottom has finally come in terms of industry employment here there are ever more cuts. Maybe we are not there even yet, but I am pretty sure we are now below the level of employment that would be average for for a region our size. That is quite a change from what was one of the most concentrated hub (relative to our size) operations in the US at one point. There must be some wisdom in all of that on how fast competitive advantage can change for a region, to the degree there ever really was a competitive advantage for the airline industry here.
Wednesday, June 25, 2008
An Akron Promise that smells funny
The Yin and Yang of housing markets in Pittsburgh
The standard metric these days for tracking the national housing miasma is the Case-Shiller Index. That index for the record tracks real estate prices not the number of transactions. Our problem is that it covers 20 regions across the country, but does not include Pittsburgh. You can see their latest data through April is here. What is well commented on elsewhere is just how bad that index is doing in all markets. Their April over April numbers show housing price declines in all 20 Case-Shiller markets, some by almost 27% in just the last year. So if Pittsburgh is having a 4.7% increase while most everyone else is having double digit declines it makes you wonder a bit why the headline emphasizes that the number of transactions is down and not just how unique it is for prices to be going up as they are here. I am sure there are a few other regions showing price appreciation, places like Houston for example. But there is no big oil industry here benefiting from higher energy prices. That makes continuing housing appreciation that much more interesting. You can't chalk it up to any one anomalous reason to explain why housing prices are going up here while dropping through the basement most everywhere else.
So really bad practice and something I would only do on a blog.. but mixing time periods and data sources in a way that I ought not to... if you graph the April over April Case Shiller data and add in the May over May data being reported locally you get this picture.
It's one thing to just say that things are not as bad here as elsewhere, it's another thing entirely to show that housing prices are still moving respectably in the opposite direction of most other regions. Depends on how you measure it, but I think that +4.7% actually represents a slight acceleration in local housing prices over the last couple of years which just makes the headline of the continuing slump here even odder.
Tuesday, June 24, 2008
If anyone wants to donate a copy of the $250 actual report, let me know.
People... Place.... Planning.... Pittsburgh?
People or Place: Revisiting the Who versus the Where of Urban Development posted on Randall Crane's blog at UCLA and is a shortened version of a piece coming out on Land Lines at the Lincoln Institute.
Speaking of place.. via Brewed Fresh Daily is a link to how planning and economic development are evolving in Philadelphia.
Monday, June 23, 2008
Attracting and Retaining the Pittsburgh workforce - really retro version
Come to Pittsburgh is the message being sent to the workingmen throughout the world. Stay in Pittsburgh is the advice to those already here. From President A.C. Dinkey of the Carnegie Steel Company comes the latter counsel. He supplements it with a number of reasons why Pittsburgh at present is, and in the future will be, the best home in the world for the workingman.Notice they didn't say workingwomen back then.
Source: June 23, 1912 in the New York Times.
Follow those stories... and tracking the Mystic Order of the Yinzerati
""Why do we have to have 'coterminous, stakeholder engagement' when we could just 'talk to people' instead?"
If only that would happen around here. With apologies to all my very good friends who have worked at Mckinsey over the decades, just say no to management-consultant-speak.
I was pointing out the other day how despite rising gas prices parking is as scarce as ever Downtown. Check out PG's coverage showing that it's worse than that. It looks like parking prices have been going up dramatically, not down which is counterintuitive if indeed people are finding it too expensive to drive. Is parking a mythical Giffen good for some?
Last week I put up a map of the last Altmire-Hart race for PA's 4th congressional district and a look at the history of PA's 18th congressional district. The PG's Jim O'Toole looks more broadly at the vulnerability of Republicans in Pennsylvania's congressional delegation and the Philly Inquirer looks at some Pennsylvania redistricting history. The story of post 2000 redistricting in Pennsylvania could be summarized as: never has so much money been spent for so little return. Another way to look at it: sometimes you can overquantify things. At least in this case, the supercrunchers got things backwards.
If you read the Philly story linked above, it focuses a bit on the migration (it's kind of a diaspora story unto itself) of State Senator Frank Pecora following the 1990 redistricting in Pennsylvania. To connect everthing, who was Frank Pecora's Chief of Staff?
I have a long transit post building up in me, but there are so many things going on that it's hard to boil down to one post. But the Trib has coverage on the expenses involved in the operation of the Port Authority's light rail system, or "T". Maybe a bit of history is needed. See this great video from the KDKA archives reporting on the opening of the T in the 1980's. There is a brief interview with spry young Jim Roddey (actually he looks much the same) who was Chairman of the Port Authority during the T construction years. Something that might have been good to include in the Trib story is the map below. This is a map of public transit usage in Allegheny County. It's hard not to miss the big impact of the "T" on ridership along its mostly South Hills routes.A more detailed view is available as a PDF file of same.
Also just for context, in London the operating shortfall for it's Tube dwarfs ours. Read this article from the Economist on their 750 pound (~$1.5 Billion) operating shortfall for their system. or this article from Chicago where they say they need $6Billion just for sheer maintenance on their system. Both are likely going to get that money. Just to connect everthing back to Pittsburgh: many know this, but the London Tube is being run these days by an American; the brother of Jim O'Toole (see above) no less. Lots of Pittsburgh expat CEO's out there. Maybe something for Jim R. to look into, but could the Pittsburgh diaspora be the new Illuminati.
Ok... when I try to make jokes, you know it's time to stop.
Sunday, June 22, 2008
Think it's all just for fun. The video above is what caused the buzz.. but the point seems to be to direct viewers toward an updated version that has promotional material postpended to it. That version would be this video.
Saturday, June 21, 2008
Old is New Again - Retro Energy Policy
Jimmy Carter, "The President's Proposed Energy Policy." 18 April 1977.Vital Speeches of the Day, Vol. XXXXIII, No. 14, May 1, 1977, pp. 418-420.Jimmy Carter delivered this televised speech on April 18, 1977. The link has a transcript, audio and even the video archive.
Friday, June 20, 2008
parsing the primary
As a starting point.... broken down by age, here is the graph I come up with for the number of voters in Allegheny county by single year of age in 2004 and 2008. Blue is 2008, Redish is 2004.
On the surface this already seems surprising because it makes it look as if the big bulge in voting was not just an increase in younger voters which is all the media really talked about. There was clearly a big, if not bigger, bump in the number of people who came out to vote between the ages of around 28 to 63.
Of course that is in the raw numbers, if you look at the percentage increase in the number of voters in 2008 compared to 2004, again by single year of age in Allegheny County I get this graph:
That shows the big bump up in younger, in fact of the youngest voters. Of course with percentages you get small number distortions when your denominators are so small, which is pretty much the case with voters under the age of 30, if not 40, in local elections. So interpret that graph as you will.
Is there something to make sense of here given all the caveats? Counting the number of voters does not allow you really figure out who was more likely to come out on election day. Especially around here, local demographics are so atypical that you get very different number of people in different age cohorts. So I have matched the voter turnout numbers used above to estimates I have on the population in the county in 2004 and in 2008.
What that gives me is the following graph which is the percentage of total population that actually voted, again by single year of age for Allegheny County in the two elections.
With that... I am not sure what it says in the end. Clearly the small number of younger voters in 2004 were given a big percentage bump up in 2008. I think it's much more interesting how many of the middle and older age voters came out. Nobody talked about that much, either during the run-up to the election nor even since. That spike in increased participation around age 27 in the 2008 primary is interesting and deserves some inspection. If I had to sum it up, I would say that the big increase in attention given the 2008 primary made the voter participation look much more like what is typical of a general election around here. What I think is probably the biggest question, and something I will look at when I have time, is whether the additional folks who voted 2008 were more likely to be the people who are likely to have come out in the general election anyway. Lots of younger voters come out in general elections even if they never make it to a primary. It makes a big difference if the folks who came out in the 2008 primary where those folks, or a lot of people really new to the political process and in the fall we can expect them to show up along with the folks who typically skip the primary, but make it to the general. The answer to that question across the country I bet will determine who wins in the fall is my call.
Thursday, June 19, 2008
death by a thousand filings
I thought some sort of resubmission was the half-expected result of previous legal agreements between the assorted parties. So this was not wholly unexpected. Surprising is that they now want to add an electronic 'ticker' to the sign. I wonder if that was in the plan all along, but might have expected to just slide it in as it was being built. I bet the argument would have been that an 'electronic' sign need not be limited to static content.
Funny to me at least is that I was talking with a researcher from outside the US last week. The general topic of all this came up tangentially and I had to try and explain as briefly as possible what the whole deal was. It's hard to explain just how inexplicable this all is to someone who is not immersed in local politics. No matter how you boil it down, people from elsewhere find all aspects of this just too bizarre to comprehend.
My only question: who decides the content of the 'ticker'? Gotta be a joke in that.
If you didn't catch it yet, the Pittsburgh City Paper has a long look at the issues involved in City-County Consolidation. The only thing to add to that is that I see the spectre of Skybus brought up ever again. Skybus as few will recall first hand has a history that goes back well into the 1960's and met its demise in the 1970's. I actually agree that the Skybus episode in Pittsburgh history (think Lamargate on steroids in terms of the politics involved) became as much a debate on metropolitanism as transportation. Only in Pittsburgh could that have happened. If you are interested in local politics, or anything related to transportation here, the rise and fall of Skybus really defines where the region is, or isn't, in terms of transportation planning to this day. For the definitive history see:
SKYBUS Pittsburgh's Failed Industry Targeting Strategy of the 1960s
by Morton Coleman, David Houston and Edward K. Muller. 2000.
Some news from Canada: Mentioned here repeatedly is how big an issue growth in the nuclear industry may be to the region. Just yesterday is news from our neighbor to the north on their plans and several new reactors.See: Ontario looking to lead Nuclear Renaissance in the Toronto Star. and on the same day there is another news story from their fellow province Saskatchewan also working up a plan to build several reactors of their own. See: With two proposed reactors, Saskatchewan joins Ontario in nuclear renaissance. Nuclear power is not exactly an industry that you can just throw some money at and become a player. The fact that there really are only a couple major contenders (one of which is here) for all of these projects popping up is really going to be big news for years go come. There just isn't another industry where we have such a concentration of all worldwide expertise.
I can even talk about this as a regional issue. The Toronto Star paper explains how US-based Westinghouse (just need to get media around the world to call it Pittsburgh-based) is one of the main contenders for the Ontario project. Atomic Energy of Canada and that French company are others. Seems that if Pittsburgh and Ontario are both considered part of the greater Great Lakes region, then Pittsburgh based Westinghouse could be considered the home team as well. Must be some collaboration that could be formed between Westinghouse and AEC. It is a shorter drive from Toronto to Pittsburgh than it is from Toronto to Montreal.
Wednesday, June 18, 2008
transit beyond the burgh
and I wonder how many local folks are attending the Third International Conference on Funding Transport Infrastructure. Their agenda sure sounds like a lot of familiar issues. It's in Paris however. I hope some academics are there, but I bet PennDOT folks would be afraid of the media taking them to task for foreign excursions if they went. Yeah, I know there is an Oslo joke in there, but I like Norway.
Governing posts about the National Congestion Scorecard and the list of 100 most conjested metros. The report card on Pittsburgh lists the worst bottlenecks in the region. It makes me wonder if the media folks who report on traffic every day really exist or if they just read down this same list every day.
ok.. this isn't transit related but..... Really stretching the envelope on government transparency is this site just launched by the New York State Comptroller: http://www.openbooknewyork.com/. It claims to be a searchable database of spending at all state agencies and all related contracts. Wow. Bets on when we get that in Pennsylvania or locally.
Tuesday, June 17, 2008
follow those stories
Reported yesterday is news that Lee Otto Johnson was sentenced to house arrest for his role in the Twanda Carlisle case. It's such a long strange story that would take tomes to explain. The case, like most legal cases, expanded far from its starting point but his role starts out with his name listed as the author of this report which was said to be the product of a $30-40K payment (for lack of a better term) from former Councilwoman Carlisle's office. Beyond the obvious problems with the document if you look at it, you will see some not-exactly-hidden photocopying from several of my colleague Ralph's reports. You can read two of those sources here and here. I still say the oddest part of this little episode is that anyone thought such a 'report' should conceivably be worth seeing the light of day.
Something that is bothering me about all of this. I really wonder how much a 78 year old with no real research or writing background (his resume is at the beginning of the report) really worked to put together a report of any kind, even one as loosely defensible as a report as that one was. I have no other info on Mr. Johnson beyond what has been reported nor on the specific evidence in this case. I hope they really looked into whether he was cognizant of this work and it was not just his name affixed to something others put together.
Where in the world is Bernardo Katz
and more illegality. I suppose we have to say alleged at this point, but the accused has fled the country and all. The news is that the city controller is looking into loans made by the city's Urban and Redevelopment to failed developer Bernardo Katz. OK, sounds like a good idea. Not sure why it took this long, but what really surprises me is the mention that one possible outcome could be liens places on Mr. Katz's non-foreclosed upon properties. Any reason this has not happened already? The fellow has already fled the country.
I have noticed a few times someone hitting this blog with the search "Bernardo Katz" and the source was Hamburg, Germany. It's only interesting to me because financial wonks over a certain age might remember a semi-famous fraud case years ago when a fellow named Martin Frankel bought and essentially defrauded some small insurance companies in Mississippi. The Wall Street Journal made a big deal of reporting on the case and he was eventually caught in Hamburg of all places living comfortable. I wonder.
More Pittsburgh TV action
OK.. not a previous story, but catch of the day from my web filter: A blog post on a TV pilot that filed in Pittsburgh last week: One and a half Italians, that is billed as the Travel Channel meets the Food Network. Amos, you out there?
Monday, June 16, 2008
My Schenley question
Asbestos is asbestos whether the school building is used or not. Even if the decision is to raze the building, the cost to remediate the asbestos is still there. You don't just tear down a building laced with asbestos. You would have have to pay to go in and clear out the asbestos. I even wonder if the cost to remove all the asbestos pending demolition or reuse is higher than the cost just to repair in place the existing asbestos problem. We don't know because all that is talked about is the cost of dealing with the cost to fix the asbestos. But there should be no overlooking the fact that the cost of dealing with the asbestos is already accrued. The school district already owns that liability whether it wants to admit it or not and it is a liability that will have to be paid off someday. It is only a question of when that cost gets dealt with. A decision to close the high school is only deferring that cost.
So I understand the school district has a cash issue that is what may be forcing their hand with regards to what to do with Schenley in the immediate future. I understand that, but this gets to the real social accounting of this type of decision. Call it accrual policy vs. cash policy, but nonetheless its the way we collectively should be looking at most issues like this. Trying to deal with the immediate cash crises is as best short term politics. The bottom line is that the decision of what will eventually happen to the building is fundamental to the decision over whether it makes sense to close the building, but nobody is talking about that at all and nobody is talking about what it means to have such a large abandoned building right at the intersection of North Oakland and the Upper Hill. There is a real cost to that as well that is not being factored into any of this.
Put simply, the question that has to be asked and answered as part of this debate is what is the plan for the building if it is indeed must close.
Honestly, I am open to the idea that the school may need to be closed, but all that a hear thus far is a narrow discussion of how the school district can balance its near term budgets. I don't blame the school board or even the superintendent for that actually. It is a situation we all put them in by leaving school financing as narrowly based as it is in Pennsylvania. But in the end that does not justify ignoring the fundamental questions that need to be asked.
Sunday, June 15, 2008
Pennsylvania's Rorschach test
When Pennsylvania was last redistricted following the 2000 census, there was little secret made in the desire to create a district that would swap one traditionally Democratic congressional district for a Republican one in Southwestern Pennsylvania. With just a little help from those darn computers a congressional district was tailor made for then State Senator Tim Murphy who would win the seat. Jeff Toobin discussed the whole history of Pennsylvania redistricting in this article in the New Yorker. In the end the effort may have backfired and according to no less of a conservative source than the Wall Street Journal the process didn't work out too well for Republicans in the long run. Maybe that explains the lack of endorsement?
But we are about to enter this whole redistricting cycle again. Passing almost unnoticed last week was just about the only chance to amend the Pennsylvania Constitution to alter the way redistricting happens. Pennsylvania's League of Women Voters (LWV) was advocating for some fundamental reform in the way the redistricting process takes place in the commonwealth. The goal was to take some of the politics out of the process. Last week was effectively the deadline if there was to be an ammendment to the state constitution in place before redistricting takes place again.
How important is redistricting? Pennsylvania is likely to lose a seat when the nation reapportions congress next. That will force changes in district boundaries across the state and make control of the redistricting process one of the biggest prizes in Harrisburg. Take a look at just how big a difference the power to define district boundaries can be. The LWV has pointed out some of the extreme cases of gerrymandering and PA-18 is at the top of their list. This for example is what the outline of the local 18th Congressional District looks like today.
There are lots of reasons that a political map need not always look neat and compact. Boundaries may reflect sheer topography or some fundamental socioeconomic patterns that do not lend themselves to simple shapes. However for PA 18 you have to wonder what reasons lead to that shape. Consider that prior to the most recent redistricting, PA18 had not only a different shape, but was far more compact and contiguous. It shows there is no fundamental explanation (other than sheer politics) for the shape PA took after the 2000 redistricting. Take a look at what its outline looked like before:
If you put both old and new districts on top of each other, you see just how much PA18 was changed. Granted, Pennsylvania lost a congressional seat in the last reapportionment as well, which forced changes across all of the state's congressional districts, but look at just how little overlap there is between what PA18 was and what it became. What this tells you is just how important the control of the redistricting process is. There is nothing more political than the drawing of political boundaries which can determine not only the party has an advantage, but what specific candidate is likely to do well.
Without reform in the process there is an interesting question as to how the post 2010 redistricting will play out in Pennsylvania. In 2001-2002, the Republicans controlled both house and senate in Pennsylvania and there was a Republican governor. That made control of the process straightforward if nothing else. Right now, the Republican party controls the state senate; the state house has a close Democratic majority, but with a Republican speaker reflecting a pretty even split. A Democratic governor is in office right now, but it will be Rendell's successor who is in office at the time of the next redistricting. So the control of Harrisburg will likely be about as muddled as it can get. Add it all up and it's hard to see how the the redistricting process will proceed smoothly. It's typical that there is some judicial play to the redistricting process, often in the form of lawsuits over the final maps that are drawn up. I would bet there will be involvement of the state supreme court far earlier in the process baring some extraordinary bipartisan cooperation in Harrisburg. Worth mentioning, the state Supreme Court right now is split 3-3 between D's and R's with one vacancy.
Think this is all too far down the road to think about. I have no doubt folks are plotting all this already and it will not be long before big bucks start to go into planning the next redistricting. The upcoming state elections are fundamentally important to who controls Harrisburg in the next few years and thus who will control the Federal redistricting that is coming up.
Saturday, June 14, 2008
Flag Day in Pittsburgh - 1941
image from the United States Flag Store
Friday, June 13, 2008
Completely random morning musings
Somebody asked if I was serious when I posted a comment that said a plan years ago to build an indoor NASCAR track in town was really a backdoor way to get at a valuable coal seam. Well, now there is talk of strip mining a park even. So yeah, I was serious. There will be a few more things people are looking to dig up as coal continues to increase in price. Coal prices, especially Pittsburgh seam coal, is accelerating as much if not more than oil these days and lots of previously uneconomic coal deposits are becoming worth digging up. Maybe I should have taken out that mine subsidance insurance?
Since we are now going to be obsessing on Presidential polls for the next 6 months, the real statsgeeks at Columbia have a blog posting with some real comparisons of how presidential polls have trended in the last 11 presidential elections. Worth a look.
Speaking of politics...I really am not getting into if this is good, bad or whatever... but remember how big a brouhaha there was over the proposed pay hike in the state legislature? It is fascinating to see what is happening in Louisiana where there seems to be bipartisan approval of a plan there to triple their legislators pay. Its just weird that its being signed by a Republican who isn't seeing his career ended as a result, he is actually talked about as a VP candidate. The difference from here were folks were tarred and feathered is weird is all.
Worth a look.. SSTI now has an interactive web page called the: State Venture Capital Dashboard
Governing has a column on viral video government. I think the meeting of the City's Cable Communications Advisory Committee last week was about as anti-viral as you can get.
I had a link last week on this, but being overly abtruse I doubt anyone saw it.. but it's kind of important. Remember Pittsburgh is still sometimes considered the largest inland port in the US. That is a half-true kind of factoid, but I will leave that for another day. Suffice it to say there is a nautical industry here (think coal barges) and the Department of Transportation has a report out looking at how difficult it is hiring workers in the maritime industry.
Thursday, June 12, 2008
Which reminds me of this advertisement... and my little annotation:
For all the talk of increased transit usage (much more so elsewhere in the country than here) I was reminded of the other little issue of parking Downtown. I am told that high gas prices or not the parking situation Downtown is as tight as ever and by mid-morning if not earlier it is virtually impossible to find a parking spot for the day in a Downtown lot. Gas prices aside, the parking situation Downtown can really only get worse in the coming year. There has to be some parking impact still to be caused by the accelerating construction of the arena and casino.
This came to mind because of a piece in the Trib last week that had a picture and a quote that spelled it out quite clearly from a commuter who said she only began driving to work recently because of route cuts at the Port Authority. Why do we sometimes seem to do the opposite thing of everyone else in the country?
And again, gas prices or not consider that the city of Pittsburgh is mandated to continue lowering the parking tax rate to the 'normal' 33% which may not mitigate gas prices, but be a little incentive to some to drive more, not less for those who commute into Downtown. Tax rollback or not, I would be surprised to see any net savings to parkers anytime soon.
Where will gas prices hurt the most. Pittsburgh proper is no longer listed in the top 50 cities in the US so it is not included in this report... but a recent report on cities that are most vulnerable to gas prices is here from Common Current:
Wednesday, June 11, 2008
Things that really matter - again
People have already forgotten what may be one of the more important stories of last year when the Duquesne school district closed its high school and the state passed a law that sent those students, fairly involuntarily, to two nearby districts. When you consider the acrimony that surrounded this plan, let alone the obvious difficulties involved in assimilating a large group of students into new schools at the last minute and with little notice.... somebody really ought to give some credit to the teachers and administrators of West Mifflin and East Allegheny. I am sure there were problems that arose that did not make the news, but the fact that this all happened as seamlessly as it did is pretty remarkable. Somebody ought to give them an award for being professions under uncommonly difficult circumstances.
Tuesday, June 10, 2008
Things that ought not to be on TV
I have written about QUBE TV and the origins of cable TV in the city of Pittsburgh, which is also the genesis of this committee. So I may have been the single person in the city with just enough interest to see what these folks are up to. There actually are some important issues this committee in particular could be at least talking about. But no.....
What did I learn? The committee spent most of its time debating how to record it's own minutes. No joke. There was a brief, and I mean brief, discussion of thinking about a New York Times article on cable rates. Then some discussion of whether that could itself be part of the minutes. Then at the end some more debate over whether the committee received $5 or $15 a month as stipend to cover parking/travel costs.
Seriously, it was painful to watch and quite embarrassing. I'm the first one to argue for transparency and all of that, but if you are going to be on TV even with a 0.1 Arbitron rating, have a plan will you. Its hard to imagine that given all the changes going on in the telecommunications world there just isn't anything to even discuss among the group that should be at the nexus of information access and regulation here. Here is a write up from Governing recently on the future of public access television which this commitee has some oversight of here. Some issues that directly affect cable TV here in town are part of the presidential debate already.
Monday, June 09, 2008
If you are reading because you saw my Sunday piece in the Post Gazette about the USS Pittsburgh and Typhoon Viper in World War II, you may be interested in my goal of bringing another WWII ship to Pittsburgh.
Some know that Pittsburgh was a major shipbuilding region during World War II when many local industries converted from their normal products. Pittsburgh would produce many of the amphibious Landing Ship Tank's (LST's) that were so vital on D-Day and many other operations during the war. I have a goal to bring one of them: LST 325 up to Pittsburgh for a visit from it current home in Evansville, Indiana. Evansville, like Pittsburgh, was a major shipyard during WWII. Most of the LST's built in WWII came from shipyards on the Ohio River. Time is running out for a generation, but I really think that some of the workforce that worked on these ships is still around and would enjoy the chance to see the product of their workmanship or in many cases their workwomanship as it was women who kept much of industrial American producing during the war.
The first picture to the left is the launching of LST-750 launched in Pittsburgh on May 30, 1944 from the Dravo Shipyard. LST-750 would have a long glorious career and be sunk just 6 months later at the Battle of Leyte Gulf.
I have previously blogged about LST-1 which was also built here in Pittsburgh. The second picture on the left shows LST-1 on local rivers soon after it was launched. When you consider how slow Pittsburgh industry was to change in the half centuries before and after WWII, it is strange to think that for the duration an entire shipbuilding industry was created, and later shut down, in mere months.
So that's the goal. How to make it happen? I have thus far not been very successful at finding an organization large enough, and with deep enough pockets, to sponsor the evolution. Any takers?
Sunday, June 08, 2008
Friday, June 06, 2008
but some back of the envelope math. 42 gallons of oil in a barrel. So today's price increase alone translates into at least +26 cents per gallon. It has to be more than that of course. A gallon of oil does not get refined into a full gallon of gasoline so right there you need to divide by something smaller than 42. Then it takes oil to get oil to market, by ship, rail, truck or whatever... eventually that gets translated into a price at the pump. So it compounds a bit. So unless it retracts quickly today's oil spike alone will translate to +30 cents? +40 cents per gallon?
Follow that story: CNN has a short video piece on the bankruptcy filing in the City of Vallejo, CA.
Cleveland+Pittsburgh+Youngstown Regional Learning Network.
Which is a pretty neat concept and I believe is open to the public but you will need to register. The 'work' aspect is just that my colleagues here will be presenting at this event. Not quite sure if I will make it.
Thursday, June 05, 2008
Wednesday, June 04, 2008
where's the wabbit?
On the same day that GM announced the large drop in auto/truck sales nationwide they announced that they would be expanding production at their Lordstown plant in Ohio (just over the Ohio border), even including plans to add a third shift which will increase employment in order to build a new small car at the plant. Remember when Pittsburgh was once the small car nexus of North American auto production? I was going to file this as a "Cleveburgh" story since there are workers from across the region who commute to jobs at the Lordstown plant.
But it goes beyond that. Forbes reports that imports of steel into the US declined last month, which is good for US producers. It's not just the level of imports, but the profitability of steel that is shooting up. Forbes had another story yesterday on that: Steel Prices Show no Rust. One big reason for that is clearly the declining value of the dollar with respect to foreign currencies which is a big boost to US manufactuers. The thing about currency impacts on output is that they do not respond immediately to changes in exchange rates, contracts are fixed over longer terms and companies that do business internationally will often hedge their currency risk in long term options . The the impact of the lower value of the dollar takes time to percolate, which also means that we have not yet seen the full impact recent weakness in the dollar. And the steel industry has local employment impacts beyond the manufacturers these days.
The coal and gas industries in the greater region are 'surging'. That is a positive for the still large coal industry and its induced economy (those coal barges have workers if nothing else... workers which are getting harder and harder to come by). Energy prices are not a completely rosy story of course, even beyond the pain at the pump. If there is a recession, energy prices are one of the big causes. but Pittsburgh still is home to a number of very energy intensive industries that are finding it very difficult to operate in such a high energy cost environment. Verdict still out on how that will all play out for certain US industries.
I honestly am waiting for when the idea of building an indoor Nascar track in Pittsburgh is going to come back into play. What does that have to do with anything? The site where it was going to be built was really sitting on a bunch of coal that I bet was difficult to get a license to mine. So the project was probably just an indirect way to get at the valueable coal. It's funny seeing how the media covered this as a 'sports' story, not that sports isn't big business, but you get the point. If the coal was worth enough to do all this years ago, imagine what it is worth these days.
Don Barden and Gary
and it seems to be just a coincidence... but the same journalist who wrote that story was interviewed in some depth on the radio here just last week. Listen to that on Ron Morris' radio program The American Entrepreneur for when he was filling in on 1360AM last Friday afternoon. The topic was specifically Gary and Don Barden and his casino operation there and worth listening to for all casino-watchers here for sure. Sounds like some similar circumstances.
Tuesday, June 03, 2008
Angels in the Neutral Zone
update: I had started to wonder this, however I am not enough of a sports expert to expound on the subject authoritatively... But Mondesihouse has raised the question of just how great last nights (this morning's) hockey game was? Was it one of the best NHL games ever?
Funny little world, Penguins games are too expensive for me to go to too many. But if you look at the list of longest hockey games ever, I was actually at the game in May of 2000 which is listed as the 4th longest game ever. So I had visions last night that it would last until dawn.
Monday, June 02, 2008
Why Vallejo Matters, part II
City of Vallejo:
~$80 million in outstanding general obligation debt (Note 3)
$83 in unfunded pension liabilities.(Note 1)
Population: 117 thousand.
City of Pittsburgh:
Outstanding Debt: $768 million
Unfunded Pension Liability: $470 million (Note 2)
Population: 312 thousand
So if you work it out in per capita terms:
Debt per capita: ~$700
unfunded pension liability per capita: ~$700
City of Pittsburgh:
Debt per capita: $2,500
unfunded pension liability per capita: $1,506
Now I really doubt that Vallejo's bankruptcy filing will stand up in bankruptcy court and it could all just be tossed out by the judge there. It just isn't the poster child others may call it. In fact, if I were one of the many parties that will certainly be arguing against allowing Vallejo to enter bankruptcy I would use Pittsburgh as evidence of a big city far worse off yet still not in Chapter 9. No matter their outcome, the situation here has to be worse. The debt per capita metrics are all far worse in Pittsburgh on their surface and when you add in the additional fact that Pittsburgh's population has been continuing to go down, and that the city's tax structure is highly dependent on it's resident population, the prognosis is even worse compared to Vallejo which has at least a relatively stable population. I could parse that even further if I compared the working age population (and thus the bulk of the tax revenue generating population) in the two cities and the comparison would be even bleaker for Pittsburgh. Of Pittsburgh's population it is a safe bet that a much larger percentage of it includes transient or otherwise minimal tax-revenue-generating students and senior citizens compared to Vallejo. When you add it all up I would bet the debt per household in the city of Pittsburgh is well over $10K before you begin to include school district debt, the unfunded health liability, or anything else.
So again, my prognostication is that the Vallejo bankruptcy is not going anywhere... but what if a judge out there does indeed let a Vallejo bankruptcy filing to go forward... what does that say about whether the City of Pittsburgh could/would/should do the same now or at some point down the road. What does it say about dozens (hundreds?) of other PA municipalities that would compare unfavorably to Vallejo in financial metrics.
and what does it say if the Vallejo case does get tossed, I suspect many will infer too much about what it says about Pittsburgh despite it being in a far more precarious financial state looking into the future.
So will you all forget about the banners will you. please.
1. the $220 million cited in that article includes $136 million in retiree health benefits which I will leave out for the moment. Not mentioned here is Pittsburgh's own health care liability which is probably on the order of another $250-300 million.
2. The unfunded pension liability is as of January 1, 2005. I bet if we knew the current pension status and not numbers 3.5 years out of date, the unfunded pension liability per capita would look even more unfavorable compared to Vallejo.
3. The 80 million debt for Vallejo may be too high or too low for comparison with Pittsburgh. There is another 80 million in debt listed in their bankruptcy filing but I think it is revenue backed bonds with a claim on water revenues. Thus it's not general obligation debt and would be more comparable to the debt the PWSA has that I am not including in these numbers for Pittsburgh. But even doubling Vallejo's debt becnkmarked to Pittsburgh is still low in absolute or per capita measurement. Also, it's unclear to me if the $80 million I used here is strictly a general obligation claim on the city there.
The Puerto Rico/Pittsburgh Connection
Sunday, June 01, 2008
With news that Westinghouse is expanding, the region's lead can only expand. But just recently there is more news. The potential that Bechtel may consolidate up to 800 nuclear workers from its site in Schenectady, NY (which is a lot for this industry) will have a real impact here and blunt some of the loss Monroeville may face as Westinghouse moves a lot of jobs to Cranberry. Setting aside Westinghouse, Monroeville isn't losing all of these jobs as the Bettis Atomic Power Laboratory in West Mifflin is expected to remain in place.
Also from this weekend is a long write up in the Financial Times on some new potential technology developments in the Nuclear Power industry that could conceivably be considered "disruptive". Worth a read. And if you didn't catch it, it is international news that Westinghouse signed a deal just last week to build two nuclear reactors in South Carolina.
Why nuclear power is concentrated here may seem incongruous in what some may perceive as based historically in 'old' industries. Yet it all fits together when you think about it. I tried to connect those dots once in Energy Burgh.