Existential Authority of the Parking Authority
I jest a bit. One conclusion, or theme, is that even with the planned monetization and recapitalization of the pension fund the pension fund is in trouble. That isn't news in any form. The report does not get into it at all, and in fact on that point references my iPension page on the state of the pension system (see page 6). Curious that; you would think the city would have provided them with all the pension data they would have needed and then some. Simply put, getting the pension system to 50% funded basically puts it to where it was earlier this decade. I actuallys suspect the pension system had eeked back to near 50% funding between 2005 and 2006 for a brief period. The point is that the trend was bad back then, leading us to where we are today. At best this all moves us to the edge of the frying pan is all.
So it is a valid question how much this helps in the long run. There is another angle to this. Even with all the new cash, the threatened state takeover could still be in play pretty soon once the very next liability calculations are completed. New liability calculations will be based on where the pension system is at as of January 1, 2011, just a few months from now. Will be a long time before we learn the actuarial health of the system as of 1/1/11, but when we do get that information, it will likely show that there will never have been a day when the pension fund was over 50% funded. It is merely the fiction of dividing current assets by a liability calcuation reflecting where we were almost 2 years ago that gives us the warm fuzzy.
Too actuarially esoteric? Maybe we are missing the bigger issues which are simpler. A friend suggested this to me. If you actually read the enabling legislation allowing for the creation of the parking authority in the first place it has some interesting verbiage. The section specifically circumscribing the freedom the parking authority has to set rates does not seem to mention either profit for an investment bank nor the need to pay off pension liabilities among the list of valid factors it can consider. Hmm..
Here is an excerpt of section § 5505. Purposes and powers of the Commonwealth of Pennsylvania Parking Authority Law (Act of June 5, 1947, 53 P.S. § 341 et. seq.) that describes the valid factors such an authorities can use to set rates:
(d) Powers.......An authority has all powers necessary or convenient for the
carrying out of the purposes under this section, including:
9) To fix, alter, charge and collect rates and other charges for its facilities at reasonable rates to be determined exclusively by it, subject to appeal under this paragraph, for the purposes of providing for the payment of the expenses of the authority; for the construction, improvement, repair, maintenance and operation of its facilities and properties; for the payment of the principal of and interest on its obligations; and for fulfilling the terms and provisions of agreements made with the purchasers or holders of such obligations or with the municipality. Any person questioning the reasonableness of rates fixed by the authority may bring suit against the authority in the court of common pleas of the judicial district where the project is located. The court of common pleas shall have exclusive jurisdiction to determine the reasonableness of the rates and other charges. This paragraph supersedes a contrary provision in any home rule charter, ordinance or resolution.Some other less interesting stuff in there as well in other sections. Anyone pay attention to all the talk that they decreased the lease duration from 75 years to 50 years as an improvement on the plan for various reasons? Turns out § 5504 is pretty explicit that the parking authority can only authorized to exist for 50 years and not longer. It can be extended at any time, but only with a 50 year horizon. Thus no 75-year deal could have been put in place without some serious legal machinations. Basically, they didn't have much choice on that one.
You wonder what other legal issues there may be with this deal.