Beware the dotted line

Really really want to end the year on a positive, maybe we will start the new year with something less negative. Anyway.. Trib follows up on the story of the Detroit pension system's losing bet on our casino: Casino's Struggles Felt in Detroit.

Here is the thing.  the story that came from sounds horrible. Risky bets cost Detroit pension funds $480 million.  Yet the Detoit pension system, which is made up of two big pension systems I presume for uniformed and nonuniformed employees were funded at 100% and 106% in their latest audits.  Granted those are from last year, but that is at least as current as our information here.

Go read the numbers yourself: See page 23 (per the pdf) of their General Retirement System audit, or the similar document for their Police and Fire Retirement system (page 25 per the pdf numbering).  I'd point you out to read the comparable documents for the pension system here... but, you know.

So even after its $480mil dollar loss (a big chunk of which coming from our casino) Detroit's pension system is three times as well funded as Pittsburgh's pension systems combined.  Maybe 4-5+ times as well funded as the Police pension fund (the worst-funded of our 3 pension funds) is here.  Detroit!?  Paragon of sound fiscal governance and transparency.

Might be interesting to look at an end of year news piece out of Detroit today. For them, their pension issues have truly become all consuming:

Another federal grand jury is probing potential problems with the city's two pension funds. Subpoenas were issued to a top pension official and to the pensions themselves seeking records about investments, including a residential real estate development in Florida.

They're mad that their pension fund is at or above 100% funding?  While we are so happy with how things are going here that we are doing anything conceivable (and the inconceivable) to make sure nothing changes here?  

Still an interesting tale of how Detroit got caught up in it all.  Below is the ownership schematic and financing behind the reoarganization of the River Casino operation as of when Bluhm took it over from Barden.  I would suggest that whenever you are a bank and have dotted lineds connecting you in a diagram like this, you have things to worry about.  The multiple colors just for the Detroit pension folks is probably a red flag in itself.  I'm just guessing Bluhm is a financial genius that is befitting a billionaire. If the Detroit pension system, and I am presuming Key Bank along the way as well took such big hits in this... then I bet his controlling interest in the casino didn't really cost him all that much in comparison.

fyi this must be all before the debt/equity was restructured.  Anyone have a similar diagram of the current, post reorg ownership structure of the Rivers Casino?  Must have a bigger chunk of equity for the Detroit pension system I figure.  I wonder if one of their pension board folks gets expense paid trips to the casino here?

It's an actuarial world

For those of you who have not been following the machinations in Pittsburgh city council (great photo btw) over how to fund its pension system just barely enough to avoid a statutory state takeover.. then just skip this.  It really is such a convoluted story that it is impossible to recount.

For those who have been paying attention to the detriment of other valuable things in your life.  I just want to point out one thing.  The last time an attempt was made to infuse the pension system with a large asset value in order to 'save' it, this is the amount of work it took to even begin considering that decision:

http://www.briem.com/files/PittsburghPensionRestructuring.pdf

As best I can tell, folks think they have been doing similar due diligence with pencil and paper on the fly these last few days.  At one point they were using a calculator at the table in city council to make verbal ammendments.  It just does not work that way.

Where we are at? What it means?  What tomorrow will bring?  I'm still waiting for city web site to post what actually was passed to make sense of it all.

addendum..  This is almost philosophical, but it just occurs to me..  if PERC accepts a promise of future tax revenue as a valid asset for Act 205 purposes, why did the city ever bother to borrow money in the form of pension bonds in the 1990's?  I wonder if this will set a precedent for a lot of other Pennsylvania municipalities to use.   SERS or PSERS might have something to think about as well.  Could solve lots of difficult pension accounting in the state. 

Seeking a velvet revolution on the 5th floor?

I wonder if today's retrospective on city council relations with the mayor, seemingly at an all time low, is a little bit rosy in it's view of the past.    Brian O. also takes up the circus that has indeed become the 5th floor, but how different is it from his own story now more than a couple decades ago:  Prague could teach Pittsburgh a lesson in civics.  Weren't there stories of swearing and actual fisticuffs on rare occassion in the not too distant past?  I personally wonder how tv has impacted the daily machinations of council.   In a world of uber informaton I'd plot the time series of words per exhortation.  There is a paper in that. Not sure who would do it? Political scientists? Linguists?  I've never quite figured out what the communications department does. Maybe them?

Between that and county political news yesterday, Pete Flaherty keeps popping up.

Pittsburgh's real estate moment?

In order to post something positive and to stick to the knitting, several positive economic notes out there. We'll start with real estate. 

I already mentioned the latest real estate data from realstats.  The PG headline was quite negative: Region home sales drop sharply.  Unless you are in the real estate biz itself, I am not sure sales is a metric that can be universally interpreted as a negative for a region.  That is a topic unto itself.

The bigger issue I also pointed out was that the other numbers mentioned in that story don't quite add up.  It said: "Average home prices rose 3.7 percent, from $138,907 last year to $151,556 last month, according to RealSTATs."  OK. Problem is that by my math a gain from  139 to 145  = +9.1%, not 3.7%.   So over on my echo that I mentioned in the last post, the principal at realstats that came up with the numbers actually commented and confirmed the PG's math was off.  Real estate values by that measure did in fact go up by over 9% year over year, and the headline didn't even notice.

Real estate price appreciation of +9.1% over the year is a huge number by most any benchmark.   For Pittsburgh it is quite unprecedented.  Should note that those numbers are the 'average' prices and it may be more common to compare median prices, but that is interesting in itself.  Note that how low inflation is, that is a real real estate price increase.  Even if 30 years ago there were some nominal increases that were comparable to that, in real terms those gains were minimal in the face of double digit inflation at the time. Latest inflation data is still virtually nonexistant in the US so that rate of appreciation is significant... for Pittsburgh historic.

Then here is the context that makes it an even bigger story.  Not only is Pgh real estate appreciating better than other markets.. almost all other markets are heading downward.   So Pittsburgh is appreciating in the face of strong national downtrend.  If there is an economic story of note around here, in the real estate data is something worth a lot lot more notice than it is getting. 

Trib also covered the data with a headline that also skipped the price story: Region's home sales fall 36 percent over year.  It also noted the other story of note that: "The median price of new homes sold (in the region) rose 13 percent to $275,000".  That's a pretty remarkable factoid for Pittsburgh in itself.  New homes basically appreciated in one year by an amount that far exceeds the median value of homes in many city neighborhoods and more than a few municipalities.   So something is up. 

For a counterfactual angle to it all.  The ongoing, if stealth-like, county real estate mass reassessment is ongoing and starting to make noise.  If we are about to enter a phase of unprecedented real estate appreciation around here, it might be good for homeowners to get new values set sooner rather than later.  Might be painful for some (and only some) folks to see new higher assessments, but like a lot of things... some pain now will avoid bigger pain later.

meta-meta-blogging

So just an odd twist in blog-world.  I will point out that nobody is doing anything wrong here.  I purposely put up that creative commons copyright notice there on the right to emphasize that everything here that I produce is as public domain as I can make it.  Free to use most any way you wish.

But I guess I feel a bit like our MSM friends claim to feel when they claim bloggers are just regurgitating their content.  I seem to be regularly syndicated at a site called Citizen Economists.  Who knew?

I'm serious, it's fine.  Weird, but fine, I just had no idea.  Though maybe the way they do this might not be quite consistent with that CC license which specifies attribution.  You can read my content over there and really have no idea where it comes from. It does have my name, but you can read that and have no idea what Null Space is.  I had no idea this was going on until I caught by accident is that someone over there left me a comment to a post of mine that is appearing there. Looks like that commenter (who is the principal from realstats that the post was about even) clearly is not a Null Space reader since he missed where it was originally posted.    Lack of backlinks probably explains why I don't see any hits from this site which I would have noticed before this.  I wonder how long I have been ghosted over there?

Needed to post this before I do into some poking at those real estate stats again.  The comment there was actually useful fodder for the next post.

Meta-news: A tale of three pension stories

Just fascinating reading the three account of the latest on the pension front. Those from Smydo,  Vidonic and Potter.   You have to wonder what those future archaeologists will think (or what current anthropologists think now) of us when they dig this stuff up. 

However, I have to give the award of the day to Vidonic though because once you dug through the chaff that was yesterday, the center of gravity all traced back to what the state has to say on all of this.  As best I can tell only he got a hold of the person who both enabled yesterday's soap opera and will determine the end game to all of this.. PERC(the Pennsylvania Employee Retirement Commission)'s Jim McAneny.   Per the Trib's version of all of this:

"It's too late," said James McAneny, executive director of the Pennsylvania Public Employee Retirement Commission. "Even if they got $500 million next year, it wouldn't change the takeover, unless the General Assembly changes the law."

There you have it.  Given that quote in itself, I am at a loss to figure what yesterday was all about.  I am actually kind of befuddled how he even enabled this latest little spat.  Did he really give hope to folks in Council that there was some alternative path, and if he did why?   My only guess is that he, like many in Harrisburg, are generally befuddled by city politics and whatever comments he made were never intended to enable a scene like yesterday (see above stories, but for the painful details of yesterday see Potter's).   So in learning of all that I bet he was a bit shocked, which probably is what lead to that quote in the Trib. Just a guess.

and with all that..  there is still that hanging conditional he left out there...  unless the General Assembly changes the law.  Only beginning to go down the rabbit hole on this.  You really have to wonder why the fear of having the state manage the investments of the pension fund is so extreme.

Risk and pensions

Ha.   you thought this was going to be about the doings downtown today.  Not quite, but everything is related somehow. 

Can't believe I missed this.  From the Detroit Free Press the day before yesterday:  Risky bets cost Detroit pension funds $480 million.   and check out their side story: Where the Detroit pension funds went wrong. Note the picture they have there on the right.  Look familiar?  Their accounting..  a $97 (egads it's $194, 2 times 97)  million dollar investment in the casino here is now worth $100,000 37 mil, though I wonder if it worth even that.   That would be called a high risk and illiquid asset.  Still wondering what specifically makes up our pension fund's illiquid assets... and what return current (and past!) private equity investments have garnered in a final accounting.   Wonks can dream.

Does make you want to give 200 million working capital to people who make those types of decisions. Doesn't it.

We all know what one of the 'bets' the Detroit pension system made is right? Would be a sure thing casino in Downtown Pittsburgh.  That has turned out real well for them.  Not.  In fact, I really suspect that the bath (euphemistically the restructuring ) the Detoit pension system took on its investment here is why the debt rating of the casino here is considered a "selective default". 

I can't resist.  Just one minor investor lost just under $200 million dollars on the casino, yet the casino is appealing it's under $200 million dollar property assessment. 


Looks like they have a whole series on the problems the Detroit pension system has. The really really sad thing in all that is that the Detroit public pension system is in far far better financial shape than is the city of Pittsburgh's pension fund. Really.. by far.  Also much more transparent if you believe that even.  That's the thing that gets me about all the pension bruhaha here.  Folks on all sides debating over things that are mostly unknown to the public, and even to the folks who are supposed to know what is going on.

existential fiscal policy

Since several have asked, my general opinion of the latest news on the PPP front is that the latest plan reminds me of My Dinner With Andre.

Policy and philosophy are not really all that far apart.  Or maybe it's finance and philosophy that are more akin than we think.  A promise to pay more into the pension fund is not exactly something new in the big picture.  Act 205 pretty much requires the city to pay more into the pension fund in the future.  So much more that the pension fund will get to a fully funded state eventually. That is what the law already says, no need for any less statutory 'promises'. So if you step back from all the competing minutia of made up numbers all around, I don't see what will be different on January 1st.  We will have traveled a long winding road to wind up at the status quo. If this promise is made that is, and the state accepts it to forego the impending takeover by PERC...  we will be exactly where we would have been if none of this ever happened.  There will still be a large and growing unfunded pension liability and no state takeover. Like it was all a bad dream. Did it all really happen?

Something more substantive:  This plan as I understand it it is that somehow the state will accept a somewhat vague promise of future revenue from the parking authority and meters to meet the mythical 50% threshold in pension funding. Remember the 50% number is arbitrary and notional.  Come January 1 the new cycle of actuarial calculation will start and we will eventually learn the current state of the pension fund.  With lease payment or without, with notional promise of future parking revenue or not, the new calculation will show that the pension fund will never really achieved a 50% funding ratio. 

But something I have wondered about in the past, but really might impact this plan more than others (though I wonder about the others as well).  Here is what the law actually states is allowable rationale for setting rates in the parking garages owned by the parking authority. 

This 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.

So absent some explicit obligation, as in a bond or loan, then it is permissible for the parking authority to raise rates to just fund the city's pension obligations?  Begs the question of what rates are proscribed in any circumstances by that paragraph, but that is why we have lawyers I suppose.  

Do I think it matters?  Not really.   The law seems to give all legal authority to the local court so who knows how that would turn out if there is not path to appeal.  It does seem to give a very broad definition of who would have standing in challenging the rates, something that is usually what trips up folks trying to litigate against tax issues.   My non-lawyerly reading of "any person" would imply that even just a rate payer could sue; that it need not even be a resident.  Plenty of disgruntled and underemployed suburban-living laywers around who would be more than happy to file something. Someone is going to sue is all I predict.   Something that would not be an issue if the PPA decided to sell all or some of its Downtown garages which they are certainly permitted to do.  

So who knows where this will all wind up?   In my ideal world we would be thinking about these things strategically and not just making policy in this uber-reactive way.  There is nothing more reactive than what is going on now with this mad rush to do something, literally anything, to meet an arbitrary deadline based on notional numbers with a deadline now measured in hours.

Strategically to me would be to think through what assets the city should own and what assets it really does not want to own any more.  Then see if monetization of the former helps deal with the pension problem and go from there.   Anyone notice that the stadiumless authority lives this week.   More than a few assets over there on the North Shore nobody wants to talk about.   Assets you would think would soon be appreciating as the T extension comes closer to opening.

Hey, let's start talking about GASB 45.

*****

Wait... I've got it.  This plan is all fundamentally one big huge TIF.  Not really a TIF, more Fee-Increment-Financing.  A FIF!

Ce n'est pas un hôpital

I was just wondering if any other region in the country has seen as much change in their local hospital network as we have over the last decade.  (other than N.O. I should add)  The latest:

Break out the tanning lotion

Enjoy the teens while you can.  Accuweather says it will be 50 and raining on Saturday. Hard to believe. Can the NHL Winter Classic be rained out?

Water Draught

Well, so much for Christmas cheer.. on Christmas Day no less the PG had this on latest from the Iron City front. i.e. the unpaid 6 (or 7) figure water bill Iron City owes to the Pittsburgh Water and Sewer Authority.  I just have to say that was one of the stranger news stories I have read in some time.  To paraphrase it was like.. sounds like there is a problem... have these strange partial emails here...  who knows what is going on?

I think I'm not even allowed to joke about wikileaks... but the potential puns of leaked emails out of the water authority are killing me.  alas. 

If I were to guess, and if I knew nothing of the whole story to date, I would infer from the news article that the PWSA had lost a check or something. Seriously.  Folks looking aimlessly for 6 figure wire transactions? Must get a lot of those?  Why else would local water bureaucrats need to be on a conference call with Oklahoma bankers.   Why does Iron City have an Oklahoma banker in the first place any way. Actually it says OK bankers 'affiliated' with Iron City.  Affiliated? 

If only one lost check was the only problem they had down there.

Probably wasn't a lost check..  and the back story is too long to recount.  If I were to humbly suggest what the real real story is in all of this.  One can read the explanation for the recent downgrade on most of PWSA debt and you get a feel for some of the issues they have.  What the story should be is this.  It starts in 2008 when the PWSA issued bonds totaling over $414 million. An amount which represented the majority of it's outstanding debt no less.

Never has so little attention been paid to something which would cost us so much. If taken together, was that at the time the largest debt offering any city entity ever put out there at once?

Most of it was for refinancing old bonds; so supposedly it would lower the financing cost of a big chunk of PWSA's debt.  That part turned out so well.  But mixed in was just over $95 million in net debt. Common trick to mix refi and new debt in one bigger package so you can spend most of your time talking how the refi will 'save' money while not really spending time on the new debt.  See the fixed and variable rate prospectuses (no, it's not prospecti) if you wish.

A water authority issuing new bond debt like that ought to be towards a goal of using the proceeds for needed capital investment.  Somone really should audit the PWSA to see how much of that $95 million specifically ever actually made it into captial investment of any kind whatsoever.  If nothing else, I am sure it would make a classic case study for a municipal finance class. I bet between fees and costs and things like penalty interest and covering other shortfalls, it would not be $95 million worth of new pipe.

If you want to get a feel for all the debt and financing issues that may be coming down the pike for the PWSA, read the fine print.

The saddest part about the whole PWSA variable rate bond imbroglio is that they issued that debt at a point in time that seems like it must have been just hours before it became apparent to the world that the variable rate debt market was going to blow up. You really have to parse the timing of it all to see how it was even possible they got into this mess.  Even I was a bit slow on the uptake and for those of you crazy enough to have read this post to the very last sentence... even that was a month or two too late.  As I recall, the main issue with the PWSA bonds at the time was that 1) city council had to extend the charter of the water authority in order to float the bonds and 2) there was not a comprehensive RFP put out for the bond services. Beyond that, nobody even questioned what they were doing and just trusted the folks who put the whole package together.

Again, it all comes down to trust.

and in what may be a first Cleveburgh story on the gridiron itself... Go Browns!

Semper Shoup

More on Col. Shoup below. If you are wondering, that is our new Navy uniform.   Think I should e-mail the admiral and suggest he mention where Col. Shoup is from?  hmm...  maybe not.

I was wrong on the local notice of this.  Looks like a 1999 PG article mentioned that Col. Shoup was from Bessmer, Lawrence County. 

For sheer humor though... Mashable.com's comic of Santa's Social Media Command Center.

Yinzerati saves Christmas

We will post-date this for tomorrow for continuity's sake, but here is the best summary of tracking Santa via TechCrunch: Google And NORAD Team Up Once Again To Track Santa

Here is a pre-diaspora diaspora addendum to the story of how the NORAD Santa Tracker got started.  In 1955 Sears misprinted a telephone number children could use to call and ask for Santa's location.  Instead of a Sears number, it was routed to the Continental Air Defense Command (soon to become NORAD) where Colonel Harry W. Shoup directed his staff to give the callers proper updates on Santa's location.  Thus started the tradition that continues to this day.

Something I can find no reference to in any local story on this..  Col. Shoup is at least in part a Yunzer.  Both he and his wife are Westminster College class of 1939.  Who knew?  I'm telling you, there is a Pittsburgher behind most every important event in the 20th century.. 

Now with NORAD partnering with Google, and Google opening an office here...  life comes full circle. 

Uh oh... What happens when you let wonks manage Christmas

Headline of the day:  Santa blames major toy shortage on Census ‘error’


Inspired a bit by: Beware geeks bearing numbers.

Can I just ask?

Who eats Mincemeat?

Caulis Negris Redux

Remember our friend MBIA, once the owner of a vast portfolio of city liens via their misnamed Caulis Negris unit.  They are getting their due.

You know.  Virtually all of Bond Buyer is relevant here today. A story of Moody's dropping the debt rating of the Detroit Water and Sewer system over mainly "looming capital needs".  None of that here?  and not one, but two stories on financial/legal problems JP Morgan is having over their dealings with local governments and their bond insurers.  Boy do I have a deal for them.  Let's see what they will pay for a used parking system. No problems down the road, I promise.

andeven  more PWSA debt downgrades that nobody caught late last week.. likely amid the fallout of the Kenney resignation tempest...  note it was not a shift to credit watch negative which some wanted to make a deal of with the city.. that is just a warning. This was an actual downgrade across a series of bonds outstanding.  If you dig into it, lots of looming issues for the PWSA still lingering from the variable rate debt.  Backup letter of credit on that expires in 2011 which is just around the corner.   Again, maybe JP Morgan will help out on that. Oh wait, that's where this problem started, and restarted. This two degree rule is getting out of hand.

and nothing untoward, but it does highlight how close a margin the county's budget is operating at.. looks like Allegheny County floated $50 million in tax anticipation bonds earlier today.  So everyone pay their property taxes quickly, or drink an awful lot at the drink tax-reporting establishment of your choice.

and just following those water stories... look what made the local news.

What will Pennsylvania look like without 12

Everyone keeps saying that the most likely congressional district that will be targeted for elimination is PA12, formerly held by the late John Murtha and now with Mark Critz as the incumbent.   I still say that eliminating just one seat in Pennsylvania will force significant boundary changes across the entire state.  Just to get folks pondering on that, imagine how the void created by 12 will be carved out just within SW PA.. and then begin to consider what secondary impacts that will have in further districts. Just to begin, you are not going to keep the meticulously crafted PA18 looking anything like what it does. 

Biz friendly Pennsylvania

I need to apologize.  I have been harshing on the Marcellus Shale Coalition for their loud calls for boycotting the City of Pittsburgh and asking why they do not engage in similar tactics with New York State which has a much more extensive moratorium on Marcellus Shale development.  Yet, I guess I was wrong to a degree.  According to this story out of Albany, it sounds like the shale industry is in general attacking New York as well.  The money quote (literally) is:

"New York was the butt of many jokes by speakers involved with Pennsylvania development. One thanked New York for sending all of the investment capital to Pennsylvania."

Wow.  "Sending all of their investment capital to Pennsylvania".  How often do you hear folks proclaiming how business or investment friendly Pennsylvania is?  I'd get some of these people doing commercials for the next Pennsylvania economic development marketing campaign.  Like Jeff Daniels does for Michigan.

Metablogging or meta real estate or just meta rambling

What do we care about here?  Some modicum of public transparency of course.  Real estate is of course a common interest here given its importance to the regional economy and of course my interest in all things urban.  Who reads here?  If you exclude MH, and the Wiz, the most common readers of this blog are collectively a host of law firms, or law-related entities out there. Never quite figured out why that is, though after reading Chris Potter's latest on doings in meta-blog-law I should be spooked... but am not really.  Probably just because of my naive faith in the first ammendment. 

Connecting those dots and somehow in the nexus of all of that, this random press release really fascinates me. Seems that a local real estate broker is taking exception to limitations in the how some local real estate information is used.  See:

"Single Mom Pittsburgh Realtor Creates Fantastic New "2.0" Website for Pittsburgh Real Estate "

So I put that up there despite a strong aversion I have to merely passing on others' messages.  It just is really fascinating.  I actually do wish there was greater transparency in the local real estate market in a sense, though to be clear that is a different issue than the public sector transparency that is so abysmal around here.   So I have to applaud the general goal I think is expressed in that, as circuitous the verbiage is in it.  At the same time, I suspect the whole thing is overplayed.  Not sure where the "2.0" part is in the web site it is touting.  It also seems a bit gratuitous in mentioning some past legal cases.  Still, I guess someone has to take on the MLS folks if it is to change.  Just an interesting use of a PR campaign to do so.  We will have to watch whether the story plays out at all.

I just figured out why it caught my attention.  It is a 'press release' whatever that term means any longer. Almost an anachronistic concept to many.  Yet it reads much like a blog post.  Hmm...  Maybe local bloggers should be sending out press releases?  I'm sure our local media friends will love receiving those.

Who is in the hot seat?

The numbers are out and Pennsylvania will lose one congressional seat resulting from reapportionment. That is pretty much what has been predicted most of the last decade so it is not a suprise. If only more of those Marcellus Shale workers flying reported their ususal residence as Pennsylvania.   In fairness it was not that close and probably a dozen states came in closer to gaining a seat relative to how the numbers came out before Pennsylvania would have retained its 19th congressional district.  There is always the next cycle.

Question lots are asking is which incumbent, or which district will go away.  The short answer is that with one district being removed from the Pennsylvania map, you will see significant boundary changes to all congressional districts.  There is basically no way you can take out any one congressional district and not have it cause secondary impacts in all the others within the state. 

Working image appended below fyi... 

Bonaire? Really?

The rest of you can ignore this...   Just a comment on the 'official' first day of winter and 20 degree morning temp. 

Top 10; yay!

Or I suppose we can always talk about our water.

Since it is a flat world we will read about this first via the UK media. In the Telegraph today:  Carcinogen made famous by Erin Brockovich found in cities across the US

I guess that saves them space on page 3.

For those who have both remained focused and read further into it, we're #9. 

What Is the Price of College?

Nothing local in it, but a new report out from the Department of Education worth a scan: What Is the Price of College?  Someone must have state breakdowns for what they are reporting on, but I am too lazy to go look.  Coincidentially (or not?) there is this from Forbes today as well: Is America Saturated with College Grads?  Remember, if that is an issue anywhere at all, it likely begins here.

Now isn't that more productive than talking about pensions and/or parking?  At least I didn't waste my time going down to watch this hearing which was scheduled for today.  I guess it happened, but with a very different set of arguments.  Is fascinating pondering why the shift?  Did the firefighters not like the idea of setting a precedent for judicial involvement in management of the city?  Do they know something we don't? i.e. Is there some other path that is going to move the train from its course.... not many working days left to effect most anything at this point, but never say never.  or was the legal argument just that weak that it forced a last minute withdrawal.  Where is that lawyer/blogger?

Musical Chairs to Come

On Tuesday the very first data from the 2010 Census will be reported.  All it will be is the total population count for each state.  This will tell us officially what we already know that Pennsylvania will lose one seat in congress resulting from the reapportionment to come.  It is very unlikely we will lose two seats as we did a decade ago after the 2000 census.  It is pretty unlikely that Pennsylvania stay even.  The recession probably blunted the growth in a lot of other states which would have aided Pennsylvania at the margin, but it didn't start soon enough or have enough of an impact in order to actually save the seat for us. At least that is the general consensus and if otherwise will be a big story.

Uber Census geeks will point out that conducting the decennial census is literally the only thing written into the Constitution that the executive branch of the US federal govt is mandated to do. The purpose is entirely to produce the data that will come out on Tuesday.  Everything else is sort of an add on.  So Tuesday's announcement could mean the entire federal government could immediately go into hibernation for most of the next decade. If you are the uber-Libertarian that is.  I suspect they will remain open, with or without a continuing resolution of course.  I was actually a federal employee one of few recent times the federal government shut down over a budget crisis, but it was the Columbus Day weekend of 1990.  If the federal government shuts down on a federal holiday, does it really shut down? Ironically I was a federal budget analyst at the time.

Back to Pennsylvania though. Spatially, losing one seat may cause even more redistricting turmoil than losing just one.  Last time, with centers of population loss in Piittsburgh and Philly you had a certain amount of geographic balance across the state which  circumscribed the changes as borders were redrawn.   This time it does not matter where the seat is 'lost' from.  The secondary impacts will significantly alter borders all the way across the state to define congressional districts with equal populations.

Then we will have fun redistricting all of the state legislature, both house and senate...  then local things like city and county council districts here.  Not to mention school board districts.  I guess there is no hope of making sense of the voting districts themselves, but we will keep plugging away at that.  When we eventually have a district that nobody shows up at to vote for a given election then I figure something has to give.

Anyway, more census fun on reapportionment. 

When computers had gears

Getting way too serious here.  So for the pre-Christmas weekend this is the coolest thing I've seen all week.  From three millennia ago, the first mechanical computers.  I wonder if there was ever a mechanical virus?

State of the (diverse) workforce

Just noting the news snippet on the start up of VibrantPittsburgh...  If you have any questions on the state of diversity in the local workforce, I doubt much has changed since I put this out there.

What is the real real estate story?

Headline screams bad news:  Region home sales drop sharply

Yet this is the cut and paste quote from that article right now as I type:

"Average home prices rose 3.7 percent, from $138,907 last year to $151,556 last month, according to RealSTATs."

I'm missing something in the math on that?  Later another quote is that regional prices for new home construction experienced "a 13.3 percent increase in the median price of a new home to $275,000."

Given that national real estate markets are extremely anemic most everywhere... I would say this is one of the bigger economic stories for the region.  Not sure most readers will realize that, but those numbers are quite a story.

and I saw this yesterday, but for some reason thought it was really from something that came out previously.. I guess it is new.  See:  Region Economy Gets High Rating

and just to follow those stories... quite a coincidence, but:   Google delays site selection for project.  Who knows what that means for the handicapping.

The Billboardurgher that keeps on giving

Given the gnashing that erupted over a single billboard, is the state of pensions and the parking lease that much of a surprise?   I had half forgotten about the billboard story until yesterday's understated update on the imbroglio. When you really think about it, lots of seeds in that little episode grew into the tree trunks today clogging city government.  Before that the big consternation on the 5th floor had to do with a few take home cars.  Remember that? That turned out to have a simple solution. Now where to park those cars?  That is another problem altogether.

I promised myself....  no chair jokes.  Only ambivalence toward chair here.

I really had forgotten that the actual court ruling we covered in June. That post had a link to the actual court opinion, and also some links to the Lamar Digitial Billboard Blog.  no joke.    I guess the update this week is a) the time for further appeals expired without any filing and 2) this new call to literally remove the billboard. 

I was thinking... what if there was some other use for the sign?  I am thinking a place you could tweet messages to and see them displayed up there.  Sort of a Chalkbot on the wall. I'm sure that would be trivial for Nathan to set up. Unfortunately, that would probably would be in violation of same regulations that did the sign in in the first place. or at the very least open up city to litigation from Lamar for them not being allowed to do the same thing in a sense. 

Which is the missing piece of yesterday's story.  Wasn't Lamar going to sue the city at some point over this all?   Something is up with that I bet. Formally or informally that litigation has begun. The best part of the story yesterday is just the passing note that the acting acting BBI head sent an email asking for advice from the attorneys. I'd punt as well in his spot. I'd be more like duck and cover given how radioactive the sign has been. 

On a side note.  You know I do hate euphemisms.. Can we at least stop calling it the Grant Street Transportation Center.  It is just a big parking lot and the old bus station; same as it has been since long before memorialized by Paul and Art. Cleaner for sure, but that's it.  All the other pieces were stripped from the design long ago.  Remember, it was going at one point to be this intermodal hub. Bus, parking, light rail, maybe even the Amtrak station all in one. Forget that.  Last I heard Amtrak didn't even want the people waiting for the bus near their station. What is the opposite of 'intermodal'?

As an alternative maybe we can name the place for Bram or something, since he may have as much emotional attachment to the place as anyone.

Speaking of political verbiage

I suppose I should at least try and comment on the latest machinations in the P3.  I've lost track of how many P's actually.  It's P for pension, parking, privatization, polemic?  Something like that.   The WDUQ version of today's news has some great quotes from all involved.  I started to parse, but quickly felt overwhelmed.  Each line deserves something; I just don't have it in me.  We will limit this to the cliff notes version.

" in order to avoid a state takeover"...    now there is an honest statement.  Actually saving the pension system?  Some other day. 

cows? ...  gotta love bovine political metaphors.

"owe it to the infrastructure world "..  Is that like the royal 'we'. 

"council should not leave the building until it finds a way to fix the pension problem"...    Laudable sentiment if ever heard prior to December. 

"millions of dollars in pursuit of this deal"...   Now there is an accounting I would love to see.

***

I do apologize.  The theater of it all is getting tiring. 

Good luck with that - Harrisburg enters Act 47

Lots of news all around on this.  Try either Bond Buyer:   Harrisburg Enters Pennsylvania's Act 47 Program

or Bloomberg: Harrisburg, Pennsylvania, Declared ‘Distressed’

Kind of a metaphysical question what defines 'distress' for a municipality.  In the census data dump yesterday Braddock, PA is showing a 35% housing vacancy rate which is a big jump from the 28% that the 2000 census was showing,  as inconceivable as that was.  I think that most likely counts as being distressed.  So Act 47 has done wonders for Braddock.  On the other hand Harrisburg, which is the state capital for those out of state readers here who don't realize that, has this little problem with a bond they guaranteed and which a distinct public authority has failed to make payments on.  I think that is something else... but to say it is 'distressed' in the sense of Braddock is a failure of political verbiage. 

I really have to wonder if that is not the highest incidence of housing vacancy for a municipality anywhere in the nation.  Other than Centralia of course, but they at least have this excuse that the state has ordered the town fully evacuated.

Forever Foraging for Fiber

Not much recent local activity in the race to win Google's Fiber contest, if contest is the right word.  Am I missing anything?

A website fiberforall.org has a daily ranking of how someone out there thinks different communties are faring in their persistent post: Who is Winning the Google Fiber Race? [Updated Daily]

How anyone comes up with that? and whether it means anything at all? Or more importantly does it mean anything to Google?  Who knows?  Let's hope it means little because we are not doing so well.  The latest ranking of top communities showing community support has us nowhere to be found, which implies were even behind Scranton?? What is up with that?  As I type it says we rank #100!!

from fiberforall.org

Must be something we can do to move up that list..  other communities are way out there in keeping up the effort.

PATair

I didn't get a chance to see Eve's students present their vision for Downtown Pittsburgh, but I note that DNJ covers one part of it that suggests a revival of an old idea: an air tram linking Downtown with the Hill District.  The view from the peak of the Hill is in fact where Pittsburgh aquired its original "Hell" designation. 

There have been some real proposals to really build new aerial gondolas in town.  The Port Authority once seriously considered a gondola from Downtown to Mount Washington.  25 cents was to be the fare.  I wonder what state funding that would have required and how the SPC vote would have gone?  Not that SPC was around just yet; it's predecessor SPRPC had just gotten going.  Also more recently, just a few years ago there was real talk of a goldola all the way from Mt. Washington to the North Shore.  I'm serious... it was in the news. 

the easy part

With some small bit of drama, the Port Authority once again squeaks by and gets state financial support. The vote enabling the money came via the Southwestern Pennsylvania Commission (SPC).. and in what must be a first for SPC, their meeting was live tweeted as well (need a hashtag for that in the future). 

I hate to say that was all the easy part.  The harder part is dealing with continuing ridership declines.  Other than a brief tick up corresponding to the hysteria surrounding the rapid increase in gas and energy prices a few years ago, the overall trend in Port Authority ridership has reverted back to its long term downward trend. Over last 3 years annual decline is averaging over 2%/year.  Note that Allegheny County population change over that time is nearly flat, though that is from census estimates.  We will obviously get new decennial census population counts in the spring. So that trend likely represents continuing change in mode among commuters more than anything else, though that is a study worth doing.

This is what I see for the Port Authority ridership trend. :

Source: Compiled from data published by APTA. Note the measurement is in thousands.

Which when you add in the fact that Downtown and Oakland employment levels are strong you have to wonder how everyone is getting to work. (yes, all policy issues in this town are connected, though we keep debating them piecemeal over and over again.)  Then you realize why parking downtown remains quite full.  Add in greater enrollment at local colleges and universities and I suspect a growing spatial concentration in services such as for hospitals and you really must get a greater potential demand for transit services year over year.  Still fewer and fewer on the bus (or T.. .though T ridership is steadier than bus ridership).

Note I just picked April to plot because I wanted to compare a particular month to be clear and free of seasonal issues  There is data out through June, but I didn't want to use a summer month since one could argue that isn't fair to the Port Authority because of all the students that make up its ridership through the year.  So I picked April as the most recent month I wanted to compare.  Other than that the month is arbitrary and I think I will have to come back to this when data from the fall is out.

For the Secret Order of the Yinzerati file

I really do sometimes wonder if Pittsburgh is the center of some vast unseen power that really controls much of the nation, if not the world. 

For those following the big news today nationally that a Virginia Federal Judge has ruled against a key provision of health care reform.  The plaintiff in that case is the Virginia Attorney General Ken Cuccinelli.   Actually I do not think he is a diasporan himself, but Ken's dad has been here in town for decades.  Just interesting. All roads lead to Pittsburgh one way or another.

I'm willing to take odds on a political prediction.  Just because I don't want to get into what may may happen in the very next next presidential cycle, but I foresee a Santorum/Cuccinelli  R ticket for 2016.

and I will point out the use of the term here, this is all a foil to point out that yinzerati has now made it into the Urban Dictionary. I still think it is misspelled.

Who obsesses on maps?

Certainly a lot of time the PG put into this series all week: Mapping Mortality.  I have no specific comment on the mortality angles they are focusing on since I try and stay away from commenting on a lot of health specific things.  I just don't know what the epidemiologists  know and this is such a complex topic.  It all does bring to mind one thing mentioned here before, which is the Vulcan Project out of Purdue which does an amazing job mapping emitters. They have been upgrading and they have a neat Google Earth app there now as well. Lot's of emitters and lots of things going on around here for sure.  One of the big comments on air around here is that we are really victims of upwind emissions.  Maybe that is true, but then we forget to mention that a lot of our emitters are themselves responsible for emissions impacting points east. The logic always seems a bit one sided to me.

Personally thinking about it.. and this is an angle I am not sure even the epidemiology literature has not yet taken up, but like everything else it has to be there are health impacts resulting from past migration patterns.  The sheer scale of past migration coupled with the self-selection of those who left clearly left us with some outlier-unique demographics in the nation.  It would be reasonable to expect that the same self-selection among those who left vs. those who stayed left us with a whole host of other uniquenesses that would show up in health metrics. But migration impact on health statistics is a topic few have done research on unfortunately.  That and I'll say that the first maps the PG up from the series sure seem to me to overlay with income metrics a fair bit which makes sense. 

What I did in the earlier post was zoom in on one of the Vulcan project's national maps to get a look at the greater Pittsburgh region. 

What does the future hold?

There will be a lot of stories on the school district with a superintendent departing, while another begins.  We will be debating what did or did not change at the school district in recent years past for many years into the future.   For the moment the talk of what impacts any of it will have can only be conjecture.  For the current situation, the latest news is that school district enrollment is now just above 25K students in total K-12 enrollment.. which is well in line with a recent trend that is continuing nearly unabated decline.   

I don't have time to update this.. but here is a graphic I put up a couple years ago with the enrollment trend for the City of Pittsburgh school district.  Note this graph is pre-K through 12 and thus a tad higher than thetotal enrollment number often reported in the news.. again a number now down to just above 25 thousand.  One way or another, we are talking a decline of 30-40% over the most recent decade of data.

If you think the story is just part of a bigger decline, here again is something I don't have time to update with another year's worth of data.  Below is a graph I previously put together of the relative change in enrollment in the city school district compared to the districts that make up the remainder of the county.  If you are wondering, the enrollment decline for the city does not track overall population change.  The city's population decline was steep, but something on the order of 6-7% over the most recent decade, which is a lot less than the 30-40% enrollment decline this graph shows.  We'll come back to that in a minute.

So my personal conclusions right now are that no matter the hagiography of what has been happening in the district of late, it is still a tough tough situation for the new superintendent. Any belief that any and or all problems have been solved are at least not quite evidenced in the enrollment stats at all.  Just not an inkling suggesting the trend is abating, or at least I don't see it yet.  It will be best to judge her performace in light of that reality and not just pretend the baseline has already inflected.

That enrollment time series going back to the 1980's is a meta-story unto itself.  If you look at it you have to wonder about some things.   It appears that the enrollment in the city's school district was nearly stable for a bunch of years pretty much through the very end of the 20th century.  So over a miasmic period when the city's population was really plummeting.. and we know that a lot of that population loss from the city was in young families (those moving out of the region, but also those just moving to suburban communities), yet somehow the school district's enrollment was nearly the Rock of Gibraltar.  I'll be direct.  I don't believe it represents the historical reality and honestly never have.  There is some great failure in that nobody ever questioned those numbers.  Note that this really is speculation, at least speculation as far as I can say.  Still, those enrollment numbers from the 80's and 90's really bear a similarity to quarterly capital gains reports produced by Madoff's AS/400.

I point that out for a lot of reasons. One is that it may be necessary to take the apparent recent acceleration in enrollment decline with a grain of salt. If the decline extended further into the back it would mitigate the recent inflection of it all, but still decline is decline.  I still think the bigger question is whether the reported data was correct and if not why not.   If it was really true that somehow the city school district was maintaining stability in a sea of decline across every other metric you can think of (except jobs located in the city of course) then folks would have been writing about us a paragon of school management and the saviour of urban America.  They didn't of course, which implies a certain rationality beyond our borders, but that now becomes speculation about speculation.  

One thing Mark Roosevelt has going for him no doubt...  Antioch's enrollment can only go up.

Water Water Everywhere

Kind of a bad day for water in Pittsburgh yesterday.  Beyond the seemingly unexpected resignation of the boss, there was also the bad news of rate increases along with some big water breaks as well.  I've heard of a few other big new breaks out there beyond what made the news.  Probably goes with the time of the year and temperature. Water line breaks will most likely be worse next week. All that on top of ongoing investigations and litigation.  I feel bad for PWSA board chairman Dan Deasy since he is relatively new on the job and most of the things leading up to most of these things happened on the previous guy's watch. 

Lots of other strange things related to the water authority of late.  Before Kenney resigned, there was the odd episode last week where he said he couldn't answer whether Pittsburgh Brewing had paid its water bill.  This was a big story and was a big $$ amount owed to the PWSA.  You would think he would have some idea the status.  Curious at best.  It also relates to another story some may have caught that former Pittsburgh Brewing owner Michael Carlow, is getting back into business and this time it's in the slag business.  Yes, slag.  There just has to be a joke in that.  He ran up a big PWSA bill as well along the way I do believe.  Water... beer... slag... bankruptcy..  perfect together?

Last month there was the recurrent bruhaha over the legacy payments made by the PWSA to equalize billing to the parts of Pittsburgh.  Make note of the water breaks above.  I hate to say this, and am a PWSA rate payer myself, but there is a simple answer to the whole American Water payment debate that keeps recurring.  Raise PWSA rates to the private sector rates set for the southern and western neighborhoods benefiting from the subsidy.  There is more than enough justification to spend any excess revenue into capital investments.  Remember this is an agency that fully acknowledges it can't account for 40% of the water flowing through its system.   I suspect that if anyone could put numbers on it, the city of Pittsburgh has the oldest working water infrastructure in the nation.  I've heard of a few places in New England that still have working timber piping, but other than that we really must take the prize. For a place that claims water is a huge competitive advantage, there is this little problem of getting the water to where it is actually used and taking it away afterwards.

What I just noticed reading the rate increase story is that one of the reasons given by the PWSA is that it was necessitated by, among other things, increasing credit costs.  Thing about that is most interest rates are historically low these days.  Raises some interesting questions why their credit costs are up.  Are they referring to their costs in the past resulting from the nearly disasterous variable rate debt they had entered into.  Remember, that was the debt that became insanely expensive when our friend JP Morgan unilaterally walked away from the credit backing the variable rate debt required.  Some huge irony in that some think JP Morgan is the city's saviour with the parking bid while at the same time would have been responsible for the collapse of the water authority if they had not been able to find someone to take their place.  It was far from a sure thing.  It cost the PWSA dearly to get through. Why would they act so benevolently in one case, and the opposite in the other?  There will be many issues of contention over the course of a 50 year lease and you want to have some trust in your counterparty. 

Which leads us to more questions.  Since the PWSA claims to have stabilized the variable rate debt problem with a new letter of credit.... then again why the increasing cost of credit?  May not have anything to do with anything, but still worth noticing by someone is that the credit rating on that letter of credit was downgraded a couple months ago.  Not just put on credit watch negative, actually downgraded.  You just have to wonder what else is in play here.

and remember...  think these are all city problems, and only city problems.  PWSA problems are the region's problems.

Holding out for a hero

Seemingly a very minor news item: Pittsburgh's pension funds up, but not nearly enough which says the combined assets went up $18 million between July 1 and Sept. 30. Given all that is going on, you would think it would be the biggest news item all around since at this point virtually all local politics (city and beyond to some degree)  now revolve on the fiscal state of the city's pension fund. 

That gain works out to a gain of 6-7 percent on the assets of $272. Not enough detail in that to break out how it all worked out between investment gains and net outflows from the funds, but roughly speaking the city is close to pay-as-you-go at this point with rough symmetry in terms of current inflows and outflows from the fund.  So for sake of argument we will say that represents mostly investment gain, but I would be glad to hear the specific breakouts if anyone wants to provide them.  Realize the stock market went up 10 to 11  percent over the time and this quote in the article from the fund managers add: "Mercer representatives said the pension funds could have made a little more, but money was moved to safer investments.".  I make note the deliberate use of the work "little". 

In reality, 6-7 percent is not bad for a pension fund invesment gain over the quarter.  It is less than the overall stock market gained, but you expect if not want that to be the case.  Few pension funds, expecially those so minimally funded, should all be in equities and will have a diversfied portfolio with safer, but lower performance assets like bonds.  So the numbers look to me about right in terms of performance.. certainly within a reasonable band.

But still... something does not add up.  There really should not have been any gain over the period if they had really implemened their plan to hedge away all risk over the summer. If that had really happened, then how is there an meaningful investment gain over the quarter?  Why do I keep harping on this .  Read that last link and it sure says to me the pension board wanted the fund managers to buy some large put options to completely hedge all risk in the fund and to completely freeze it at the value it was at at the time.  It is an awfully good thing they didn't or else even that $18 million dollar gain would likely have  not happened if that plan had been implemented in any significant way. 

But I have a theory... no, let's call it merely a hypothesis... or in Nimitzian fashion an 'educated guess'.   See, I think the pension board fully wanted to implement its valuation 'freeze' via some sort of put option or other investment vehicle.  I really suspect (this would be the hypothesis) that some functionary along the line just refused to fulfill such an ill-conceived order.  It really constituted a big exercise in 'market timing' which almost any reputable investment professional would advise against for your invesment portfolio.. and would find aghast as a plan for a public pension fund so minimially funded as it is.  It would literally have been a big big bet.  The numbers imply that it just didn't happen at least to the scale the original story implied it was going to be.  If there is some invesment the funds could have made that truly 'froze' the funds and protected it from any further losses from where they were in the summer, yet still gain $18 million over the last quarter (so no downside which was the stated goal, yet still be able to move up) then someone is a sheer genius in term of invetment portfolio  management.   I don't think such a portfolio is even possible. 

If my theory is true then some investment professional fulfilled his or her professional responsibility in a way awfully rare around here.  I would say that would make them a veritable hero since it likely resulted in the city not losing out on the investment gain last quarter of the 18 million which at this point is a big deal for the pension fund.  My investment banker friends would get a huge bonus for a decision that resulted in an 18 million dollar gain that was otherwise not supposed to happen.  As it is here, for all I know, it could have gotten someone fired.  It is some corollary to all of our other pathologies that those who do their jobs really well never get noticed, just as those who don't rarely get crticized.  I think we get madder at those who do their jobs actually.

One way or the other... the whole episode encapsulates why the pension fund is in the mess it is in.  What decision process would have made the pension board even want to engage in a massive exercise in market timing, a virtual slots pull bet, putting at risk the entire pension funds assets? Extrapolate that one decision to all the decisions over the last 50 years in the pension fund and you get what you get.  It gets to the whole question of how the city will ever resolve its pension funding problem.  There will be a solution mind you, of that I am sure.  Getting to it will only begin when we stop digging the hole deeper. 

We'll end with the astute comment again from the current investment fund manager in today's article:

"You are at a crossroads today," Boucek said. "It is a very precarious position."

The 'you' is us and the crossroads is not about the literal $ amount in the pension fund.

Manufacturing Burgh

Dateline Lyndora, PA - Butler County.  The Atlantic: Is There a Future for 'Made in America'?

Amazing Apportionment Machine

Power to the Peoplesoft

There is both too little and too much to comment on...  so maybe we will just poke at the most wonkish of stories today which is the latest installment in the great saga to bring the city's financial system out of the 1980's.  See the Trib: Mayor urged to OK shared finance system. The story is about the planned (hoped?) for merger of city and county financial accounting systems that has been in the works for quite some time.  I'll summarize the latest news: hasn't happened yet. There, you don't need to read the news article.

Part of me says the story is about what it all says about the ICA.. What may be the biggest thing it is trying to push, and has been for years, yet alone provide funding for is still something it can't get the city to do.   Could change I figure. In the article though it's the last couple lines that really got me wondering. 

The system eventually could be shared with city schools, city and county agencies, and even the 130 municipal governments in the county, authority officials said.

The thing about that is... well..  some agencies are out spending real money for new accounting systems of their own.  Can't really imagine they would be doing that if they saw merger into another system anytime soon.  I do wonder though, in our cutting edge information technology city (hey, when is that Google fibre decision coming?!), why do we have a city that actually run more on COBOL? I bet they still use typewriters routinely somewhere in city government.  Not sure where they would be able to get typewriters fixed any more, but I bet they are still being used until they just fail completely.

Seriously, the story here is more about the ICA more than information technology or the mechanics of accounting. Maybe I am just impressionable because I was reading the filings online in the firefighters litigation over the pension 'stuff' discussed yestereday.  Some of the contract between the firefighters and the city are included in that complaint.  I think I knew this,  but had forgot that one of the items literally written into one of the recent firefighters contract was that he city would ignore all of the ERASE studies. (see page 24 of the pdf page number in the previous link, item number 13).  What are the ERASE studies?  Those were the studies of the fire bureau that constituted what may have been the primary obsession of the ICA in its first years of existance and certainly were some of its biggest expenditures. Lots and lots of money spent on those studies; they were possibly among the most expensive local studies ever done on anything. Yet not only were they not implemented, they were literally erased in their entirety. The contract verbiage you can read there says in a very minimalist way just: "remove ERASE study".  You just know they wanted to write "erase ERASE study" which is effectively what was done.  Again, what has the ICA been doing all these years that only now are we only now having this whole big pension cataclysm?

Yeah, yeah...  who cares?   Let's go debate parking chairs or something.  It is almost that time again.

Surely a Sure Bet

Maybe I misunderstood, but I sure thought the message when they were changing the law was that table games were going to change everything.  Looking at the data thus far, granted it's a little early, I'm not seeing it.  Is that a peak already.... or an aberration?

Table Games Total Gross Revenues by Month - Rivers Casino - 2010

Social Media Solutions

So I have to admit I find this fascinating.  Bram pointed this out first, but there is an online web/petition site of sort opposed to the impending state takeover of the city's pension system.  In fact, except for Bram I am a bit unclear how anyone would know this site was there since I have seen no other mention of it online or otherwise, publicly or privately, nor any variation thereof. 

It's fascinating for a lot of reasons.  I was just listening to a student presentation that included some discussion of how Pittsburgh ranked low on some benchmarking of social media compared to other regions.  May be true, but I sure bet that is all an age artifact.  Still this web site is, in a sense, a local paradigm shift worth taking note of. I'd love to see the web traffic stats for that site.

Whether it will impact anything I dunno?   When it started it was listing every individual who signed it petition.  After a few days it was up to all of 10 entries and thus why I suspect they modified the site and took down the actual list of names. It was curious in that most of the names were not city residents (it posted your 'neighborhood' which the form asks for).  I presume the list exists in the ether somewhere and will be presented to someone, by someone, somehow, at some point before the pumpkin arrives which would imply it will happen pretty soon if the goal is to alther the trajectory on anything here.  

The whole parking/pension imbroglio has taken on such a life of it's own that it is hard to comment on.  But I can't pass on one point.  This anti-takeover site does have a "solution" section that describes in its entirety its  answer as this:

Immediately adopt Pittsburgh Parking Partners Revenue Sharing Services Contract, which provides an infusion of upfront cash solving the pension crisis both short and long term, includes revenue sharing for the city, limits meters' hours and rates, rebuilds city garages, updates the meters and creates a best in class parking operation for the City of Pittsburgh.

Seriously. It's an awfully short solution to such a big problem... If anyone thinks the parking lease in itself, and there are arguments both for and against it, will by itself solve anything in the long run then they are engaging in the same false logic that created the problem here in the first place.  Even if the infusion of cash will get the pension funding up to a nominal 50%... that is merely a level it was at maybe 4 years ago.   So if the situation was not 'solved' a few years ago it will not be 'solved' by getting back to 50% by the end of the year.  It is worst than that of course.  Come January 1 we will start the cycle to again calculate the current liability of the pension system, which is almost assuredly going to be higher than where the pension system was at 2 years ago.  All the numbers we are pretending to be valid in this debate are really mostly based on data from 2 years ago as of January 1.. all of 3 weeks away.  So even with a potential $224 million dollar infusion in the pension system, the funding ratio in reality will have already fallen well below 50% in the future's past.  It is all an arbitrary and mostly meaningless fiction to even talk about the system as reaching that 50% funding ratio anytime soon...   capital infusion or not. I am still waiting for anyone to really talk about long run solutions, vice all this obsessing over this very short term goal of getting over a pseudo 50% before January 1.

As a postscript I'll add that it is another interesting twist that the city's firefighters have filed an action in common pleas court to stop the planned state takeover via litigation.  While not a lawyer, I will sometimes play one online, and the angles of this are a little interesting. I have a hard time figuring who is going to be arguing on the other side against what the union has filed since the city's executive branch is strongly on their side on this point.   Sure seems to me that if every city contract had the potential to supersede state law, the implications are really quite phenomenal and I could think of some other contracts the city should enter into.  Too bad we don't have a lawyer-blogger around who obsesses on the machinations inside city hall to comment on the merits of the case.  and this may be a dumb question, but since this involves a state law applying to a local government (a manifestation of state law) with a public sector union trying to stop a state regulatory action involving two Commonwealth agencies (both PMRS and PERC) then should this case not be filed directly in Commonwealth Court?   But what do I know?

When audio ruled

A little late, but it is indeed Pearl Harbor Day.  Long before the intertubes people tuned in their radios for the latest news.  Some of the live broadcasts here from WCAE radio (later to be renamed WTAE) are available here:

http://library.umkc.edu/spec-col/ww2/pearlharbor/radio.htm

Some of the Pittsburgh specific recordings on that page are:

Broadcast #3 This bulletin from Honolulu, heard over WCAE (Pittsburgh, PA) at 4:15 p.m. Eastern time, offers the first direct-contact report from Hawaii.

Broadcast #7 This newscast, heard over KDKA (Pittsburgh) at 4:30 p.m. eastern time, announces the immediate alert against both espionage and Japanese Americans, who were, according to the report, equally surprised and shocked by the attacks. and

Broadcast #11 By the time this broadcast was heard over Pittsburgh's KDKA at 5:30 p.m. Eastern time, the nation was already on high alert against sabotage.

Cleveburgh Economic Development

I've been kind of watching this, not quite comprehending it all, but Blomberg has a good synopisis of Cleveand's big new bet on a $465 million project that defies description a bit.    See:

Cleveland Bets $465 Million Vornado Can Revamp Economy as Health-Care Hub

I have to say that even after reading that detailed exposition, I still don't get what it is.  Some kind of pseudo convention center and exposition space dedicated to medical equipment. 

That story is a bit amazing in that it has a bit of everything. Politics of course.  Some legal and crimimal investigations impacting it all.  A Drew Carey mention. The Kennedys.  Middle Eastern capital. Even a somewhat gratuitous TM quote in there for example.. and Murph has a point commenting that they seem to intend to build this all on spec. Another version of the story quotes him as calling it a shot in the dark even.

You know, we're pikers.  This thing beats anything we have for sheer story. The thing I wonder about is I alaways thought we sold ourselves as a medical devices cluster.

Surreal

Bring Back Jay's!

So I felt obliged to read Bob H's commentary today on the prospects of the book(store) biz in the Burgh:  Bookstore plan stays on shelf for now.  I'm thinking he should write a blog.  Overall, his comments may be right on, but there were a few points that just jumped out at me.

That the economy may not be conducive to new businesses may be be quite correct.  Most bookstore owners I have ever known were never ones to be reacting to the macro-economy.  Though he quotes one Brookings study of note recently that says the local economy may not be humming, there are also things like Forbes that say Pittsburgh has some of the biggest income growth in the nation.  Starting a new biz is not necessarily about where you are at, but where you have been as a region.  You have to wonder if there are now a slew of under-retailed businesses opportunities in the region reflecting upon the recent history when it made no sense to invest here.  From a true investor's point of view, or let's say a value investor's point of view, it may be the ideal time to come to town. 

The lesson of course is that by the time conditions appear so ideal that Bob or I were to start a new book business, our less risk averse and more entrepreneurial friends will have already staked their ground.  Kind of how it is supposed to work. 

But he also points out some curious geography, which is really what caught my attention:

The city's up-and-coming neighborhoods -- Lawrenceville, East Liberty, Garfield, kind of -- don't seem poised to support a full-service bookstore.

So first off.  East Liberty hosts the (relatively - by Pittsburgh standards*) new Borders Bookstore which I am just guessing is the biggest bookstore in the entire city of Pittsburgh. He didn't write "don't seem poised to support another full-service bookstore".    Since I am sure Bob knows about Borders, do his comments mean 'Eastside' has now officially seceded from East Liberty or otherwise merged with Shadyside?

Garfield.  OK..  Garfield is about a few feet from my doorstep and the the sheer size of Garfield may make new business generation difficult.  Still, I wonder if Bob knows there is a very neat (if not full service) bookstore operating in Garfield right now:  Awesome Books (formerly Clay Penn).  No coffee-shop, but it does have this Maine Coon cat effectively guarding the place that adds to the appeal   Does that one operating bookstore alone already make it among the book-elite among the city's 88 semi-official neighborhoods which are almost all lacking any bookstore at all? I assure you in terms of bookstores per capita Garfield is near the top.

Lawrenceville is an interesting point though in its lack of a bookstore. Someone should get on that.  They do have a Library (for now), so it's not like they are a book-desert. I still can't believe your average bookstore entrepreneur is reading the Wall Street Journal as they decide upon a business plan. There must be some new arrival hipster willing to tell Ben Bernanke he can be damned.  (as per the Farragut quote mind you, not Dante).

So I started typing thinking Bob's piece would be an easy foil to give me an excuse to post a picture I have of Jay's Bookstall on its last day. Now I can't find it.  So maybe I will append it later when I track it down.   

Trust me.. that was all more fun than having me comment on Harold's commentary today.  But if you want more on that I pull from the archives: Economic Impact of the Elderly in Allegheny County.

Hey wait... elderly read books still don't they?

* We will stop calling all the things in Eastside 'new' when the Spine Line finally gets built.