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Ravenstahl urges unity on pension plan
State could take over city retirement funds
Friday, August 28, 2009

Faced with a looming state takeover of Pittsburgh's long-ailing pension fund, Mayor Luke Ravenstahl tried yesterday to rally city officials, workers and residents against parts of legislation now dashing through Harrisburg.

"We have a chance to unify here," Mr. Ravenstahl said at the opening of an evening public meeting that later turned occasionally raucous. "We have the chance to unite behind something to get this done."

Under the legislation, the state would let Philadelphia boost its sales tax by 1 percent to deal with its pension shortfall, but seize Pittsburgh's even-more-troubled retirement fund.

Pittsburgh would make state-mandated payments into what would be a state-controlled pool. Mr. Ravenstahl has said those payments would cripple the city -- either immediately, or after an eight-year ramp-up.

"It will mean higher taxes," said Mr. Ravenstahl. "It will mean reductions of services. It's not good news for anybody in the city of Pittsburgh."

The city's approach to the legislation hasn't yet solidified, but it could be to delay, seek to amend, or litigate.

The bill's different treatment of Pittsburgh and Philadelphia was topic one.

"If they gave us the same thing they gave Philadelphia, a 1 percent sales tax increase for one or two years, I think we'd be in good shape," said Teamsters Local 249 President Joe Rossi, to loud cheers from a packed Council Chamber.

The public meeting came hours after top city officials met in Mr. Ravenstahl's conference room to start forging an approach to the pension bill, which passed the Senate Wednesday. It is not expected to get a House vote until after Labor Day.

At that meeting, city pension consultants revealed that the fund has gained some ground due to stock market gains, holding $265 million on July 31 and approaching $280 million this week -- around 31 percent of the $899 million it should contain to cover obligations to retirees and current workers.

That still puts the city far below the 50 percent threshold that would trigger a state takeover under the legislation. The administration wants to lease public parking garages, hoping to raise $200 million to shore up the fund, potentially getting it to a half-funded status.

Mr. Ravenstahl said he has given up on being completely exempted from the legislation, and wants to build consensus around an amendment that would delay the takeover, or soften its blow.

"It was made very clear to us that this is very important to Philadelphia, and this is going to get done for Philadelphia," said Mr. Ravenstahl.

Sen. Jim Ferlo, D-Highland Park, came in for particular criticism for voting for the package. Mr. Rossi said he "did remind Sen. Ferlo that he wasn't elected in Philadelphia, but that he was elected in the city of Pittsburgh," prompting more cheers and cries of "politics" and "puppet."

Mr. Ferlo released a letter to Mr. Ravenstahl saying he and other senators "take exception to some comments that we are not representing Pittsburgh interests but somehow concerned about the city of Philadelphia.

"While we may have preferred to make additional changes [to the legislation], we did the best job we could do under the circumstances," he wrote.

While the bill sailed through the Senate, it sustained a blow yesterday afternoon. The Pennsylvania Professional Firefighters Association came out against it in an e-mail saying that "our hard earned pensions will now be at the mercy of state bureaucrats who have no concern for us or our municipalities."

Control of the city's pension fund could end up in court.

Pension fund solicitor Fred Frank would not discuss conflicts between the state legislation and the city's home rule powers at a city pension board meeting yesterday. But the board met behind closed doors to discuss possible litigation and plans to huddle up again Saturday morning.

Rich Lord can be reached at rlord@post-gazette.com or 412-263-1542.
First published on August 28, 2009 at 12:00 am