In a strong indication that he expects Pittsburgh city’s parking deal to reach financial close, Mayor Luke Ravenstahl has proposed a 2011 operating budget for Pittsburgh that includes a $452 million cash infusion from the deal.
The move countered Ravenstahl’s previous indications that he would submit a budget that reflected the painful service cuts and tax increases that the city would face absent the parking deal revenues.
The 2011 budget: less
The 2011 budget did not reflect these or any other painful layoffs and service cuts. Instead, the budget funds the city’s operating expenditures, $359.8 million, at about .75 percent more than 2010. Emergency services, police and fire services are each funded at about the same level, according to the budget document.
The Intergovernmental Cooperation Authority (ICA), a financial oversight body, must approve Pittsburgh’s budget before it goes to city council for their approval. The ICA has 30 days to request changes before Ravenstahl presents the budget to the council on 8 November.
Last year, the ICA forced Ravenstahl to make changes in the budget when it noticed $15 million of contingent revenues. The ICA forced him to resubmit a budget based on current revenues.
It is unclear yet how the ICA will react to the 2011 budget, which depends upon the “successful partnership” to lease the parking assets, according to a statement from the mayor’s office. Pittsburgh City Council and the Pittsburgh Parking Authority will each have to approve the parking lease before the city can reach financial close on the $452 million offer.
The $452 million offer, made by JPMorgan Asset Management and LAZ Parking of Hartford, Connecticut, expires 1 November.
The offer is equivalent to almost the entire $453.4 million 2011 budget Ravenstahl submitted to the ICA.