Pittsburgh delays parking study over cost

A study of ways Pittsburgh can squeeze more cash out of its parking system has been put on hold due to uncertainty over how pay for it. But Pittsburgh’s City Council has vowed to press on with the study, which it hopes to complete by September, according to a senior Pittsburgh executive.

“Right now, the study’s been delayed,” Pittsburgh Budget Director Bill Urbanic said in an interview. “But we do hope to proceed very shortly,” he added.

The study will put a price tag on the value of a long-term concession, or public-private partnership (PPP), for the parking assets as well as several other alternatives. These include keeping the parking assets in the hands of Pittsburgh while increasing parking rates and issuing bonds, an outright sale or privatisation of the assets and a privatisation with a revenue-sharing agreement.

Pittsburgh’s nine city council members voted 8-1 in March to conduct the study to better understand how much their parking system is worth, as ultimately they will be asked to approve any long-term concession.

“It’s sort of like selling your house,” Urbanic said. “If someone has made you an offer, you want to make sure you’re getting the best possible offer.”

Originally, the city was planning on the study costing $50,000 and being carried out by the Government Finance Officers Association, a professional organisation for public-sector financial executives. The study was supposed to be complete by mid-June, according to Urbanic.

But the Government Finance Officers Association backed out of the study because another part of its organisation had issued a business proposal to the city on another matter, creating a conflict.

“We had a lot of entities with conflict,” Urbanic said.

Eventually, Pittsburgh chose Finance Scholars Group, an Austin, Texas-based boutique consulting firm, to do the study.

But then another, bigger problem cropped up: the cost of the study grew to $250,000, and that created uncertainty over how to fund it.

Urbanic said the city will re-programme some old funds to meet the new cost and will proceed shortly with the study.

The hope now is to get it done by September, Urbanic added, when the city council is likely to be asked to vote on whether to approve any PPP offer on its parking system.

Any offer the city does receive will have to be enough to help Pittsburgh bring its pension plan back up to an adequate funding status. The pension is only about 30 percent funded and if it doesn’t get up to the 50 percent mark by 1 January of next year, Pittsburgh risks losing its management to state authorities.

Urbanic estimates that $220 million is needed to get the pension back up to a 50 percent funding level.

Pittsburgh Mayor Luke Ravenstahl has also said he would like to use the proceeds to retire about $100 million of Pittsburgh Parking Authority debt.