Parking Garage Economics

Leasing or selling public parking garages to shore up finances. Readers of the Institute’s work will recall days of yore around 2009 and 2010 when the City of Pittsburgh had a plan to lease the garages and meters to put the proceeds into the pension system. That did not happen, but the details of the plan are touched upon here, here, and here.

The idea did keep traction in the capital city of Harrisburg: we wrote in June 2011 that the Act 47 recovery plan for Harrisburg mentioned the possibility. Instead of paying off pensions, the 2012 final recovery plan noted "if the parking assets are included in the debt solution, the proceeds from the parking assets transaction will first need to be applied to repay the existing debt of the Harrisburg Parking Authority. The remaining proceeds…could potentially be used to pay a portion of the incinerator debt and to contribute over time to address a portion of the City’s structural deficit".

Such deals can be quite complex and raise a lot of questions. One that was raised in a news article is whether the Harrisburg arrangement is a lease or a sale. When the arrangement involves not leasing the garages to a private interest but a state-level economic development authority who will also involve another local non-profit economic development agency and then two private interests will have a role in managing property and parking operations, things can get a bit complex.

Why the involvement of the other authority and the non-profit? Because locals were worried "…that parking rates could increase out-of-control to boost profits while the assets themselves could languish and degrade in the hands of a company with no long-term interest in the welfare of the city." Similar thoughts arose many times during the debate in Pittsburgh. Of course, it is safe to assume that policymakers in both cities did not contemplate that a private operator would have to pay property taxes (unlike a municipal or authority owner), collect parking taxes, pay expenses, and still make a profit while recognizing that simply imposing higher rates would eventually result in a drop in parking customers.

Sewage Issues Rise to the Surface

There’s going to be a lot of attention paid to the wastewater treatment authority known as ALCOSAN. That’s because the long-lingering-in-the-background issue of how to treat overflows has a firm, but maybe not final, price tag: $2.8 billion over ten years, from 2016 through 2026. One City Councilman-ALCOSAN serves Pittsburgh and 81 other municipalities in Allegheny County-recently called the upgrades "the greatest public works project of the era".

Another City Councilman said ALCOSAN "can’t ask ratepayers to pay what they can’t afford". As of 2011 the average customer charge for wastewater treatment-based on 60,000 gallons of water a year-was $276. Rate increases of 10% a year, which was the percentage increase identified today, would result in an 150% increase in that typical annual bill amount. That’s part of the reason the Authority says they want to go back to the EPA to talk about the total amount from the consent decree.

So who will be steering the Authority through this process? The seven member board consists of three members appointed by the Mayor of Pittsburgh, three members by the Allegheny County Chief Executive, and one member jointly appointed for terms of five years. Currently there are three elected officials, two union officials, one university official, and an official of a construction company on the board according to the Authority’s website.

What Has Happened to PA’s Largest Police Forces?

This question gets posed as new crime statistics for Pittsburgh are released showing a decrease in violent (Part 1) crimes. Data from the Pennsylvania State Police’s Uniform Crime Report shows crime stats, but also contains data on the fifteen largest local police agencies. Omitting county forces, the five largest municipal forces (measured by full time police officers) in 2010 were Philadelphia (6,734), Pittsburgh (887), Allentown (197), Harrisburg (179), and Erie (173). That’s a total of 8,170 officers in those five cities.

A decade earlier those five cities combined had 8,580 full timers, about 400 more. Obviously, populations of those cities has changed a bit, so it is more accurate to take a measurement of full time officers per 1,000 people in those two time frames.

All of those rates were down with the exception of Harrisburg, which was up slightly from 3.5 per 1,000 to 3.6 per 1,000. Probably not very noticeable as the city reported having eight more officers in 2010 than 2000. Pittsburgh, even with layoffs prior to Act 47 status and changes to post-retiree health care, which affected police, still carries roughly the same officer per 1,000 people with 3.1 in 2000 and 2.9 in 2010.