He also makes the equally important point that there are no genuine advantages to having the City administer the plan, given its sorry record in managing both benefits and funding.

Most recent case in point: the “liquification” of plan assets in the final quarter of 2010 to avoid any losses which might upset the effort to avoid having the State take over the plan probably cost the plan about $20 million since the S&P 500 rose 21% between September 1 and the end of the year and the yield on cash must have been well under 1%.

I would have thought that the primary concern of the Pension Board was supposed to be the welfare of current and future retirees. Given over 25 years of near-sighted politics on the part of both City Council and the Mayor’s Office, a State takeover would provide substantially more reassurance to this vulnerable group than continuing existing arrangements.

The Mayor was clearly willing to see increased parking rates on property controlled by the City and the Parking Authority used to fund pension obligations. So, he should not object to Council’s plan to dedicate monies from increased parking rates to meet these same obligations.

Council was wise in rejecting the Mayor’s plan. That plan would provide a lump sum injection of monies into the pension fund. But it would also divert a portion of the lease receipts to other, unspecified purposes. This would leave the city with a large unfunded obligation and no dedicated source for funding it. The City’s past history with one time injections of monies into its pension fund has shown that this is not a long-term solution. In 1996 and 1998 the City issued $269 million in bonds in order to partially fund its pension liabilities. Yet, the percentage of unfunded obligations continually fell subsequent to this injection of funds because the City’s elected officials continued to find it politically more expedient to ignore these obligations and spend available monies elsewhere. If the Mayor didn’t want to follow a similar, politically expedient, but short-sighted path, his plan would have committed all monies raised by the intended lease to the pension fund. That he did not do so is a red flag.

Higher, market-based parking rates make sense. Much of the demand for city public services comes from the presence of non-residents who are employed within the city limits. They pay no earned income tax to the city. Increasingly, they work for non-profits which pay no property taxes. Higher parking rates in places like Downtown, Oakland and the Northside may well cause owners of commercial real estate to lower their rental rates in order to maintain occupancy levels. But, they are major beneficiaries of police, fire and other services provided by the city and should be bearing a larger portion of the burden of paying for these services than they do under the current system of taxation.