It looks like the Ravenstahl administration changed its sales strategy on the parking lease/pension plan.
Two weeks ago, the administration said it would introduce a 2011 budget to the ICA today that would not include the proceeds from the parking lease, but instead be balanced on the back of harsh, across-the-board spending cuts. Why? Because the oversight board hasn't allowed the mayor to balance budgets on un-approved revenues (something he discovered last year when he sent over a budget that included college tuition taxes, and it was rejected). And city council hasn't even received the parking lease legislation, let alone approved it.
So today's $453.4 million operating budget is a bit of a shocker. It indicates that the $452 million bid opened Monday for the parking assets is so big that it can take all the pressure off the annual budget, avoiding layoffs or tax increases to keep it balanced. From a press release:
Through a highly competitive bidding process, the City received a high bid of $451.7 million for an operator to lease the City’s parking system. That bid was $120 million more than what the City needs to bolster the pension fund and prevent the state from taking it over. In addition, the best and final offer round resulted in a $40 million increase in the upfront payment.
“Through a careful, deliberative and highly competitive process, we know that we can receive a $451 million opportunity that allows us to address our City’s pension problem and overcome one of the largest hurdles that prevents us from reaching fiscal solvency,” Ravenstahl said. “We learned Monday that this plan gets us above and beyond what we need to prevent a state takeover without cutting employees or services, and adding more debt or taxes on the backs of our residents.”
The full budget in pdf form is here. We'll have more tomorrow but it looks like the city is pushing much of that extra $120 million (mentioned in the mayor's statement) into long-term capital spending.