Parking authority to save $400,000

The authority will let the contracts expire Sept. 30 in a series of moves it says will save it $400,000 a year in management costs, said Ralph Horgan, executive director.

The authority plans to take over management of garages at Mellon Square, Ninth and Penn, and Smithfield and Liberty. A lot on Second Avenue also is to be closed at some future date to make way for construction of the Grant Street Transportation Center, which will replace the Amtrak station near the David L. Lawrence Convention Center. Alco's contract to manage the Third Avenue Garage ends Oct. 1, 2006.

Horgan said the authority will save $200,000 it pays Alco annually in management fees and another $200,000 by having fewer managers running the garages.

"Our goal here is to try to save as much money as we can in our operating budget," Horgan said. "We think we can achieve that by taking those facilities in-house."

The move is coming now, he said, because authority-anticipated revenue is down, mainly because the city's increased parking tax -- from 31 percent to 50 percent -- has caused a decline in the number of people parking cars Downtown.

"I think they're faced with some financial hurdles," said Alco Parking President Merrill Stabile. "We're disappointed with how they're facing those hurdles, but there's nothing we can really do about it."

Horgan said the change has nothing to do with Alco Parking's performance. People who park in the lots likely will not notice the change, he said.

"Things have gotten extremely difficult for us with the parking tax," Horgan said.

Because of the increased tax, the authority raised rates in February to compensate for expected lost business. The higher rates have generated $3.6 million in new revenue. But the authority used nearly $3.5 million of the take to pay the city the increased tax, Horgan said.

"A rate increase that would have added $3.6 million to our bottom line has really just gone up the street to the city," Horgan said.

The three garages offer a combined 2,000 spaces.

Ending the Alco contracts will help the authority balance its $32.2 million 2005 budget for the year starting Oct. 1, Horgan said.

City Council increased the parking tax in January to help ailing Pittsburgh balance its 2004 budget.

Booting Alco Parking from the three garages is the authority's latest cost-cutting move. It has terminated three non-union employees, switched some full-time positions to part-time, eliminated pay raises for non-union workers and increased the employees' share of health-care payments.

What's not known is how many of the roughly 40 union employees working at the three garages will lose their jobs.

All employees at authority lots belong to Teamsters Local 926. At the three garages, Alco Parking employs the union workers and receives payroll reimbursements from the authority.

The union workers have job protection for a year if they choose to work for the authority after the management change.

Marc Dreves, business agent for Teamsters Local 926, said after a year, some will continue working, but have to accept unpopular shifts or locations. An undetermined number of others will lose their jobs.

The employees could opt to continue working elsewhere for Alco Parking, but face the same uncertainty, he said.

The Parking Authority generates $13 million to $15 million annually for the city's budget, from parking taxes, ticket fines and a lump sum payment from parking fees, Horgan said.