Thursday, July 14, 2005

Financial outlook

Questions cloud city's financial outlook - Pittsburgh hasn't received any of the $6 million in contributions promised by nonprofit groups. The Pittsburgh Public Service Fund Board, an umbrella group for city charities, has yet to vote on whether to provide the money.
Don't hold your breath. That money was never going to materialize.

The budget process in city hall has always been a total joke. Peduto can buy expensive garbage cans for his district from money that wasn't spent three years ago. The cans, the process, the garbage -- it's all crooked. The harder it is to figure out, the more those in power like it. Confusion gives comfort to the weenies who can't get comfort any other way -- like with 'respect.'

Going after the non-profits for $6-million per year is a dead end opportunity. Pittsburgh might as well start its own space program and use those windfalls too. NASA couldn't get a lift-off yesterday. The Buhl is being talked about as a historic building. Perhaps they'll hook a shortfall in 2006 on some squeezed money there -- to the tune of $10-million. Point is, it's smoke and mirrors. Blame the non-profits for the ills of the city.

Another link on the same news in the PG: Councilman says city revenues are lagging

Think again.


Anonymous said...

Questions cloud city's financial outlook

By Jeremy Boren
Thursday, July 14, 2005

The specter of a budget deficit still hangs over Pittsburgh midway through the first full year of its financial recovery, despite surplus predictions from Mayor Tom Murphy and the Act 47 financial recovery team, the head of the city's oversight board said Wednesday.

"The Act 47 team has assured us that all the expenses are in line and everything is terrific," said William K. Lieberman, the oversight board's chairman. "And we don't see it that way. We think there's a deficit coming up, and we'll see at the end of the year."

Caught in the middle, Pittsburgh City Council yesterday fretted over how the city would avoid the financial land mines that threaten the savings projected in this year's budget.

"Our spending is on target. The question is, is the revenue there?" Councilman Doug Shields explained to council yesterday.

According to Shields' finance committee estimates, the answer is "no."

Among the major potential trouble spots:

Pittsburgh hasn't received any of the $6 million in contributions promised by nonprofit groups. The Pittsburgh Public Service Fund Board, an umbrella group for city charities, has yet to vote on whether to provide the money.

The city's new payroll preparation tax was budgeted to earn $41.5 million this year, but current figures show the final number could be $38 million, which is $3.5 million less.

And the privatization of the city's vehicle fleet and garage operations has saved about $2 million less than expected.
Lieberman shares council's concerns regarding the nonprofits' contribution and the short-changed payroll tax. He said, however, the state-run Act 47 team, charged with monitoring city spending and revenue details during a five-year recovery term, has assured him both will come through.

The Act 47 team was created after the state declared Pittsburgh a financially distressed community. Lieberman's state oversight board -- the Intergovernmental Cooperation Authority -- was appointed by the state Legislature in 2004 to track city finances over the long term; it deals less with day-to-day issues.

One outcome that's nearly certain is that an $11 million surplus Murphy predicted in May won't happen, said Jim Roberts, head of the Act 47 recovery team.

"We're still optimistic," Roberts said yesterday. "It's early, but we're still optimistic that we'll end the year with a surplus. It's fair to say that (it will be) less than what the mayor said."

How much less could become clear early next week when the recovery team issues an analysis of the city's financial situation, Roberts said.

Murphy spokesman Craig Kwiecinski said the mayor has agreed to meet with Shields and others monthly to discuss his budget concerns. As for specifics, Kwiecinski said, "It's premature to speculate on the city's financial position until we have had the opportunity to thoroughly and adequately review the second-quarter numbers."

Second-quarter figures for the city's spending and income will come out Friday, said City Controller Tom Flaherty.

Flaherty predicted that Pittsburgh would end up with one of its tightest year-end budget balances ever, probably much less than $10 million.

"You're supposed to have $40, $50 million or something around there," he said. "There isn't going to be any wiggle room for the next mayor, that's for sure. The Murphy administration is just going to leave by the skin of its teeth."

Jeremy Boren can be reached at or (412) 320-7987.

Anonymous said...

Councilman says city revenues are lagging
Shields says more cuts may be needed
By Ed Blazina, Pittsburgh Post-Gazette

Pittsburgh City Councilman Doug Shields and the city's Act 47 recovery coordinator say the city's revenues are lagging behind projections, and additional cuts may be needed in the second half of the year to stay within budget.

The Murphy administration said it's too early to project the budget until official numbers are received for the second quarter of the year.

Shields, council's finance chairman, said the city could end up $6 million to $8 million short on revenue.

He told council yesterday the city probably will save less than $1 million from turning its fleet management over to a private company, rather than the $3 million included in the budget. In addition, the city projected a $6 million contribution from nonprofit organizations but an agreement is still pending and the final amount is expected to be closer to $5 million.

Collections of the city's payroll preparation tax also are likely to be several million dollars short of the $41.3 million in the budget.

Rather than the $11 million surplus the Murphy administration projected in June, Shields said the final figure could be less than $1 million unless the city makes some changes.

Shields has called for monthly public meetings among council members, the Murphy administration, the state-appointed Act 47 recovery coordinators and the oversight board, officially known as the Intergovernmental Cooperation Authority. He said he expects to meet before the end of the month so the city can begin developing a 2006 budget, which must be presented by Sept. 20.

"There are significant holes everywhere," Shields said. "We all need to sit at the table and we all need to agree what the numbers are now. That, to me, is the most reasonable way to go about this."

Jim Roberts, one of the city's Act 47 recovery coordinators, said he shares Shields' concern after reviewing financial figures from the city's first quarter, and he endorsed regular meetings. The recovery coordinators and the state Department of Community and Economic Development, which appointed them, next week will release a formal analysis of the first quarter.

"It's early to make projections based only on the first quarter, but I can say this: We are concerned about the payroll tax revenue," Roberts said. "It's a little early to say what the shortfall might be. The city is making an effort to contact those companies that were expected to pay the tax to see what is going on."

Roberts said the projection the city would collect $41.3 million from the tax was problematic from the beginning because the tax was new this year. The tax charges 0.55 percent on the payrolls of for-profit companies in the city.

John Murray, a member of the oversight board, said it is too early for new taxes and other operational changes to turn around the city's finances.

"I hope we have some surplus -- any surplus -- at the end of the year," he said. "I think it's important to make the point that the city is not out of the woods by any means yet."

Roberts said it will be important for the city to make adjustments after it receives second-quarter numbers, which should be in the next two weeks.

Craig Kwiecinski, a spokesman for Mayor Tom Murphy, said financial concerns are "speculation" until second-quarter numbers are available.

(Ed Blazina can be reached at or 412-263-1470.)

Anonymous said...

Those cans that Peduto got were from his neighborhood needs money that wasnt spent. He did nothing wrong with using it, plus the district needed those.

Mark Rauterkus said...

Understood. Thanks for the comment. Let me be clear.

The process is crooked. The budget is a mess. The same old style of operation stinks. Pittsburgh is bankrupt.

There are too many accounts that are open from years past. NONE should be open. Zippo. Do everything above board on the year of its scheduled action.

If the city needs garbage cans -- then the city should buy garbage cans. But, that isn't a city council neighborhood needs issue at all. There should be no such "account" that the councilman can spend in one's district.

The mayor's office and the city's administration should be taking care of the ongoing re-supply of garbage cans -- not city council.

Pittsburgh's leadership is messed up. Stick to the knitting. Councilmembers legislate.

We have a horrid mayor. So, others have had to pick up the slack. But, the council is in charge of the budget and the budget has had to be better to make up for the horrid mayor. And, the budget is still just a sad excuse of smoke, mirrors, confusion, open accounts, lack of accountability, unknown funds, oversights and overlords in fights, questions and un-filled promises that linger for years on end.

Peduto did nothing wrong in getting the garbage cans. Fine. But, Council has done nothing right in management of the budget process. Councilman Peduto needs to share a good bit of that blame.

Do zero based accounting -- while on council. Make the exercise happen. Perhaps it will be fruitless in 2006 -- but it might be better accepted in 2007 or 2008. But, it takes heavy lifting to get there -- and well beyond a campaign chain saw.