City Controller Reports Pittsburgh Finances Are On Target But Criticizes ICA Lawsuit

Jul 7, 2015

Pittsburgh Controller Michael Lamb said the city is on track to meet budget and revenue projections in 2015.
Credit Deanna Garcia / 90.5 WESA

The City of Pittsburgh is on target to meet revenue expectations and possibly end with a surplus, according to City Controller Michael Lamb.

Lamb, who gave a mid-year update at the City County Building on Tuesday, said Pittsburgh made progress on its long-term debt through December despite having borrowed money in 2014. But, he said, city officials could do more.

“We continue to have challenges related to pension obligations and to infrastructure, which certainly require us to be more diligent in how we spend capital dollars and in detailing the priorities of those expenditures,” he said.

For 2015, Lamb said the city is on track to meet projections.

“On revenues we’re running actually ahead of where we were last year in tax collection – about $16 million ahead of where we were last year,” Lamb said. “That’s mostly because we did increase millage on property taxes last year, so we do see those increased revenues.”

Lamb said funds from the Regional Asset District that once went to the Urban Redevelopment Authority’s debt are now going into the city’s general fund, but that difference was anticipated.

“We’re on track ... on the expenditure side,” he said. “We do have a couple of departments that have sent some red flags up that we will be communicating with in the next few weeks just over concern of their potential to go over budget, but for the most part, we are on track.”

Those include the police and fire departments and the Department of Innovation and Performance. At the year's half-way point last week, each had gone through more than half of their respective budgets, Lamb said.

“In some cases that’s explainable,” he said. “There are contractual relationships that they enter into in the beginning of the year that get counted for early in the year and that equal out as the year goes on.”

Lamb said his office will go on a something of a "fact-finding expedition" for any department at risk of going over budget.

Part of the city’s budget is dependent on more than $10 million from state gambling revenue currently being held by the Intergovernmental Cooperation Authority (ICA), which has financial oversight of the city. Mayor Bill Peduto last week announced the city was suing the ICA to receive those funds. Lamb criticized that move.

“I’ve said before that I think the biggest problem here is one of communication,” he said. “We need to sit down and talk to each other. I don’t think filing lawsuits is the right way to go about that.”

Lamb said the ICA has released funds in the past after talks with city officials. The Peduto administration has been less communicative, he said.

Peduto spokesman Timothy McNulty disagreed.

"The controller is incorrect,” McNulty said. “The city holds conference calls every other week with the ICA and its other financial overseers, and has bent over backwards for 18 months to give it all the information it has requested, but still the ICA has refused to release the taxpayer funds due the city under state law."

Lamb said the ICA is withholding the funds to force the city to implement a new payroll system that has been in the works for years. Lamb said that work is moving forward with the city slated to make the switch early next year.

Both city and county officials have applauded Pittsburgh's trajectory for growth in recent years. Lamb argued Tuesday that growth is a myth.

“We don’t really have job growth, we don’t really have population growth, but we do have an increase in median income,” he said.

Presented at the meeting Tuesday, the Popular Annual Financial Report also provides information on Pittsburgh’s demographics, government and business.