Debt Is Down and Spending Is Up, Says Pittsburgh Controller Michael Lamb
There’s good news and bad news.
That was the message from city of Pittsburgh Controller Michael Lamb Wednesday, as his office released its 2013 Popular Annual Financial Report. Lamb called the report the “layman’s version” of the city’s Comprehensive Annual Financial Report, which was released early this year.
The good news, said Lamb, is that the difference between the city’s liabilities and its assets shrunk by $4.1 million in 2013, to $423.8 million. In 2007, the gap was close to $600 million.
“It’s still not where we’d like it to be,” Lamb said. “Most of that … is a reflection of the fact that we still carry significant debt, some of it pension debt, some of it other obligations like pension and long-term obligations. But we continue to move in the right direction.”
The bad news is that the city’s budget situation is still pretty grim, said Lamb.
“While people say we can’t cut our way out of this problem, that doesn’t mean we can’t control spending,” he said. “That’s been part of the problem. There haven’t been proper spending controls put in place in the 2014 fiscal year.”
The controller applauded Mayor Bill Peduto’s executive order requiring the Office of Management and Budget to scrutinize all city expenditures, including those under $2,000 which were previously exempt. But Lamb said that will likely only go part of the way to fixing the problem.
Of some concern to Lamb are several city departments that had already spent disproportionate amounts of their annual budgets by the end of May.
He pointed to Animal Control as an example, which had already run through 66 percent of its budget with seven months left in the year. The Bureau of Police had spent 49 percent of its salary line item, a cost which is unlikely to change throughout the year, while the Mayor’s Office had already spent 52 percent of its overall budget.
Lamb said he has reached out to those departments on track to overspend, and he’s hopeful that they’ll respond with reasonable explanations, like making big purchases at the beginning of the year.
One of several divisions still on budget is the Parks Department, but Lamb said a recent expenditure is deeply concerning. He said the department recently spent thousands of dollars on a new high-tech conference room, but that his office had similar equipment installed for a price tag of less than $1,000.
“We’re talking about a pretty dire budget situation here and we’re spending in excess of $17,000 for the kind of equipment that we know can be done for far less,” Lamb said.
He also criticized the Mayor’s severance incentive program for employees on the verge of retirement, saying the costs of the program were underestimated, while the savings were overestimated.
Lamb said while the city certainly needs to rein in spending, finding ways to increase revenue will be vital to achieving financial stability. He said the city’s non-profit community needs to play a greater role.
“We have a city of 300,000 people who have to provide services for the city of about a million people,” Lamb said, referencing all the people who live outside Pittsburgh but travel into the city for work and recreation. “That math is difficult, and part of the way you deal with that math is for the biggest employers in this town to help.”
Clarification: This article has been updated to clarify Controller Michael Lamb's statements on the difference between the city’s liabilities and its assets, which shrunk by $4.1 million in 2013, to $423.8 million.