Pittsburgh Revenue Flat, Debt Down And Pension Fund Growing

May 1, 2015

Pittsburgh Controller Michael Lamb released the 2014 Comprehensive Annual Financial Report (CAFR).
Credit Deanna Garcia / 90.5 WESA

Pittsburgh Controller Michael Lamb said the city is doing well financially, but it could still improve spending.

Lamb released the 2014 Comprehensive Annual Financial Report which showed Pittsburgh ended the year with a total fund balance of $183 million, an increase of $22.6 million from 2013.

But Lamb said the city’s unrestricted fund balance, which he likened to a savings account, is at $53.7 million.

“That is a major drop from where we were last year,” said Lamb.

The 2013 balance was $82.4, but Lamb said the drop was not unexpected. Funds went to capital projects as well as severance packages for employees.

“Our fund balance now is the lowest it’s been since 2010,” said Lamb. “We are still within the recommended range, we always want to have 10 percent set aside and we are certainly well within that range.”

Lamb did say more is expected to come out of the fund this year for capital projects and operating costs. He cautioned the city to better control spending, because revenue is not growing at a fast pace because job growth is flat; so, he said, the city still has a revenue problem.

“It’s not that the people living here don’t pay enough, people living here pay plenty,” said Lamb. “We still need to have a serious, continuing discussion with our large non-profits about their role and the role they’re going to have in moving this city forward.”

There was some wage tax growth in 2014, but Lamb said that is due to increasing incomes, not more jobs being created. He said Pittsburgh’s population continues to be flat, and public school enrollment continues to drop.

Other CAFR points include that Pittsburgh’s gross bonded debt continued to drop, even though the city borrowed money in 2014.

“So we’re on a very good downward trend paying down all of our debt all the way now down to about $550 million, a little less than that actually, so a very good picture with respect to our long-term debt,” said Lamb.

In regard to one of the city’s major issues – pensions, Lamb said there is good news.

“The pension fund actually grew again last year, so that means that we were cash-flow positive in the pension fund, meaning there was more money available than the money that went out the door,” he said.

While revenue was up slightly, Lamb said the city still needs to move forward with caution.

“We still need to do the job of controlling costs in this government because they continue to grow, even with the wage freeze we’re spending more money this year, although I think we’re doing a better job of controlling costs this year than we were the first half of last year,” he said.

The full CAFR and current budget and expenditure information is available on the controller’s website.