Pensions ding healthy Pittsburgh budget, audit finds

Jeremy Boren

May 2, 2009 (McClatchy-Tribune Regional News delivered by Newstex) -- Pittsburgh is cash-strong but remains pension-poor, city Controller Michael Lamb said Friday.

Lamb released a 148-page financial report that shows Pittsburgh received about $31 million more than it spent in 2008, marking a second consecutive year of budget surpluses.

The city posted robust parking and payroll tax revenues in the first quarter of 2009, Lamb said, and has socked away about $53 million in a savings account and earmarked a separate $45.4 million to pay down long-term debt.

Lamb says the healthy tax collections are a sign of Pittsburgh's resilience.

"What that says to me is that while there has been significant unemployment across the country and even some unemployment in this region, within the city proper we have not lost a lot of jobs and arguably have added jobs," Lamb said.

Something must be done, however, to bolster the city's anemic pension fund, which he characterized as one of "two huge problems." The other is the city's $723 million in principal long-term debt, which has fallen.

"We have a plan to deal with (the debt)," Lamb said, referring to the $45.4 million set aside. "We don't have a plan right now to deal with the pension. We've got to really focus on that to get this city fiscally sound."

Mayor Luke Ravenstahl said he is pleased with the audit.

"By holding the line on spending, we've built a hefty savings account so that we can pay down debt and invest in top-of-the-line public safety tools for our officers," he said in a statement.

The pension fund has about 29 percent of the money it needs to cover $899 million in liabilities. The fund fell from $385 million at the start of 2008 to $262 million by year's end -- a $123 million drop tied to the global economic downturn.

Lamb said a proposal from Ravenstahl to investigate leasing or selling the Parking Authority's garages must net at least $200 million for the pension fund, after paying off the authority's $108 million debt, to be worthwhile.

City employees could be asked to pay more toward their pensions as well, Lamb said.

"Certainly we can't be granting new benefits," he said.

Lamb is the second elected city official in two days to suggest the city's police, fire and other unions could be asked to pay more.

At a mayoral debate taped Thursday, Councilman Patrick Dowd suggested just that -- and opposed Ravenstahl's idea to lease the garages.

"We've got to figure out: Can we actually promise to people you can work for us for 20 years and retire at 50 with a full pension and live another 30, 40 years," Dowd said.

Jeremy Boren can be reached at jboren@tribweb.com or 412-765-2312.

Newstex ID: KRTB-0288-34603882