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Lamb urges Pittsburgh to demand more from nonprofits in final financial report as City Controller

Pittsburgh City Controller Michael Lamb speaks at a lectern.
Kiley Koscinski
/
90.5 WESA
Pittsburgh City Controller Michael Lamb gave his final annual financial report Friday, which painted an optimistic view of the city's finances.

In what was his last annual financial report as City Controller Friday, Michael Lamb offered a sunny assessment of Pittsburgh’s finances. But he gave mixed grades to the Gainey administration's efforts to get the region’s large nonprofits to contribute more to the city.

“The city is in a much better position now than when I started in this office,” Lamb told reporters Friday. “Yet we still are not seeing meaningful contributions to the operation of city government from our largest employers, which absolutely must change.”

Mayor Ed Gainey has charged the city solicitor’s office with reviewing all parcels in the city owned by nonprofits to make sure they meet state standards for tax exemption. When asked for his thoughts on the review, Lamb said it should be standard operating procedure and not a headline-making initiative.

“That's something that we should always be doing [and] it's something that we regularly did,” Lamb said.

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Lamb argued that while adding those properties back to the tax rolls is important, the city risks leaving money on the table if it fails to negotiate additional contributions from nonprofits.

“If we're ever going to get to any kind of meaningful discussion around new resources to the city from our large nonprofits, the first step of that is getting to the table” he argued. “And it seems like right now we're not even at the table.”

The Gainey administration has claimed the city is negotiating with some of the largest nonprofits about their contributions, but leaders have so far declined to elaborate on the status of those negotiations.

Lamb also cautioned against leaving federal coronavirus aid dollars on the table. The city received $335 million from the American Rescue Plan Act, and all of that money must be allocated by the end of 2024 and fully spent by 2026. The city has yet to allocate about $133 million.

While “there’s work to be done,” Lamb said spending the money “should be the least problem that we have,” and stressed that the city should focus its attention on making sure organizations that receive the federal money spend it in a timely manner.

Lamb did applaud improvements in the city's day-to-day fiscal health: The city received $73 million more than it spent in 2022, and general fund revenues totaled more than $700 million — up nearly 16% compared to the year before.

The city’s "rainy day fund," which took a dramatic hit in 2020, had a cash reserve that is more than double the recommended size, according to the report. At $167.3 million, the fund balance accounted for nearly 26% of total expenditures in 2022: The goal is to have a reserve of 10%.

On the other hand, the city’s municipal pension suffered what Lamb called “a fairly large drop” — down $68 million from 2021— thanks to a challenging year for the markets. Lamb said pension funds are not immune to market volatility, but stressed that the city should be able to recover the loss.

“I am confident that the invested portfolio will rebound,” he said. “We are also buoyed by the dedicated revenue from the parking asset.”

Though parking tax revenues increased by $9.5 million compared to 2021, they have yet to return to pre-pandemic levels — and “maybe won’t” as a result of the coronavirus, Lamb said.

“The idea of driving into town every day is not something that's happening now and not likely to return,” he said. “It’s a challenge for our economy. It’s a challenge for the culture of Downtown.”

Lamb also reflected on the progress the city has made in recent years as the region continues to recover from the pandemic, noting that the financial picture would be quite different if not for the federal support.

“We have weathered the worst of this storm,” Lamb said. “We've come through the other side with still a very stable financial situation, in large part thanks to the American Rescue Plan and also to our own resilient economy here in the Pittsburgh area.”

Kiley Koscinski covers city government, policy and how Pittsburghers engage with city services. She also works as a fill-in host for All Things Considered. Kiley has previously served as a producer on The Confluence and Morning Edition.