Pittsburghers were rightly disturbed last week when they heard about the princely profits posted by the University of Pittsburgh Medical Center. The tax-exempt, nonprofit institution reported earnings of $459 million on record revenues from a recent three-quarter period.

Some Fortune 500 companies would kill for numbers like that.

At the same time, Pittsburgh functions on a 12-month budget of $420 million -- less than UPMC's profit for nine months! The city is in financial distress, under state oversight and receives all of $4.4 million a year from the Pittsburgh Public Service Fund, voluntary contributions made by the nonprofit sector. It takes not one, not two, not a dozen -- but 100 tax-exempt organizations to chip in that amount. Launched in 2005 to help the city with its budget, the fund expires after this year.

The UPMC earnings announcement was the perfect setup for a report, issued days later by the city controller's office, that detailed the frustrations of a city like Pittsburgh in hosting so many tax-exempt institutions that occupy so much land yet pay so little toward public services. Acting Controller Tony Pokora said that 14 medical facilities and eight colleges and universities own $3 billion in real estate that would normally generate $32 million a year in property taxes. But nonprofits -- even the rich ones -- get to keep the land tax-free, while Pittsburgh gets $4.4 million from a charitable fund whose days are numbered.

The flip side is that large, successful nonprofits like UPMC, Highmark, the University of Pittsburgh (which just announced a $1 billion building program), Carnegie Mellon University, West Penn Allegheny Health System and others bring jobs, vitality and valuable services to a community. All well and good, but nonprofits should be the first to realize more must be done.

The controller's audit recommended several ways in which Pittsburgh, with 36 percent of its assessed real estate value held by tax-exempt institutions, can be helped to shoulder this burden. None of them is onerous.

Seek a state reimbursement program for cities saddled with high percentages of tax-exempt property. Not only Pittsburgh but also Philadelphia, Scranton, Harrisburg, Erie and other places are host communities for growing nonprofits, yet they collect no revenue from the increasing amounts of acreage taken off the tax rolls. Connecticut and Rhode Island are two states with model support programs.

Lobby, in partnership with nonprofit institutions, for a reasonable, state-mandated system that sets payments in lieu of taxes at a level that's affordable to tax-exempts, yet meaningful to cities.

Negotiate a five- or 10-year extension to the Pittsburgh Public Service Fund -- and, we would argue, with more generous contributions from mega-nonprofits.

Obtain greater support for the city's financial bottom line by asking large nonprofits to rewrite service contracts so that they are free or at reduced cost.

No one wants a return to the bad old days, when the city cherry-picked certain nonprofits, based on which had the highest CEO salaries and Duquesne Club memberships, and then threatened a messy and public legal challenge to the group's tax exemption -- all aimed at negotiating payments in lieu of taxes.

That's why a fair and organized approach, as outlined by the controller's audit, is worth a try. This is a budget issue as critical as any facing Pittsburgh. Mayor Luke Ravenstahl should exert his political capital on it, and nonprofits should see their participation as a matter of good citizenship.