The recession is complicating efforts to reduce the city of Pittsburgh's debt and plan its finances for the next five years, officials said yesterday after an ill-attended special council meeting.
It's not that there's a shortage of cash; Controller Michael Lamb said the city took in around $30 million more last year than it spent, boosting an already healthy savings account.
The problem is that economic uncertainty makes it hard to complete an agreement governing $45.3 million that's to be set aside to shave future debt payments, and some on council are balking at doing any long-term planning without seeing that emerging pact.
Writing a long-term plan without knowing the details of the debt reduction effort "is sort of like planning a trip without a destination," said Councilman Patrick Dowd. "Until we lock down the debt service piece, everything else is in limbo."
Mr. Dowd called yesterday's meeting to get a sense of how the administration and state-picked fiscal overseers expect to use $45.3 million that's in hand now to trim $51 million from debt payments due in 2011, 2012 and 2013. Without nipping that debt, the city may face deficits.
The mechanics of a debt reduction agreement are the subject of talks between the city Law Department and the state-picked Intergovernmental Cooperation Authority. Representatives of both offices were invited to the 10 a.m. meeting, but didn't attend.
Nor did the state's Act 47 recovery team, which works with the ICA to monitor city finances, and drafted an initial debt reduction pact that has been scrapped.
City Solicitor George Specter and ICA Executive Director Henry Sciortino said, separately, that they didn't attend because until the debt agreement is done, there's nothing to talk about.
Councilwoman Darlene Harris -- who joined Mr. Dowd and Councilwoman Tonya Payne at the meeting that was skipped by the other five council members -- suggested that it may not be the best time to lock up money. "I believe that [officials] are considering what could happen with the economy the way it is now. That's why I think it's smart that that money is just sitting there right now."
Financial uncertainty "is a part of the equation," Mr. Sciortino said. "We all have the same fears and concerns about the economy. ... We're not going to disregard what is certainly an unprecedented set of circumstances in our world."
He said ways can be found to earmark money for reducing future debt, while keeping some flexibility in case the recession drains city coffers.
Mr. Lamb said the city has a solid savings account and "it would be a shame to waste" the opportunity to trim debt. "Let's use that cash flow we have today to make significant improvements for the future."
Council is set to begin on Feb. 12 a series of special meetings toward a new five-year financial plan under state Act 47 for distressed municipalities, to replace the plan passed in 2004. Mr. Dowd said he'll introduce a resolution today to postpone those hearings until council sees the debt reduction agreement.
The Act 47 team expects to attend the Feb. 12 meeting and outline its views on the city's finances, said its co-leader Jim Roberts.
