Wednesday, March 24, 2004

Pittsburgh Finances

Others have been all over recent developments regarding the city's fiscal oversight board &mdash including the Post-Gazette's court victory forcing them to open the meetings in accordance with state law. So I won't recap that.[1]

Today, however, the P-G reports that the board is close to making its first recommendation. Sticking close to what he knows,

James Smith III, chairman of the five-member Intergovernmental Cooperation Authority and a bond underwriter, said yesterday that he has been studying the city's staggering debt load and has determined that some of it could be refinanced, saving some money in the short term.

Smith said the savings would be rather small compared to the city's estimated $40 million cash problem looming this fall, but should be considered anyway.

"It is small relief, but a viable opportunity exists," said Smith, who works for Merrill Lynch. "It doesn't solve the problem, it doesn't even make a dent, but it needs to be looked at."

The arcticle does go on to note that Merrill Lynch won't get the business due to conflict-of-interest laws. This is, however, the basic problem with creating a board that is so invested in the status quo. Faced with a $40M annual hole in the budget, they are finding ways to save a few hundred thousand dollars a year. In the meantime, they suggest that this year the problems might be resolved by sellng off assets to raise cash. There doesn't seem to be any mention of how next years problems might be resolved.

[1] OK, there should be links in there, but I've mostly switched to blog reading via RSS feed and I am no longer positive where I read these things. That said, I am quite sure that Fester and Praktike have both been all over this.