Which is It?

First the city is broke and now the are talking a surplus. Which is it???????

The first quarterly report by one of the city of Pittsburgh's fiscal overseers predicts a $3.97 million budget surplus this year, but the report chides elected officials for overspending.

The biggest budget problem identified is an estimated $3.27 million shortfall in collections of a new payroll tax. The report also lowers expectations of nonprofit institution contributions to the city from $6 million to $5 million. Saving the day is an estimated $4.8 million windfall from vacancies in the police ranks.

The anticipated surplus is five times the $748,000 fund balance written into the city's budget when it passed late last year, but much less than the $11 million surplus Mayor Tom Murphy predicted in May.

The quarterly report takes the mayor, council and city Controller Tom Flaherty to task for their spending. Murphy's office is on pace to overspend its $1.16 million budget by $208,000, the report says. Council and the City Clerk are on target to exceed their $1.73 million budget by $188,000, according to the report.

Flaherty is budgeted to spend $2.14 million but is on pace to spend $467,000 more, the report said. Flaherty has sued the city to prevent cuts to his watchdog office, citing a 1992 court order that sets staffing levels.

Shields, though, said he continues to be concerned, since this year's projected surplus is based on job vacancies that will be filled by next year.