Profuse Parsimony Pays Off--Pittsburgh Still Has Pennies Left to Pinch : * Economy: While some say the frugality has reached ridiculous heights, the city is thriving when compared to counterparts.

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Through bad times and good times, Pittsburgh has pinched its pennies until Lincoln yelps. And for cities, these are bad, bad times.

At least one in four cities faces a huge budget deficit. New York is in its usual crisis; so is Philadelphia. Bridgeport, Conn., has filed for bankruptcy. Even Beverly Hills counted its silver spoons and let go some staff.

And then there's sensible Pittsburgh.

Never having lost its head in the intoxicating 1980s, the city remains cleareyed in the '90s. A little luck and a series of frugal administrations have combined to keep Pittsburgh's budget down to the bone.

It wasn't always so.

When Mayor Pete Flaherty took office in 1970, the City-County Building had spittoons in the lobby, and spittoon cleaners on the payroll. Water-meter readers were chauffeured around town by Teamsters Union drivers. You could call City Hall and get a switchboard operator any time, day or night. Civilian watchmen staffed police headquarters around the clock, seven days a week.

"They had a chair. They leaned against a wall right in front of the police station," said Bruce Campbell, who was Flaherty's executive secretary.

"We decided that since we had policemen going in and out of there, we didn't really need guards," he said.

Flaherty slashed jobs and withstood a 10-day, Teamsters-led strike.

The next mayor, the late Richard Caliguiri, in office from 1977 to 1988, allied with business leaders to rejuvenate the city.

"Decisions were made by directors on a business basis, not on what a ward chairman or a powerful local politician wanted," said lawyer George Jacoby, who served as Caliguiri's executive secretary. Caliguiri held the line on taxes in all but one of his 10 years in office.

The administration of Mayor Sophie Masloff continues the miserly tradition:

* When the city learned that police officers were using full-service gasoline pumps, it asked them to pump their own. Police complied, although their union president complained that officers would be trailing an odor of petroleum.

City General Services Director Louis DiNardo said the change would save up to 27 cents per gallon, or an estimated $37,000 a year.

"Any movement, even if it's a small movement, saves big money," he said.

* For two years, Pittsburgh has lighted its fireworks on the third of July instead of the Fourth, thus eliminating holiday pay for police officers staffing the event. Net savings: $20,000.

A bonus has been workday revelers who haven't had time to get rowdy. "The quality of the crowd on the third of July is more family-oriented than on the Fourth. They don't drink all day," said city finance director Ben Hayllar.

* The city decided that Allegheny General Hospital and other traditionally tax-exempt institutions should start paying property taxes. Hayllar reasoned that since the advent of Medicare and Medicaid, many hospitals now are reimbursed for work they once performed as charity.

The hospital, not surprisingly, disagrees. It has challenged the decision.

* The city is sponsoring a lottery for garbage haulers, tree trimmers and dog catchers, intended to reduce workers' compensation costs by rewarding safety. A $2,000 prize will be split among 10 workers whose names are drawn at random, if none has filed a disability claim that month.

Workers' comp is expected to cost $20 million this fiscal year, nearly 6% of the city's $340-million budget. So Hayllar hires private detectives to videotape workers' comp recipients who are suspected of cheating. The city also gives light duties to workers with minor injuries to avoid what Hayllar called "the Geraldo syndrome: You want to watch TV. You don't want to come to work."

Pittsburgh's penny-pinching has reached ridiculous heights, at times. For example, when a day-care center for the elderly wanted to remove a parking meter to create a no-parking, drop-off space, the battle took 11 months.

"It's as if parking meters are sort of sacred cows," said Arlene Snyder, executive director of the Vintage Adult Day Care Center.

She said the city took four months just to supply the name of the person authorized to speak on the matter.

"Once we said there was a meter that had to be removed, there was a gasp," Snyder said. Finally, she succeeded by calling the mayor's office.

"We might go for space No. 2. We needed to fall back for a while to recoup strength," she said.

Hayllar insists that the city maintains parking meters less for the revenue than for the benefit of merchants who want turnover in the spaces in front of their shops. But Snyder is not convinced.

"There really aren't any merchants around our space," she said.

There are other instances of profuse parsimony. For instance, it has been only two years since the city got decent street signs. Few old signs existed, and they were hard to read. The city caved in and put up new ones only when it became painfully clear that ambulance drivers couldn't find where they were going.

So Pittsburgh must be out of the red and in the pink, right? Not exactly.

Department chiefs were ordered earlier this month to propose layoffs and cost cuts to avoid a projected $35-million shortfall by the end of 1992.

"We're experiencing the same type of difficulties, I think, as every city government now," General Services Director DiNardo said.

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