Good afternoon and welcome to Pittsburgh City Council's cable cast post agenda on the 2025 fourth quarter financial and performance report from March 25th, 2026.

For the record, we are joined today by council members Charlotte, Celonetro, and Warwick, and I'm sure other members will be joining us shortly.

I am I am really glad to be holding this.

I expect this to be the first of quarterly post agendas after each of the quarterly reports and after the ACFER and in an effort to ensure that budget season is a year-round endeavor rather than November, December endeavor for council members.

And the upside of that is that we're all meeting regularly.

Multiple departments are meeting regularly to discuss city finances.

And the downside of that is that not all council members attend that meeting.

I attend that meeting on behalf of council.

I do my best to talk to council members as a chair of finance and law, but um, but not all council members are present, and I think this can be a way to daylight to the public and to involve council members in our financial realities and future budget decisions throughout the year.

So I'm grateful to all of our invited guests.

If we want to um go down the line and each introduce ourselves and then we'll turn it over to you to get started with uh presentation.

Um Ian Fitzgerald, Deputy Director of Finance Department.

Rhea Price, Deputy Director Um and Acting Director currently of the Office of Management and Budget.

Elizabeth Sir Cone, Assistant Director of Operating and Special Revenue.

David Hutchinson, Assistant Director for Capital and Asset Management.

Thank you very much.

And acting director of OMB Price, I'll turn it over to you for your presentation.

Okay.

Um first of all, I want to apologize for my uh voice.

Um recovering from an illness, so um, I might need some cough drops and or drink some water during the presentation.

You have very capable staff with you to fill in if necessary.

I know you do.

Yeah.

Um, so uh like uh council person Strassberger said, uh, we're here to discuss the results of the fourth quarter report for 2025.

Um so I I thought I'd start with a very high-level look at where we ended the year.

Now, um what you see here are the overall unudited results of how we ended the year.

And don't try to look at anything because I'm gonna zoom in on some numbers, but you'll see I have three sets of numbers um outlined in red.

And we're going to zoom in on those numbers in a second.

Okay.

So uh here's where we ended the year.

Uh the first number that is outlined um that is $658 million, uh $386,000 and $66.

Uh, that's uh how we ended the year um in revenue collection.

Then if you go down to the $667 million, uh 25,000 667 million, 25,881 dollars.

Uh, that is how we ended the year um in expenditures.

And that very bottom number at the bottom, uh, that is what we refer to as our operating result.

Now, what that represents is simply the total revenues minus total expenditures.

Um please note that that number is negative.

So that means that we ended the year in the red.

Okay.

So we ended the year with almost a nine million dollar deficit.

Now, I wanted to start by pointing this out because now I want to do a comparison to show you this should look familiar.

This is from the five-year forecast um of the 2026 operating budget.

Uh, this is what you pass at the very end of 2025.

And um, I'm gonna zoom in on some numbers here too, but what I want you to focus on is the 2025 estimate column.

Okay.

So normally this year I think that the mayor's office and council did something different than in previous years.

So there would be estimates that would be provided in September.

And typically, uh from my memory, those estimates would typically be updated for the November budget.

From my understanding, that did not happen this year.

Okay, so but that normally does happen.

So uh that 2025 estimate that um was the same for both the September and the November budgets and the budget that you ultimately passed.

So anyway, what I want you to focus on here is the uh the total revenues that were estimated to and and the 2025 in that budget.

Now that number was 665 million uh 740,243.

Then moving down to total expenditures.

That number was about 665.5 million dollars.

And here you see the operating result.

It is very modest, but it was still a positive operating result of 163,000.

So now the reason why I wanted to point those two out was I wanted to show the variance between um what was estimated uh um in the operating budget document and uh what the um the actual showed us at the end of the year.

So as far as revenues, uh okay.

So there was about uh we ended up collecting uh a little under $8 million less than what was in the estimate in the operating budget.

Then on the expenditure side, we ended up spending um 1.5 million dollars more than was anticipated in the operating budget.

And the operating results, of course, that means that it was off by about 8.5 million dollars.

So another reason why it's very important to point this out is because that brings us to the conversation about the fund balance.

Okay.

In the 2026 operating budget, uh the beginning fund balance for 2026 was uh a hundred that number was 168 million dollars.

Because of that deficit, you're now you have to decrease that number by 9 million dollars.

So the fund the beginning fund balance is now 159 million dollars.

And then you have to factor um that 9 million dollars into all those uh fund balances um going on from 27 to 2030 then.

Um so um moving on, we're gonna do a deeper dive into revenues.

And um, here I'm gonna uh turn this over to Ian Fitzgerald.

Um yeah, so some of the the positives that came out of uh 2025 were our our real estate collections exceeded the um the budget that we had predicted.

Um this is a positive result, especially given the need for the assessment reassessment within the city and our expectations of the downtown parcels, you know, slowly hemorrhaging value over time.

So we had a correct model going in that resulted in um a positive, which is good.

Um parking tech collection also exceeded budget, which is good because that has that means it is normalized since like the pandemic, um and we're sort of expecting that to happen as more events started happening.

Um also I believe you know, all the lots are starting to charge higher rates as you go.

I remember when I first started in 2022, it was like $14 a parking a lot, and now it's or $10 to park on certain lots, it's now like $14.15.

So we're sort of seeing the results of that happening.

Um another um that outperformed the budget was the deed transfer tax, um, which has been a difficult one to predict with the current climate related to property sales.

So that was a good positive to see.

Um, and we were hopeful that we'll continue going into this year.

Um, some of the negatives um earned income tax and payroll expense tax um severely um underperformed.

Um I'll get into payroll expense in a second.

Um, but earned income taxes collected by Jordan Tax Service.

Um, they do have I believe 90 days or 60 days to turn over those things.

So some of it could also be timing, but we're continuing to monitor that situation um as well, because they are the tax collectors for that tax.

As for uh payroll expense tax, um what we found was there were delays in processing large chunks of money on in our department, which we have um been looking into and digging into better ways to do it.

Um also some causes that may have led to the approximate ten million, nine million dollars that got delayed and pushed into 2026.

Um I think it might be a good time to take a step back and sort of talk through how our remittance process works.

So we have four remittance technicians that review and validate data.

Um we have a collection supervisor who oversees all that.

So what we do is we process every piece of mail that comes in, both for real estate and every single tax through that group of four technicians and one supervisor.

We also process any zero returns.

So what happens is if someone files and they don't owe money, we still need to process that form.

Also, so if we have any staff that's out for extended period, we do see lags in processing.

We also have peak seasons when it comes to real estate, especially right around now.

Um so we get a little backed up usually in business tax and then we sort of catch up throughout the year.

Um when I was crunching the numbers related to this, we had never pushed more than a maybe 300,000 to 500,000 into the next year for the last two years.

So this was a sort of anomaly.

Um we have sort of already remedied the situation.

We pivoted a person who had experience in that to help dig us out.

Um and I believe we are caught up to where we should be going into this year.

Um so a couple things, you know, we're always looking for ways to improve.

Um I mentioned the zeros before.

Um we are looking for ways to expedite a portal that would be able to process zeros so that potentially we can reduce the number of filings that go through our remittance team.

Um we are also looking for better ways that our tech can process um.

We are currently waiting for like a Windows 11 update on one of the pieces of tech, and then we will update from a 4.0 to an 8.0, which should process the zeros faster as well.

So we're fighting it from multiple angles where we have a staff member that can pivot and help during peak times, especially October, November, December, so we can avoid this in the future, so it's not a headache for the OMB team.

Um, and we can continue to monitor because a lot of the stuff we have to do is reactive, but from a fiscal year perspective, we can be reactive in the early part of the year and then correct.

Um so we're trying to just make it easier um so we can avoid some of our pitfalls.

Um also another negative was intergovernment revenues was short for four million dollars from a transfer from liquid fuels that should have hit, but it um got credited in 2026.

And this slide that is up is sort of what I was talking about with the payroll expense.

Um, and I have some other data that I ran since this slide was developed, but um you know we see we're seeing close to 9.5 million that rolled into 2026 that probably should have been 2025.

Okay, um I'll go back into expenditures now.

Um before I continue though, um, there was something I wanted to point out whenever um I was talking about the deficit that I didn't mention.

Um I did go back through um our prior uh quarterly reports.

I looked at our fourth quarter reports, um, going back like the past like uh 15 or so years, and the last time we showed a deficit in the fourth quarter report uh was year 2020.

So um that was in the thick of the pandemic.

And then um the last time before that was in 2010 when we were still in Act 47.

So I just thought that was important to note.

So um, yeah, and keep in mind these are unaudited results too.

So the ACFER may very well show something different because we have different um uh basis of accounting.

So yeah, um on the expenditure side, uh here's some good news.

Um, our pension funding status uh as of uh the last uh as of the end of the year of 2025, the total funding percentage of the comprehensive um municipal pension trust fund was almost 78% funded.

So that's up um a whole uh 2% from the end of the year of uh 2024.

Um moving on to the American Rescue Plan.

Um we've spent uh a vast majority of that as of the end of the fourth quarter.

We still had about 20 million dollars remaining.

However, everything has been allocated.

Um you will see though, with the budget reopener, um, we did uh some submit some amendments, some minor amendments to ARPA.

So this is just a snapshot of uh where the American Rescue Plan Um funding was and what what's remaining where now uh this slide, I just I thought it was important to highlight this.

Okay, so you'll see that for four years, um the city supplemented its operating budget with ARPA funds by between 33 million dollars to almost 50 million dollars over those four years.

So the total of those four years uh comes out to almost 178 million dollars, which is over half of the ARPA that we received.

Okay.

Now, if you recall the estimated fund balance for the end of 2025 is $159 million, okay.

Um hundred seventy seven million, $159 million.

To me, that that's very troublesome that we could uh we supplemented our operating budget by more than where our fund balance currently lies.

Okay.

If we did if we hadn't collected ARPA, then we would have and we we spent the way that it that we had, we'd have a negative fund balance.

So and this is just a visual showing that.

Okay, so um moving on.

Um so just looking at um some of the 2025 results.

So uh this is where some overspending happened.

Um overall, the city spent three million dollars in budgeted in salaries and wages, and this was primarily due to the under budgeting in uh premium pay.

Um in employee benefits, uh we spent about half a million dollars more than budgeted.

And uh the city spent about five million dollars more than budgeted in the professional and technical services subclass, but that is due um primarily primarily to the large amount that was reappropriated in 2020 uh from from 2024, and I'll get to that um in a couple slides.

And four departments or bureaus actually exceeded their budgets in uh 2025, and those departments were EMS, FIRE, and uh DPW operations and DPW environmental services.

And um EMS, that was uh a fairly significant portion of their overall budget at 8.5%, and fire six percent.

Um and this is just a higher level view, and this is just outlining uh their those uh bureaus expenditures for the year.

Okay, um I mentioned that I would talk a little bit more about reappropriations.

Now I'm sure a lot of you aren't really familiar with what reappropriations are.

Now, unlike the capital budget, um, if you don't use funding in the operating budget, at the end of the year you lose those funds if you do not spend them.

Uh the only times you do not lose those funds is if they are already tied up in a contract or a purchase order that has been issued but you has not been paid.

In those cases, uh we will reappropriate a corresponding amount of money to cover uh those purchases, or else like departments would be penalized in the upcoming budget year for not getting those expenditures out the door.

So this shows uh the reappropriations column in the quarterly report.

And then I just wanted to um highlight um how the re how the reappropriations have trended, trended since 2016.

Now you'll see going back to 2016, the amount of reappropriated that year was only three million dollars.

You look at 2025, the amount that was reappropriated was over 45 million dollars.

So that essentially inflated uh the operating budget by over 6%.

So uh this is something that I definitely want um us to uh look at more carefully going forward and examining every single PO and contract that is reappropriated because um that is a huge number, and uh that increase from three million dollars to uh 41 million dollars in less than 10 years' time.

Um that's I mean to me that's just eyebrow raising.

And I'm not saying that anything, you know, um you know negative was done.

I just think that we need to you know take a deeper look at that.

Um there's been qu some questions about some items that should have been paid in 2025 that um have that were instead paid in 2026.

So um I just wanted to highlight the big ones.

So um we had a Pittsburgh water bill uh that was paid uh at the end of January, and that was 9.6 million dollars.

And I wanted to point out that only $4 million was budgeted for that in 2025.

So um they didn't even have the funds uh to pay that bill in 2025.

Um we were sitting on about uh one and a half million dollars in uh fleet invoices, so free fleet repair invoices.

And we were sitting on at least uh 250,000 in um invoices for outside council that uh law did not have the ability to pay at the end of 2025.

Um now I'm gonna turn it over to to Dave to talk about the CIP.

Yeah, so this slide and the next slide represent a table that's included in our quarterly reporting.

On the vertical access, there's a bunch of different project types.

This is everything we budgeted for in the 2025 budget.

Uh vertical access has the project types kind of grouped by project um family, and then on the horizontal access or different periods of time reflecting the spending that we did for those 2025 funds in the calendar year of 2025.

On the top right corner is some of our set summary data.

You can see that we had um over 127 million in budgeted 2025 funds across all of our 25 fund sources and in the calendar year 2025, uh we spent about 29.5 million of that money.

It's important to um keep in mind we'll and then again, out of that 29 million, about 18 million of it was paving.

Um shout out to our paving program, they're able to mobilize really well.

They always have a solid plan before we even give them the money, so they're always ready to hit the streets uh whenever the funds are available.

But the fund availability does play into this.

It's not that they get the money on January 1st and are able to just start moving with it.

It varies based on the fund type.

So for bond, we had kind of two tranches of fund availability.

Um about 20% of the funds are available in March, and then the rest were made available in May.

And then for pay-go, uh, we had enough revenue in early March to make that transfer so the paygo funds could be available to the departments.

Parks tax, we funded some of the the projects um in September, had to pull back some of the funding in December.

We just reinstated that funding recently as well, so those are all fully funded for 2025.

Um then, yeah, again, it's it's important to think through that this is just the the budget year 2025 spending in the calendar year 2025.

There's of course capital spending across all budget years throughout the year.

So for the calendar year 2025, we spent about 145 million in total across all of our old fund sources, pay-go, bond, CDBG, um, and out of that, only the 29 million was the actual 2025 budgeted funds.

Okay.

Um, some of these slides I'll just uh speed through so because I'm sure that uh you have questions.

But uh so because since we're uh discussing the quarterly report, I just wanted you to be aware that we show uh head counts in the quarterly.

So uh this is just a snapshot of uh a head count page that that we show.

Um and then um I wanted to dive a little bit more into premium pay because uh that's been a hot topic of discussion.

So um I just uh highlighted uh those four departments or actually four bureaus that I mentioned uh previously that had went over budget overall.

And so and I wanted to show um how we were budgeting and how the actuals had ended up um turning out every year going back to 2021.

Now you'll see that um if you look um at each chart on the left-hand side you'll see what was budgeted for the department, and on the right hand side, you'll see um the the bar that shows what was actually spent.

Now, when you look at salaries and premium pay, um EMS has consistently uh exceeded their budget for salaries and premium pay.

And yeah, below the chart, you'll see the actual numbers that make up that chart.

So um this uh chart shows fire, similar situation.

Um the city has uh not been budgeting enough to cover their actual expenditures.

Okay, this shows uh DPW's uh Bureau of Operations.

Um this has been a relatively recent phenomenon for the for them.

Um but in the past uh two or three years or two years, sorry, um they have overspent what was budgeted for salaries and premium pay.

And this one shows environmental services, and again, uh this is they have not uh consistently overspent, but I just wanted everybody, you know, just to see a few examples of uh how they have trended.

Um one of my last slides.

Um I know that people have been talking about Act 47.

We're not really um anywhere close to there yet, but I just wanted people to be aware that um there are several criteria um to going into Act 47.

Um here are two of them right here.

Um one of them says the municipality has maintained a deficit over a three-year period uh with a deficit in each of the previous fiscal years.

Um based on these unaudited results.

Again, these are unaudited, um, we may have reached year one of that.

Then um the municipalities' expenditures have exceeded revenues for a period of three years.

Um again, um, based on these unaudited uh results, we may have reached at year one of that.

And um I just wanted everybody to be aware that our quarterly reports are available on our website.

So um if in if you just go to Google and just type in um Pittsburgh, uh quarterly reports, OMB, uh it'll bring you to this page right here.

So um the quarterly reports they go back pretty far if you ever want to take a look at any of them.

So but uh that's basically it for us.

So um we're you know, happy to um accept any questions.

Thank you very much.

Is there anything welcome, Director Gula, and thank you for uh for being here.

I didn't know if there was anything before we get into questions that you wanted to state off the bat, or we can okay.

Thank you very much.

So we uh we have been joined, uh let the record reflect we've been joined by councilwoman gross and councilman Wilson.

And we'll start with councilperson Charlotte, work our way down and then back to Councilman Wilson.

Thank you.

Uh so I really appreciate this, and uh thank you, Madam Chair, for calling this.

I think this is a really good idea that we should be doing when you put these reports out.

Um sometimes they go out, but we get busy and we don't um always take the time to digest them in the way that I think we should.

Um I hope this is some this is the a regular occurrence from now on um to to help us be brought to up to date with the work that you guys are doing specifically in that um uh budget task force or the financial task force uh that's going on.

Um to just bring us to speed here.

So I really appreciate that.

I I really give a lot uh my questions are not necessarily policy, but just kind of in my own understanding here.

If I can start with the last slide that you had.

Uh you mentioned that two of the qualifications for Act 47.

Uh one is that a deficit over a three-year period, but you also say that it could be or another qualification would be expenditures exceed revenues.

What is the difference between a deficit and expenditures exceeding revenues?

In my mind, that's the same thing.

Um I agree with you.

Um honestly, I don't I I can't answer uh why they have that differentiation there.

Okay.

Good.

Okay.

Well then I guess if you don't know, then I guess I'm not crazy for uh for asking the question.

Um also you mentioned uh your concern about reapportional, yeah.

Sorry.

Uh politics, I was thinking reapportionment.

Uh re reappropriations.

Um why is that a concern to you?

In my mind, that means you know that that we've budgeted too much in one department and not enough in another.

So it probably means that we did a bad job forecasting what a department needs.

Um but does it actually mean something else to you?

Um yeah, so like I said, it kind of um inflates a department's budget.

And um we have to be very careful of uh those amounts that we reappropriate over because it is possible that um I don't know, maybe they liquidate a contract or um they end up not receiving the goods that were in that purchase order.

Um once they release uh those amounts, they would go back into their budgets.

Now they should not be able to spend that on other things.

Okay, so we would have to be aware of that.

And ideally, we would decrease their budgets by a corresponding amount that was liquidated.

So but if you're not watching that diligently, it has you know it has the capacity to artificially inflate their budgets.

Gotcha.

Okay, that makes sense.

Um I had another question.

Uh I think Ian, you brought this up about the de-transfer tax.

Um that that uh increased by five million, but it looks like it was it was at least what the estimate was supposed to be last year, or within um within reach.

I think if I'm reading this right, the 2025 estimate oh no, sorry, I might be looking the wrong.

Looking at 30 39 million roughly for both of them.

Hold on, sorry, give me a second.

So I think that is that compared to the budget number.

Yeah, I believe so.

So we had budgeted 39 million and brought in where's the revenue?

Forty 43 million, I believe.

Oh, okay.

Uh I guess I'm not seeing the 43, but there's a good chance that may that was probably the budget number.

The numbers that you're looking at are the ass the other thing.

That would be in the Q4 itself.

Okay.

Well that I mean that that's a good sign because the due transfer tax has been uh one of the holes that we've been most concerned about.

Um I think is as we've all discussed, we we're well aware of uh building being owned by an LLC, the LLC being transferred, and then not paying the transfer tax specifically on larger buildings, which we you know desperately need in the transacts there.

So I'm I'm glad to hear that that despite everything that that is still um, yeah.

I'm looking at page set page nine of the quarterly report.

Um not of the slideshow, I'm sorry, but I'm looking at in the actual quarterly report.

And so the the budget for the deed transfer tax was uh 42 million dollars.

Uh the actuals that came in was actually 47 and a half million dollars.

Okay.

Great.

Um I think that's really all that I have.

Um really uh really appreciate this insight and thank you for that.

Thank you, Councilperson.

Councilwoman Cellonetro.

I just have a question.

You might not be able to get to this.

Councilwoman, is your mic on?

Apologies.

Oh, I'm sorry.

Yeah, they turned that off.

Um your positives, uh real estate tax collections exceeded expectations.

Can you tell me if you were using an agency?

Do we use an agency to collect those funds, or was that something we were doing in-house?

So the current current property tax we collect for city school library and parks.

Prior year property tax is new for us, and it's just for city library and parks.

The school district, it was being collected initially by Jordan Tax Services.

And we dissolved that contract for the city.

So those items that the city collects now we do in-house.

The school district is still using Jordan Tax Service to collect their prior year tax collections.

So at the end of every year, we turn over whatever's delinquent, we turn those over to Jordan just for the school.

Well, that's good news, then we're able to collect without having to use an outside agency.

Um one one thing to note on that too is that we also issue refunds that are a result of um B par level hearings or board of viewer, like that reduces the revenue.

So that revenue accounts for that.

Okay.

So in prior years we've had different fluctuations because of the way that the the BPAR level hears the cases now.

They've shifted the timeline to be before the assessment is made.

So most of their um hearings occur at the end of the year ahead of the tax year.

Some big ones carry over that are more complex.

Like I believe there's there's one big one coming out there that we're waiting to hear on.

Um so if you're comparing year to year, we're in a new phase of that, and we've that that's why I was exciting for us to have forecasted it and come out on on the positive because we're trying to factor in the assessments, which could range from small to very large depending on occupancy rates and things like that.

The only other thing I wanted to ask you was uh the American Rescue Plan remaining bound to a little like close to 20 million.

Um that's already um under contract.

That's correct.

Yes.

Completely on your contract.

Okay.

Yes.

That's it for me.

Thank you, Councilwoman.

Councilmember Warwick.

Thank you.

Um yeah, thanks for the presentation.

So just so I'm understanding, so the whole so we entered.

So there was a nine million dollar deficit at the end of 2025.

Plus the five million in unbudgeted water bill.

Or does that include the water bill?

Um no, we're starting a new year.

So like out of that.

Yes.

Yes.

So are we count so um the nine million dollar deficit is that's things that have been paid and just so that's just lowered our fund balance.

Correct.

Okay, got it.

Um and so the fund balance that's now and so that's the so that's already been paid.

Like it's a deficit, but it's been paid.

Correct.

It's a deficit based on the budget from got it.

Okay.

Um but as far as the whole for 2026, um that's so when we have the 9.6 million dollar water bill being paid in 2026, but we budgeted four million for water.

Well, that was what we budgeted in 2025 for water.

Um in 2026, I believe it was four million dollars that was originally budgeted, but whenever council you did your amendments, I think you added six and a half million dollars to utilities, if I'm not correct.

So um uh uh yeah, I'm not sure um I wasn't here whenever that happened, but uh I believe that may have gone uh at least the majority of that went to the water uh line item.

So so when you're saying that only four million is but so you're was the four million budgeted in 2025 for water yes and we didn't pay I mean it what what I'm trying to ask is did that four million carry through?

I mean, are we using that four million to pay this water bill now in 2026?

I'm trying to figure out the whole is the whole five point six?

So I mean once the year ended, we lost that that four million dollars.

However, at the very end of the year, um OMB had submitted, what do you mean we lost that four million dollars?

Oh so it just goes back into the fund balance, okay.

Since it wasn't spent.

Oh, okay.

Right.

So it just like it wasn't spent on other things.

It was uh it you know what yeah.

But um at the end of the year, OMB submitted legislation to uh transfer six million dollars in uh debt service, um I think it was interest savings um to that line item, and then that was then reappropriated over into 2026.

Got it.

So we should be good as far as hopefully uh unless something crazy happens with water.

Um well I mean we were able to pay that then in January.

And so with the six and a half million dollars that council uh increase the operating budget by in your amendment, um hopefully we would be we will be good for 2026.

Okay to pay that at the end of the year, we won't wait until 2027 to pay the 2026 bill.

Okay, so so okay, we put additional money, but we're still what I'm trying to figure out is the hole that we're in in 2026.

For everything.

So there were like headlines, it was like we're gonna have a 40 million dollar deficit.

Like what so I'm trying to like we're going to have briefings um about that.

Um yeah, for for the purpose of of this post agenda, I just focus on um uh 2025.

But I'm happy to answer um any questions that you have about um some of the items that you'll see in the amendments um yeah that we sent over for the budget reopener.

Um and feel free to reach out to me too if you you know take a look at those.

So um and so can you just explain?

So the fund balance is at $159.

$159, correct?

Okay, and that is too low.

So well, I mean, no, I'm not necessarily saying it's too low.

Um it's uh it's nine million dollars lower than what was in the 2026 operating budget.

And then so the fund balance for each year after that too was off by nine million dollars.

Got it.

Okay.

So um it immediately um puts us at a different uh starting point.

For 2026, yes, which is why we're changing yes.

Right, which is why we're changing partly part partly why we're changing the budget.

Yes.

Got it.

Okay.

And what is if you can remind me, what is the can you remind me of the the num where we need to be at with fund balance by law?

Uh yeah, so um by uh our law uh for every year of the five-year plan, we should be at a 10 percent uh fund balance as a percentage of expenditures for each year of uh the five-year plan.

So that's from 2026 to 2030.

Um however, I do want to point out that that percentage is actually very low.

The GFOA, um which is the government finance officers association, their recommended fund balance percentage is uh 16.7 percent.

So 10 percent is is rather low.

And at one point, um coming out of Act 47, our goal was supposed to be to start at 10 percent, but to work our way up to that 16.7 percent.

We never got there.

Okay.

So and if I mean in So with this shift, this $9 million that's you know, that that now needs to be accounted for where is the fund it where is the fund balance now?

What's that percentage now?

With before before we change the budget.

Oh, you know, I don't have that with me right here, but I can I can definitely get that too because I do have that information um, but just not right here with me.

Okay, but do we know if it's below 10 percent?

Yeah, it wasn't it wasn't below 10 percent.

Okay.

So yeah, uh that's before looking at all the things that we feel should have been budgeted that were not.

Got it.

Okay.

Okay.

And then um all right, well, we can save that for another conversation when we look at the budget amendments.

Okay, I think I I think I understand.

So just um but all in all, we spent nine million more than we thought we were gonna spend.

Well, we we collected um less in revenue and we oversp we overspent as a spent, right, right, right.

So it was right.

Um is not good.

And uh and the biggest culprit, it seems was premium pay.

Uh that's one of the big things.

That's one of the one of the big things.

Right, right, right.

A little bit of benefits.

Um, and oh yeah, that's what I'm saying.

So professional and technical services.

Yeah, and do we have any insight?

That's not really your own.

Yeah, I mean that that's okay.

Um that we know where we're overspending on professional and technical services.

Um I'd have to dig in to find out exactly which I think it's primarily I and P.

Okay.

And that is um that again, it goes back to the reappropriations, okay.

So um they may set up these large contracts um for software.

And so say they use um 300 fifth like 350,000 was supposed to come.

Um I'm just throwing this number out there.

Right, right.

Was supposed to come from uh 2025 funds when the year ended, maybe they only end up they got started with the project late, and so maybe they only spent like a hundred thousand of that.

So then that 250,000 would roll over from 2025 to 2026.

Okay.

So you know, that's one of the reasons why that number is so large.

But uh a lot of that was in professional and technical services.

Okay, I s I guess I'm not totally clear on that still, but um, I mean, I understand what you said about so 2020.

So if if I I understand what you mean about like I have budget to spend in 2024, and then if I don't spend it, but I'm like, oh I'll just gonna stick it over on 2024.

No, no, no, no, that's not that inflates my budget in 2024.

The only time you can do that is when um something is under contract already, or you um uh you bought something but you haven't received it and paid for it yet.

But um if you have like if you don't if there's still money rel remaining in your budget, but you don't have it you know obligated for something, then you lose that money.

It just goes to the fund balance.

That's how we build our fund balance.

So for this professional and technical services, um, I mean, because we're constantly approving, right?

Like an increase and increase.

Is that what this is?

Is that just like you know, where we you know we've got it, you know, we've budgeted an amount and then we approve more sort of periodically over the year.

Yeah, I mean, uh the this is where a lot of those contracts that that you approve are budgeted um in.

But um I don't I don't think that that's the reason for the overspending.

Uh like I said, I just I just think it's uh the amount that has been reappropriated because it's just ballooned so much.

I guess I'm still not totally clear.

I'm just wondering if we should because I know as council, right?

Like it comes in and it's like I mean I'm thinking about IMP in particular, but it like it comes in and it's like, okay, we need another X to get it done, and we don't have the big picture of that, right?

Like we're and I I mean I can say myself, I've never asked myself like, oh geez, is this gonna like result in a deficit because we just keep increasing the amount?

I mean, I guess you could say the same on a DOME project or whatever.

Um well I will say that whenever OMB receives that legislation um for items like that, uh the budget analysts do do an analysis on that, and they will take a look at um the amount that that contract would increase um w the amount that's uh going into that contract and look at um what's remaining of their budget for the year and look at um other things that they have obligated.

So ideally it should not go to you if it would uh surpass their their budget.

Got it.

Okay.

So there's like in IMP, there's I mean, I know like with DPW and there's like contingency, you sort of tack on a contingency.

Is that does that happen in IMPs?

I don't know if changed.

Um I don't like honestly, I've just been back for a couple months, so I haven't like I um but I know in the past, and I was um N OMB previously there was no contingency.

Liz, do you know?

Um if I may, I was just going to looking at the expenditure summary in the quarterly itself.

The adopted budget for 25 was about 25.5 million dollars.

We spent 30.7.

So that sounds like we spent more than what we budgeted, however, we reappropriated 20 million, so that inflates the budget to 45.9.

So we really actually had a savings of 15 million.

And so some of that either was reappropriated to 26.

If um you had a big contract and it got started late, so you didn't complete it in time, that then rolls into the next year.

So some of this 15 million might have been reappropriated.

I don't have that number in front of me.

Some of that could have reverted back to our fund balance.

So we didn't technically spend more than we had.

It was just more than what the standalone 25 budget was.

Okay.

So 25 budget plus what was reappropriated, we are in the green for what we spent.

We didn't overspend money.

Wait a minute.

So we're not in a deficit if we count the savings from 2024.

It's savings wouldn't be the word that I don't know.

If we count what we didn't spend in 24 plus what we budgeted in 25, our number was a positive result.

Yeah, like our um the the operating result looks at that is just what was actually spent, okay?

So like it was what was actually collected in revenues minus what was actually collected in expenditures.

It doesn't look at the budgeted numbers or the reappropriations.

Okay.

I just I mean sorry, I'm just trying to see this like as if it was like my own bank account, right?

And I'm like, okay, well, if I had like money that I thought I was gonna spend last year, but I didn't actually spend it, and I can now spend it this year.

So we're in the green if we count for 2025 if we count that.

Got it.

Okay.

All right.

I think I understand uh maybe I've confused myself even more with my questions, but I think it's confusing.

I appreciate it.

Uh I do have to run.

So um thank you.

Thanks everybody.

Thank you, uh uh, Madam Chair for hosting.

This was helpful.

Yeah, thank you.

Councilwoman Gross.

Thank you.

I might just pick right up on that because I was gonna ask about the appropriations, reappropriations as well.

And I don't know, in my mind, it helps me to think about like a big um home improvement project or something, right?

I suspect that if we looked at the professional and technical services across departments, it's building things, not purchasing software.

Is that a fair assumption?

Would would a DOME retaining wall at like a three million dollar retained wall be professional technical services?

I think that's more into property services.

I don't think so.

Okay.

For yeah, for Domi if it's linked to a specific project to be built into the project budget.

Um, it's technical services.

Yeah, yeah.

Yeah.

So we should probably break those out.

Okay.

Um because it is radically different for us to wrap our minds around whether it's you know, whatever outlook is misbehaving, or we're building a 300 foot retaining law that's holding up a city street.

But isn't that in capital though?

Correct, yeah.

Yeah, it's a completely different budget.

So it is not like yeah, he's there's no operating budget.

Okay.

So yeah, so what are the different types of things?

We talked about IMP.

What are the other types of things that we just subcontract out so much, and some of those projects are capitalized, but not all of it is like hosting fees, I think would be operating budget.

But the process of actually giving out like building a system would be a capital expense.

I think just experiences to us building out the tax system.

Um at one point, uh URP expenses were in the operating system.

So we really are.

We're mostly talking about tech.

Yeah, um well, no matter what department it's in.

There are like pretty um, I guess not that high dollar, but like any kind of consulting services, um, those are in that uh that subclass as well.

Legal, yeah.

Um trying to think of anything else offhand.

To add to what um Director Guller was saying, you know, I'd mentioned this earlier about our OPEC software needing a Windows 11 upgrade.

That will cost us money.

So but we would potentially do an intra-departmental from somewhere else to cover it.

So it's it's one of those things like you know, it has to happen for us to move better.

It's you know, and sometimes you don't know if things are gonna break or if you run into a glitch when you're developing software.

This is what gives keeps me up at night.

So the the like whole the world has dug itself into, right?

It's not Pittsburgh particularly, right?

Everything good God, right?

The whole that we've we've collectively as society dug ourselves into with dependence on tech.

So um that has ballooned in 10 years from three million to 40 million.

But this is some professional and technical services on this slide that's called reappropriation.

Oh, yeah, it's the thing that you're calling attention to, you're labeling it reappropriation when it's either I think some member asked about it moving from department to department, but I thought it was like time-wise, it's rolled over from one budget year to the next.

Correct.

Yes.

So yeah, so I I don't know why I think one budget year is sideways, the next budget year is this way, but yeah.

So if you've rolled it over from 2024 to 2025 or 2025 to 2026, then it's called a reappropriation.

Correct, yes.

So 40 million dollars in one year rolled over.

Correct.

All right.

That's a lot, yeah.

Yeah, like that's the same.

And so is that reflective of the we're in a just even bigger hole of technology, so we just have an even that's how big our professional and technical services budgets are.

That that meant much of the projects are incomplete and then roll over to the next year.

Um, I just want to clarify um one thing.

That that uh 41 million, it's not just professional and technical services, it's all subclasses.

Okay.

Okay.

Okay.

So but um there is a lot.

I think Lizard said 20 million of that was professional and technical services.

So about half of it.

Yeah.

Okay.

But uh, but yeah, um that's all subclasses.

Okay, yeah, maybe you could email us a breakout of more of like what it is.

And again, you're like you're saying it's not that any one department's doing anything wrong.

It's just that projects are multi-year projects, but they're budget budgeted like this one year and then have to be pushed over into the next year.

Right.

And then we don't want them to be penalized and you know, so uh but we also don't want them to have kind of playing around money.

100% that isn't line item to something else.

Correct, yes.

Okay.

Okay, I think I followed that.

Thank you.

That was helpful.

Because I really was thinking that the that those other kind of like we just I have complaints that we don't do enough in-house, not just without the technology, but like I was just talking to the DPW director before I came in here, like building steps, you know.

We not we our construction division can build steps, but we choose not to.

And then we like you know, paid companies to do steps and concrete and that kind of stuff.

No, we outsource so much.

So yeah, that would be under property services.

Yes.

Thank you.

Okay, so I'll I'll know to look for that.

I always like to repeat to the public who are keep hearing both the media and us and this post-in a talk about the water bill.

Like, you know, even 30 years ago, the water bill was zero.

Five years ago, the water bill was zero, I think.

They paid us money and a pilot.

Yes, they did.

Yeah.

Um so we knew this was coming.

Um, and yet still maybe we didn't realize how big it was like the 10 million dollar bill, or that the the bill we got from them in 500 separate envelopes that added up to 10 million.

Did I say that right?

Is that what actually happened in 2025?

300 separate envelopes?

I wasn't here in 2020, so I don't know those details.

I know that they had hundreds of accounts, and so it has been hard to connect.

I can tell you that's getting fixed.

Yes.

I would hope so, because on the finance end, we get individual bills even for three TV properties.

And so if you think about there being 11,000 properties in the three TV inventory, each one of those, if there's water service to them or had been, we would get a bill.

So that's a lot of bills.

Wow.

So I'm assuming that DPW gets at least and that's a month, mind you.

So, you know, ways that the city budget has grown that was really actually just ordered and not not within our like we were preempted, basically.

We're ordered by the state to pay those water bills to bill from a you know used to be our left hand billing our right hand or not billing a right hand, and now it's been ordered.

Our municipal authority is billing us.

Um there's that.

I also am flipping forward to the slides on premium pay, and I see an EMS slide.

I see a fire department, I see a DPW, and I see a DPW environmental services, but I don't see a police.

Is there no um I didn't put that because um their budget like they weren't exceeding their budget?

Good to know.

Okay.

So the police in 2025 did not exceed their budget.

Okay, that's good.

And then we I think didn't really, you know, we don't have time in this post agenda to dig down into the departments that are exceeding it and try to figure out kind of more of those details.

But that's something we'll want to.

Um I talked to fixed in the in the budget proposals.

So well, um council budget.

Uh you whenever you amended the 2026 operating budget, um you added $8 million annually, I believe, in premium pay, and that was to EMS and fire because those were had been so under budgeted.

Which is a different question as to why there is premium or like overtime happening.

And one thing I and that's what I'm kind of getting to, right?

Yeah, yeah.

One thing I was surprised about whenever I um started in O and B, um, analysts weren't getting payroll registers.

When I used to be an analyst in the Office of Management Budget in my previous stint at the city, all the analysts received pr uh payroll registers and we analyzed um things like overtime, and um that was no longer happening.

So um that is uh um a practice that I would like to uh start up again.

Wonderful.

Thank you.

Um and I think I don't really have too many other questions.

I just want to make sure I understand the revenue things again.

So I'm just gonna like repeat.

You pointed out that we talked about the real estate tax actually being higher than anticipated in spite of you know, giant high multi-you $30 million buildings getting you know going to the county and having their value reassessed downwards.

And then also, if I'm understanding this correctly, the Judge Hertzberg decision to lower the common level ratio from 80 some percent to 60 percent.

So they have a lower assessment and then they get to take 60 percent of the lower assessment.

Is that true?

Or now that they got the low assessment, well, they wouldn't have do they not get to take the common level ratio?

They would have to I think they would have to actually file against that current lower assessment to receive a lower assessment.

However, commercial properties are usually assessed differently than residential because the commercial properties are based on the ability to make income from those properties, so it depends on occupancy and those types of things as opposed to just a common level ratio.

So the common lower ratios are both mostly the residential like single family homes or small residential that's where most of the common level ratio issue is contributes to an uptick of homeowners, residential homeowners filing on their assessments in order to have them lowered to meet the common level ratio from where they currently are.

Great.

So yes, so it's big it's a hit both on like the big commercial buildings, either office or multifamily and the residential properties.

We've had it's sort of a double whammy.

A hit.

Yeah, right on those assessments.

And somehow we still have a higher real estate.

We haven't so potentially contributed to improved collections, especially on the prior year end.

However, it's a little difficult to forecast because of the way the county now has structured their appeal timeline.

So it used to be you had to apply in before March 31st, I think, for the current tax year.

So we would or the prior year, so we would end up issuing refunds.

The way it's structured now is that so anybody wanting an appeal for 26 actually the a large majority of those hearings were heard in 25 before the end of the year.

So they're actually reflected, the results are reflected in the certified assessed value in 2026 that we get from the county.

So we're in this sort of like weird limbo to where things are switching over.

So we're trying to estimate not necessarily refunds, but what we think the new certified assessment would come to.

So we probably underestimated a little bit, but not much.

Because we're afraid it's going to be lower.

Yes.

Right.

And so again, that is also just out of our control.

Right.

The county has the jurisdiction and authority, and the courts in the county did things and they have which has taken a hit on our property tax revenue.

So I just just a reminder to you know to the public who are wondering why.

Well, I guess the commercial properties are appealing and saying their properties are worse less because they don't have commercial tenants.

So again, the whole kind of working at home thing and losing the big office leases downtown, et cetera, et cetera.

Um that is we're we'll all be having lots of eyes on that as we're talking about the county doing reassessments, et cetera, et cetera.

I still get emails um from you know residents thinking that we control assessments as the city government.

And so I just, you know, I just to just to repeat on the record, um, that we don't.

And so that's why we need the county to do the reassessments.

Um and then the deterrence for tax, I know we touched on that a little bit.

I mean, we still do have um, I I think I had the biggest the city memory that anyone knows of like a scattered site, LLC that owned 150 properties in my district.

Almost entirely single family homes, a couple small commercial like main street properties.

They were just sold to I know a local company to a Baltimore company.

And um, I don't know if those paid like a real estate transfer tax.

I don't think they probably did.

I should find out, right?

Because it was like an LLC's entire portfolio was sold.

So I guess I could follow up and ask you if that's something that you know of.

It's not that I know of, but we try to keep a track, you know, track of those things, but there are loopholes that they definitely use to skirt paying the tax.

Yeah.

So like you know, 10 years ago when we said LOC, we were thinking it's like one property, you know, like one house or something.

And certainly now sometimes they do register as like if they have every house on a street, they'll use a different LLC for each house.

Um so it's just hard to keep track of where that all the legal loopholes are going.

Um as we talk about real estate um transfer tax.

And certainly, if there are any ideas, um not today or whatever, about how to close any of those loopholes, everybody would you know welcome them because I know I I can think of a couple of large a large buildings.

I don't think the Cork factory in the strip district, I think it's been sold like four times and never paid any real estate transfer tax any of the times.

Um I think the big apartment building in Highland Park is the same thing.

So I distinctly remember in like 2017 or so having this conversation when Natalia Rudyak was chairing as finance chair, and she you know had that as an example of the problem with raising the real estate transfer taxes, you know, that's a giant 400 unit apartment building.

Um sold without paying any real estate transfer tax.

Just to add when we forecast, usually for de transfer, we only look at residential sales mostly and the number of those, mostly because some of those larger commercial sales, if they do pay, tend to overinflate those numbers, and there's usually fewer of them, and they're usually exorbitantly larger amounts compared to the average, you know, mundane turnovers.

Yes, but the point of it when we were being lobbied to raise it, yeah, was that the commercial properties would be paying their fair share.

Yep.

And they don't, right?

And so once again, we created a tax burden on the first-time home buyer, which we didn't mean to do.

Um you know, need to because it's it's you know, it was fun there to fund affordable housing, part of it, not all that part of it.

Um we've made it less affordable to buy a house.

So it wasn't, you know, I was always kind of unhappy that that's where we ended up.

Um but um and that's certainly where we we are.

Um so if there's any ideas of how to make it more fair, you know, we're everybody's open to them, I think.

Um I think that probably does it for me for like kind of understanding um why the numbers are so mismatched for 2025 and didn't come out the way we thought.

Although I did want to say like one last thing for the record.

When we're talking about the fund balance, we talked in percentages sometimes and real actual numbers here we have in front of us.

So like the 2025 ending fund balance, the columns are a little bit off uh for me.

What it was what are you said you gave us the number for the current fund balance, I think, director?

159 million dollars.

So if that was 10%, then our operating budget would be 1.6 billion, but it isn't.

So what is the percent?

Like what percent fund balance are we at?

Oh um, yeah, I'd have to I'd have to look at that.

Um yeah, it is uh for 2026.

But whenever you get to um 2030, um that story changes.

So we're the proposals in front of us now are to take some money out of that.

So it would lower it.

I think it'd be helpful for us to understand like what percentage is it at, and if we take eight million out or whatever the mayor's proposal is, like what does that take us down?

I do have that data, I just don't have it right now.

I mean, when eight million should be one percent or so, less than one percent.

Right.

Because the operating it's based just on the operating budget.

Correct, yes.

And the operating budget is less than 800 million.

Uh yes, it's around 700.

Well, um for well, before I I know the whenever we um the amendments, uh that would bring us if all the amendments went through, it would be uh 721 million dollars for 2026.

Okay.

So but the the budget that you passed, um it was around 690 some thousand.

Does that sound about right?

Yeah.

Lots of numbers in my head.

So I know, right.

So yeah.

So it's very it's like 20 percent or something.

More than 20 percent.

Yeah, like I said, I could I uh I could get those exact numbers to you.

I just don't have that in front of me.

Yeah, that'd be helpful, I think.

Okay, okay.

All right, that's all I am, madam chair.

Thank you.

Thank you, Councilman Wilson.

Thank you very much.

So thanks for holding this post agenda here, and thanks for all the good information.

Um I might reach out about a couple of these slides or put on here, especially the ones you were good over.

They were just you know, like dots on the screen for me.

But if if you could help me understand like what the takeaways were from those ones, because that's kind of um at that point.

I think I came in a little late, but I was really curious about those ones.

Could you go over like a like a highlight of what you were?

Yeah.

So the telling us.

Yeah.

What those what the table and those two slides show are the budgeted amounts for 2025.

So all of our 2025 bond pay-go, CDBG, um, federal highway, any of our grant sources we anticipated for the 2025 program year against the actual spending for just those fund sources.

So not the entire capital budget, just how much of 2025 money did we spend in calendar year 2025?

Um what's not reflected in that.

How much did we spend?

29 million and some change.

We've spent 29 million of the bond money of all fund sources for 2025.

That's not all the capital spending that was done in 2025, though.

That's the point of uh uh of uh what that he's trying to make.

So that um the actual capital spend was much higher than that.

Yeah, it was 145 million for all fund sources inclusive of not just 2025, but if we spent like 2018 bond money, that's included in the 145.

It's just not represented in that quarterly table.

So that's why we were talking about it.

But we spent 25 of the of what we were allocating for 25.

29, yeah, correct.

20 million.

I think it's 129, but let me triple two.

Do you allocate 129?

127.

So you're just like you're you're just um highlighting how long projects take to get done, right?

Yeah.

Okay.

All right.

And then the re appropriations, which I was following along, and thanks for asking those questions, because that was the that was really the harder one when it gets out of here.

So I'll I'll wait for the follow-up, but I just wanted to just go over this again.

Um, even though I think I got most of my questions.

But so you don't have as much detail today, and you'll follow up with what's really important.

Yeah, um, I'll follow up with you to find out exactly what kind of detail that you're both looking for.

So what's what's your hunch though?

Like why are we going from three to forty-one?

Like what?

Is it just because we just have so many more technology?

Um so to be uh to be completely honest, uh uh whenever we started um going back to 2016, we'd only been in JD Edwards for so many years.

I do remember whenever we went from PeopleSoft to JD Edwards, we did a lot of cleanup of um old funds that were lingering around in old uh contracts and purchase orders.

So we kind of started at a cleaner slate back then.

Um but what year did that happen in?

Um what what year did we go from PeopleSoft to JDF?

Like 2012?

Yeah.

So um so that there was like a very little amount that we just even before.

Yeah.

This this chart.

Correct, yeah.

So it starts 2016, so like twenty like twenty sixteen to I don't know, really the first two years there.

2016 and 2017, then it really uh exponentially increases.

I I don't Liz, I don't know if you have any insight on this.

I don't know if ARPA funds have anything to do with that.

Uh no, I don't believe so.

So um some of this can be attributed to chain supply um or supply chain, excuse me.

It's like if you think about our public safety bureaus, they might have uniform orders that are two years behind.

Um I know we switched vendors and so they were trying to clean up some of those old orders where you know the acting chief at the time was still waiting on two shirts from when he was, you know, whatever rank.

Um we like just looking at the table itself, it could be um a rent payment that we are holding for the zone four-five combination, but that project keeps getting shifted.

So we just keep moving the funds to what we believe to be the correct budget year.

And so that reflects as money unspent, but it's actually could be attributed to we can't spend it right now.

We don't want to lose it because then we won't be able to fund it.

These are all operating right, these aren't really.

Yeah, these are all correct yes.

Um in the past, we had a policy where we we would only uh reappropriate um the prior year prior uh anything that was set up from prior year budget funds.

I don't know if that is when we so we do what's called um it's a report for open orders.

We the analysts work with their departments to say you rolled this amount into the current budget year.

We do this usually around November, December.

You rolled this much in.

You have not spent some of this amount.

What's going on?

Are do you still need this uh contract?

Are we moving away from this?

We would like to sweep that money into the fund balance so that we can't take it into the next year and maybe misuse it.

Um typically if it is past if it's in Q3, the beginning of Q3 through Q4, we anticipate that maybe this is just a timing issue.

So we'll let you without too much question roll that into the next year.

We scrutinize more so the Q1, Q2 rollovers that still make it to the next funding year.

And I would say in the past we have been doing better.

Um perhaps some of that is because budgets started getting tighter, and so they needed to then access funds.

Um so now they have less of a perhaps cushion to be rolling those over.

Well, this uh slide reminds me of the was it a budget hearing that we had with the last administration.

They were explaining the 11 million dollar rollover that they were expecting from vacant positions or just employee turnover over the year?

Uh vacancy allowance, perhaps.

Vacancy allowance.

So is some of that built in here?

No.

No.

No, that's not here at all.

Separate from that.

A vacant there's no rollover of vacancy allowance.

Correct.

A vacancy allowance is a negative expenditure that we budget per department, estimating what we think turnover might save us.

Yeah.

And so that was projected to be like round 11 last year.

Yeah, but that's not something that is like I mean, that goes back into the fund balance, but you don't see that like reflected in any sort of like budget, you know, like as a rollover, you know, to the next year.

So I mean it's it's accounted for in the fund balance.

Did that happen?

Um I I can't give you a pr an actual projection of uh uh of what that's I'm curious about that.

Okay.

Yeah, we could we could find out because we can yeah, we could just look at you know what was budgeted overall for no, actually I can tell you right now.

Um we overspent in salaries and wages overall.

So no, there was no salaries and wages uh savings.

But to it the issue.

I don't know how we go from 11 to zero.

So that maybe I'll make it.

There could be vacancy allowance is budgeted in our regular salaries object account.

Premium pay also lives within the same subclass.

And so the detail, the level of detail that we show in the quarterly reports is just the subclass level.

Oh, so it was factoring with that.

But we just looked at that number.

I am curious what that number.

We can show you um, we can look at salaries, what was spent in sal what was budgeted for salaries and what was actually spent in salaries.

So um there is there is likely a savings there because the overspending happened in premium pay.

Councilwoman asked about police, and she is correct that police overspent in their premium pay, but we were under our budgeted amount for regular salaries.

So the bureau itself did not exceed their budget because those two numbers offset.

We don't bill we don't budget for vacancy in the police bureau because of how we budget for new recruits, but that's a good example of how those two offset.

All right, thanks.

Thank you, Chair.

Thank you.

I think uh a lot of my colleagues have asked many of the questions that I had about the content of the within this um slide deck.

So thank you for your um for your presentation.

I guess some of my questions then will be forward looking and certainly we'll continue to hold um these post agendas, certainly we'll continue to meet as a joint financial task force.

I want to be mindful that, you know, um if we're using maxims here, right?

Like if all you have is a hammer, everything looks like a nail, like we have we have legislative power, but I don't want to legislate our way out of this.

So with that in mind, are there any I guess are there any safeguards that are in place or should be in place um to prevent some of these challenges in the future?

Um I am thinking of I mean what we've talked about uh already is it is it an internal policy that we need, or is it you know just changes that will naturally occur because like budgets are tight and we need the funding or actual legislation that's needed um around reappropriations?

I I'll just start there.

Like is and you're you're all the ones that attend GO FOA conferences, so I'm also leaning on you to say, you know, lessons learned from other cities or what you've heard from other municipalities.

Is there legislation that we might need to consider on I'll just start with reappropriations, but then we can go into some other um yeah, I don't know if if we're at that point yet.

Yeah um we really need to take a look at that and um maybe um examine them more closely going forward, and I'd like and honestly, like I wasn't here before, so I don't know what what the practice was.

So um but um maybe we could look at anything like be I don't know if there's a way to be notified any time um a purchase order that has not been uh spent has been um liquidated.

I mean that's the best word I can uh think of or um likewise uh for a contract because like I said, um departments can do that and then they can spend those funds.

Uh if we're not notified of that, you know, then the funds are still there.

We would ideally decrease their budget by that amount that that has been liquidated.

So I don't necessarily know if that's been uh if that's occurring and if it's occurring like all the time.

But um we can you know maybe talk with the controller's office to get something in place for whenever that happens.

Certainly.

Yeah, and these are just ideas.

I do not want to add extra work that then, you know, will result in paperwork that no one looks at again, right?

So I I'm very mindful of that.

I remember when I was INP chair, um, there was another council member who was concerned to the point that was made earlier of it's like pieces of an elephant, like you don't know the whole picture until maybe you you get it presented to you at the end of the year or in a in a slide deck like this.

But particularly with technology, there was a council member concerned about all of the spending on all this technology that we just don't know how important it is, how necessary, how much it is versus what we should be paying.

And we did start receiving quarterly reports of it, and even that was really difficult to understand, right?

So that was somewhat different from um contra like obligations or contracts that we were in for such software that then extended multi-years.

But it's something I'm gonna continue to think about, and maybe maybe it's something to continue to for all of us to mull over what internal um notifications or um or other methods might be appropriate to to know about that.

I guess a similar in the a similar vein, unpaid bills.

Um, you know, so if there are any ideas now, please say them.

But it's something I want to continue to think about is um who should be without overwhelming again, council, controller's office with too much information that is and and without forcing budget analysts or um I guess budget analysts to um produce reports um that are really, really time consuming.

I'm just asking the question, right?

What what who should who should be seeing our bills and our bill status and our payment status?

Well, um just uh going back to one of our uh our biggest unpaid bill, the Pitts Pittsburgh Water bill.

Um I've been talking with Kevin Paulis and Ed Barca over at uh Pittsburgh Water, and we're hoping to start um a quarterly um billing instead of just doing it once a year.

So hopefully we don't have like a giant bill like that uh surprise us at the end of the year.

So um yeah, uh he um just recently sent me uh first quarter uh information.

So hopefully in April we can get a chunk of that paid.

So quarterly billing, consolidation of our invoices, right?

Which we did already with Ducain Light and hopefully can do with our other utilities.

So to the councilwoman's point that we're not seeing 300 or 500 different bills for different accounts that they're all consolidated into as many, as few as possible.

And okay, so then if it's co if that's quarterly and other larger utility bills can be quarterly, then we see it, and then we discuss it here at the table.

So that's one thing.

Um potential avenue for improvement which is already sort of being worked on is that is a new ERP system, which is what we're in the middle of with that the consultant that we hired.

Um I know that um I can probably speak on behalf of my colleagues at the controller's office and OMB, like we are diligently reviewing how the system works with the full intent to make things more transparent and easy for more and more people to see.

So some of it is the visibility of some of these things with our antiquated ERP system too, right?

Like if only one person knows about it, they know about it, but it'll get passed on where there can be checks and balances that are built within this new ERP system, which is why it's super important.

Great point.

Like multiple eyes, like not just two, but like multiple eyes on every on every point.

Yeah.

Um and for the public sake, for everyone who's tuning in, um, when do we expect the newer ERP system to be up and running?

Any guesses?

Is that like around 2020?

Is this gonna be another reappropriation?

I don't know.

I might be retired.

Yeah, I think that's a good question.

I think it'll be budgeted, hopefully correctly.

Um right now we're currently at the stage of reviewing some of the feedback from that consultant that's gonna help set up the RFIR, like that type of thing.

Um the reason that I and P led it that way, and I agree, is that they're the experts in the market, and so we'll know a little bit more once those that RFP is drafted, and then we get back what we see in the timeline, and and most of these consulting firms will lay out like you'll have these five engineers for this window of time.

Like we'll start to see a timeline mapped out.

Um, and then we have to hold ourselves accountable to also meeting those deadlines to keep things moving.

So hopefully we avoid any um reappropriations.

But again, you're the some of the problems with like the tech asks, and we see this all the time is you know it's it's almost like a side job within our job too, is like we're developing these systems while we're you know we're in charge of bringing in revenue, right?

Um and we're trying to design system to help us bring in revenue at the same time.

So like the expertise gets built over time.

It's not like anyone can be hired off the street and learn tax law and tech at the same time.

So it's like a weird endeavor.

Um I do feel good about the team that's from various departments that are a part of the ERP.

We're all asking the right questions.

There's a spreadsheet that we're reviewing that has 760 items.

That's uh that's how thorough plant moran was with our the interviews with our team, so we're all going through it and sort of evaluating what's priority per our per our view.

Um and then OMB is doing the same, and so is the controller's office.

So it's a very thorough process, hopefully that helps in the overall timeline.

Yeah.

That's great.

So just generally, how do you think that council, mayor's office, controller, um, finance, OMB, and I guess anyone else at the Joint Financial Task Force overall can help avoid repeating the scenario in the future.

It's a big question, but any ideas?

We've discussed a lot.

I mean, forums like this, you know, definitely help.

And yeah, you know, open communication, definitely.

That we're scheduling, I guess, for next Tuesday, I'll hold those questions.

I think many of us do.

So those are those are the extent of my questions for the 2025 quarter quarter four.

I'll open up to other colleagues if there are any additional questions or comments before we adjourn.

Nothing.

Okay, well, thanks to all my colleagues for their questions today.

Thank you all for being here.

Thank you for putting this together.

I think we, you know, I I found it highly informative.

And I've been part of the task force this this whole year.

So this is great.

And we'll continue this.

Um, Sunshine Transparency is so important to building trust and government, and I think forums like this will continue to help um ensure that we have we're solvent, we have a we have we're on strong financial footing into the future, that we have a strong rainy day fund into the future, and that we all have you know many, many eyeballs on um our our budget, not just in November, December for you know our traditional budget season, but throughout the year.

So really looking forward to this continued conversation in these continued forums.

Thank you all so much.

And with that, um official.

Well, we've exhausted the business of this post agenda.

This meeting is adjourned.