This post-agenda session featured two panels: the City Controller’s Office presenting the 2025 Annual Comprehensive Financial Report (ACFR) and the Office of Management and Budget (OMB) along with the Department of Finance presenting the first quarter 2026 financial performance report. Council members discussed the city’s financial health, structural deficits, fund balance trends, and potential revenue and expenditure actions.
Good afternoon and welcome to Pittsburgh City Council's cable cast post agenda on the annual comprehensive financial report or ACFER and the 2026 first quarterly financial and performance report for June 24th, 2026. And we should have more council members with us shortly. But I would like to allow our the first panel from our city controller's office to introduce themselves and to open with some opening remarks if you like. Thank you, Councilperson Strasberger. I just want to first acknowledge my colleagues who join me at the table today. Um Deputy Controller Pete McDevitt, who is at the table for the first time from the controller's office rather than council budget. Um Jamie Zala, the chief accounting officer for the city of Pittsburgh, and Namita uh Dwarkinath from our controller's office solicitor. Um the way we thought we'd do this today is to go through our slide deck and then um have a conversation and dialogue. So uh the controller's office, as folks know, has four primary functions: internal auditing, which helps the support the city towards uh with targeted evaluation and guidance, accounts payable, we pay the city's bills, inspection and engineering, which confirms the work was done, and our accounting division, which manages our books and produces the annual report financial report of record, the annual comprehensive financial report, which we'll be talking about today. Each year, our office puts out the ACFAR city code requires us to create a general purpose financial statement by May 1, and our office goes beyond that and creates a document that meets the standards of the government financial officers association, including component units, additional statements, footnotes, and statistical tables. So, what's different between the ACFAR and the budget? The budget is a plan, the ACFA shows the results. These are the two main financial documents that the city produces each year. The budget is the chief policy document of the city, and it outlines what the city plans to accomplish through which policies and programs it funds. The ACFR shows the audited results in line with government accounting standards board of how well the city is spending following its spending plan, excuse me. For your awareness and the public's, um, the ACFAR differs from OMB, the reports that OMB distributes because those reports reflect a cash basis, which is the amount of money and when money is moved from and to and from accounts. It tells us what everything we did within a year costs us. This lets us know the true cost of government in a fiscal year. An accrual basis is also called GAP, which stands for generally accepted accounting principles. Think about our 2025 water bill. The bills were received in 2025 but paid in 2026. But the ACFR shows it in 2025 because it was the year we used the water. Now we'll just have a conversation about the big picture with the general fund in 2025. We brought in 687 million dollars in 2025, and we had 732 million dollars leave the general fund. This is a net loss of 44.6 million dollars. To compare, we had a 7.1 million dollar gain in 2024. Highest percentage of our money comes from. This will continue to be our most stable source of revenue as it's the least susceptible to an economic downturn. However, it is still vulnerable to a lowering common level ratio. Interest earnings, which are reflected under miscellaneous, make up a smaller proportion in 2025 due to the loss of ARPA funds in interest-bearing accounts. In terms of revenue, the city did quite well with revenue generally last year and outperformed budget on most major taxes. Despite outperforming budget, real estate earnings were still down compared to 2024. And as I mentioned, our interest earnings also went down as a result of no longer having ARPA. Where money goes, in 2025, we spent more on streets and sanitation than we did in 2024. We increased our contributions to culture and rec as well as economic development. We spent slightly less on general government costs, including the bureaucratic functions that keep things running every day. In general, city expenditures were up a relatively modest amount, less than 2%. Salary increases, as noted on the deck, include overtime, which our office has continued to caution about. Salaries and overtime are not interchangeable, and having less staff who work more, particularly within public safety, leads to worse outcomes for both employee retention and quality service provision. Property services, including utilities like the water bill are also notably increased. And as a reminder, 2025 was the first time we paid a full water bill. Our office has been quite vocal as well about the fleet, which is why we highlighted it and included it in this year's presentation. We spent, excuse me, we spent an average of more than a million dollars a month to maintain our fleet in 2025, with unanticipated costs reaching more than half of planned maintenance costs. A newer, safer fleet avoids high cost repairs and allows for better strategic planning. We did see a large influx of new vehicles in 2025, especially for police, resolving a multi-year backlog. Fire continues to lack adequate vehicles, and costs and lead times continue to go up due to the monopolization of the fire apparatus industry. Capital project spending. In 2025, we funded just over 115 million in capital projects, and we spent almost 123 million, with over half going towards mobility and infrastructure projects. We're able to spend more than what was funded in the capital program because, unlike money in the operating budget, capital funds will continue to roll forward until they're spent. So this shows us catching up a bit on old projects.