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OPENPUBLICA · PUBLIC MEETING RECORD

Record of Proceedings

Pittsburgh City Council 2026 2nd Quarterly Financial Report Discussion - September 1, 2026

City Council — Tuesday, September 1, 2026

BodyPittsburgh, Pennsylvania

SessionCity Council

DateTuesday, September 1, 2026

StatusFILED

Video Record

0:00 / 1:49:28

Transcript — VerbatimClick a timed line to jump · ⧉ to share it

0:11

Good afternoon and welcome to the Pittsburgh City Council's Cablecast post agenda on 2026 second quarterly financial and performance report on September 1st, 2026.

0:23

I'm Councilperson Erica Strasberger, and I will be chairing this post agenda discussion today.

0:27

And this as a reminder to those who might have tuned in before, we um have been holding uh in an effort to discuss the budget on an ongoing basis throughout the year on council rather than tackling tackling it in on one big fight at the end of the year.

0:45

We have been holding uh quarterly meetings to discuss each of the quarterly financial and performance reports and having a discussion at that time to better track uh exactly where our finances are, where revenues are forecasted to be and the changes that that occur throughout the year.

1:02

So once again, we have some invited guests with us.

1:04

Thank you for being here today, and I'll we can go down the line so that you can introduce yourselves and um and then um and then feel free to launch right into the presentation.

1:15

My name is Rhea Price.

1:17

Um I am the deputy director of the Office of Management and Budget.

1:21

Uh we currently don't have a director, so I am acting in that capacity right now.

1:26

I'm Jen Gula, I'm the finance director.

1:29

I'm David Hutchinson, I'm the assistant director for capital asset management.

1:33

Elizabeth Sakone, Assistant Director for Operating and Special Revenue.

1:37

Thank you.

1:37

And before we do get started, I'll note that we're joined today by President Council President Daniel Lavell, by Councilman uh Anthony Coghill, and uh we might have other council members joining us shortly.

1:56

Okay.

1:56

Um I guess uh should I go ahead and get started?

1:59

Please proceed, yes.

2:00

All right.

2:01

Um in front of you you'll find a hard copy of the uh slides that I'm about to go through.

2:07

But uh as uh council member Strasberger mentioned, uh we are here to discuss the second quarterly 2026 financial performance report.

2:18

Okay, before I get into the second quarter, I just wanted uh to have a very brief review of the first quarter results.

2:29

So on this slide here, you'll see uh the 2026 net operating balance uh page that we have in the quarterly report.

2:37

I'm gonna be zooming in on something, so uh you know, don't try to read any of these numbers, okay.

2:43

So um but but you'll see here I have the year-end estimate column uh outlined here.

2:51

Now what I want you to focus on is uh this number at the very bottom.

2:57

The uh 24,385,072.

3:02

That was the deficit that we were projecting um in the first quarter report.

3:09

Okay.

3:10

So now I'm going to move on to the second quarter results.

3:14

And I'm basically going to show the same slide and what we're now projecting.

3:20

Okay, like I said, this is that same slide, but updated for the second quarter.

3:25

And again, I'll zoom in on what I want you to focus on.

3:30

And now you'll see that the deficit, our our projected deficit has gone from 24 million dollars to over 30 million dollars.

3:41

Okay.

3:42

So unfortunately, I don't have good news for you today, so but that's uh what I wanted to start with.

3:50

No, that's what we're projecting to end the year at.

3:54

So uh yeah, so after the second quarter uh results have come in and we've updated our projections and both revenues and expenditures for the third and fourth quarters.

4:03

So that's where what we're now uh projecting.

4:05

So we're only I'm sorry if I'm out of line here.

4:08

I just uh is it okay for me to jump in?

4:11

Okay, okay, thanks.

4:12

The um so we're projecting 24 million dollars in the first quarter, but only six million dollars over the remaining three quarters deficit.

4:20

No, no, so the the um first quarter slide that I showed you.

4:24

Yep.

4:25

So we were whenever we produced the first quarter report at that time we were projecting um to end this fiscal year.

4:33

Okay, so this is a projection of the end of the year.

4:36

Uh yeah, so it's gotten worse.

4:37

Okay, well, that's well, it's better for me because I'm saying 24 million on the first quarter, so I was on a different train of thought.

4:43

So uh okay, I get it.

4:45

Sorry.

4:45

Okay, so basically our situation is projection one up six million dollars.

4:48

Yeah, yeah.

4:49

To the to the bad.

4:52

Yeah, understand.

4:54

Okay.

4:54

Um so yeah, I'm gonna go over some high-level numbers with you now.

5:00

So some key findings, like I mentioned, we're currently projecting a 32 point uh $30.2 million deficit by the end of the year.

5:08

Um revenues, we're projecting those to come in at about $698.4 million or $16.5 million under what we budgeted for revenues, and expenditures are projected to come in at about uh $728.6 million dollars.

5:27

Um so it's actually um like under the adopted budget plus reappropriations, uh, but it's over the adopted budget.

5:38

And I'll get into those nuances uh in a little bit.

Discussion Breakdown — Share of Meeting

Budget█████████████████████████████████████████████53%

Technology and Innovation███████8%

Public Works█████6%

Pending Litigation███4%

Trust Funds███4%

Procurement███3%

Personnel Matters███3%

Privacy and Surveillance███3%

Economic Development███3%

Summary of Proceedings

Pittsburgh City Council Post-Agenda: 2026 2nd Quarterly Financial & Performance Report

On September 1, 2026, at 2:00 PM, the Pittsburgh City Council held a post-agenda discussion on the 2026 Second Quarterly Financial and Performance Report, chaired by Councilmember Erika Strassburger. The meeting featured presentations from the Department of Finance and the Office of Management and Budget (OMB), including Director Jen Gula, Acting Director Rea Price, and other staff. Councilmembers Daniel Lavelle, Anthony Coghill, Deb Gross, Bob Charland, Kim Salonetro, and Barb Warwick (online) participated in the discussion. The report revealed a worsening projected deficit and highlighted several revenue shortfalls and expenditure pressures.

Discussion Items

Deficit Projection Update: The projected year-end deficit increased from $24.4 million in the first quarter report to $30.2 million. Revenues are now forecast at $698.4 million ( $16.5 million under budget), and expenditures at $728.6 million.
Reappropriations: $36 million in prior-year operating funds were carried into 2026, of which approximately $11.7 million remains unspent. Departments with the largest unspent amounts include Innovations & Performance ($3 million), City Planning ($1.5 million), and DPW Facilities ($830,000). Reappropriations have ballooned from about $3 million a decade ago to $36 million this year.
Revenue Concerns: Key revenue lines expected to fall short include payroll prep tax, parking tax, and amusement tax (each roughly $2.5 million under budget, possibly due to processing timing). The largest shortfall is a $6 million federal EMS reimbursement program that has not yet been approved. Intergovernmental revenue from automated red-light enforcement was removed from the budget but not expected. Interest earnings budgeted at $13 million may come in closer to $8 million. Positive offsets include deed transfer tax and telecom licensing.
Expenditure Pressures: Health care costs (active and retiree), a Social Security correction from 2025, a $10 million water bill from PWSA, fleet bills, legal outside counsel, and fuel expenses are driving overspending. Vacancy allowances have been set too aggressively (up to 6% of salary budgets in some departments), and unbudgeted leave buybacks and underfunded longevity payments are adding to salary costs. Overtime is projected to exceed budgets in police, fire, DPW operations, and environmental services.
Capital Budget: Quarter two capital spending was $5.2 million for 2026 budget year, with total spending across all budget years at about $34 million, on par with historical trends. Major activities include street resurfacing, step repair, vehicle purchases, and the Bob O'Connor golf course payment.
ARPA Update: $3.8 million was spent in quarter two, leaving $12.7 million of the original $335 million to be spent by year-end, which OMB expects to accomplish.
Labor and Contractual Obligations: The FOP arbitration remains open. Council requested a breakdown of the budget impact of recent labor agreements, including longevity payments for new groups like ASME 2719. The ShotSpotter contract was extended through 2030 at $1.3 million per year via a piggyback agreement, which some councilmembers questioned.
PWSA Water Bill: The city is now paying a full water bill (quarterly true-ups) after a PUC order, replacing the previous payment-in-lieu-of-taxes system. The 2025 true-up was $9.7 million.
Draft (NFL Draft) Costs: The city spent $1 million on the draft and received $2 million from Visit Pittsburgh, but total costs including overtime ($1.3 million) and lost parking revenue (parking collections halved for that month) likely exceed the reimbursement. Council requested a detailed accounting.

Key Outcomes

The projected deficit of $30.2 million does not include future transfers to the Housing Opportunity Fund ($10 million) or Stop the Violence Trust Fund ($10 million). The current fund balance is approximately $130 million.
No decisions or votes were taken; the discussion was informational. Council directed OMB to provide additional data on: vacancy allowance calculations, breakdown of technology contract costs, details on shotSpotter and axon reappropriations, impact of labor agreements on the budget, and a more complete accounting of NFL draft costs.
OMB committed to adding a slide in the next quarterly report showing savings/overages compared to the adopted budget (excluding reappropriations).
The meeting adjourned after all questions were addressed.

Meeting Transcript

Good afternoon and welcome to the Pittsburgh City Council's Cablecast post agenda on 2026 second quarterly financial and performance report on September 1st, 2026. I'm Councilperson Erica Strasberger, and I will be chairing this post agenda discussion today. And this as a reminder to those who might have tuned in before, we um have been holding uh in an effort to discuss the budget on an ongoing basis throughout the year on council rather than tackling tackling it in on one big fight at the end of the year. We have been holding uh quarterly meetings to discuss each of the quarterly financial and performance reports and having a discussion at that time to better track uh exactly where our finances are, where revenues are forecasted to be and the changes that that occur throughout the year. So once again, we have some invited guests with us. Thank you for being here today, and I'll we can go down the line so that you can introduce yourselves and um and then um and then feel free to launch right into the presentation. My name is Rhea Price. Um I am the deputy director of the Office of Management and Budget. Uh we currently don't have a director, so I am acting in that capacity right now. I'm Jen Gula, I'm the finance director. I'm David Hutchinson, I'm the assistant director for capital asset management. Elizabeth Sakone, Assistant Director for Operating and Special Revenue. Thank you. And before we do get started, I'll note that we're joined today by President Council President Daniel Lavell, by Councilman uh Anthony Coghill, and uh we might have other council members joining us shortly. Okay. Um I guess uh should I go ahead and get started? Please proceed, yes. All right. Um in front of you you'll find a hard copy of the uh slides that I'm about to go through. But uh as uh council member Strasberger mentioned, uh we are here to discuss the second quarterly 2026 financial performance report. Okay, before I get into the second quarter, I just wanted uh to have a very brief review of the first quarter results. So on this slide here, you'll see uh the 2026 net operating balance uh page that we have in the quarterly report. I'm gonna be zooming in on something, so uh you know, don't try to read any of these numbers, okay. So um but but you'll see here I have the year-end estimate column uh outlined here. Now what I want you to focus on is uh this number at the very bottom. The uh 24,385,072. That was the deficit that we were projecting um in the first quarter report. Okay. So now I'm going to move on to the second quarter results. And I'm basically going to show the same slide and what we're now projecting. Okay, like I said, this is that same slide, but updated for the second quarter. And again, I'll zoom in on what I want you to focus on. And now you'll see that the deficit, our our projected deficit has gone from 24 million dollars to over 30 million dollars. Okay. So unfortunately, I don't have good news for you today, so but that's uh what I wanted to start with. No, that's what we're projecting to end the year at. So uh yeah, so after the second quarter uh results have come in and we've updated our projections and both revenues and expenditures for the third and fourth quarters. So that's where what we're now uh projecting. So we're only I'm sorry if I'm out of line here. I just uh is it okay for me to jump in? Okay, okay, thanks. The um so we're projecting 24 million dollars in the first quarter, but only six million dollars over the remaining three quarters deficit. No, no, so the the um first quarter slide that I showed you. Yep. So we were whenever we produced the first quarter report at that time we were projecting um to end this fiscal year. Okay, so this is a projection of the end of the year. Uh yeah, so it's gotten worse. Okay, well, that's well, it's better for me because I'm saying 24 million on the first quarter, so I was on a different train of thought. So uh okay, I get it. Sorry.

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