Cable Advisory Committee - Regular Meeting

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 Strasburger and I will be chairing this post agenda discussion today and this as a reminder to those who might have tuned in before we have been holding. In an effort to discuss the budget on an ongoing basis throughout the year on council rather than tackling it in one big bite at the end of the year, we have been holding quarterly meetings to discuss each of the quarterly financial and performance reports and having a discussion at that time to better track exactly where our finances are, where our revenues are forecasted to be, and the changes that occur throughout the year. So once again, we have some invited guests with us. Thank you for being here today, and we can go down the line so that you can introduce yourselves, and then feel free to launch right into the presentation.

My name is Rhea Price. I am the Deputy Director of the Office of Management and Budget. 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 and Asset Management.

Elizabeth Sarkhan, Assistant Director for Operating and Special Revenue. Thank you. And before we do get started, I'll note that we're joined today by Council President Daniel Lavelle, by Councilman Anthony Coghill, and we might have other council members joining us shortly.

Okay. I guess, should I go ahead and get started? Please proceed. Yes. All right. In front of you, you'll find a hard copy of the slides that I'm about to go through. But as Councilmember Strasburger mentioned, we are here to discuss the second quarterly 2026 financial performance report. Okay, before I get into the second quarter, I just wanted to have a very brief review of the first quarter results. So on this slide here, you'll see the 2026 net operating balance page that we have in the quarterly report. I'm going to be zooming in on something, so don't try to read any of these numbers, okay? But you'll see here I have the year-end estimate column outlined here. Now, what I want you to focus on is this number at the very bottom, the $24,385,072. That was the deficit that we were projecting in the first quarter report. 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. 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 projected deficit has went from $24 million to over $30 million. So unfortunately, I don't have good news for you today. But that's what I wanted to start with. That's what we're projecting to end the year at. Yeah, so after the second quarter results have come in and we've updated our projections in both revenues and expenditures for the third and fourth quarters. So that's what we're now projecting.

I'm sorry if I'm out of line here. Is it okay for me to jump in? Okay, thanks. So we're projecting $24 million in the first quarter, but only $6 million over the remaining three quarters. Deficit.

No, so the first quarter slide that I showed you, so whenever we produced the first quarter report, at that time we were projecting to end this fiscal year.

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

Yeah, so it's gotten worse.

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

Okay, so basically our situation went up $6 million. Yeah, yeah. To the bad.

Yeah, I understand.

Okay, so yeah, I'm going to go over some high-level numbers with you now. So some key findings, like I mentioned, we're currently projecting a $30.2 million deficit by the end of the year. 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 $728.6 million. So it's actually... like under the adopted budget plus reappropriations, but it's over the adopted budget. And I'll get into those nuances in a little bit. Okay, now at this point, I wanted to compare some of the findings from just the first quarter to the second quarter, okay? So I've already went over this a few times already. We're projecting a $24.4 million deficit by the year end. In the first quarter report, that's jumped to $30.2 million. On the revenue side, the first quarter report had projected that we'd end the year with a little over $707 million. Now we've revised that projection to $698.4 million. On the expenditure side, the Q1 report projected us spending about $732 million. We've revised that downward slightly to about $729 million. Now, I just want to focus on the differences between the second quarter of 2025 compared to the second quarter this year. Sorry, this is blocking my view. So you'll see here, these are the revenues collections. So the total revenues collections for 2026 in Q2 were $135 million. In the second quarter of 2025, it was around $136 million. And then the table below has the split between tax revenues and non-tax revenues. And shortly, I'll hand off the mic to Director Gula so she can talk a little bit more about revenues in a few moments. And then again, on the expenditure side, I wanted to show the high level differences between the second quarter of 2025 and the second quarter of 2026. Bottom line, this quarter, We spent $149.6 million compared to this quarter last year, which we spent about $146 million. So we spent about $3.5 million more this quarter than we did this quarter last year. So one thing that most of you here will know, I've been focusing, trying to call attention to the reappropriations. So I've included a couple slides about this. I'm gonna read the screen up there, because the Zoom thing is covering my screen. So I basically wanted to explain in a little more detail what the reappropriations represent. So these are basically operating funds from the prior budget years that were obligated but not spent. So they carry forward into the current fiscal year. So these include amounts tied to encumbered contracts and purchase orders. So this ensures that those funds will remain available in the upcoming fiscal year. So as you all know, most operating funds lapse or expire at the end of the budget year. So we do these reappropriations so that the departments are not hurt. Because these funds are tied up in contracts and purchase orders, so they still have to spend these. But this year, $36 million was reappropriated from 2025 to 2026. And I just wanted to provide an update of where we are on those. So of that $36 million, there's approximately a little under $12 million that remains to be spent. So at the end of the year, we will look at these again. We look at these every year. I'm hoping that we can look at these more often. but uh yeah we still have about 12 million dollars remaining of that 36 million dollars and i just wanted to outline the departments with the large with the largest amounts remaining um imp has about three million dollars remaining uh city planning uh one and a half million dollars a lot of that is related to the comp plan DPW facilities has about 830,000, law 830,000, DOMI over 600,000, and human resources over 600,000. And on this slide, I just wanted to show you how the reappropriations impact the budget. And I think that I take a more conservative look when it comes to the reappropriations than maybe prior folks in OMB did. So you'll see here, there is the adopted budget column, okay? So the adopted budget... that was $721.5 million, okay? Since there were $36 million in reappropriations, that basically increases the department's suspending authorities to $757 million. And whenever you know that we have revenues budgeted at $721 million, this gives us the ability to spend more than we're bringing in, okay? And so I don't wanna, talk about this too much because I've talked about it a lot in the past, but so that's why I think it's important to monitor these reappropriations and they have ballooned in the past like decade or so. I can remember when typically we only have around three million dollars in reappropriations from one year to the next year and so as you can see this year it was 36 million. That is actually less than last year but it is still a very large amount. All right, at this point, I will hand it over to Director Gula to talk about revenues.

Good afternoon, everyone. So at the end of Q2, we have a number of revenue lines that are expected to come in under budget, three of them being taxes, which are payroll, parking, and amusement. They each total about maybe $2.5 million apiece, which sort of makes up for about half of what we're going to be short. However, a lot of this is based on the cadence of the processing of the tax payments. So there is still an opportunity over the next two quarters that they could catch up. But right now, it's not necessarily showing based on how we collected last year that it would happen. So if the processing doesn't increase, then yes, we will come in under budget for those tax types. However, licenses and permits, charges for services, intergovernmental revenue, interest earnings and miscellaneous are things that we have a little less control over, at least in my department. Charges for services makes up a huge portion of our deficit. So there is a program that was introduced to us by the state that relates to EMS revenue collected, where we would get a reimbursement from the federal government. And the state assured us that we would see this money in 2026. So it was forecasted for this year and the amount was at least $6 million that we forecasted. However, the state assured us that we could probably see more than that. um that has since and it was budgeted so it's since been removed so in the report you'll actually see that line item short by at least six million dollars and most of that is attributed to that program they're still confident that it will occur but we're not sure when we'll actually see the revenue from it we probably won't federal funds if I'm not mistaken, I believe. It's a federal program.

It needs approval from the federal government.

Federal government. And we don't know if those funds are approved or disappeared or...

We don't know. So it's a program that we had to register and file an application for, which we're still in the approval process for that part. And that approval process had been delayed some. So I think the state is still confident that it will happen and we'll receive those funds. We're just not entirely sure when that will be. So it's been removed. for this year and also any of the forecasts going forward until we have funds in hand.

So our budget's going to show shortage of $6 million because we've not been reimbursed and we don't know when we're going to be reimbursed.

Right. Yep. Also, there shows a deficit in intergovernmental revenue, and that is related to the automatic red line enforcement. So it was anticipated that we would be receiving revenue due to that program this year, which it doesn't look like that's going to occur either. And it may not occur next year either. So that also has been removed and going forward in subsequent forecasts. What's that? I'm sorry. Yes. But it was budgeted for this year because it was included.

It actually was not budgeted for this year. It was not? No, it wasn't budgeted for this year. Yeah, we removed that in the budget re-opener. Oh, we did? Yeah. Apologies.

That's good. That's a little bit of good news anyway. Right.

Interest earnings, obviously, if we're not bringing in, and we've also had to spend out of our so-called rainy day fund, and they've lowered interest rates, we're not going to make the expected budget revenue on interest earnings for this year either. However, on the lighter side, go ahead.

Yeah, I was just going to say, so we accounted for so much interest, and you're saying we can't account for that right now.

We're not going to see it.

We're not going to see it. But how much did we account for?

I think we budgeted for about $13 million. $13 million, and we're getting zero. No, no, no. We're not getting zero, but we're not getting $13 million. We're probably closer to maybe eight or less. Okay, okay. So, but on the positive side, and there is one, I assure you. Deed transfer tax, I think, is almost close to budget right now, so we intend to exceed the budgeted revenues on deed transfer tax. Telecom licensing, we got a larger, disbursement from one of the payers of their telecom licensing tax so that's increased and over budget currently in actuals and then fines and forfeitures the same however it's not enough to actually make up or close the gap so in The prior budget, there were also some revenues that were projected that we would be getting that we aren't getting at all, never did, never will. They both relate to PWSA. Both of these items are either included in the co-op agreement or they were already included in another portion of the budget on the expenditure side, one of them being a fuel reimbursement. And the other was they're part of the pension, and so they were included as revenues, but they are not revenues. They are now removed in some other agreement, and we're not seeing them, or accounted for somewhere else as another tradeoff, and so they're not revenues anymore.

They're essentially double-counted. They were double-counted.

Yes. Okay.

Does anybody have any questions?

Yeah, I would love to see. You don't have to do it right here in live time, but I would love to see my 2026 operating budget and see where it was counted in both places. You don't have to do it right now. So it was counted as a positive, negative, and then also as revenue.

You won't be able to see it in the actual budget document. I mean, I can show you the line items from our budgeting system that would show that. Yeah.

I mean, I don't know what's the general accounting procedures, but it doesn't seem like there should be just like a lower expenditure because there's some offset that isn't really transparent in the publicly facing budget.

Right. Right? Yeah. I mean, there are thousands of lines that go up into just the operating budget. So it's like there's a lot of lines to go through. And so the public budget document, to make it easier to read, you can't include every single transaction.

But these intergovernmental ones they should be flagged somewhere so thank you for flagging it here in this presentation because it's a kind of a policy area that I think the public knows about and wants to know more about thank you that's all I had unless you yep

Yeah. Finish the presentation and then we'll just take questions after that.

If there's clarifying questions as they go, but yeah. Okay. Now we're going to move on to the expenditure side. And I'll take the first few slides and then I'm going to hand it off to Liz Sircone. She's the assistant director that oversees the operating budget and special revenues. Okay, so on the expenditure side, what you're seeing here, this is basically every department bureau and office in the city. I have an outline around the second quarter results, and I also have an outline around the columns that show the year-end estimates compared to the adopted budget, reappropriations, and final budget. So we've already went over a lot of this, but our spending on the expenditure side was almost $150 million this quarter, and that brings us to an end-of-year estimate of $729 million. On this slide, and Liz will get into this a little bit more in a few minutes, but this slide just shows the departments that are expected to go over their adopted budget. Now, I want to clarify that it is going over their adopted budget, not their final budget. The final budget includes the reappropriations. But as I said, I take a more conservative approach to looking at this. I tend to look at expenditures compared to the adopted budget. So that's why I have these outlined here in such a way. And then this slide basically shows This basically shows the same information, but in a different way. And these are what we refer to as subclasses. We have about nine different categories of spending in the operating budget. So as you can see, that's salary and wages, employee benefits. professional and technical services, and so on. And so we wanted to show the second quarter spending by the subclass and to show what we're projecting to end the year.

Can you read some of the bigger numbers? Because honestly, I can't read it on the screen nor on my handout in front of me. Oh, okay.

Yeah, there's a lot of information here.

It's really, really small for members of the public. It's kind of illegible to me.

Okay, yeah. So I'll go through each one of these categories if you guys are okay with that. So, okay. Salaries and wages... So we are projecting to end the year spending about $306 million, and we're projecting a savings there of under $4 million. Okay, that's savings. However, moving into the employee benefits category, we're projecting to spend about $213 million, which is about $4 million over the budget. In professional and technical services, we're projected to spend about $31 million, and that will lead to about $10 million in savings. Property services, we're projecting to end the year at $96 million, and that will leave us... Oh, one thing I want to... Okay, these savings or overage... numbers that I'm saying, that is whenever you factor in the reappropriations. I think actually next quarter I will add a slide to show the savings or overages compared to the adopted budget because I think that is helpful. I just thought of that as I'm going through this, but I will do that for the next quarter. Yeah, property services were projected to spend $96 million, and when you factor in the reappropriations, that will have $5 million in savings. Other services, we're expecting to end at $6 million, and when the reappropriations are factored in, there will be savings of $2 million. Supplies, we're projecting to spend $22 million. And when the reappropriations are factored in, we'll have savings of about $670,000. Property, we're projecting to spend about $9.6 million by the end of the year. And so with the reappropriations factored in, that'll leave us with savings of $1 million. The miscellaneous category, we're projecting to spend $6 million, and then that'll leave us with about $9 million in savings when the reappropriations are factored in. And then debt service, we're basically, we're projecting minor savings there. But the reason why I have, oops, sorry. The reason why I had the 5.2 through 5.7 subclasses outlined, that is because when you look at the adopted budget only and look at the projected expenditures, those do go over the adopted budget. So like I said, I think it's important to point that out. And so the next post-agenda, I will include a slide that shows that. Like I said, Liz is going to explain a little bit more, but the following departments are expected to see their adopted budgets, so I won't go over these departments right now because I'll leave that to Liz. All right, and at this point, I'm going to turn it over to Liz.

Before we get into department specifics, just calling out a few major issues, some that we already have talked about. Healthcare active and retiree expenditures are coming in over budget, and we are still trying to get a handle on our VEBA trust fund cash balances. Social Security, I can't remember if we discussed at the end of Q1, excuse me, but this was a reconciliation as part of the controller's, I believe, ACFR report. They found Social Security amounts that were misused. budgeted in 25 and so there was a true-up that occurred in April of this year and it is Depleting the budget for 26 because of the way that it showed up in JD and Certain expenditures carried into this year, those were the water bill for nearly 10 million, a collection of fleet bills for 1.4 million, and then legal outside council expenses. And then finally, we are constantly monitoring where we think our fuel expenses will end up this year. So this slide, these are not necessarily departments that are going to exceed their adopted budget, but these are departments that we are predicting would potentially exceed their salary and wages budgets, which is the 5-1 subclass. We want to make sure that you understand this is not due to overstaffing. The likely culprit here is staffing is actually at budget and we anticipated vacancy savings. And so a over budgeted vacancy allowance is now contradicting what we have in actual staff salaries. Additionally, there are amounts for leave buyback that were unbudgeted going back some time, actually, and so that is tripping up some of our more tighter departments. Overtime for police, fire, DPW operations, and environmental services is currently predicted to go over. And then we are looking into an underfunding of longevity payments across some of our departments. Yes.

Just clarifying question. What are we currently projecting for overtime?

I don't have it handy on this slide, but we can certainly... Oh, it's on the other side.

Okay.

Yeah. Oh, actually, it's on the next slide. Thank you.

Could you explain this one class of leave buyback? What are we talking about there?

so i believe there are two and ria can help me here there is two expenditure lines for leave buyback one is for you hit your pto caps and you get a quarterly payout and the other and i think this one is if you leave city employment you are paid out your time i believe

One deals mainly with vacation time and the other deals more with personal time. Yeah, I'd have to give you those exact specifics. But background is, this typically changes, like in the past whenever I was an OMB before, sometimes the accounting of these things change whenever you go to a new payroll system. So I remember a long time ago, okay, we did used to budget and pay out those leave buybacks in different accounts. And so it was both budgeted in two different accounts. One is in salaries and wages, and one is in employee benefits. And it was paid out that way. Something happened in 2018 oh well no and then at some point whenever we went to a new payroll system this is prior to 2018 everything was paid out in one account then something happened in 2018 sorry it's very complicated i've been trying to reverse engineer this but something happened in 2018 that they started to be paid out in those two separate accounts once again i reached out to payroll to see if uh We went to a new payroll system that year, but no, we didn't. And nobody really recalls why the change happened then. So since then, those two different classes of LEAF have been paid out in those two different accounts, but the budget has not been updated to reflect that. And that goes back to 2018. So we just discovered it now. Thank you.

We can go on to the next slide. So this slide is looking at premium pay collectively for Q1 and Q2, comparing 25 and 26. Quick look at most of these departments. I believe there's only two major departments that are actually exceeding their overtime for last year, which is police and DOMI. everyone else is actually on par with overtime from last year or under and we can in the next slide address who is going over So these are the departments that we called out briefly, projected to exceed their adopted budget. And again, some of these are because of reappropriations. The mayor's office is because of the disparity study reappropriation. Office management budget is largely fleet-related expenses for transdev and fuel. INP, this is one that had over-budgeted a vacancy allowance and unbudgeted leave-by-back. They also had $9 million in reappropriations. The controller's office is purely over budgeted vacancy and unbudgeted leave buyback. HR is largely benefits. Healthcare, other insurance, retiree benefits, and unemployment compensation are all coming in high. Planning, similar situation in their salaries, and they also have the comp plan reappropriation. Public Safety Administration, they also have a over-budgeted vacancy allowance. They also, we are working on reconciling some salaries that were mischarged there. They have people hitting PS admin who should be in other bureaus or in the Stop the Violence Trust Fund. They also carry the ShotSpotter reappropriation and the Police Cruisers reappropriation. Police is a mix of under budgeted and overspent. They are currently exceeding or coming near their uh overtime budget they also were the hardest hit them and ems for the 2025 social security correction by the controller's office i think i checked today and they their social security budget as of today is overspent they also carry an axon reappropriation DPW administration, their largest issues fall under the utilities expenses, and they again carried the 2025 nearly $10 million water payment for this year. Environmental services, similar situation to police. It's a culmination of under budgeted and or overspent. Their overtime is looking like it'll be above budget. They also have two expense budget lines, their roll off boxes and their uniforms, which has exceeded their budget. Um, and then finally Domi, uh, their longevity is under budgeted, um, similar leap buyback situation, and then 2.3 million in reappropriations.

yeah in terms of the capital budget with the quarterly report it's important to keep in mind it's really just showing the spending for the 2026 budget year within the 2026 calendar year so it's excluding all the spending that the teams do using prior year funds with that being said for quarter two 2026 we had about 5.2 million dollars in spending um in four locations that are shown over the next three slides Street resurfacing is always a perennial favorite. They do a great job spending their money. We also saw some activity with step repair and replacement. We purchased a few vehicles in quarter two, 2026. We also did our annual payment to the Bob O'Connor Golf Course as part of their ongoing maintenance. It's a little tricky to separate out the total spend for quarter two across all of our budget years, but it looks to be about $34 million, which is on par for what we've done historically. It's also important to keep in mind that the numbers will ramp up, especially with quarter three, the nice weather we have, and now we have construction we can do well into September, October, sometimes November. So we're hoping to see some more construction numbers in quarter four as well when some of those um prior month bills come due we pay those invoices and also some genuine construction activity hopefully a tiny bit in quarter four but uh keep you posted on how that looks that's mostly it for capital thank you

And this is just the last slide. I just wanted to provide a brief ARPA update. So the second quarter ARPA spending was about $3.8 million. And we still have about $12.7 million out of the original $335 million that remains to be spent. And I am quite confident that that will be spent by the end of the year. And that's all we have to present. We're open for questions.

Thank you very much for your presentation and the questions we've gotten so far. I wanted to also note that we've been joined by Councilwoman Deb Gross, Councilperson Bob Sharland, Councilwoman Kim Salinetro, and Councilmember Barb Warwick, who's joining us online. And unless we have anyone who has a hard stop, we'll go in the order that I just read from the beginning, though, from Council President Lavelle. Do you have any questions for the invited guests?

Really, one, thank you for setting this up. Two, this is comprehensive, so I was able to get most of my stuff answered already. But I do have one question, actually. The JOT tax, where is that showing up as an expenditure within our budget, given that we're having to both not collect and reimburse?

So we haven't spent anything for it. We haven't reached a settlement on that yet. Okay. And then nothing's been budgeted for that. Correct me if I'm wrong. No. Right.

What about last year we budgeted?

Law carries the expenditure in their judgments budget.

Oh, okay. Yeah.

Yeah, on the expenditure side, there was budget for it. There was basically $8 million over two years budgeted in law. But on the revenue side, we no longer budget the revenues.

We were. We're not moving forward.

Correct.

Correct. Okay.

Yeah, for 26, it was a zero. So in 25, we were budgeted, but we only collected a portion of it when we were able to. But for 26, it was budgeted at zero. And going forward, it is also.

So I have a different question then. If it's carried over on the expenditure side within law, aren't we going to exceed the line item for law to pay out judgments?

I'm not sure I understand your question. So we haven't spent anything related to it yet. We didn't.

I understand that. And I don't know the number off the top of my head. So if within law there's, let's say, $10 million for judgments, I'm considering the repayment of the job once that happens as a sort of a judgment. But there's also landslides. There's all types of judgments that we settle are we projected to exceed the that no no okay um and i know you're looking forward and you can't totally project this but we were projected to be negative 26 or so when you projected first quarter 24 now we're at 30. if that same line continuum carries we're going to be closer to 40 come q4 is that fair

I mean, I don't want to make any assumptions.

I'm just assuming the trajectory of our expenditures, our revenues, stays on a similar arc.

It is, yeah, definitely possible that that deficit will increase. And one thing I want to make sure everybody keeps this in mind, that deficit does not include those beyond the line transfers. So that does not include the Housing Opportunity Fund transfer of $10 million. That does not include the Stop the Violence transfer. So yeah, I just want to make that clear.

What's in our fund balance currently?

Oh, I don't have that exact amount. I think the last time I looked, it was around like $130 million. You know this.

It's probably close to that, about $130 million.

Thank you.

Thank you. Councilman Coghill.

Thank you, Madam Chair. And again, thank you for hosting this. It's important for us to keep an eye on revenues being the situation that we're in and to have a realistic look at it. So I just want to talk about the reappropriations first. The reappropriations, my office has been working on this in other facets. So of $36 million, and correct me if I'm wrong, these are monies that have been appropriated, approved for spending, not necessarily under contract, but approved.

Most of them are under contract.

Most of them are under contract.

Or in purchase orders.

Right. So at the end of every year, some more than others, IMP I think was your highest here, have extra monies that they are unencumbered, they haven't spent.

They are encumbered. Yeah, they are encumbered because they're contracted and they're tied up in purchase orders. So the money just hasn't left the door.

So you're just putting it back into our general fund because it's not spent. Doesn't mean that it's not... going to be spent it doesn't cancel out the contract or anything like that everything's still unless we cancel the project for some reason but providing that we still want the project done nothing changes but then we just re-appropriate it in the next year so we take it back because we didn't spend it because that reflects our real budget for 26. And then next year, do we have to go through a bunch of bureaucracy just to get the project? Do we have to reallocate the money or anything like that?

No, no. The Office of Management and Budget, we do a very large journal entry. Well, before that, the analysts will work with the departments and go over every single amount that – can potentially be reappropriated. And then after that review is done, then there is a very large journal batch, and it will just increase the spending authority of all those departments.

So of the $11.7 million that has been reappropriated for 26, how much of that is anticipated to be spent on the existing contracts 11.7 it's there's no we're just reallocating because we're not spending it this year that way it shouldn't reflect the budget this year but at the same time it doesn't cancel or nullify any contracts that are it's all been accounted for or approved in one way or the other right and again the only thing that would change is the budget for next year because we have to include that in right because we'll be spending it then because we're under contract

Yes, that's correct.

Unless, again, things change, which I've had a couple projects that were slated to go and haven't, then we can utilize that money for 27 and whatever.

Well, ideally, what would happen if money that is tied up in, say, an encumbered contract, if that project wraps up and there's money left over in that encumbrance, then we would liquidate that and then we would reduce the budget by that corresponding amount. Because we don't want to... I use the phrase artificially inflate their budget.

Yeah, I understand. Okay, so that's it for now, Madam Chair. Yeah, it's very informative. I appreciate it. Not much good news, but, you know. And as the Council President was asking about the jock tax or facility usage fee, I guess that's what it's called, we have not, you said, been ordered to pay back anything as of yet. that we will those discussions are ongoing they just take time yeah we don't have any examples from other cities or anything like that that had to pay back or did not have to pay back so as part of the original litigation refunds were not part of

the decision or the litigation itself. So they are an object that's outside of that. Got it.

So they haven't taken up a reimbursement yet.

I mean, in order for someone to be reimbursed, I think they would have to file an additional case.

Yeah, that's what I'm saying. They have to go through a whole legal process to get that reimbursement.

There's a whole legal process that the law is working through.

There is none right now to speak of.

No.

Okay, let's keep it that way, all right? Mark the wood. Right, right. But we did not account, of course, for any of that, like we had in the past, $4.5 million or so that we were gaining from that. We're not collecting it anymore.

We collected $19,000. We collected $19,000. There was $19,000, and it was a... a holdover from, I guess, an amount of filing that we were able to collect before the lawsuit ended and it was caught in the process and got deposited, but that's it.

Correct me if I'm wrong. I thought the Ganey administration was going to continue to collect that, even knowing that we probably were going to be ruled that we couldn't collect it. I think we were collecting it and we shouldn't have been.

I wasn't here, so I don't have any knowledge of that. So during the whole litigation process, there were instances where the courts... There was a decision passed where we had to cease collecting for a period of time until it went to the next step in the legal process, and it stayed the initial decision, which allowed us to recollect again. So... Instead of stopping altogether, we collected when we were legally permitted to while the case was still moving through the legal process.

And if that comes back to haunt us and there's a reimbursement, that's kind of the chance we took at the time, I guess. That was last year. That was maybe two years ago. over the past two years all right all right okay finally one last thing um the reimbursements from the state for all the ems and everybody else we hired throughout the county how much money are we talking there total that we are that we were anticipating but we're now seeing are you talking about the ems initiative

You're talking about the reimbursement for the draft? Yeah, yeah, yeah.

Oh, the reimbursement from the draft. Yeah, we did receive that. So the second quarter overtime, that will look high. But since we received that check from Visit Pittsburgh just last month, it's booked to the third quarter.

Okay, but we've been made whole on all of our expenses through the draft?

No, I wouldn't say that.

Anything in particular that we were promised that we're not getting?

I mean, no, I don't know what we were promised. I wasn't involved in this.

Overtime, other police departments.

We were promised and did receive a full $2 million from Visit Pittsburgh.

Okay, so then we're done with that. And if we went over, it's kind of our fault. Is that right, Elizabeth? That was the deal, $2 million. And if we went over, then there's a guesstimation of some sort. But there's no clause in there that says if we went over $2 million, if we went to $3 million, that they have to reimburse us that. Yes.

I believe we were promised the $2 million after the event occurred, but yes.

But we got the $2 million. We got the full $2 million. Okay. Well, it sounds like we don't really, okay. I mean, if we went over, we went over. It's kind of our fault, I guess. We don't have an argument to go back and say we need more money, I guess. There was nothing in the contract. Nope. Nothing discussed like that at the time. Okay, Madam Chair, thank you very much. That's it for me. Thanks for being here.

Thank you. Thanks for the questions. Councilwoman Gross.

Thank you, Madam Chair. I'll also follow up on the reappropriations thing. It was super helpful, I think, for us to kind of get an understanding of it in the last discussion. And so has, I'm not remembering exactly what the numbers were. So have some of, has that number reduced since the last time we talked about it? And can you like explain to us how much it was reduced and how?

I'm not sure what you mean by reduced. I thought the IMP number was higher. Oh, because they spent money down. So the money actually went out the door.

Yeah, exactly. I think it was really helpful for the administration to flag that for us in the public. But I think that when I had the initial conversation with IMP, I asked if maybe some of those contracts just weren't needed. You know, I mean, I think that is the task at hand for each one of these departments. And so has that not happened yet where we've said, like, actually, we can reduce that contract or actually, you know what? It doesn't need to keep rolling on for 18 more months. We can wrap that up in six months.

Yeah, there are discussions, but they're very— Nothing's come to fruition yet. Yeah, exactly, right.

Okay, but I think that is the task at hand. So remind me, I think the last time we did this, it was around $30 million or something that was reappropriations?

Well, I&P alone began the year with $9 million in reappropriations.

And what was the total that you were flagging in the city budget?

Yeah, the total was $36 million.

$36 million. And you were saying that some years ago that was only $3 million. correct and again i think it's both an indicator of how much work is contracted out as opposed to you know 20 30 years ago when everything was done in-house you didn't have softwares but also you didn't have lots of subcontractors everywhere so these rolling professional contracts and many city departments some bigger some smaller um makes our real budget number different I'm going to call the rollovers because that's easier for me to remember what they are. That is not like the technical term. And so they're a little bit off book. They're not really off book, but they kind of are not in that document that's, as you're saying, our adopted budget for this year. Whereas when it used to be, before any of us were on council, when we passed a budget for the year, because all the department's work was kind of in-house, that it was zeroed out at the end of every budget year, and that was really the hard budget. And so now it really isn't. It's not as hard because there's this extra $37 million in rollovers that... It's better for us to, I think, that we're having these discussions about those specifically. We should keep having those discussions about those specifically so that they're just not out of sight, out of mind, because it's causing a real problem in our cash flow and our expenditures, et cetera. Okay, so thank you. So on the beginning of your slides...

Oh, I had it marked, but then I moved my pen.

If you have a little, the slide that talks about the departments, I think it's on page 12, or it's slide 12, or box 12, of the ones that are, it says reappropriations update. And it has innovations and performance, city planning, DPW facilities, law, dummy, and human resources. But then on, thank you. on your discussions about departments projected to exceed their adopted budget. On one of the last pages, Public Safety Administration is over its adopted budget because of a reappropriation. But that's not listed on the other reappropriations update page. So I'm curious about it. Shot spotter and police cruisers are rollovers. And so how much are those?

I don't have those amounts.

Are they small?

I would have to look at the sheet.

Because those are both big expenditures. And so is it a big rollover or is it a small rollover? Because it didn't make it onto your list of the departments with the largest amount of appropriations. But those are large budget numbers, so it may not look like a large amount when it's in the biggest department budget.

I can get you those exact amounts. But it might be $3 million. Yeah.

It just doesn't look big relative to the police budget. Because the next one is police is also over budget because of the FICA correction, but also the Axon reappropriation. So that's also a rollover contract. And that's the body cameras. I mean, that's a massive contract. And so I'm curious how much... of it is reappropriation. Do you have that number, actually?

I can speak to the police cruisers quickly. It looks like, and I'd have to go back for the original amount, it looks like we're down to a little over a million left for that subclass which i think is generally just the the cruisers themselves shot spotter looks like we pay out in in different times so it looks like that has decreased and then i can get to you on axon that is also looking much lower than it was so i think it's because of how their contract invoice timeline works, we potentially are invoiced in 25, but we don't pay until 26. So that is sometimes why we roll over some money.

So it's not like an ongoing contract. It was maybe just the invoice was paid in a different calendar year than was received. Okay, so that makes sense. But those are, I just wanted to get a sense of the scale of those because those are, you know, big technology, except for the cruisers, but big technology contracts. And we've talked about the size of our technology contracts. And here it's interesting because they're not actually in the IMP department. They're in the... you know, a different department. And so it helps when you have those subclasses. Like, instead of just having professional services, I wonder if you're able to break out the subclass by a kind of technology contract. Like, I don't know if it's coded that way. I don't know if a law department... Is professional services or law office is professional services, but also like a shot spotter is also professional? I'm not sure how your subclasses work. It'd be interesting to know.

Yeah, we can put that information together.

Thank you. We do call out certain ones. Finance, for example, calls out our debt service and interest lines. So we can certainly make some adjustments.

That would be interesting, I think. We'll be talking about some of these technologies in the privacy and surveillance post-agenda that the report is actually due that Council passed in March. So they sponsored to ask MP to look at all of the things that we use that are capable of surveillance. That report's actually due to Council this week. And we're scheduling a post-agenda. We might have to break it down into two discussions because we want the department to present on these. And so having these dollar amounts, I think, also help people think through it. Certainly Council has, for example, talked about shaw spotter before. And, you know, I think we have a healthy debate that is important to the public. um and we may have it on these other kinds of big technology expenditures as well um but i also have um you know it is a big national debate as well so there's a lot more that's come out nationally about what cities are doing some cities have chosen not to do or change their minds about and including the license plate reader, not the red light enforcement license plate reader, they're similar but different, that some cities have been like, you know what, we're stopping all those contracts because, again, basically tech companies were stealing people's private information. because they hadn't structured their contracts. We're actually, I think, going to have a great discussion about it because our department has been very vigilant about this. So I want to give, actually, council credit and an IMP credit. That doesn't mean it's perfect, but I feel like we'll see the report soon. And I know that the IMP department has... paid attention and learned and has gotten some good guidelines in place. Again, it's a moving target that cities are learning a lot about. I'm a little off topic here. I apologize. I'll wrap it up. But we'll be having that discussion too. So it would be helpful if it's not too difficult. I think we'll be talking a lot more about this as budget season comes up. And then it might help us also get a handle on having these rollovers or not or how to make sure we're planning ahead for them so we if we highlight them better so i appreciate that um i think the only thing i'll wrap up about is just um being a little confused about some of the expenditure issues that's like page 12, slide 24. I think Councilman Charlene asked in the discussion about the buyback, it's the same slide. And so I'm curious what the, it's only 700,000. But what is underfunding longevity payments mean?

So what is that? Do you know what longevity payments are? It's something that's in a number of CBAs. So it's a benefit to certain union members based on their length of service.

Seniority is, I think, a colloquial way of talking about it.

It's not seniority? It's an actual payment. Almost like a bonus.

It's like a bonus for length of service? Correct. Longevity meaning like...

Yes, not left. Please correct me if I'm wrong. I think a lot of them start after five years of service.

Yes, five is generally about when it starts.

And it's typically a flat fee based on those years.

Okay. That makes sense. What we mean here by underfunded is the way that our budgeting software works is you are assigned a start date with the city, which starts the clock for your years of service. And with that, you are assigned a longevity amount that you would get. Now, as you progress through your career, that amount changes based on if you hit year 10 or year 15, depending upon your CBA. And so budget analysts then have to go in and reconcile that manually every year. And some of our contracts have changed who gets longevity payments and what those scales are and so what we think here is that that manual override might have missed something and usually you wouldn't see it if your subclass as a whole has savings

And historically, it was primarily the public safety bureaus, the unions, and those that received longevity payments. This year, a new addition was Ask Me 2719. All right.

It's actually really in favor of employee stability, right, and tenure, like keeping our workforce stable. But I can imagine that it's very complicated because of all the different contracts and having to do something manually. It's understandable. Okay, so one last quick thing. The slide right above that, I thought we'd paid that water bill, that $10,000.

Oh, we paid it. Okay, so this is just... It should have been paid in 2025.

We paid it in 2026. Okay, great. I'm just writing a note that it has been paid. We're not going to see it again. No, we'll still see it.

It'll be a new bill. That won't be the old bill. We're doing that quarterly now. Rather than doing one great big true-up, now we're doing it quarterly. So we've paid the first quarter so far. We're still working on the second quarter.

I think it goes back to a little bit, and then I will stop. I understand how we used to do TRUA because it was our internal city department, and then it was our authority, but it was our asset. But I think these things should just be listed separately as revenues or expenditures and not be like, oh, well, we've minused your pension contribution from the bill that we're supposed to pay. I mean, those should just be on the books where they belong. Are we going there? Is that how we're heading?

We haven't had any discussions about that this year.

All right, so we'll just ask you about it. You just tell us about it every time. You'll have to just, instead of it being on paper, we'll just be like, okay, so was that mine? It used to be things like the telephone bill, right? They're paying their own telephones now. We're not covering part of the telephones, right, at PWC, right? Right.

But, I mean, honestly, there was a time when we were.

Like, we also, like, you know, they were our office phones and they were their office phones. And those things have gotten. And the POC has told us to, like, separate these things more and more. So, all right. All right. I'll stop there, Madam Chair. Thank you.

Thank you. Council Member Warwick texted me that she does have a hard stop if it's okay with other members, unless you all have to go to push her ahead. Okay. Thank you. I appreciate it. Just text me or let me know and indicate if you need to go. Council Member Warwick, you're up.

Yeah, thank you so much. Thanks, everyone. And I appreciate, I apologize for not being in person. Got the kids home from school today. So, yeah, I'll try and keep just a few questions. So as far as the vacancies, I guess I thought last year, you know, with the, throughout the budget process, I thought that I remember that we had asked or departments to tighten their belts and that we had already kind of accounted for, sort of taken out any vacant positions that we didn't think we were gonna fill. Is that, and I recognize it as a different team doing this. Is that something that?

Well, the vacancy allowances are something different. The vacancy allowances, that's just basically So most departments are not going to be 100% fully staffed for the entire year. So we start with the baseline budget for full-time permanent salaries. And then depending on the department, We look at how they're currently staffed and maybe historically how much savings they've had in salaries. And so we attribute, well, in the past, we would apply a certain percentage to offset their salaries based on like turnover and salary savings.

Oh, I see. Okay, so this is like normally in the course of a given year, Someone leaves and it takes two or three months to hire a new person until we have that same answer. But that did not happen this year as it normally does.

The vacancy allowances were, in my opinion, a little too aggressive. So in the past, we were more conservative about the vacancy allowances. We've been actually analyzing this over the past several days. And if you look back going to 2016 to 2020, vacancy allowances were typically around 3% of those full-time permanent position salaries. that has creeped up to around like 6% in some departments. So like I said, it's just a little more aggressive than we have been in the past. And so that can become an issue whenever you have things that weren't budgeted properly, say the lead buyback, because that hits salary and wages too. So yeah, there's different categories of salaries and wages. in that one subclass. Anyway, so we would be conservative with those vacancy allowances, and by conservative, I mean have a low percentage. And also, if it was a small department, say CPRB or the Commission on Human Relations, we wouldn't have a vacancy allowance at all, and that continues to this day. But that's what the vacancy allowance is.

Yeah, okay, that makes sense. And then the vacation buyback, that's when people haven't taken their vacation and they're getting paid for it instead?

Yeah, it's typically whenever somebody leaves.

Oh, right, so they haven't taken vacation and they retire or leave and then they take it all. Yeah, I mean, it really is kind of like between a rock and a hard place, right? Like we have... You know, we're closer to fully staffed than we have been. Folks aren't taking vacation, you know, and then, you know, they're sort of saving that vacation. Yet, you know, so this, yet we're asking our departments to tighten their belts more and more, right, to do more and more with the same amount of people. You know, as far as the tech issues, it's, and this is not, I don't mean anything, but, you know, it sounds, just sort of listening, oh, it's like, oh, you know, like, when I hear things like manually entering something into something and this got missed or something was doubled, you know, those all, of course, sound to me like issues related to tech that isn't necessarily up to the job of what we need it to be yet, you know, this tech is just wildly expensive. These ERP systems, they just really break the bank in many ways. I don't know if that observation sounds correct from your side of the table.

I think it's a combination of things. It's both weaknesses of the systems and human error, too.

Okay, okay. Right. But in theory, right, like a solid, you know, when you have solid IT, I don't mean this for this department, but any department, right, like solid IT, in theory it helps with that. But at any rate, I do want to touch just quickly on the shop spotter, just to kind of elevate that again. You know, we still do not have our post agenda on the shop spotter. It got... it got uh you know we had to postpone it uh i still do want to have that post agenda by the way because i think that there are serious uh concerns about the utility of shot spotter at all right uh and as as councilman bros mentioned there are a number of cities uh that have had this conversation however uh perhaps more important than that certainly to this conversation is that, you know, we learned last year, I'm sorry, we learned earlier this year when we were trying to get this post agenda finally, you know, finally on the books that a piggyback agreement was used to extend this ShotSpotter contract into, I believe, 2030. at 1.3 million dollars a year and that that was done knowing full well that council had questions about this contract and wanted to discuss it and discuss the utility of this system and that council was bypassed in that in that process for something called a piggyback agreement. So that is not great, and it also comes with a massive price tag, $1.3 million a year for a system that I would say is questionable to its efficacy. But at any rate, I do want to have that post agenda. I don't know what the details of contracts like that. If we are stuck with this $1.3 million bill, between now and 2030 or not. But at any rate, that is TBD for that conversation. I guess the last thing I just want to say is I just want to make it clear, because we hear this a lot, we just got to cut, we got to cut, we got to sit. And I just want to make it clear to the public, we have done austerity. We have gone to every department. in the city of Pittsburgh and told them to tighten their belts and they have, right? So we have, you know, I can't think of a single department that isn't, that hasn't, you know, shaved off everywhere they can and are, you know, providing services. But so for me, the conversation really continues to be and has been last year, this year, right? is is how do we increase revenue how do we increase revenue in the city of pittsburgh in a way that uh doesn't harm our uh you know hit the pocketbooks of our uh of our uh working you know of our um foreign working class residents uh how do we do that in a way that uh you know makes it possible you know i know that our large non-profits has stepped up with some generous donations, that is fantastic. Really kudos to the administration on getting the ball rolling there. But it's not enough, right? We can see that, right? It's not enough. And I just wanna, from my perspective, as a representative of the city, it is our duty to make sure that we can continue to provide the top quality services that we do provide and continue to improve the services that we need to improve upon in order, and I think that that is part of, a significant part, of the kind of growth strategy, right? That, you know, what we are talking about, not only making the city great for people who live here, right? And then continue to provide services for the folks here today, paying taxes today, but also make it a, you know, cutting services, you know, is not how, you know, reducing trash pickup or whatever it may be, whatever services, you know, some person may think they could do without here in the city. I would venture to bet that actually they would not want to do without those if push came to shove. And so we need to figure out a way to increase revenue so that we can maintain services that are working, expand services that more people need, and improve services that may not be working as well as they should. That's how we grow the city, right? That's how Pittsburgh is a beautiful city to live in, and that's how we continue to make it better and bring in new people as well. So I appreciate it. Thank you. Thank you, Madam Chair, for letting me jump the queue there. I appreciate it.

Thank you for your questions. Okay, we'll move now on to Councilperson Bob Charland.

Thank you. I will try to remain quick here, although I'm not sure I'll be able to. I wanted to start with the vacancy allowances because this was something we belabored last year at the end of the year when we were talking about this, specifically because the vacancy allowances went from a smaller number to a much larger number from the preliminary budget to the final budget that Mayor Ganey submitted to us. And we, you know, we talked to Director Pollack about this a lot. And essentially, you know, we didn't understand, you know, as I understand vacancy allowances, let's say Environmental Services is about 140 employees. I might be slightly off about that. We know that we really only ever have like 115 of them. We're always, we're trying to get to 140, but we don't have 140. So we essentially give ourselves a credit on the expenditure for that purpose. And then some reason that number ballooned from the first budget to the second budget. And we all were kind of like, we asked about that and There were a lot of answers but none that actually ever really made sense and we kind of just accepted that. How do we calculate vacancy allowance? I've heard some things recently about how this is actually calculated and they seem pretty troubling to me. Can we talk about how that is actually

Yeah, so we were, in OMB, we were discussing this today, actually. We're working on calculating the vacancy allowances for the 2027 operating budget. So it is not a hard science. There's just as much an art to it, you know, as it is, you know, just looking at the numbers. So, yeah, like I said, if it's a small department, we don't budget a vacancy allowance at all for it because it's fully staffed. And unless we know something different, we're going to assume that it's going to continue to be fully staffed for the upcoming budget year. Then whenever you get to mid-size departments, as I mentioned in the past, a common percentage we use for the vacancy allowance was around 3% of the total permanent full-time positions, those salaries. And that number, whenever you look at the position pages in the budget, It's that number at the end of the listing of those full-time permanent positions. So in the past, it was around 3% of that. But to be completely honest, at the end of the year, there was typically a larger percentage of savings salaries than we budgeted. It was important for us to be very conservative because typically at the end of every budget year, there was always one department, usually a public safety bureau, that would go over budget in their salaries and wages for whatever reason. And so what we would do at the end of the year, we would have end of year transfer legislation. That's what we would refer to it. And so what we would do was then we would look at the savings that were still left in all the other departments' budgets, and we'd transfer that over to the department that was going over budget. So, yeah, that was the reason why we'd be maybe excessively conservative with those numbers. But, yeah, it looks like that hasn't necessarily been the approach in recent years, so they've gotten more aggressive with the vacancy allowances. And honestly, like, if they... looked back at the savings compared to the budgeted salaries, when you look at all the departments, some departments do have substantial savings. So I'm sure that they use that as justification to increase the vacancy allowances.

so you know because this is kind of exactly the point um i believe we have budgeted for like 80 crossing guards i i could be wrong on this i don't have the the budget in front of me and frankly i haven't looked at the numbers as closely as i did if you're talking in december i would probably be a little better at putting this together, but let's say we budget for 80 crossing guards. We have like 45. We want to get to 80. We would never turn away someone who wants to become a crossing guard because we're in such dire need to have more crossing guards. But we're using the savings from that to pay for overages that we have in police or in fire.

Well, that's how we did it in the past. We don't necessarily do it that way anymore. Because Well, like, crossing guards are still budgeted in public safety admin, right? Yeah. So any savings there would go to the public safety admin salaries and wages.

Okay. And this was the point that we brought up last year was that, like, this is, you know, the more that we move this around, the more this becomes, like, dishonest budgeting. And it's the same problem, the problem that I've brought up since when I was a staffer, where we always say that we're going to pave less next year to make the budget work. And then inevitably, when we do the five-year budget in year three, we're going to say, we're actually not going to pave in 2028. But we are going to pave in 2028. As soon as that year gets closer, all of a sudden, that number, what we thought 2028 we would be paving, that number now triples. And you do that to make the numbers work. And so this is like one of the really distressing things about vacancy allowance is that it seems like it's budget math. It's a way to make the numbers add up even though they don't really. So I do hope that this is something that we address in this year's budget and can have a more honest accounting for the public and more honestly, accounting for ourselves, you know, about what that actually is going to look like and don't use this as a magic fixer, which, you know, is a belief that we did last year. Okay, so that's really all I want to say on that. I do want to ask about some of the revenue shortfalls that we're projecting here. I guess they're not quite... I don't know. I'm not an accountant. I don't know if you call them shortfalls yet, but things that are not performing the way that we thought they would be. So payroll prep tax, that essentially means that there's less employees or employees are making less money that are with companies that are within the city of Pittsburgh, correct?

So payroll prep is paid by the company based on the number of employees and their overall income. total payroll that works in the city of Pittsburgh. So it could mean two things. It could mean that their payroll numbers have reduced, right? So there's less employees. But if you look at other things that are related to payroll prep, so LS tax and EIT, which is earned income also. So normally those three types of, because they're based on wages, and employees they relate together and so you would normally tend to think that those also would be affected and they're not so what finance has experienced this year because we run with very small numbers of employees is processing of the tax forms and if we're down like one or two people there's a backlog so there could be and our backlog actually affected the 25 ending on payroll prep where we actually rolled over like 12 million dollars of that into 26. so the 26 budget and it's like we're projecting that it's going to come short is actually the newer amount plus the $12 million that we rolled into when we adjusted or we amended the budget for 26. So we increased the budget of payroll expense by like $8 million, I believe.

Okay.

However, like when we forecast and do this forecast for the quarters, it's based on like the cadence of the collections that came in the year prior. So it could be that we're not necessarily seeing a downturn in the revenue altogether, but the timing of the processing of the payments may not be relating to, which is causing like The actuals, which is then causing like us to project lower on income. So for the end of the year. So it still could. It could be timing. And it could be that for all three tax types, actually. So they could write themselves by the end of the year. So and they're each down about two million or so based on what we budgeted at. So the real concerns, though, are the ones that are the non-tax revenue. I mean, I'm not saying that that's not a concern, but it's hard to say whether it's truly a downturn or if it's just a timing situation with when the payments are coming in.

Okay. So, I mean, that's good because, you know, I... while what the budget means is important, also the story that it tells about the state of Pittsburgh is, you know, also important. So it's good to know, and you're saying that parking tax and amusement tax, those could also just likely be a timing issue. They just haven't been processed yet, or the, you know...

It could be, and... You can't see it as part of this, but the forward revenue that we see coming in, because the controller just closed July, there's definitely bumps in those collections, which push it up. I'm not saying it's going to close the gap at all, but it's pushing upward, so it could right the ship by the end of the year. But we'll just have to wait and see how it plays out.

The other one that is concerning is the licenses and permits.

There's definitely a downturn in the number of and the amount collected in construction permits for residential and commercial.

So we're seeing less construction? Yep.

It doesn't look like it, but revenue-wise, there's a difference.

It does look like it.

Yeah, it's a difference between where we were last year and where we are this year.

A fun game to play is count the cranes in Pittsburgh, and I think I count one right now, and that's not good. That's not healthy. We have no cranes operating downtown. That's terrible. And that's not necessarily a conversation for this, but I guess other members have gone on to some questions about what the story that this tells, and so am I. Okay, the last thing I wanted to ask about, because I want to kind of understand this correctly, is the draft. So we put a million into Visit Pittsburgh, and then we got a check for two million from Visit Pittsburgh. But do we know, do we have an accounting of how much we spent on the overtime and on the, you know, public safety and public works and everyone that was required to be there? Do we know the number of how, like how much the draft actually costs this municipality?

I don't do expenditures.

I'm looking at you, but yeah, I guess.

No, I don't think that we have a complete picture of it. So, I mean, on expenditures, we do, but then on the revenue side, we don't. So, yeah, I mean.

What do you mean on the revenue side?

So our parking tax may have been impacted by the draft. There might be some other things.

We lost a lot of parking, though, too. We did. We lost a lot.

Well, I'll tell you right now that our collections compared to last year for that month are half. So I would say, absolutely, we lost money on parking.

Yeah, I mean, all the North Shore parking was gone. So I guess that's one of the things I would love to... Visit Pittsburgh, put out their economic impact report. It was not that impactful. The report was not impactful. I mean, it didn't have a whole lot of details broken out there. I've asked for that report and have not... know the where they got the data from have not seen that um if we spent a million and got two million back you know we we need and we that would work if we only spent a million um on overtime i don't think that's the case so no i think we spent about 1.3 million it was 1.3 in overtime 1.3 on overtime um we have a breakdown so

The $1 million and the $2 million, while yes, they canceled, they are two separate things. We did submit expenses for the full $2 million that we received from Visit Pittsburgh.

Okay. So we believe we're somewhat close to being made whole, or we think like we're...

Overall, I would suggest that we are not whole.

Can you... I won't hold you to this, but what is the magnitude of not being made whole?

Well, if we submitted $2 million worth of expenses, then we're saying we spent $2 million, but technically our $1 million out, $2 million back were at least $1 million over.

Okay. I would love to find out more detailed information on that as best we could. I know it's not going to be a perfect accounting, but as close as we can would be helpful.

Yeah, we can certainly provide that.

The hotel motel tax is up again next year, so it would be nice to talk to Visit Pittsburgh about being a good partner if they would like our support. All right. With that, thank you for hosting this, Madam Chair, and thank you for all your guests here.

Thank you, Council Member and Councilwoman Salinitra.

I thank you so much for doing all this. I know how much hard work you've put into creating this and bringing us this information every month. Part of the... bad part of coming into the room late is that I'm speaking last and most of my questions have already been answered. But I had a quick question on reappropriations. And I know it sounds like we're really beating a dead horse with reappropriations, but it's very difficult to understand reappropriations. So I want to make sure I understand that this money was 2025 money that we have not spent. So it rolls over into 2026. I want to make sure that the public understands that, you know, that that rolled over.

Yeah, that's correct. So normally operating budget, unlike capital, operating budget funds expire at the end of the year. So after December 31st, there's no more 2025 operating funds left. However, there are situations where funds are tied up in contracts and purchase orders. And there's a third category, too. There may have been legislation for them towards the end of the year, but it never actually got into a contract yet. So those are also reappropriated. Okay. But yeah, they're from the prior year. There are rare cases, very rare cases, and I don't like this, that are funds from even earlier than that, that rollover. Okay.

Okay.

But it should just be the prior year.

Okay. My other question was regarding the false revenues. Can you give me a general understanding or explanation of the Pittsburgh Water Pension at $2.3 million? And I'm not sure what you mean by accounted for in a true up on expenditure side.

Okay. So we're doing things a little bit differently this year, but in the past handful or so of years, so the city and pittsburgh water perform what they call a true up and what that involves is at the end of the year um we get all our our expense expenses together so like all the permit fees and public works fees that are attributed to work that pittsburgh water did and then pittsburgh water puts together um all of our water bills and other items together and so at the end like all those calculations are done and then an amount um is determined at the end of that to see who owes who what and um And then whenever this true-up first started, it wasn't 100%. It started at like, I'd have to look at the co-op agreement, but I think it started at like 25%. I think it was 40 or 60. Okay, yeah. But now we basically have to pay Pittsburgh Water 100% of what we end up owing them after that true-up. And so at the end of 2025, that amount was $9.7 million. Thank you. Oh, and I'm sorry, I just want to add, and as part of that true-up, some of the Pittsburgh water costs in there were, are there pension costs? And so that was already factored in the true-up, but then whenever you look at, in the revenues, in the budget system, there was an amount explicitly called out for Pittsburgh water pension. Okay, okay.

The only other question I had was on the operating results, the deficit by year. Is there a way to, and I apologize if it was answered or talked about before I came in the room, is this a trajectory that we think will continue into the third and fourth quarter as far as the increase? You went from 24 million to 30 million. Do we anticipate that, or can we project that that's

Honestly, it's very hard to say. In the past, at least on the expenditure side, in my experience, we were much more conservative at the beginning of the year. So the outlook on expenditures would typically get better once you got to the end of the year. And the same thing with revenues, too, in the past. But this year has been a weird year, in my experience. So it's very hard to say at this point.

Okay. I appreciate that. That's it for me, Madam Chair. Thank you. Thank you for your questions. And thank you all for your answers and the explanations. I feel like every time we hold these sessions, you add another slide or you add another graph, and it's just really helpful for our understanding. as we, like I said in the beginning, as we grapple with the budget year-round rather than right at the end of the year and get to ask some of these questions. And I so appreciate my colleagues' engagement and questions, and we've gone through this together, so we know that we need to really take this seriously this year and in future years. I guess my only question is, There's this whole section of the budget that is the result of labor agreements, labor negotiations that council has no say over, right? But yet it's there, and it's this part of the budget that... that results in pay increases year over year, pension obligations, retroactive pay, all those types of things. I don't expect you to have it offhand now. I know the FOP arbitration remains open. There are others that are coming up soon. But it might be helpful for maybe even something written to us, but then for next time, to sort of understand what the ramifications of the most recent like in the last five years, agreements look like for a budget. We want our workers to be taken care of, obviously, and they have budget ramifications, so it might just be helpful for our own understanding of the budget, what that looks like, right? We were paying this for Some, you know, labor union kind of slice of our workforce in salaries, now it's this, just to kind of break it down like that.

Is that something that's possible that you could break down for us? Yeah, we can definitely do a lot of that. Yeah, there's definitely, like, specific categories. Like, we were talking about the longevity. We can absolutely give you, like, show you the amount that this last round of negotiations with Ask Me 2017 had on, you know, longevity payments because that wasn't something that was paid out to them in the past.

Yeah. Again, it's not to point fingers. It's not to – it's not to cast a – it's just to understand it because it's not often something that we get to talk about as counsel. So, okay. My only other thing is, we've talked about, we touched briefly on capital. I just want to return to that. I understand what you're saying about, and we see this every year, quarter one, quarter two, there's going to be far less. But are we on track? Do we feel like we're on track to be able to hit the targets that we think the budget that we set out to accomplish where, you know, we're... We're at the end of the summer, essentially, so we have still a long construction season before us, but I was actually surprised to see so little in the capital budget that was accounted for through quarter two.

Yeah, I'm always in support of more spending, so I'd love to see more spending happening in quarter two. Comparing this year to previous years, though, we are pretty much on pace. Like we're at 33 million and some change. I did the harder math during this meeting. For quarter two, 2026. 2025 you're at 34 million in years prior uh we had two years in the 20s we'd one year in 2022 that was like 15 million for quarter two so in terms of the rhythm of the normal construction calendar we are on pace with that um what can really throw that off or if there are any major construction projects that get delayed um that actually shifts the the street resurfacing budget you're Talking about earlier, for example, we had for 2027, 13 million anticipated for Cali Rec for construction. We just got the proposal July 1st. They're now anticipating it's going to be 8 million 2027, 5 million 2028. So what that does is increases our ability to add 5 million to 2027's paving budget, but then it decreases the amount of funds available for 2028. We don't do any kind of vacancy allowance for delays for capital. We try to take the best, most conservative version of the project. We want the projects to get done quickly. So we don't play any math games as far as anticipating those delays. But when they do come through, they end up creating more room for the current year that we're budgeting for, but less room for the out years when we go to do that six-year capital improvement program.

Thank you. I just thought of this question because I was so amazed and impressed with under, well, I don't even know if it was under budget, but the really precise and the timeframe that we were anticipating for the commercial street, the big slide, the big slide of the commercial street bridge, right? It was incredible engineering. And at that level, they were able to know that there were both carrots and sticks when it came to performing within the amount of time or going over. And I just am curious if that's something we even have the power to enforce, or if there were firms that could actually pay us for going over the amount of time that... like to look into it yeah potential source of revenue i don't i suspect that if we could do what we would have done it by now but i thought i'd ask as i'm thinking about sources of revenue because we'd you know if we could charge a bit for every time that a project went over um not even just over budget but like over the amount of time that they were supposed to take um yeah i would like that that'd be not not insignificant but Neither here nor there. Okay. I don't think I have any more questions. We've covered a lot. I get the benefit of getting a lot of my questions answered during, you know, sort of the meetings that we have in between these quarterly meetings, joint financial task force and revenue certification. So I don't have any more. Do any of my council colleagues who are still joining us have any more questions? Councilman Crockhill.

I'm sorry, I'll be brief. I just had a couple of follow-ups. Okay. And these are just real simple, at least the first two are. Vacancy. Back to vacancy again. So if somebody moves on for another job and we're in the process of hiring somebody, it might take six months. Six months, that goes into that pot while they're not there because we're not paying a salary, right? Now, if somebody moves on to another job and we decide not to fill that position, does that go to vacancy? No.

Yeah, that contributes to the vacancy.

Okay, so that would go into vacancy if we decide we're going to eliminate the position, basically. Well, for the current... For the remainder of the year.

For the remainder of that operating budget year, you would see savings from that position. But then you would...

Yes, so it's just a year. I mean, so if they went on to a new job in January, then we'll see, you know, 11 months of savings. Yes. Because next year, it's going to have to write itself again, whether we decide to, you know, fill that position or not. If we decide not to, then it's going to be reflected in the budget then. So, okay, so whether they move on or whether, you know, time period between we hire somebody, it all goes into vacancy for that year. And then a tally runs for the year following as it did then. So, okay, the other thing was PWSA, our water bill with PWSA versus our reimbursements for pension and other things. Who's paying more? Are we breaking even? Are we losing? We're paying a lot more. We're paying a lot more, are we? Yeah, yeah. And whose decision was it to start paying the water bill again? Was that council's? Was it?

No, it was probably recently. It was definitely in the past 10 years, right?

We might have to reevaluate that.

The authorities would pay us a payment in lieu of taxes. All the authorities did. That doesn't happen anymore.

It was just this sort of, sorry to, like, warn it, but it was this sort of, like, still, like, separation between from them being a department to them being a fully regulated utility separate company. And over five years, we were paying a little bit more, a little bit more on par with, like, what we're actually being charged for water rather than a payment.

And it was actually ordered by the Public Utilities Commission, too.

Oh, so we didn't have a choice in that. No, we did not have a choice. Oh, okay. Well, that makes sense. I feel better about it if I voted for it. I can't remember. I didn't know the water was going to be that expensive, honestly. I mean, that's a lot of money that we have to account for every year. So, okay, what I hope is to answer that. The other thing was this. I just want to, for the public's sake and for my sake, we have how many trust funds? You don't have to have exact numbers, but we have a lot of trust funds. It's not just Stop the Violence and the housing opportunity.

So special revenue accounts, you're talking about trust funds, grant accounts, capital job numbers might fall into that category. Trust funds in the budget... There's probably 20 to 25 that we list out because they usually have personnel costs in them. And then there's another six, seven pages that just list spend authority because they don't have people.

Okay, so we're talking $30-plus million a year encumbered by trust funds.

Oh. I think it's one more. It's more than that. Yeah.

So we've got Stop the Violence at 10. We've got the Housing Opportunity Fund at 10.

That leaves the city. So we don't have a trust fund for it.

It's your Parks Tax Trust Fund, two RAD accounts, which is money that comes in separately from the city budget. It's CD funding, HUD funding. EEOC funding, which is also HUD funding.

I'm not suggesting by any way, shape, or form, I don't want this room to be filled next week saying Coghill's trying to raid the trust funds. But I just want the public to know that we have $10 million a year going into Stop the Violence, which there's some really good things going on there. Whether that's a proper amount or not, we'll debate that as we see where our finances are, I guess. So... So, okay, but you're saying it's well over $30 million in different trust funds, which most of them are needed and valuable to us.

And not all of them are funded through our budget. Many of them have outside sources coming in.

Yeah, there's a reason why they're called a trust fund or a special revenue fund. The funds that come in, we're legally obligated to spend it on only specific expenditures. Yep.

Yeah, right.

So that's why they're segregated from the general fund.

Yeah, yeah, right, right. But of that, $30-plus million. I'm not talking about any outside funding comes in. I'm talking about what the city of Pittsburgh puts out. And we know it's $10 million to stop the violence fund.

Yeah, right, right. I don't know if it would be...

It actually, in that context, I believe it might actually just be stop the violence that we budget money into.

Okay, that's good to know, Elizabeth. That's kind of what I was unclear on. That's all I was really trying to...

There have been a few instances in the past maybe four or five years that we've needed to assist for payroll needs, assist trust funds. Like when money didn't come from the county or the federal government into our seniors' trust fund, we needed to maintain payroll for those and the programs. Understood.

Yeah, so we kind of borrowed from it. from perhaps the parks tax excuse me the parks general fund but they've since retained their their status okay just in general I just want to know in general so our expenditures per year salaries are what thirty percent

Oh, no, salaries and wages and benefits, too, is definitely over 75% of the operating budget.

Over 75% of the operating budget, right, which is most of the year. And the operating budget for last year was how many millions?

$721 million.

$721 million, yeah. So, I mean, obviously we have to find ways to either generate new revenue or cut spending moving forward. I don't wish to lay people off or anything like that, but if there are departments, and we'll talk as a council, moving forward that if by attrition somebody retires then we're not affecting anybody's lives or having them go seek new employment but if we could do more with less I think that's going to have to be on the table for us moving forward in the way of positions sound salaries right I mean that's where a lot of big savings could be done there when you factor in the benefits and all so Okay, that was it. It was very informative. I appreciate it. Again, thank you, Madam Chair. Appreciate these sessions that you put together. I think they're going to be helpful leading up to the budget for sure.

Thank you very much, and thank you all for joining us. Thank you for the informative session. So having exhausted the business of this post-agenda hearing, this hearing is adjourned.

Thank you. Thank you.