2022_PAFR.pdf

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FOR THE F ISCAL YEAR ENDED

DECEMBER 31, 2022

PREPARED BY: MICHAEL E. LAMB

CITY CONTROLLER

I N

T H I S

A N N U A L

R E P O R T

two years

Responsibility: legislative authority

ELECTED OFFICIALS

COUNCIL MEMBER DISTRICT

Mayor: edward c. gainey

Control ler: Michael E. Lamb

CITY COUNCIL MEMBERS

CITY COUNCILCITY CONTROLLER

u Innovation & Performance u Finance u Human Relations Commission u Law u Office of Municipal Investigations u Equal Opportunity Review Commission u Equipment Leasing Authority u Permits, Licenses and Inspections u Management & Budget u Citiparks u Public Works u City Planning u Department of Mobility & Infrastructure u Public Safety u Human Resources & Civil Service u Citizens Police Review Board

9 Council Districts

Bobby Wilson 1 (412) 255-2135

Theresa Kail-Smith, President 2 (412) 255-8963

Bruce Kraus 3 (412) 255-2130

Anthony Coghill 4 (412) 255-2131

Barbara Warwick 5 (412) 255-8965

R. Daniel Lavelle 6 (412) 255-2134

Deborah Gross 7 (412) 255-2140

Erika Strassburger 8 (412) 255-2133

Rev. Ricky Burgess 9 (412) 255-2137

TABLE OF CONTENTS

TELEPHONE

CITIZENS of the CITY of PITTSBURGH

Photos: Front Cover: A majestic view of Pittsburgh from the Duquesne Incline. Back Cover: Clockwise from top left; A view from Manchester in the North Side, photo by John Altdorfer; Lunchtime in downtown Pittsburgh; Bike patrol in downtown Pittsburgh; A view of the Point from the North Shore, photo by John Altdorfer.

MAYOR

A MESSAGE FROM THE CITY CONTROLLER

Control ler: Michael E. Lamb

Government Finance Officers Association

Award for Outstanding

Achievement in Popular Annual

Financial Reporting

Presented to

City of Pittsburgh Pennsylvania

For its Annual Financial Report For the Fiscal Year Ended

December 31, 2021

Executive Director/CEO

T hank you for taking the time to review the City of Pittsburgh’s Popular Annual Financial Report (PAFR) for the year ended December 31, 2022. The purpose of the PAFR is to increase awareness throughout the community of the financial condition of the City of Pittsburgh. In addition to providing information on City finances and government operations, this report also helps demonstrate what makes Pittsburgh a great place to live, study, and work.

As Pittsburgh continues to evolve and thrive, it is crucial for us to come together and ensure transparency, accountability, and responsible fiscal management. For the thirteenth consecutive year, this report has received the Award for Outstanding Achievement in Popular Annual Financial Reporting from the Government Finance Officers Association. For a more detailed view of the City’s finances, you can review the 2022 Annual Comprehensive Financial Report, which is available on the Controller’s website.

We understand the significance of open communication, and the PAFR serves as a platform for sharing vital information, fostering dialogue, and answering your questions related to Pittsburgh’s finances, revenue streams, expenditures, and investments that shape our vibrant community.

While the COVID-19 pandemic began to morph into an endemic as vaccines and boosters became readily available, the virus’s economic impact was still felt in 2022. The City itself was buoyed by the support of the American Rescue Plan Act (ARPA), but the regional economy is likely dealing with permanent changes as a result of the pandemic, including changes to the workforce and population fluctuation. City finances in 2022 remained stable. With the help of ARPA, the City exceeded budget projections and collected more than $700 million into the general fund. While initial allocations of ARPA funds were made in 2021, City Council and the new Mayor reallocated monies in 2022.

It is important for us to demonstrate the role City government is playing in supporting these activities. In the PAFR, we highlight the prudent decisions and collaborative efforts made by city officials and departments to maximize resources and deliver essential services to our residents.

A new Bridge Asset Management Trust Fund was created in the wake of the Fern Hollow Bridge Collapse in Frick Park on January 28, 2022. City and county leaders surveying the scene were joined by President Joe Biden, who happened to be visiting Pittsburgh the day of the collapse to promote the Infrastructure Investment and Jobs Act.

The bridge collapse highlighted the backlog of critical infrastructure repairs faced by the City of Pittsburgh and the impact of deferred maintenance during the preceding 40 years. This is covered in more detail on page 8 and 9.

I welcome any feedback, comments, or concerns regarding the information included in this report. Whether you are a taxpayer, business owner, community leader, or simply someone invested in the prosperity of Pittsburgh, we value your participation and encourage your engagement. Your input and insights are invaluable in shaping our fiscal policies and priorities for the future.

Sincerely, Michael E. Lamb City Controller

Photo: Downtown from the Sheraton Hotel, Station Square.

A B O U T

P I T T S B U R G H

Estimated City Population 302,971

Median Age

Race

Language Spoken at Home

Educational Attainment

Estimated Median Household Income

Housing Units

City Staffing

Employment

areaemployment_pittsburgh.htm Unemployment Rates

* Rate is not seasonally adjusted Per Capita Income $37,655 Persons Below Poverty Line

https://worldpopulationreview.com/us-cities/pittsburgh-pa-population

Pittsburgh Public Schools Demographics

Pittsburgh Public Schools 2021-22

u PA Average Spending per Student** $19,667

DEMOGRAPHIC AND ECONOMIC STATISTICS

PITTSBURGH PUBLIC SCHOOL STATISTICS

Photos: Top, left to right: Lower and Central Lawrenceville from the Tryp Hotel, photo by John Altdorfer; Pittsburgh Lincoln Kindergarten Class, photo by Jason Cohn; Bottom left to right: Pittsburgh Obama High School Girl’s Basketball team, photo by Jason Cohn; Chatham University faculty member with student, photo by Chatham University; 2023 All-Star middle school instrumental concert, photo by Jason Cohn; Pittsburgh Dilworth morning assembly, photo by Jason Cohn.

PITTSBURGH EDUCATION, CULTURE & BUSINESS

Pit tsburgh Public Schools Statist icsColleges and Universities in the City* Carlow University Carnegie Mellon University Chatham University Community College of Allegheny County Duquesne University Point Park University University of Pittsburgh

Museums in the City* The Andy Warhol Museum Carnegie Museum of Art Carnegie Museum of Natural History Carnegie Science Center Children’s Museum of Pittsburgh Contemporary Craft Fort Pitt Museum The Frick Pittsburgh Mattress Factory National Aviary Phipps Conservatory and Botanical Gardens Pittsburgh Center for Arts and Media Pittsburgh Zoo & Aquarium Senator John Heinz History Center Soldiers & Sailors Memorial Hall & Museum

2022 Fortune 500 Companies Headquartered in Pittsburgh Alcoa Corporation Arconic Kraft Heinz The PNC Financial Services Group, Inc.

PPG Industries, Inc.

United States Steel Corporation WESCO International, Inc.

Westinghouse Air Brake, Wabtec Corp.

Source: 2022 Fortune Magazine, Fortune 500

Largest Health and Social Service Nonprofits* Achieva Baptist Senior Family Brother’s Brother Foundation Center for Organ Recovery & Education Goodwill of Southwestern Pennsylvania Jewish Federation of Greater Pittsburgh Life Pittsburgh Pittsburgh Mercy Pressley Ridge United Way of Southwestern Pennsylvania Vincentian Collaborative System Wesley Family Services

Largest Arts and Humanities Nonprofits* Allegheny County Library Association Boy Scouts of America Laurel Highlands Council Carnegie Library of Pittsburgh Carnegie Museums of Pittsburgh Phipps Conservatory and Botanical Gardens Pittsburgh CLO Pittsburgh Cultural Trust Pittsburgh Symphony Orchestra Pittsburgh Zoo & Aquarium Western Pennsylvania Conservancy *Source: 2022 Pittsburgh Business Times Book of Lists

Photos: Top left to right: Community College of Allegheny County, North Sde campus; CORE staff prepares for an organ recovery at CORE headquarters in Pittsburgh; The PNC Financial Services Group, corpo-rate headquarters in One PNC Plaza; Animals are always visible at the Pittsburgh Zoo; Bottom left to right: A Pittsburgh Mercy outreach team consisting of a physician, a nurse practitioner, and an outreach worker deliver street medicine to persons who are experiencing homelessness.

(Photo © 2023 Pittsburgh Mercy. Used with permission); Phipps Conservatory;

LIFE Pittsburgh has several Adult Day Health Centers throughout the western half of Allegheny County, where they provide care for older adults who need extra support to continue living at home; The Byham Theater which is part of the Pittsburgh Cultural Trust.

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Photos: Top to bottom: The Marshall Mansion in Mellon Park; South Side Signal Project along Irvine Street, taken at South 18th and Josephine Streets; The Negley Station on the East Busway, is the first station in the Station Improvement Program.

American Rescue Plan 2022 The City of Pittsburgh was awarded $335 million in pandemic response and recovery funding. The City received half of the funds, $167.5 million, on June 3, 2021, and the second half came on June 6, 2022. All American Rescue Plan Act money was deposited into the dedicated ARP Trust Fund.

The Office of Management & Budget is responsible for filing the City of Pittsburgh’s Recovery Plan Performance Report with the U.S. Department of the Treasury.

On January 26, 2022, $20,221,879 was transferred from the ARP Trust Fund to the Capital Fund for Capi-tal Projects and on February 21, 2022, $48,046,278 to the General Fund for Operating Expenses.

The largest allocation of 2022 ARP funds was $27,292,000 in the Operating Budget to eliminate the anticipated workforce reduction and avoid the layoff of 600 employees, including firefighters, paramedics, and police, as well as cutting some City services.

Major Capital Projects using ARP funds in 2022

Three (3) transfers out of the ARP Trust Fund in 2022 went towards two (2) City trust funds

2022 Payments from the ARP Trust Fund to City Contracts & Cooperative Agreements

The City of Pittsburgh is planning to spend nearly $10 million of ARP funds over the next two years to expand on a current program designed to as-sist those experiencing homelessness, substance abuse or untreated mental health issues.

Pittsburgh City Controller American Rescue Plan Trust Fund Monitoring Page can be found at https://fiscalfocus.pittsburghpa.gov/

AS OF DECEMBER 31, 2022

$335,070,222 Total ARPA Funds $(165,531,385) Total Encumbered

$169,538,837 Difference $31,998,073 Remaining Balances on Open Contracts

$201,536,910 TOTAL in ARP Trust Fund (as of 31 Dec 2022) https://fiscalfocus.pittsburghpa.gov

AMERICAN RESCUE PLAN INFORMATION

Project Name – Operating Budget Eliminate the Anticipated Workforce Reduction 3% Wage Increases for Non-Union Positions Restore Some Vacant Positions (9/1 start for 2021 only) Restoration of Non-Personnel Lines Restoration of ELA Non-Personnel Lines Restoration of Additional Public Works Non-Personnel Lines New Positions/Mid-year Swaps (9/1 start for 2021 only) New Non-Personnel Lines New Non-Personnel Lines for I&P Needs New Non-Personnel Lines for Public Works Needs Community Public Safety Facilities OCHS- AHN Project Land Maintenance for City & 3TB-owned Properties

Project Name – Transfers to Other Trust Funds Lead Safety Trust Fund

Bridge Asset Management Trust Fund

Total Encumbered as of 31 DEC 2022

TOTAL Transfer to New Trust Funds

Total Expenditure as of 31 DEC 2022 2022 Remaining Balance – Operating

Project Name – Capital Budget Demolition of Structures Cowley Rec Center Facility Upgrades Cowley Rec Center Tech Upgrades Thaddeus Stevens School Facility Upgrades Thaddeus Stevens School Tech Upgrades McKinley Rec Center Facility Upgrades Phillips Rec Center Facility Upgrades Hazelwood Senior Center Facility Upgrades Marshall Mansion Facility Upgrades Marshall Mansion Tech Upgrades Paulson Rec Center Facility Upgrades Paulson Rec Center Tech Upgrades Public Works Fourth Division Construction Robert E. Williams Rec Center Facility Upgrades Robert E. Williams Rec Center Tech Upgrades Green Fleet Improvements Streetlights 57th Street Steps Frazier Street Steps Hill District Corridor Enhancements North Avenue Streetscape Rehabilitation (Safety & Signal) Irvine Street Improvements Public Step Improvement Projects

Total Encumbered as of 31 DEC 2022

Total Encumbered as of 31 DEC 2022

Total Expenditure as of 31 DEC 2022

Total Expenditure as of 31 DEC 2022

Total Encumbered as of 31 DEC 2022 Total Expenditure as of 31 DEC 2022

2022 Remaining Balance – Capital

2022 Remaining Balance – Transfers

2022 Remaining Balance – Contracts

$ 52,918,772 $ 2,343,168 $ 7,584,135 $ 682,525 $ 1,375,000 $ 3,715,580 $ 598,323 ($ 104,758) $ 1,599,300 $ 2,082,393 $ 1,000,000 $ 5,000,000

$ 3,000,000

$ 81,794,438

($ 52,918,772) ($ 2,343,168) ($ 7,584,135) ($ 682,525) ($ 1,375,000) ($ 3,715,580) ($ 598,323) $ 104,758 ($ 1,599,300) ($ 2,082,393) ($ 1,000,000)

($ 3,000,000)

($76,794,438)

$ 2,000,000 $ 2,500,000 $ 30,526 $ 1,000,000 $ 119,242 $ 200,000 $ 170,000 $ 50,000 $ 1,100,000 $ 34,111 $ 300,000 $ 30,526 $ 1,400,000 $ 500,000 $ 30,526 $ 13,750,000 $ 4,000,000 $ 598,116 $ 1,800,000 $ 2,274,000 $ 2,500,000 $ 1,000,000 $ 1,100,000 $36,487,047

$ 250,000

$ 1,800,000

$ 2,050,000

$ 200,000 $ 17,000,000 $ 2,800,000 $ 100,000 $ 999,900 $ 1,000,000 $ 21,000,000 $ 2,100,000

($ 1,596,270) ($730,723) ($25,177) ($ 6,066,735) ($444,818) ($799,692) ($ 9,663,415)

($ 250,000) ($ 1,800,000) ($ 2,050,000)

($101,709,680)

$ 403,730 $ 2,500,000 $ 30,526 $ 1,000,000 $ 119,242 $ 200,000 $ 170,000 $ 50,000 $ 369,277 $ 34,111 $ 300,000 $ 5,349 $ 1,400,000 $ 500,000 $ 30,526 $ 7,683,265 $ 4,000,000 $ 598,116 $ 1,800,000 $ 2,274,000 $ 2,500,000 $ 555,182 $ 300,308 $26,823,632

2022 ARP TRUST FUND FULL ALLOCATION: $335,070,222

Project Name – Contracts & Co-op Agreements Maher Duessel Contract (Administration) Lead Line Replacement Penn Circle Two-Way Conversion: Station-Euclid Casa San José Immigration – Court Program Match PittSTAR Streeteries Program Jasmine Nyree Center OWNPGH Affordable Homeownership Program Downtown Commercial Real Estate Conversion Program

TOTAL ARP to Capital Budget

TOTAL Contracts & Co-op Agreements Total Encumbered as of 31 DEC 2022

$45,199,900

$ 165,531,3852022 ARP Trust Fund Totals

($ 66,935) ($ 2,209,892) ($ 2,800,000) ($ 100,000) ($ 500,000) ($ 1,000,000) ($ 5,475,000) ($ 1,050,000) ($ 13,201,827)

Total Expenditure as of 31 DEC 2022 2022 Remaining Balance of Encumbered

$63,821,705

$ 133,065 $ 14,790,108 $ 499,900 $ 15,525,000 $ 1,050,000 $ 31,998,073

TOTAL ARP to Operating Budget

$ 5,000,000

$ 5,000,000

This chart shows the project line items legislatively approved by City Council encumbered and spent for 2021 & 2022.

The last column shows any remaining balance of committed funds.

F E R N H O L L O W

B R I D G E

C O L L A P S E

On the morning of January 28, 2022, the Fern Hollow Bridge in Pittsburgh’s Frick Park collapsed into the ravine below. Fortunately, no life-threatening injuries resulted to those who had been on the bridge at the time of its fall, but the incident put a local – and national – spotlight on the city’s backlog of critical infrastructure needs.

Coincidentally, President Joe Biden arrived in Pitts-burgh the same morning to promote projects funded by the Infrastructure Investment and Jobs Act, which was passed by Congress in the fall of 2021. National, state, and local leaders arrived at the scene to assess the damage and vowed to oversee the bridge’s reconstruction.

Within days, the city signed an emergency agreement with Governor Tom Wolf’s administration, and the Pennsylvania Department of Transportation (PennDOT) announced that $25.3 million would be set aside to cover the costs of building a replacement bridge. Under this fast-tracked process, ground broke on the new bridge in April and officially reopened to traffic on December 22, 2022.

Though its quick replacement was celebrated as a success in intergovernmental cooperation, the incident turned Pittsburgh residents’ attention toward the dozens of other bridges in urgent need of repairs. As was widely reported at the time, the condition of the original Fern Hollow Bridge was rated “poor” by state-licensed inspectors prior to its collapse, alongside dozens of others owned and managed by the city.

In response, City Council approved transferring a total of $1.8 million in American Rescue Plan Act (ARPA) funds through 2022 into a new Bridge Asset Management Trust Fund. Those funds were primarily spent on a $1.5 million contract with an outside consultant to catalogue and assess the state of all 147 city-owned bridges.

The final report was released in December and con-firmed what many had already suspected: dozens of Pittsburgh’s bridges were in dire need of capital upgrades. While the report stated that there were “no vehicular bridges with a structural concern that would require a new closure,” it did conclude that there were 27 vehicular bridges with issues that needed addressed within one week and another 13 with immediate structural priorities.

The Gainey administration reported that as of December, all but three bridges in the former category and five in the latter category had seen their needs addressed. The report included PennDOT’s ratings for 116 city-owned bridges:

u Very Good: 4 u Good: 12 u Satisfactory: 14 u Fair: 54 u Poor: 32

Fern Hollow Bridge Collapse and Reconstruction:

Confronting Pittsburgh’s Infrastructure Deficit

“The collapse of the Frick Park Bridge this morning is a reminder that investments in infrastructure are invest-ments in public safety.” – City Controller Michael Lamb

“Pittsburgh is the City of Bridges, but too many are in poor condition like the one behind me before it collapsed.” – President Joe Biden

Photos: Above: President Joe Biden was in Pittsburgh promoting projects funded by the Infrastructure Investment and Jobs Act when the bridge collapsed; At right: Rebuilding the piers for the Fern Hollow Bridge.

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C O L L A P S E

Photos: Top: The aftermath of the Fern Hollow Bridge collapse;

Left: Celebrating the reconstruction of the bridge in December 2022.

Despite these first steps, internal challenges remain.

Staffing shortages in the Department of Mobility and Infrastructure (DOMI) have left a mounting backlog of work on a thinning staff while city leaders continue to explore new avenues to raise revenues that would fund future infrastructure needs. In the approved 2023 Capital Budget, around $101 million was re-served over the 2023-2028 period for 13 individual bridge repair projects in addition to over $22 million for ongoing bridge restoration and upgrade efforts.

Of the bridges with dedicated capital projects, 10 were rated “poor” by state inspectors, two were rated “serious,” and one was rated “fair.” Still, the earliest anticipated start date on any of these projects is 2024, and while the city is expected to draw from new funds made available for bridge repairs under the Infrastructure Investment and Jobs Act in the short-term, closing the City of Pittsburgh’s infrastructure deficit will remain a pressing issue for local leaders well into the foreseeable future.

West North Avenue & Brighton Road Penn Avenue Pensdale Street Bridge #2 Parking Lot Bridge at Woodruff Street River Avenue Viaduct Second Avenue Shaler Street South Negley Avenue Seventh Avenue Swindell Bridge Swinburne Bridge Brighton Heights Boulevard Timberland Avenue 28th Street Wilksboro Avenue (Pedestrian Bridge) Milroy Street

Charles Anderson Bridge Ansonia Place Bajo Street Calera Street #1 Calera Street #2 Centre Avenue West Carson Street Elizabeth Street East Liberty Boulevard Corley Street Herron Avenue Larimer Avenue Lowe Street (Pedestrian Bridge) Maple Avenue McArdle Roadway Midwood Avenue (Pedestrian Bridge)

*As reported in the City of Pittsburgh Comprehensive Bridge Asset Management Program released in December 2022. Ratings are subject to change.

WHICH BRIDGES WERE IN POOR

CONDITION ON 2022?*

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T T S B U R G H

G O V E R N M E N T

Department of Finance/City Treasurer The Department of Finance/City Treasurer is responsible for the collection and investment of operating cash of the City. Finance audits City revenues and bills and collects tax revenue, fees, and charges. The Finance Department is also responsible for the investigation and auditing of revenue accounts.

Department of Mobility and Infrastructure The Department of Mobility and Infrastructure (DOMI) is responsible for managing the operation of and access to the public right-of-way, such as streets, sidewalks, and bridges.

Department of Public Works The Department of Public Works (DPW) maintains the City’s park facilities and public structures. DPW also meets the environmental needs of Pittsburgh residents by collecting residential refuse and recycling. The department also ensures public safety by responding to weather-related emergencies such as flooding, land subsidence, snow and ice storms, and other disasters.

Human Resources and Civil Service The Department of Human Resources and Civil Service (HRCS) is responsible for overseeing employment and staffing of the City of Pittsburgh government. HRCS also manages education and training, benefits, and worker’s compensation for City employees.

Office of Management and Budget The Office of Management and Budget (OMB) ensures the effective and efficient use of the City’s resources in order to sustain the delivery of quality services to the residents of Pittsburgh. OMB establishes sound fiscal policies, and delivers a clear and accurate picture of the City’s current and future financial position.

Permits, Licenses and Inspections The Department of Permits, Licenses and Inspections is responsible for the administration and enforcement of the Pittsburgh building code and zoning code and also enforces the City’s various business and trade licenses.

Bureau of Emergency Medical Services The Bureau of Emergency Medical Services is dedicated to the health and safety of residents and visitors through the provision of advanced life support, pre-hospital care, medically-directed technical rescue, and transportation of the ill and injured.

Bureau of Fire The Bureau of Fire develops, implements, and admin-isters public safety programs in areas of fire suppres-sion, first responder emergency medical care, fire prevention, hazardous materials code enforcement, fire and arson investigation, and public education.

Bureau of Police The Bureau of Police is responsible for the protection of life and property, the enforcement of criminal and traffic law violations, and the prevention of crime.

Citiparks Citiparks, Pittsburgh’s Department of Parks and Recreation, is responsible for promoting and operat-ing many of the City’s recreational, educational, and cultural programs. Citiparks operates all of the City’s swimming pools, spray parks, community and senior recreation centers, the Schenley Oval Sports Com-plex, Schenley Park Ice Rink, and the Mellon Park Indoor Tennis Center.

City Controller See page 11 for responsibilities and duties of the City Controller.

City Planning City Planning is responsible for ensuring that devel-opment projects are in compliance with the City’s neighborhood plans and applicable zoning regula-tions. Planning also makes sure that development projects are ADA (Americans with Disabilities Act) compliant, and conducts reviews of a project’s impact on traffic, storm water management, and the environment.

The City provides a full range of services, including public safety, construction and maintenance of City property and infrastructure, sanitation services, and recreation and cultural activities. The Water and Sewer Authority, Urban Redevelopment Authority, Stadium Authority, and Parking Authority are component units of the City and are shown as such in the financial statements and the footnotes to the annual report.

WHAT YOUR GOVERNMENT DOES

Photos: Left to right: Enjoying the fountain at Point State Park; The Pittsburgh Bureau of Fire, Fireboat 1 protecting boaters on the three rivers; A patient being transported to Allegheny General Hospital on the North Side; Pittsburgh mounted police.

T T S B U R G H S

C I T Y

C O N T R O L L E R

PGH Watchdog is a mobile app that enables any person to report to the City Controller’s office any waste, fraud, and abuse of City government-related tax dollars they may see.

PGH Watchdog is available for free on the Apple App store and Google Play or Twitter @PGHWatchdog

Accounting The Controller’s accountants are tasked with tracking all revenues and expenditures made by the City. At the end of each fiscal year, they produce an annual financial report that details the City’s fiscal condition.

Accounts Payable The accounts payable section oversees the payments made by City departments. They receive purchase orders, checks, and contracts in addition to performing audits of payments to make sure City funds are being spent appropriately.

Engineering The Controller’s office has a team of inspectors who travel across the City to assess big projects.

This ensures quality completion.

Fiscal Auditing Our fiscal auditors perform financial reviews of programs by analyzing their revenues and expenditures. A key focus is ensuring funds are being appropriately tracked and spent across the City government.

Performance Auditing Our performance auditors conduct audits of City departments to find inefficiencies and make recommendations that save money or improve the delivery of services.

2022 Fiscal Audits:

u Bureau of Police, Department of Public Safety:

Police Secondary Employment Trust Fund u Department of Finance: Three Taxing Bodies Services Trust Fund & Escrow Account u American Rescue Plan Trust Fund u Follow-Up Report: Special Events Trust Fund

2022 Performance Audits:

u Department of Finance:

Real Estate Tax Processing u Pittsburgh Bureau of Police u Department of Mobility & Infrastructure u Department of Public Safety, Bureau of

2022 Special Reports:

u Tax-Exempt Properties

PGH WATCHDOG

OFFICE DIVISIONS

AUDITS RELEASED IN 2022

The City Controller is one of two independently elected, citywide offices in the City of Pittsburgh, the other being the Mayor. It is the job of the Controller to protect city government-related tax dollars from waste, fraud, and abuse. The Controller audits all city government-related expenditures (the City also has a Finance Department and Treasurer who are responsible for collecting and auditing all City revenues), and conducts audits of all City departments and authorities.

To learn more about Pittsburgh’s controller, please visit http://pittsburghpa.gov/controller/controller.html or Twitter @PGHController

The City Controller’s office launched an unclaimed prop-erties website which allows the public to search the City’s database of unclaimed funds.

For more information, and to search the City of Pittsburgh’s unclaimed funds database, please visit:

http://pittsburghpa.gov/unclaimed-property/ index.html or Twitter @Unclaimed PGH

UNCLAIMED PROPERTY

As the saying goes, “a picture is worth a thousand words.”

Fiscal Focus Pittsburgh is an online data platform that gathers the City’s complex financial information and organizes it into clear graphics.

For more information, please visit:

https://fiscalfocus.pittsburghpa.gov or Twitter @FiscalFocusPGH

FISCAL FOCUS PITTSBURGH

OpenBook Pittsburgh is a searchable website of City of Pittsburgh contracts, elected official campaign contributions and expenditures, and a list of lobbyists who are registered with the City.

To learn more about OpenBook Pittsburgh, please visit:

www.openbookpgh.com or Twitter @OpenBookPGH

OPEN BOOK PITTSBURGH

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R E V E N U E S

When assessing City finances, it is important that we focus on the City’s General Fund. It is used to account for all regular day-to-day operations, revenues, and expenditures of the City, except those required to be accounted for in another fund. In this section, we will discuss General Fund Revenues, the largest of which are taxes.

General Fund Revenue Fluctuations From 2021-2022, the Grand Total General Fund Revenues & Transfers increased approximately $94.7 million or by 15.6%.

The net increase in Revenue is about $78.4 million.

This is attributed to increases of $16.6 million in Payroll Preparation Taxes, $12.2 million in Grants, $11.8 million in Other Taxes, and $10.8 million in Earned Income Taxes.

$48.5 million from the City’s American Rescue Plan Trust Fund were transferred into the General Fund.

From 2020-2021, Total General Fund Revenues increased approximately $32 million or by 6%.

These increases were mainly due to post-pandemic activities returning such as concerts, shows, conventions, and sporting events. Elements of this increase include $20.2 million in Deed Transfer Taxes, $8.1 million in Other Revenues, $6.2 million in Earned Income Taxes, and $5.4 million in Parking Taxes. In 2021, $33.7 million from the American Rescue Plan Trust Fund were transferred into the General Fund.

24%

19%

Re al

E st at e

12% 10%

7%

Ea rn ed In co m e

Pa yr ol l P re pa ra tio n

O th er T ax es

Ch ar ge s

10%

D ee d Tr an sf er

G ra nt s

O th er

R ev en ue

11%

7%

Pa rk in g

Parking Taxes A tax equal to 37.5% of the consideration paid for each parking transaction is levied on the patrons of non-residential parking places in the City.

Deed Transfer Taxes A tax of 3% of the consideration paid for real property transfers is levied upon the transfer of an interest of real property situated in the City.

Other Taxes Other taxes assessed by the City include the Amuse-ment Tax, the Institution Service Privilege Tax, the Local Services Tax, and the Facility Usage Fee.

Real Estate Taxes Real estate taxes are imposed on most property in the City as assessed by the Allegheny County Board of Property Assessment, Appeals and Review. The rate was 8.06 mills on buildings and land.

Earned Income Taxes This tax is levied at a rate of 1% on the wages or net profits earned by City residents. The City also receives a portion of the Earned Income Tax assessed by the Pittsburgh Public Schools equal to 2%.

Payroll Preparation Taxes This tax is imposed on all for-profit employers at a rate of 0.55% of the total wages of all employees who work in the City.

The following are the descriptions of the major types of taxes the City levies:

MAJOR TAXES ASSESSED BY THE CITY

Like all governments, the City must raise funds to pay for the services that it provides to its citizens and businesses. These sources of funds, referred to as revenue, are raised through fees, charges, and taxes.

Real Estate Taxes Earned Income Taxes Payroll Preparation Taxes Parking Taxes Deed Transfer Taxes Other Taxes Total Taxes Charges Grants Other RevenueTotal Total Revenue Leases Transfers In

GENERAL FUND REVENUES AND TRANSFERS

2022 2021 2020

$606,036Grand Total $700,762

$155,413 125,294 75,331 46,201 64,857 63,415

$530,511 48,070 52,495 15,658

$646,734 1,982

52,046

$151,813 108,300

64,095 31,258 43,985 49,459

$448,910 37,155 49,457

$536,302

2,000 $538,302

WHERE OUR MONEY COMES FROM

(in thousands)

$151,951 114,450 58,779

36,695 64,187 51,609

$477,671 41,524

40,253 8,840

$568,288

37,748

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E X P E N D I T U R E S

During the years ended December 31, 2022, 2021 and 2020, the City expended its funds as shown to the right. The per capita amounts represent the amount that the City expended on each type of service per resident, while the aggregate represents the total amount spent.

From 2021-2022, General Fund Expenditures in-creased by approximately $37.5 million or by 7.3%.

Elements of this increase include a 19% increase in Public Works, a 13.8% increase in Community, Recreational, and Cultural, and a 5.1% increase in Public Safety. Transfers to other funds increased 7.9%, predominantly made up of increases in transfers to the Capital Projects fund and additional other transfers.

From 2020 to 2021, General Fund Expenditures decreased by approximately $15.2 million or by 2.9%.

Elements of this decrease include a 2.7% decrease in Public Safety, and a 6.9% decrease in Public Works.

These decreases were partially offset by increases in urban redevelopment and community, recreational, and cultural expenditures. Transfers to other funds increased 13%, predominantly made up of increases in transfers to the debt service fund and additional other transfers.

* Expenditures and transfers are those respective amounts divided by the estimated City population.

24%

19%

Re al

E st at e

12% 10%

7%

Ea rn ed In co m e

Pa yr ol l P re pa ra tio n

O th er T ax es

Ch ar ge s

10%

D ee d Tr an sf er

G ra nt s

O th er

R ev en ue

11%

7%

Pa rk in g

56%

16%

Pu bl ic S af et y

9% 3% 1%

G en er al

G ov er nm en t

Pu bl ic W or ks

En vi ro nm en ta l S er vi ce s

Co m m un ity , R ec ea tio na l

C ul tu ra l

12%

O

TH

E R

E X

PE

N

D

IT

U R

E S

T

R A

N

SF

E R

S

14%

O th er E xp en di tu re s

Tr an sf er s

O th er T ra ns fe rs

Tr a ns fe rs t o C a p ita l

Pr oj ec ts

O th er E x p en d itu re s

1.18%

.95%

1%

.10%

U

RA

S ub si dy

GENERAL GOVERNMENT EXPENDITURES

General Government expenditures are related to the administration of the City’s affairs. These expenses include the costs of all elected officials as well as the Department of Innovation and Performance, Finance Department and Law Department, among many others.

Public Safety expenditures represent the Emerg-ency Medical Services, Bureau of Police, Bureau of Fire, and Animal Control.

Public Works expenditures include administration and street and parks maintenance.

Environmental Services expenditures include garbage collection and recycling services within the Public Works Department.

Community, Recreational and Cultural expendi-tures are the costs of the Department of Parks and Recreation.

The URA Subsidy is the City’s subsidy to the Urban Redevelopment Authority.

Other Expenditures include all amounts that are not included in the categories above.

Transfers are funds provided by the General Fund to support other funds of the City.

WHERE YOUR MONEY GOES

Once the City collects taxes and other revenues, the funds must be spent efficiently to provide a variety of services to the citizens and businesses of the City.

Photo: Downtown Pittsburgh and the Andy Warhol Bridge from the Three Rivers Heritage Trail on North Shore. Photo by Angela Yoho.

Aggregate (in thousands) Per Capita*

5,542

56,285

14,625

43,845

6,836 2,075 23 7

9,000

59,599

8,805

$ 299

1,083

$1,669

$ 100,788

353,650

59,052

20,817

7,203

3,246

5,625

$550,381

Expenditures

Government

Public Safety

Public Works

Environmental Services

Community, Recreational and Cultural

Urban Redevelopment Authority Subsidy

Other Expenditures

Total Expenditures Transfers

$ 323

1,144

$1,747

$ 97,614

345,715

53,296

20,731

5,830

2,136

2,826

$528,148

$ 318

1,110

$1,693

Transfers to Capital Projects

Transfers to Debt Service

Other Transfers

Total Transfers $581,570 $1,920 $ 1,947 $ 1,896 $627,785 $588,693

$ 68,663 $ 60,545$ 77,404 $ 227 $ 200 $ 227

Grand Total

GENERAL FUND EXPENDITURES AND TRANSFERS

(in thousands)

$ 96,442

336,404

49,642

20,256

6,328

3,246

$512,907

T T S B U R G H S

C A P I T A L

S P E N D I N G

The City maintains a separate Capital Projects Fund to account for the financial transactions and resources used by the City for the acquisition or construction of major capital assets. During 2022, the City spent $70.66 million on Capital Projects.

0.0

0.2

0.4

0.6

0.8

1.0

$47.53 M

$13.4 M

$ In millions

$0

$5

$10

$15

$20

$30

$30

$40

$50

En gi ne er in g an d

Co ns tr uc tio n

Fa ci lit y

Im pr ov em en ts

V eh ic le s an d Eq ui pm en t

N ei gh bo rh oo d D ev el op m en t

$5.26 M

Pu bl ic S af et y

$2.47 M A dm in is tr at io n an d

Su b-

A w ar ds

$1.17 M $0.83 M

Costs associated with administration of the City’s capital assets and Capital Improvement Plan

Improvements to walls, steps, fences, roads, sidewalks, and bridges

Major repairs of City assets, such as parks, play-grounds, pools, ballfields, and fire stations

Purchase of vehicles and heavy equipment for public safety and service delivery

Repair and replace important infrastructure for the health and well-being of City residents

BY FUNCTION

u Central Business District: $0.61 million (1%)

BY LOCATION

TOP CITYWIDE PROJECTS

TOP NEIGHBORHOOD PROJECTS

Photos: Clockwise from top left: Two Pickle Ball Courts are now ready for players at Bud Hammer Park; An aerial view of the park at West Penn Recreation Center in the Polish Hill neighborhood; Street maintenance with heavy equipment; Bedford speed hump road work; Ongoing bridge maintenance for Pittsburgh’s bridges.

Investment in the City’s neighborhood business districts and residential communities

F I N A N C I A L

H I G H L I G H T S

PILOT Contributions from Large Nonprofits The amount of property within the City of Pittsburgh owned by large nonprofit institutions has grown considerably in recent decades, rising to around 20% in 2021. While the region has undoubtedly benefitted from a nonprofit model centered on these “eds and meds,” their growth has also taken an increasing share of properties off the tax rolls, putting strain on City finances.

Given their exemption from property taxes – a leading source of revenue for vital public services like fire, police, and EMS – many municipalities nationwide offset this revenue loss with voluntary arrangements called “payment in lieu of taxes,” or PILOTs. Under these agreements, nonprofits typically commit to making annual monetary contributions over a set period of time to lower the tax burden on local residents and businesses.

Yet despite Pittsburgh’s vibrant and growing nonprofit sector, PILOT revenue has fallen sharply over the past two decades. Growth in the nonprofit sector can be attributed to the “Big Five”: UPMC, Highmark, the University of Pittsburgh, Carnegie Mellon University, and Duquesne University;

collectively, they own over $4.3 billion in exempt property, leading to a “tax loss” of over $34 million each year to the City. As of 2022, substantive PILOT agreements between the City and its largest nonprofits remain elusive.

The City’s Cash Position Long-Term Debt In 2022, the City’s debt increased by $22.3 million to $495 million. The increase is due to the City’s borrowing for capital projects.

OUTLOOK FOR CITY FINANCES

$6M $5 $4 $3 $2 $1

D ol la rs

C ol le ct ed

In $ Millions

2022 2021 2020 2019 2018 2017 Pension Liability Dedicated Parking Pension Assets

1,600 1,400 1,200 1,000

$ In Millions

PENSION FUNDING STATUS

As stressed in the City Controller’s 2022 joint report with the County Controller’s Office on Tax-Exempt Properties, PILOT agreements with just the five largest nonprofits set at half of what they would pay in property taxes if not exempt would recoup over $17 million in revenues each year. At a time when local officials continue to explore new ways to broaden the tax base without burdening our most vulnerable, securing long-term and equitable PILOT agreements must remain a top priority. PILOT agreements with these institutions are necessary as compensation for essential public services used by all organizations in the City, like critical infra-structure and emergency services. Doing so would ensure long-term, stable sources of revenue to help the City offset post-pandemic declines in other revenue sources.

Pension Funding Pension funding is crucial to provide retired city employees with financial security after they stop working. Commonwealth of Pennsylvania Act 44 of 2009 required the City’s aggregate pension funding level to be at least 50 percent by December 31, 2010 to avoid having the City’s pension funds seized and administered by the Pennsylvania Municipal Retirement System. The City’s plan to meet this level of funding includes transferring dedicated parking tax revenues through 2046 in addition to employee and City-obligated contributions.

Securing funding for the City’s Comprehensive Mu-nicipal Pension Fund continues to be a challenge for City officials. It is important for the City to manage the pension fund responsibly to maintain its long-term sustainability and honor its commitment to its employees.

Despite having the parking tax as a source of reve-nue, the fund remains underfunded and will require additional funding commitments and cost reductions moving forward. As of the end of 2022, with revenue from the City’s parking tax, the City’s pension fund held approximately 65% of the funds needed.

PILOT CONTRIBUTIONS FROM LARGE NONPROFITS

PILOT AMOUNTS COLLECTED

PRESORTED

STANDARD

US POSTAGE

PAID

PITTSBURGH PA

PERMIT NO 5450

Although this report is largely based on the City’s 2022 Annual Comprehensive Financial Report, this report is not prepared in ac-cordance with generally accepted account-ing principles (“GAAP”). Only the financial data for the general government is includ-ed in this report and, therefore, all of the City’s discretely presented component units are excluded. Additionally, information is pre-sented in a summarized manner and certain financial statements and note disclosures re-quired by GAAP are omitted. A copy of this PAFR as well as the City’s audited 2022 Annual Report, which is prepared in accordance with GAAP, is located at www.pittsburghpa.gov/ control ler.

PAFR Consultants:

The Binkley Kanavy Group, LLC, Pittsburgh, PA

Pit tsburghControl ler @PGHControl ler city of Pittsburgh 414 Grant Street Pittsburgh, PA 15219 pittsburghpa.gov

2022 PITTSBURGH, PA POPULAR ANNUAL FINANCIAL REPORT

https://pittsburghpa.gov/controller/index.html