City Finance Update Pittsburgh’s Financial Future April 12, 2011 Post Agenda Councilman William Peduto, Finance Chair
May 27, 2015
City Finance Update
Pittsburgh’s Financial Future
April 12, 2011 Post AgendaCouncilman William Peduto, Finance Chair
Recap of 2011 Operating and Capital Budget Post Agenda April 5, 2011
Operating Budget on target for 2011 Capital Budget has deficiencies due to:
Slow State and Federal Reimbursements Unexecuted sale of the Courts Building to State Need to clear old encumbrances and projects
As a result, may need to use a small portion of the City’s $40M “rainy day” fund balance to fund all of 2011 Capital Plan
Best Practice Review City does some things well Needs improvement on issues such as
communication Need for ERP Financial System
2011 - 2017 Budgets2011 - 2017 Budgets
2011 2012 2013 2014 2015 2016 2017
REVENUES 443,033,600
463,761,100
473,746,100
481,004,000
490,748,000
496,882,350
503,093,379
EXPENDITURES 450,087,572
466,411,213
470,320,829
476,510,774
485,646,706
491,627,790
499,869,750
OPERATING RESULT 5,022,028
(2,650,113)
3,425,271
4,493,226
5,101,294
5,254,560
3,223,630
BEGINNING FUND BALANCE 44,795,746
37,741,774
35,091,661
38,516,932
43,010,158
48,111,452
53,366,012
Transfer to PAYGO - - - - - - -
Reserve Fund Balance Transfer (12,076,000) - - - -
ENDING FUND BALANCE 37,741,774
35,091,661
38,516,932
43,010,158
48,111,452
53,366,012
56,589,642
Operating Budget 2011-2017
Dependent upon PPA PILOT $9.3M Must continue to watch Healthcare and
Pension Costs Debt service must be properly
restructured Reassessment may impact RET Revenue Must continually look for efficiencies and
new revenue sources
Revenues vs Expenditures
440,000,000
450,000,000
460,000,000
470,000,000
480,000,000
490,000,000
500,000,000
510,000,000
2012 2013 2014 2015 2016 2017
Revenues
Expenditures
Total to Pension Funding 2010-2017 $586 Million*MMO increases biennially estimated, Employee Contributions annually taken from PMRS, Additional Contribution increases– assumption are estimates and are not actuarial certified
Pension YEAR MMO Parking Tax Dedication Additional
Employee Contributions Total Revenue Into Fund
2010 $ 45,000,000 $ 13,376,000 $ 48,000,000 $ 9,200,000 $ 115,576,000
2011 $ 46,400,000 $ 13,376,000 $ 3,600,000 $ 9,591,713 $ 72,967,713
2012 $ 48,720,000 $ 13,376,000 $ 5,000,000 $ 9,916,846 $ 77,012,846
2013 $ 48,720,000 $ 13,376,000 $ 5,000,000 $ 10,259,332 $ 77,355,332
2014 $ 51,156,000 $ 13,376,000 $ 5,000,000 $ 10,566,287 $ 80,098,287
2015 $ 51,156,000 $ 13,376,000 $ 5,000,000 $ 10,863,609 $ 80,395,609
2016-2017 $ 53,413,800 $ 13,376,000 $ 5,000,000 $ 11,153,176 $ 82,942,976
Pension & Debt
$-
$20,000,000
$40,000,000
$60,000,000
$80,000,000
$100,000,000
$120,000,000
$140,000,000
$160,000,000
$180,000,000
Pension MMO+Dedication+ $63,376,000 $67,096,000 $67,096,000 $69,532,000 $69,532,000 $71,789,800 $72,684,840
DEBT $87,655,572 $87,688,159 $87,691,648 $87,702,599 $87,692,429 $87,704,798 $87,425,935
2011 2012 2013 2014 2015 2016 2017
Capital Needs 2011-2017
$20-$30 Million needed annually in “City” funds, either PAYGO, Bond or combination
Major items include street maintenance, demolition and vehicle acquisition
State/federal matching, TIP projects $120-$160M needed for 2012-2017
Capital Funding Continued efficiencies in the operating budget,
development of new revenue sources may allow for dedication of excess operating dollars to PAYGO
Act 47 Plan suggests restructuring of debt/issuance of “new” money tax exempt bonds for 2012-2017
Debt can be structured to correspond with long term plan
Just like a mortgage to fit your annual payment ability, bonds can be issued in different terms 10, 20 or 30 year payment schedules
Debt Service$87,700,000 $68,900,000
$30,700,000$28,800,000
$-$-
$10,000,000
$20,000,000
$30,000,000
$40,000,000
$50,000,000
$60,000,000
$70,000,000
$80,000,000
$90,000,000
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Extra Dollars
Debt Payment
Debt Cliff – Available Funds
$0
$10,000,000
$20,000,000
$30,000,000
$40,000,000
$50,000,000
$60,000,000
$70,000,000
$80,000,000
$90,000,000
Additonal $ $229,637 $18,830,657 $56,991,378 $56,986,337 $56,984,042 $58,862,527 $58,859,687 $58,860,697 $87,655,572
2017 2018 2019 2020 2021 2022 2023 2024 2025
Sample Debt Service
The City of Pittsburgh General Obligation Bonds, Series of 2008 Series 2006C Debt Service Projection
Annual Date Principal Coupon Interest Debt Service Debt Service 3/1/2009 1,254,675.00 1,254,675.00 9/1/2009 1,254,675.00 1,254,675.00 2,509,350.00 3/1/2010 1,254,675.00 1,254,675.00 9/1/2010 1,254,675.00 1,254,675.00 2,509,350.00 3/1/2011 1,254,675.00 1,254,675.00 9/1/2011 1,254,675.00 1,254,675.00 2,509,350.00 3/1/2012 1,254,675.00 1,254,675.00 9/1/2012 1,254,675.00 1,254,675.00 2,509,350.00 3/1/2013 1,254,675.00 1,254,675.00 9/1/2013 1,254,675.00 1,254,675.00 2,509,350.00 3/1/2014 1,254,675.00 1,254,675.00 9/1/2014 5,000.00 4.250% 1,254,675.00 1,259,675.00 2,514,350.00 3/1/2015 1,254,568.75 1,254,568.75 9/1/2015 5,000.00 4.250% 1,254,568.75 1,259,568.75 2,514,137.50 3/1/2016 1,254,462.50 1,254,462.50 9/1/2016 5,000.00 4.250% 1,254,462.50 1,259,462.50 2,513,925.00 3/1/2017 1,254,356.25 1,254,356.25 9/1/2017 11,905,000.00 5.250% 1,254,356.25 13,159,356.25 14,413,712.50 3/1/2018 941,850.00 941,850.00 9/1/2018 35,880,000.00 5.250% 941,850.00 36,821,850.00 37,763,700.00
3/1/2019 0.00 0.00 9/1/2019 0.00 0.00 0.00 3/1/2020 0.00 0.00 9/1/2020 0.00 0.00 0.00 3/1/2021 0.00 0.00 9/1/2021 0.00 0.00 0.00 3/1/2022 0.00 0.00 9/1/2022 0.00 0.00 0.00 3/1/2023 0.00 0.00 9/1/2023 0.00 0.00 0.00 3/1/2024 0.00 0.00 9/1/2024 0.00 0.00 0.00 3/1/2025 0.00 0.00 9/1/2025 0.00 0.00 0.00 3/1/2026 0.00 0.00 9/1/2026 0.00 0.00 0.00 Total 47,800,000.00 24,466,575.00 72,266,575.00 72,266,575.00
Actions needed for 2011-2017
• Capital budget. Analysis of various funding scenarios.
• Action on Council-Controller parking for plan.
• Cost controls. We have done a good job of keeping down costs, but we need to create more efficiencies.
• Revenue enhancements. Look for new revenue without increasing real estate or earned income taxes.
• State action. Changes in State law for pensions, non-profit payments, reassessment, etc..