PITTSBURGH, PA (October 18, 2021) The Office of Mayor William Peduto and Office of Management and Budget have released financial data about the resilient financial cash reserve practices of the administration that have led to enhanced fiscal management and reliability for the City, especially in the face of the pandemic, that will be needed to guide the City’s continued recovery.
Mayor Peduto has long been a leading voice for financial management improvements for the City. When he served as City Councilman, he recognized that the City was in financial distress and proposed the City enter Act 47 state financial oversight, but at that time he could not get anyone to second his proposal. In 2004, Mayor Peduto successfully sponsored the legislation for the City to enter Act 47, which led to controls on spending, increased taxes and the adoption of fiscal reforms.
Mayor Peduto helped to write all three Act 47 financial recovery plans in 2004, 2009 and 2014, including when he served as City Council Finance Committee Chair. In addition, he institutionalized Act 47 financial practices by introducing and passing fiscal City Code and ordinance reforms to ensure that the City continues to follow and strengthen its responsible financial practices to avoid financial distress in the future following the City’s exit from Act 47 in February 2018.
Since 2014, Mayor Peduto has focused on strengthening the City’s cash reserves in order to be prepared for financial shocks, while still budgeting for record investments in community-based capital projects and infrastructure.
Responsible financial management of the cash reserves, sometimes called a “rainy day fund," allowed the City to sustain the financial disruption of the pandemic without having to lay off employees who provide essential public services. When there are additional monies in the city’s operating budget, some of that money is transferred to the capital budget for critical infrastructure and asset projects and the rest is put into the reserves at the end of each fiscal year.
The following data reflects the total reserve funds for the past seven years. Decreases in year-to-year funding are attributed to increased funds being transferred to important capital projects and investments. For example, the decrease from 2017 to 2018 includes the city’s establishment of the Housing Opportunity Fund which saw a $10 million transfer to the fund.
|
Fiscal Year
|
Ending Fund Balance
|
|
2014
|
$58,590,162.42
|
|
2015
|
$56,113,162.33
|
|
2016
|
$78,828,682.90
|
|
2017
|
$97,243,093.55
|
|
2018
|
$96,146,658.87
|
|
2019
|
$120,307,451.04
|
|
2020
|
$75,645,904.26
|
|
2021*
|
$75,424,703.00
|
“Thanks to our ability to have funding in our reserves, we were able to sustain city operations throughout the pandemic until we received the federal relief that I advocated for with the American Rescue Plan so that we didn’t lose critical city services that our neighbors depend on. It was the rainy day that we were prepared for,” said Mayor Peduto. “Our long-term financial recovery will continue to feel the stresses of the pandemic over the next few years and our recovery depends on rebuilding the cash reserves over that time to be a resilient city that will be prepared to face whatever the next challenge will be.”
The current five-year financial forecasts suggest that the financial strains of the pandemic will continue to threaten City budgets. Through Mayor Peduto’s planning and City Council’s leadership, the American Rescue Plan funding for city services and personnel will support City budgets until 2023. To continue a strong financial position, the City must control spending while also focusing on adding jobs in Pittsburgh’s new economy and growing residents with additional housing stock. Without spending controls and meaningful revenue growth, the City will again find itself in financial hardship.
