1. City Finance Update Pittsburgh’s Financial Future April 12, 2011 Post Agenda Councilman William Peduto, Finance Chair

2. 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

3. 2011 - 2017 Budgets 2011201220132014201520162017 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

4. 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

5. Revenues vs Expenditures

6. 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 YEARMMOParking Tax DedicationAdditional Employee ContributionsTotal 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

7. Pension & Debt

8. 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

9. 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

10. Debt Service

11. Debt Cliff – Available Funds

12. 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

13. 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..