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Ordinance amending the Pittsburgh Code of Ordinances, Title Two: Fiscal, Article I: Administration, Chapter 219: Operating Budget, by adding sections establishing procedures for managing Prior Year Encumbrances.
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Whereas, The City of Pittsburgh ended 2025 in a deficit exceeding 5% of its revenues, and is projected to end 2026 with a deficit less than a fraction of a percentage point away from exceeding 5% of its revenues again, and,
Whereas, two consecutive deficits exceeding 5% of a municipality’s revenues can be a trigger for entering into ACT 47 oversight, and,
Whereas, Mayor Corey O’Connor has “sounded the alarm” on the dire nature of the budget and the City’s fiscal future; and,
Whereas, Funds carried over from a previous year’s operating budget are referred to as Prior Year Encumbrances and have ballooned from $2.8 million dollars in 2017 to $36 million dollars in 2026; and,
Whereas, Prior Year Encumbrances represent expenses budgeted for a specific fiscal year that were not actually spent in its budgeted year; and,
Whereas, the unspent funds would otherwise be returned to the City’s reserve fund, bolstering its ability to deal with the financial challenges currently before it; and,
Whereas, Strengthening the reserve fund is crucial to the City’s ability to avoid a deficit in 2027 and the potential regression into Act 47 status, a strong reserve fund also improves the City’s long term financial health, and,
Whereas, there is currently no official and binding policy on handling Prior Year Encumbrances; NOW,
The Council of the City of Pittsburgh hereby enacts as follows:
Section 1. Pittsburgh Code of Ordinances, Title Two: Fiscal, Article I: Administration, Chapter 219: Operating Budget is hereby amended as follows:
§219.09 Prior Year Encumbrances
Unspent prior year encumbrances must be closed and transferred into the City’s reserve fund by the conclusion of the 2nd quarter of the City’s fiscal year.
Prior to the conclusion of the 2...
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