Financial statement analysis homework!
jafr_1
cafr_december_31_2014.pdf
COMPREHENSIVE ANNUAL FINANCIAL
REPORT for the year ended December 31, 2014
ULHHU
Michael E. Lamb, City Controller CITY OF PITTSBURGH PENNSYLVANIA
i
Front and back cover photos credits are from Thinkstock.com by Getty Images.
CITY OF PITTSBURGH, PENNSYLVANIA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED DECEMBER 31,2014
TART.F. OF CONTENTS
INTRODUCTORY SECTION
Letter of Transmittal
GFOA Certificate of Achievement
Organizational Chart
Elected City Officials
FINANCIAL SECTION
Independent Auditor's Report
Management's Discussion and Analysis
Basic Financial Statements:
Government-wide Financial Statements:
Statement of Net Position
Statement of Activities
Fund Financial Statements:
Balance Sheet - Governmental Funds
Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position
Statement of Revenues, Expenditures, and Changes in Fund Balance - Governmental Funds
Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balance of Governmental Funds to the Statement of Activities
Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual (Non-GAAP Budgetary Basis) - General Fund
Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual (Non-GAAP Budgetary Basis) - Community Development Fund
Page No.
I-l
1-8
1-9
I-IO
14
CITY OF PITTSBURGH, PENNSYLVANIA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED DECEMBER 31,2014
TABLE OF CONTENTS fContinuedl
Fiduciary Fund Statements:
Statement of Net Position - Fiduciary Funds
Statement of Ciianges in Net Position - Fiduciary Funds
Combining Statements of Discrete Component Units:
Combining Statement of Net Position - Component Units
Statement of Activities - Component Units
Notes to Financial Statements
Page No.
Required Supplementary Information:
Pension Trust Fund Disclosures - GASB Statement No. 67:
Schedule of Changes in the City's Net Pension Liability and Related Ratios - Pension Plan
Schedule of the City's Contributions and Investment Returns
Notes to Required Supplementary Information - Pension Plan
Employer Pension Plans and OPEB Disclosures:
Schedules of Funding Progress - Pensions
Schedules of Contributions from Employers and Other Contributing Entities
Note to Required Supplementary Pension Schedules
Schedule of Funding Progress - Other Postemployment Benefit Plans
Supplementary Information:
Combining and Individual Other Fund Statements and Schedules:
Combining Balance Sheet - Nonmajor Governmental Funds
Combining Statement of Revenues, Expenditures, and Changes in Fund Balance - Nonmajor Governmental Funds
Combining Statement of Net Position - Pension Trust Funds
16
17
18
20
21
95
96
97
98
99
100
101
102
103
104
CITY OF PITTSBURGH, PENNSYLVANIA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED DECEMBER 31, 2014
TABLE OF CONTENTS rContinucd)
Combining Statement of Changes inNet Position - Pension Trust Funds
Agency Funds:
Statement of Changes in Assets and Liabilities
Capital Projects Fund:
Combining Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual (Non-GAAP Budgetary Basis)
Budgetary Comparison Schedule
STATISTICAL SECTION
Net Position by Component - Last Ten Years
Changes in Net Position - Last Ten Years
Program Revenues by Function/Program - LastTen Years
Fund Balances, Governmental Funds - Last Ten Years
Changes in Fund Balances, Governmental Funds - Last Ten Years
Governmental Fund Tax Revenues by Sources - Last Ten Years
Assessed Valuation and Estimated Actual Values of Taxable Property - Last Ten Years
Property Tax Rates - Direct and Overlapping Governments - Last Ten Years
Principal PropertyTaxpayers - Current Year and Nine Years Ago
Assessed Value, Tax Rate, Levy, and Collections - Last Ten Years
Ratios of Outstanding Debt by Type - Last Ten Years
Ratio of Net General Obligation Bonded Debt to Assessed Value and Net General Obligation Bonded Debt Per Capita- Last Ten Years
Ratio of Annual Debt Service Expenditures for General Obligation Bonded Debt to Total General Governmental Expenditures - Last Ten Years
Computation of Direct and Overlapping Debt
Page No.
105
106
107
108
109
110
111
112
113
115
116
117
118
119
120
121
122
123
CITY OF PITTSBURGH, PENNSYLVANIA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED DECEMBER 31, 2014
TABLE OF CONTENTS rContinued^
Page No.
Net Debt and Remaining Debt Incurring Margin in Accordance with Act No. 52, Approved April 28, 1978- Local Government Unit Debt Act 124
Legal Debt Margin Information - Last Ten Years 126
Revenue Bond Coverage - Pittsburgh Water and Sewer Authority - Last Ten Years 127
Revenue Bond Coverage - The Stadium Authority of the City of Pittsburgh - Last Ten Years 128
Demographic and Economic Statistics - Last Ten Years 129
Principal Employers - Current Year and Ten Years Ago 130
Property Value, Construction, and Bank Deposits - Last Ten Years 131
City Employment - Last Ten Years 132
Full-Time Equivalent Municipal Employees by Function/Program - Last Ten Years 133
OTHER INFORMATION
Salaries and Surety Bonds of Principal Officials
Schedule of Bonds and Notes Payable
134
135
Introductory Section
Letter of Transmittal
aiico
MICHAEL E. LAMB
First Floor Cily-CoLinty Building 414 Grant Street Pittsburgh. Pennsylvania 15219
CITY CONTROLLER
April 28, 2015
The Honorable Mayor, Members of City Council, and the Citizens of The City of Pittsburgh, Pennsylvania:
I am pleased to submit The Comprehensive Annual Financial Report (hereinafter, CAFR) of the City of Pittsburgh (hereinafter. City) for the year ended Dcccmbcr 31. 2014. The City's charter mandates that only a general purpose llnancial statement be issued by May
This does not include component units, statements mandated under GASB 34, footnotes and the statistical section. This year we arc issuing a full CAFR by May l'̂ ' which meets the Government Financc Officers .Association (GFOA) standards for Excellence in Financial Reporting and allows the City to get an unmodified opinion from the City's independent auditors.
We believe that the enclosed data is accurate in all material respects and is reported in a manner designed to fairly present both the financial position and the results of operations of the various funds of the City. This statement will enable the reader to gain an understanding of the City's financial activities. Responsibility for both the accuracy of data, and the completeness and fairness of the presentation, rests with the management of the City. This report contains all the funds of the City.
Since the end ol 2012, concern has arisen over the management and control of City funds as a result of a criminal investigation of the Chief of the Police Bureau. A criminal conspiracy to redirect City funds for the personal u.se of the Chief has raised questions over the invoicing, payment, collection and deposit of secondary employment funds within the Police Bureau and the Department of I-inancc. This matter has been under investigation by federal authorities since early 2013. While the loss identified is not material to the City's financial statements, this, along with other concerns of cash management, has pointed to the need for a city-wide review of cash management policy. My office, along with the Intergovernmental Cooperation Authority and a contracted forensic accounting firm, examined City funds a( every point of transaction. The purpose of this examination was to determine whether funds were properly processed and managed and that adequate controls for these funds are in place.
412-25S-2(W5 I -IUk; 412-2.S,S-Sy90
Maher Duessel, Certified Public Accountants, has issued an unmodified ('clean*) opinion on the City of Pittsburgh's financial statements for the year ended December 31, 2014. The independent auditor's report is located in front of the Management's Discussion and Analysis (hereinafter, MD&A).
The MD&A knmediately follows the independent auditor's report and provides a narrative introduction, overview, and analysis of the financial statements. TTie MD&A complements this letter of transmittal and shouldbe read in conjunction with it.
Profile of the Government
The City of Pittsburgh, incorporated in 1816, is located in the south-western part of the Commonwealth of Pennsylvania occupying 58.3 square miles with a population of 306,500. The City government is comprised of a strong elected mayor, and a council elected by district. The mayor is the chief executive of the City who appoints the heads of various departments andthe council has the legislative authority. The mayor is elected to a four-year term and the coimcil members are elected to a staggered four-year term. The even numbered districts are elected in one year and the odd numbered districts are elected two years later.
The City is empowered to levy a variety of taxes including: property taxes on real estate, earned income taxes on residents that live within the boundaries of the city, and other usage taxes are charged when using certain facilities within the City. In addition, the City levies taxes on employees that work within the city and on businesses that operate within the City. Please see the Revenue Section for a more detailed explanation of the taxes collected.
The City provides a full range of services, including police, fire and emergency medical services, construction and maintenance of City property and infi'astructure, 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 theCAFR.
Council is required to adopt a final operating and capital budget for the next year by the last day of the fiscal year, which is December 31. The annual budget is the basis of the City's financial planning and control. The operating budget is prepared on a departmental basis. The department heads may spend within a budget classification (e.g., salaries, supplies, rentals, miscellaneous) as they see fit; however, any transfers between classifications or departments have to be approved by council. The Mayor's Office also prepares a five-year plan annually. Most of the strategic and development planning is done by the Urban Redevelopment Authority.
1-2
FINANCIAL INFORMATION
The Financial Information is broken down into two categories: Internal Control and Budget Control, and are explained in further detail below.
Internal Control: Managementof the City is responsible for establishing and maintaining an internal control structure designed to ensure that the assets of the City are protected from loss, theft, or misuse and to ensure that adequate accounting information is compiled to prepare financial statements in accordance with accounting principles generally accepted in the United States of America. The internal control structure is designed to provide reasonable, but not absolute, assurance that these objectives are met. The concept of reasonable assurance recognizes that: (1) the cost of a control should not exceed the benefits likely to be derived and (2) the evaluation of costs and benefits requires estimates and judgments by management.
Budget Control: Budget control is maintained at the line item level on a departmental basis. Activities of the General Fund, the Special Revenue Fund (Community Development Fund only), and the Capital Projects Fund are controlled by an annual legally appropriated budget. Capital Projects are also controlled on a multi-year basis.
ECONOMIC CONDITION
Located at the confluence of the Ohio, Monongahela, and Allegheny Rivers, the City serves as the seat for Allegheny County and is the largest of the Coimty's 130 municipalities. Downtown Pittsburgh is commonly known as the Golden Triangle and serves as the regional center for Southwestern Pennsylvania, Eastern Ohio, and Northern West Virginia.
Economic Background
The City continues to build and strengthen its economy not only by expanding existing businesses, but also by working to attract new businesses and industries to the region. The primary goal is to assist businesses both small and large in developing and enhancing working relationships among economic development practitioners throughout the state. By supporting the growth of tiie existing business core and marketing its competitive advantages to attract new businesses, the City has modernized its economy. These goals and efforts have resulted in the number ofjobs in Pittsburgh remaining steady from 2013 to 2014 which follows the national trend. The steady job market has resulted in an unemployment rate that is lower than the state and national rates. As of December 31, 2014, Pittsburgh's unemployment rate was 4.4% compared to 5.0% for the state and 5.6% nationally.
Initiatives such as '^one-stop service providers" allow firms doing business in the City to be assigned a project coordinator who will serve as a single point of contact throughout the development process. Tax credits granted by both the federal government and the Commonwealth of Pennsylvania provide financial incentives for companies to hire new
1-3
employees. The City also contains three State Enterprise Zones which enable businesses located within those designated areas to enjoy more favorable interest rates and tax incentives. The City has several sites included among the Commonwealth's Keystone Opportunity Zones, whichprovide exemptions from a majority of state and localtaxes for a number of years.
Recently, the City has focused on the revitalization of its downtown core, making aesthetic improvements to reestablish it as a regional destination point for entertainment and business. With the formation of a Business Improvement District in 1996, the Pittsburgh Downtown Partnership spearheaded unprovements in maintenance, safety, and marketing. A combination of lectors including residential tax incentives and the growing enrollment in post-secondary educational institutions has stimulated residential growth and development in the central business district In 2012, the City xmveiled a redesigned Market Square, Downtown Pittsburgh's central meeting place, making it more pedestrian friendly. Overthe last few years, the area has seena culinary renaissance with many new restaurants opening in Market Square and throughout Downtown Pittsburgh. Also, construction has been made on the Tower at PNC Plaza, a 32-story skyscraper that will be the new world headquarters of the PNC Financial Services Group; in addition, a new hotel and parking facility, The Gardens at Market Square, is currently in progress.
Realizing that economic development is only the start, the City is also strengthening and revitalizing its neighborhoods by encouraging new housing and mixed-use development throughout the City, providing both new and existing residents a higher quality of life. Major development sites offer great opportunities for growth in the lower Hill District, the Strip District, and in Hazelwood. Community plans are also fiirthering development initiatives in Larimer, Lawrenceville and the Hill. Throughout our neighborhoods, the City has partnered with developers and community groups to attract new stores and restaurants. A prime example of this partnership is the 28-acre Civic Arena site, located in the Lower Hill District; this site has been cleared and construction will begin in 2015. U.S. Steel Corporation is among the first to be approved to build a new 285,000 square foot headquarters at this location.
At the old Nabisco site, the Bakery Square complex was developed. Google expanded to a 100,000 square foot space and has added an additional 150 employees with ambitions to expand even further. The Bakery Square development welcomed a Marriott Springhill Suites and a 145,000 square foot Target opened in East Liberty. Spurred by this success, more than $100 million in private, mixed-use development is now underway or due to begin construction in the coming years in this corridor, including luxuiy apartments and rental townhomes, parking, and 200,000 more square feet of commercial space.
One of the key areas of economic growth in Pittsburgh has been the technology sector which has produced over 30,000 new jobs since 1980, sharply offsetting job losses from other industries in the region. The University of Pittsburgh and Carnegie Mellon University lead the way in research of biotechnology, bioengineering, robotics, and information technology. Increases in university research and development spending are a significant sign that the City's universities are working to commercialize technology
1-4
development. Over the past 15 years, Pittsburgh has more than doubled its number of technology driven firms, creating over 1,200 new enterprises. Today, nearly 2,400 high technology firms employ over 90,000 individuals, accounting for roughly nine percent of the total workforce in Greater Pittsburgh.
However, technology is not the only area with significant job growth increases. Pittsburgh sits at the center of the rapidly growing energy sector. The advances in natural gas extraction have enabled access to previously unattainable resources through the process of hydraulic firacturing of shale. The greater Pittsburgh region is located above both the Marcellus and Utica shale formations and, while this kind of drilling activity has been banned in the City of Pittsburgh, the effects of the growth of this industry in the region are impactingthe City and its residents. Job growth has also been spurred by other key sectors including mani^acturing, financial business services, and healthcare all of which have contributed significantlyto the increase in economic and employment vitality of the city.
According to the Pittsburgh Regional Alliance, the Pittsburgh region was among the nation's top performers for business investment in 2010, despite the worst global economic conditions since the Great Depression. Since then, Pittsburgh has also been recognized as one of the least costly places to do business, and one of the top cities for starting a new business.
Development and advancement is not just limited to businesses and industry, it expands into the educational field as well. In cooperation v^th the Pittsburgh School District, the City has created the Pittsburgh Promise Program. This program provides scholarships of up to $10,000 per year for qualified students to any accredited post-secondary institution within Pennsylvania. As of the end of 2014, more than 5,500 graduates of the Pittsburgh Public Schools have taken advantage of the Pittsburgh Promise scholarship. This investment into education shouldencoiirage the City's population to grow making it more attractive for families to call Pittsburgh home.
The overall outlook for Pittsburgh in the 21^ century and beyond is promising. The City's investments and initiatives of the past several years are leading to more business development and increased residential construction.
REVENUES
Real Estate Tax - Real estate property in the City is assessed by the Allegheny County Board of Property Assessment, Appeals and Review at a rate of 100% of its fair market value. The rates for 2014 were 7.56 mills on buildings and on land. A mill is $1 on each $1,000 of assessed value, or $7.56 for every $1,000 of assessed value. The 2014 total taxable assessed valuation for the City is $18,662,994,911 vs. the 2013 total of 20,232,390,808, a decrease of approximately 8%.
1-5
Tax Payments - Real estate taxesare payable in three installments, but a 2% discount is granted if paid by February 28^. Ifthe payment is not made on time, interest is charged at the rate of 10% per annum, and is added to the balance ofthe tax due for the year.
Earned Income Tax - This tax is levied at the rate of 1% on the wages or net profits eamed by residents of the City.
Parking Tax - A tax equal to 37.5% of the consideration paid for each parking transaction is levied on the patrons ofnon-residential parking places in the City; e.g. ona $13.75 parking fee, $3.75 istax, or 37.5% ofthe $10 underlying parking charge.
Amusement Tax - This tax is levied at a rate of 5% on the admission price paid by patrons of all manners and forms of for profit amusement within the City. Non-profits are exempt firom the amusement tax.
Deed Transfer Tax - A tax of 2% of the consideration paid for real property transfers is levied upon the transfer ofan interest in real property situated in the City.
Institution Service Privilege Tax - Certain receipts of non-profit, non-charitable organizations conducting or operating a service or service institution in the City are taxed on their gross income.
Local Services Tax - A $52 tax levied upon each individual whose principal place of employment is located in the City, regardless of residency. If an employee's income is less than $12,000, they are not subject to thetax and can apply for a refund.
Payroll Preparation Tax - This tax is imposed on all for-profit employers at a rate of .55% of the total wages ofall employees who work in the City. This tax is paid quarterly based on the payroll of the previous quarter. The installments are due February 28, May 31, August 31, and November 30.
Facility Usage Fee - A 3% tax on wages eamed by non-resident athletes and performers that work at certain facilities that have been subsidized with public money.
AWARDS
The Government Finance Officers Association (GFOA) awarded a Certificate of Achievement for Excellence m Financial Reporting to the City for its CAFR for the fiscal year ended December 31, 2013. The Certificate of Achievement is a prestigious national award recognizing conformance with the highest standards for preparation of state and localgovernment financial reports.
In order to be awarded a Certificate ofAchievement, a government unit must publish an easily readable and efficiently organized CAFR whose contents conform to program standards. Such a CAFR must satisfy both generally accepted accounting principles and applicable legal requirements.
1-6
A Certificate of Achievement is valid for a period of one year only. The City has received a Certificale of Achievement for over the last twenty consecutive years (fiscal years ended 1992-2013). We believe that our current CAFR continues to conform to the Certificate of Achievement program requirements and we are submitting it to the GFOA to determine its eligibility for another certificale.
ACKNOWLEDGEMENTS
The preparation of this report could not be possible without the concerted effort of the entire staff of the Controller's Office. The continued efforts of the accounting department are gratefully appreciated. I would like to thank the employees of the various departments and authorities of the City for their assistance in providing the Controller's staff and the independent auditors with the necessary infonnation to complete this report.
Respectfully submitted,
Michael E. Lamb
City Controller
1-7
Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Pittsburgh
Pennsylvania
For its Comprehensive Annual Financial Report
for the Fiscal Year Ended
December 31,2013
Executive Director/CEO
1-8
C IT
IZ E
N S
O F
T H
E C
IT Y
O F
P IT
T S
B U
R G
H
c r y
C O
N T
R O
L L
E R
P F
T T
S B
U R
G M
W A
T E
R r.
S E
W E
R
A U
T H
O R
IT Y
U R
B A
N
R E
D E
V E
L O
P M
E N
T
A U
T H
O R
IT Y
H O
U S
IN G
A U
T H
O R
IT Y
P A
R K
IN G
A U
T H
O R
IT Y
L
E N
G IN
E E
R IN
G &
C O
N S
T R
U C
T IO
N
P U
B L
IC W
O R
K S
F A
C IL
IT IE
S
K S
Y .3 P O
L IC
E
E M
E R
G E
N C
Y
M E
D IC
A L
S E
R V
IC E
S
B U
L D
IN G
IN S
P E
C T
IO N
P A
R K
S &
R E
C R
E A
T IO
N
P U
B L
IC
W O
R K
S
C IT
Y
P L
A N
N IN
G
P U
B L
IC S
A F
E T
Y
P E
R S
O N
N E
L S
C IV
IL S
E R
V IC
E
C O
M M
iS S
iO N
C m
Z E
N S
P O
L IC
E R
E V
IE W
B O
A R
D
M A
Y O
R M
A N
A G
E M
E N
T ft
B U
D G
E T
T
S E
R V
IC E
C E
f- T
T E
R
N &
G H
B O
K H
O O
O S
IN N
O V
A T
IO N
A N
D
P E
R F
O R
M A
N C
E
F IN
A N
C E
•l U
M A
N
R E
L A
T IO
N S
C O
M M
IS S
IO N
O F
F I C
E O
F
M U
N IC
IP A
L
IN V
E S
T IG
A T
IO N
S
E Q
U A
L
O P
P O
R T
U N
IT Y
R E
V IE
W
C O
M M
IS S
IO N
C IT
Y
C O
U N
C IL
C r iY
C L
E R
K S TA
D IU
M f
A U
T H
O R
IT Y
S P
O R
T S
&
E X
H B
T O
N
A U
T H
O R
T Y
E Q
U IP
M E
N T
L E
A S
IN G
A U
T H
O R
IT Y
P E
N S
IO N
P L
7 \N
S
CITY OF PITTSBURGH, PENNSYLVANIA
ELECTED CITY OFFICIALS
As of April 28, 2015
MAYOR
William Peduto
CONTROLLER
Michael E. Lamb
MEMBERS OF COUNCIL
Bruce Kraus, President, District 3
Natalia Rudiak, Finance/Law Committee, District 4
Darlene M. Harris, District 1 Theresa Kail-Smith, District 2
Corey O'Connor, District 5 R. Daniel Lavelle, District 6 Deborah Gross, District 7 Daniel Gilman, District 8
Rev. Ricky Burgess, District 9
I - 10
Financial Section
a lerDiirsM' Certified Public Accountants
'.03 i.ile Sifi-
Siiiip . 00
Hiiisl:urcjri Pa
Ma^r. J12.4715500
1^. J'24:'10COH
1 3003 "^onh Ffnii
Sn :; 101
larn-stM • 1. '•''lO
N1a»n '"'232 l2o^J
•,.» ^w?32K230
Independent Auditor's Report
M? D'lv
SuHft 204
•iijllpi ISW
Mjin •'2- 2^5 6HOO
'•M 72J,2fi5 6«7G
The Honorable Members of Councii
City of Pittsburgh, Pennsylvania
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City of Pittsburgh, Pennsylvania (City), as of and for the year ended December 31, 2014, and the related notes to the financial statements, which collectively comprise the City's basic financial statements, as listed in the table of contents.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We did not audit the financial statements of the Stadium Authority of the City of Pittsburgh (Stadium Authority), which represent 2.8%. (1.0%). and 2.1%, respectively of the assets and deferred outflows, net position, and revenues of the aggregate discretely presented component units. These statements were audited by other auditors whose report has been furnished to us. and our opinion, insofar as they relate to the amounts included for the Stadium Authority, is based solely upon the report of the other auditor. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall financial statement presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
Purs'.iin^ the prolcssion whiic proniotinfi t!h- pubtii ^ood" www.nid cuas.cotn
The Honorable Members of Council City of Pittsburgh, Pennsylvania Independent Auditor's Report Page Two
Opinions
In our opinion, based on our audits and the report of the other auditors, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City as of December 31, 2014 and the respective changes in financial position, andthe respective budgetary comparison for the General Fund and Community Development Fund for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management's discussion and analysis and the pension and other postemployment benefits schedules on pages i through XV and 95 through 101 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City's basic financial statements. The introductory section, combining and individual other fund financial statements and schedules and statistical section are presented for purposes of additional analysis and are not a required part of the basic financial statements.
The combining and individual other fund financial statements are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, based on our audit and the procedures performed as described above, the combining and individual other fund financial statements are fairly stated in all material respects in relation to the basic financial statements taken as a whole.
The Honorable Members of Council
City of Pittsburgh, Pennsylvania Independent Auditor's Report Page Three
The introductory section and statistical section have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we express no opinion or provide any assurance on them.
Emphasis-of-Matter
As more fully discussed in Note 1(B), the City is still currently considered a distressed community under the provisions of the "Municipalities Financial Recovery Act" (Act 47) of the Commonwealth of Pennsylvania and continues to operate under a financial recovery plan. Our opinion is not modified with respect to this matter.
"DtteAAel Pittsburgh, Pennsylvania April 28, 2015
Management's Discussion and Analysis
Management's Discussion and Analysis
As management of the City of Pittsburgh (City), we offer the readers of the City's financial statements this narrative overview and analysis of the financial activities of the City for the fiscal year ended December 31, 2014. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal, which can be found at the beginning of this report, and in the basic financial statements and supplementary information.
Financial Highlights
• The liabilities of the City exceeded its assets at the close of the most recent fiscal year by $421.8 million. As of December 31, 2014, the City, in its statement of net position, has a net position unrestricted deficit of $554.3 million. The accumulated deficit results principally from the City's outstanding general obligation bonds being issued over the years to finance projects that do not result in recording assets; specifically, to fund the payments to the Pension Trust Fund ($200.4 million outstanding as of December 31, 2014), the City's borrowings to finance economic development efforts (including projects to the City's Authorities, principally the URA), and maintenance expenditures on City infrastructure and equipment needs.
• The City's total net position increased by slightly over $2 million in 2014 from 2013. This reflects the City's continuing effort to control costs.
• As of the close of the current fiscal year, the City's governmental funds reported combined ending fund balances of $183 million, an increase of $22.7 million from the previous year. Approximately 30% of this total amount, $53.7 million, is available for spending at the govemment's discretion (unassigned fund balance).
• At the end of the current fiscal year, unassigned fund balance for the General Fund was $53.7 million (compared to $82.0 million in 2013) or 13.1% of total General Fund expenditures and debt service transfers for 2014, down from 17.3% in 2013 and 17.8% in 2012.
The City's gross bonded debt amounted to $558.1 million at the end of the fiscal year.
Overview of the Financial Statements
This Management's Discussion and Analysis is intended to serve as an introduction to the City's basic financial statements.
The financial section of this report consists of three parts: Management's Discussion and Analysis, the basic financial statements (including notes to the financial statements and detailed budgetary comparison schedules), and combining and individual fund statements. The basic financial statements present two different views of the City through the use of government-wide statements and fund financial statements:
The first two statements (pages 1-3) are government-wide financial statements that provide short -term and long-term information about the City's overall financial status.
The remaining statements (pages 3 through 20) are fund financial statements that focus on individual parts of City government and report operations in more detail than the government- wide financial statements.
The governmental funds statements describe how general government services were financed such as public safety and sanitation.
Fiduciary fund statements provide information about the retirement plans for City employees in which the City acts solely as a trustee or agent for the benefit of others. Fiduciary funds are not reflected in the government-wide financial statements because the resources cannot be used to support City activities.
The financial statements include notes which provide an explanation for certain financial statement line items and also provide more details for this information. The statements are followed by a section of required supplementary information that further explains and supports the information in the financial statements. In addition to these required elements, a section with combining statements provides details about the non-major governmental funds that are presented in single columns in the basic financial statements. The following diagram, labeled A- 1, shows how the required components of this comprehensive annual financial report are arranged and relate to one another.
Figure A-1 REQUIRED COMPONENTS OF THE COMPREHENSIVE ANNUAL FINANCIAL REPORT
Management's Discussion and
Analysis
Government-wide
Financial
Statements
Summary <•
Fund
Financial
Statements
11
Basic
Financial
Statements
Detail
Required Supplementary
Information
Notes to
Financial
Statements
Figure A-2 summarizes the major features of the City's financial statements. The remainder of this overview section of Management's Discussion and Analysis explains the structure and contents of each of the statements.
Figure A-2 Major Features of City's Government-Wide and Fund Financial Statements
Fund Statements
Government-wide
Statements Governmental Funds Fiduciary Funds
Scope Entire City government (except fiduciary funds)
The activities of the City that are not proprietary or fiduciary, such as police, fire, and recreation
Instances in which the City is the trustee or agent for someone else's resources, such
as the retirement plans for City employees
Required financial statements • Statement of net position • Statement of activities
• Balance sheet
• Statement of revenues, expenditures, and changes in fiind balance
• Statement of fiduciary net position
• Combined statement of
changes in fiduciary net position
Accounting basis and measurement focus
Accrual accounting and economic resources focus
Modified accrual accounting and current financial resources
focus
Accrual accounting and economic resources focus
Type of asset/liability information
All assets and liabilities, both financial and capital, and short-term and long-term
Only assets expected to be used up and liabilities that come due during the year or soon thereafter; no capital assets included
All assets and liabilities, both short-term and long-term; the City's funds do not currently contain capital assets, although they can
Type of inflow/outflow information
All revenues and expenses during year, regardless of when cash is received or paid
Revenues for which cash is
received during or soon after the end of the year; expenditures when goods or services have been received
and payment is due during the year or soon thereafter
All revenues and expenses during the year, regardless of when cash is received or paid
GOVERNMENT-WIDE FINANCIAL STATEMENTS
The government-wide financial statements report information about the City as a whole using accounting methods similar to those used by private-sector companies and are designed to provide readers with a broad overview of the City's finances. The government-wide financial statements include not only the City itself (known as the primary government), but also component units of the Urban Redevelopment Authority (URA), Pittsburgh Water and Sewer Authority, Public Parking Authority, and the Stadium Authority. Financial information for these component units are reported separately from the financial information presented for the primary government itself. These statements can be found in the financial section of this report.
Although there are a number of government-wide financial statements, for the purposes of this report only two will be highlighted since they are closely related: the statement of net position and the statement of activities.
The statement of net position includes all of the City's assets and liabilities, except fiduciary funds. Net position - the difference between the City's assets and liabilities - is one way to
in
measure the City's financial health, or position. Over time, increases or decreases in the City's net position serve as a useful indicator of whether its financial position of the City is improving or deteriorating.
The statement of activities presents information showing how the government's net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event gives rise to the change that occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave). Additional non-financial factors such as changes in the City's real property tax base and general economic conditions must be considered to assess the overall position of the City.
The primary features of government-wide financial statements are reflected in Figure A-3.
Figure A-3 Government-wide Financial Statements
Governmental Activities
Measurement Focus: Economic Resources
Accounting Basis: Accrual
Statement of Net Position
Assets
- Liabilities
= Net Position
Statement of Activities
Net Program (Expense) Revenue + General Revenues
= Change in Net Position
• Governmental activities - Most of the City's basic services are included here, such as the police, public works, recreation, and general administration. Property and earned income taxes, charges for services, and state grants finance most of these activities.
FUND FINANCIAL STATEMENTS
The fund financial statements provide more detailed information about the City's most significant funds, not the City as a whole. A fund is a group of related accounts that are used to maintain control over resources that have been segregated for specific activities or objectives. Funds are used to keep track of specific sources of funding and spending for particular purposes. The City, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. However, not all funds are the result of City policy; some are required by state law. The funds of the City can be divided into two categories, governmental funds and fiduciary funds, and are explained in greater detail below:
• Governmental Funds - Most of the City's basic services are included in governmental funds, which focus on (1) how cash and other financial assets can readily be converted to cash flow in and out and (2) the balances left at year-end that are available for spending.
IV
Consequently, the governmental funds statements provide a detailed short-term view that helps you determine whether there are more or fewer financial resources that can be spent in the near future to finance the City's programs. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government- wide financial statements. The relationship between governmental activities (reported in the statement of net position and the statement of activities) and governmental funds is described in a reconciliation that follows the governmental fund financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of expendable resources, as well as on balances of expendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government's near-term financing requirements.
Because the focus of government funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities. By doing so, readers may better understand the long-term impact of the government's near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balance provide a reconciliation to facilitate this comparison between governmental funds and governmental activities.
The City maintains individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balance for the General Fund, the Capital Projects Fund, the Community Development Fund, and the Debt Service Fund, all of which are considered to be major funds. Data from the other six governmental funds (non-major funds) are combined into a single, aggregated presentation (other governmental funds).
The City adopts an annual appropriated budget for its General Fund, Capital Projects Fund, and Community Development Fund. A budgetary comparison statement has been provided for these funds to demonstrate compliance with these budgets.
The basic governmental fund financial statements can be found on pages 4-15 of this report.
Fiduciary Funds - (Pension Trust Funds and Agency Funds) - The City administers three pension plans. One is for the general employees and the others are for police officers and firemen. Together, these three plans cover essentially all full-time employees. The City is responsible for ensuring that the assets reported in these funds are used for their intended purposes. All of the City's fiduciary activities are reported in a separate combined statement of fiduciary net position and a statement of changes in fiduciary net position. We exclude these activities from the City's government-wide financial statements because the City cannot use these assets to finance its operations.
Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government-wide financial statement because the resources of those funds are not available to support the City's own programs. Agency funds are custodial in nature and do not involve measurement of results of operations.
The basic fiduciary fund financial statements can be found on pages 16-17 of this report.
Notes to financial statements - The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements can be found on pages 21-94 of this report.
Required supplementary information - In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning the City's progress in funding its obligation to provide pension benefits to its employees. Required supplementary information can be found on pages 95-97 of this report.
Government-wide Financial Analysis
In the case of the City, liabilities exceeded assets by $421.8 at the close of the most recent fiscal year.
By far the largest portion of the City's deficit in net position is its unrestricted deficit of 554.3 million. This deficit is partially offset by investment in capital assets less any related debt still outstanding used to acquire those assets of $48.6 million. The City uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending and the assets have been financed with debt in an amount that exceeds the capital assets carrying value.
Although the City's investment in capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities.
VI
Summary of Condensed Net Position
The following table presents a condensed summary of net position:
City of Pittsburgh's Net Position
Govemmental Activities
($ millions)
2014 2013
Assets
Current assets:
Unrestricted assets $ 234 $ 202
Capital assets 141 146
Net pension asset 91 94
Total assets 466 442
Deferred Outflows of Resources
Deferred charge on refunding 6 6
Liabilities
Current liabilities 143 132
Long-term liabilities, outstanding 750 740
Total liabilities 893 872
Net Position
Net investment in capital assets 49 41
Restricted 84 36
Unrestricted (554)
o o
Total net position $ (421) $ (423)
At the end of the current fiscal year, the City reports a $421.8 million net deficit for the governmental activities due in part to its debt burden outstanding. This is consistent with the prior fiscal year.
Summary of Changes in Net Position
The following table shows the revenues and expenses of the primary government.
Governmental activities - Govemmental activities increased the City's net position by slightly more than $2 million.
Vll
The remaining amounts are as follows: City of Pittsburgh's Activities
Governmental Activities
($ millions)
Revenues:
Program revenues: Charges for services Operating grants and contributions Capital grants and contributions
Total program revenues
General revenues:
Real estate property taxes Earned income taxes
Local services taxes
Payroll preparation taxes Parking taxes RAD sales taxes
Deed transfer taxes
Amusement taxes
Payment in lieu of taxes
Facilities usage tax Donations and endowments
Other taxes
Other
Total general revenues
Total revenues
Expenses: General government Public safety Highways/streets Sanitation
Economic development Culture and recreation
Interest on long-termdebt plus amortz. of issuancecost and premium/discounts
Total expenses
Change in Net Position
Net Position:
2014 2013
$ 51 3; 49 54 59
25 32
130 140
130 126
87 83
14 14
56 54
53 52
27 25
20 21
14 14
2 2
5 4
1 2
1 -
2 2
412 399
542 539
75 84
301 283
77 84
15 16
23 25
16 14
33 29
540 535
2 4
Beginning ofyear (423) (427)
End of year $ (421) $ (423)
Vlll
Expenses of the governmental statement of activities are shown below by functional area:
Culture and Economic 3,/^ Debt Service, 5%
Development, 4%
Sanitation, 3%
ighv/ays/Streets, 15%
General
Government 14%
Public Safety, 56%
General Fund tax revenues are presented below by type of tax:
Amusement Tax, 3%
Deed Transfer.
Tax. 5%
RAD Sales Tax,
arking Tax, 13%
Local Services
Tax, 3%
Other, 3%
Real Estate; 3
Earned Income, 21%
IX
Governmental Funds
Governmental funds - The focus of the City's governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City's financing requirements. In particular, unassigned fund balance may serve as a useful measure of a government's net resources available for spending at the end of the fiscal year.
The General Fund is the chief operating fund of the City, with revenues and expenses that are connected to every aspect of the City. Revenues for the General Fund totaled $485.4 million in 2014, an increase of $2.8 million or by less than 1% compared to 2013. The greatest variances from budget to actual in tax revenue came from increases of $2.5 million in earned income tax, $2.2 million in deed transfer taxes, and $1.4 million in Amusement taxes, and was offset by a $6 million decrease in real estate property taxes. All other taxes were relatively stable.
In addition to the above General Fund tax revenues, the City collected $15.6 million in the Community Development Fund, $10.3 million in Capital Projects, and $15.6 million in Nonmajor Governmental Funds, mostly fi:om pass-through of federal and state monies.
At the end of the current fiscal year, the City's governmental funds reported combined ending fund balances of $183 million, an increase of $23 million from 2013. Approximately 41% of this total fund balance, or $74.8 million, constitutes unassigned fund balance, which is available for spending at the government's discretion. The remainder of the fund balance that is restricted for endowments, employee benefits. State and Federal Purpose Grants, capital projects, and the Enterprise Resources Planning (computer) System is $73.9 million and the amount assigned for encumbrances and debt service is $33 million.
At the end of the current fiscal year, the unassigned fund balance of the General Fund was $53.7 million, while total fund balance for the General Fund was $63.1 million. As a measure of the General Fund's liquidity, it may be useful to compare both unassigned fund balance and total fund balance to total fund expenditures. Unassigned fund balance represents 15.1% of total General Fund expenditures and operating transfers, while total fund balance represents 12.1% of General Fund expenditures and operating transfers. A fund balance percentage of 15-20% of expenditures is typically considered a sign of financial health.
The fund balance of the City's General Fund decreased by $32.6 million during the current fiscal year compared to an increase of $3.6 million in 2013.
Expenditures and uses, including debt service payments/transfers, for the General Fund in 2014 increased to $494.1 million, compared to $475.6 million in 2013, representing an increase of 3.4% or $18.5 million overall.
Transfers to the Debt Service Fund of $87 million, combined with debt subsidies of $14.5 million, totaled $101.5 million, compared to $86.9 million in 2013. The debt subsidies are for the URA and Auditorium Authority and are commitments made by the City over the life of their bonds. Debt and debt subsidies accounted for 20.5% of the expenditures and uses, illustrating the magnitude of the City's armual debt service. The City's normal debt service percentage has been between 22-25%.
x
the magnitude of the City's annual debt service. The City's normal debt service percentage has been between 22-25%.
The Debt Service Fund has a total fund balance of $1.1 million, all of which is assigned for the payment of debt service.
The Community Development Fund had intergovernmental revenues of $15.6 million and expenditures of $15.6 million. The Capital Projects Fund had $10.3 million of revenues, and $33.2 million in maintenance and non-capital related expenses. The Capital Projects Funds fund balance increased by $53.4 million in 2014 to $97.4 million as of December 31, 2014. This was due mainly to $50.6 million net proceeds from a bond issue less excess of expenditures over revenue of $22.8 million.
General Fund Budgetary Highlights
Actual budgetary basis General Fund revenues were below the budgeted revenues by $8 million before use of prior year fund balance, mainly due to a shortfall from budgeted real estate tax revenue of $6.2 million, economic development slots revenue of $5.1 million, and local share of slots revenue of $4.3 million. This was partially offset by an increase in earned income tax of $2.5 million, deed transfer tax of $2.2 million, and state aid pension of $2.6 million. In addition, the final actual budgetary basis revenues were less than the final budgetary basis expenditures by $1.9 million. Final budgeted General Fund expenditures were $2.8 million higher than the original budget. Actual General Fund budgetary basis expenditures were $15 million below the final budget total.
During fiscal year 2014, City Council amended the budget primarily for the following reason:
• To appropriate funds to pay primarily for prior year commitments in the form of encumbrances for General Fund purchase orders authorized and issued, but for which goods and services were not received nor paid for by December 31, 2014 totaled $2.8 million.
Capital Asset and Debt Administration
Capital assets - The City's investment in capital assets for its governmental-type activities as of December 31, 2014 amounts to $140.5 million, net of accumulated depreciation. This investment in capital assets includes building and building improvements, land, machinery and equipment, furniture and fixtures, vehicles, infrastructure, capital lease, and construction-in- progress.
Major capital asset events during the current fiscal year were limited due to the lack of working capital to invest in assets. The only major increase in assets was the purchase of $8.3 million in vehicles.
XI
City of Pittsburgh's Changes in Capital Assets
Governmental Activities
($ millions) 2014 2013
Land and land improvements $ 46 $ 46 Construction in progress 5 5 Buildings and building improvements 89 89 Capital lease 15 15 Infrastructure 180 180
Vehicles 69 68
Furniture and fixtures 4 4
Machinery and equipment 3 4
Total capital assets 411 411
Less accumulated depreciation for: Buildings (83) (82) Infrastructure (122) (118) Vehicles (49) (49) Fumiture and fixtures (4) (4) Capital leases (8) (8) Machinery and equipment (4) (4)
Total accumulated depreciation (270) (265)
Total capital net assets 1; 141 $ 146
More detailed information about capital assets is provided in Note 6 to the financial statements.
Long-term debt - At the end of the current fiscal year, the City had total debt outstanding of $558.0 million, which comprises debt backed by the full faith and credit of the government.
Xll
City of Pittsburgh's Outstanding Debt
Governmental Activities
($ millions) 2014 2013
General obligation bonds:
Beginning balance at January 1 $ 565 $ 622
Debt issued and other 120
Refinanced bonds (63)
Principal payments and other (64) (57)
Ending balance at December 31 _$ 558 $ 565
More detailed information about long-term debt is provided in Note 9 of the financial statements.
SigniHcant Events
In November 2003, the City sought municipal self-help as a "financially distressed" municipality under the Municipalities Financial Recovery Act (Act 47). The Pennsylvania Department of Conmiunity and Economic Development (DCED), after review of the City's application and advice of its legal and financial experts, agreed. The Act 47 coordinators issued their Recovery Plan on June 11, 2004, which was adopted by Pittsburgh City Council on June 29, 2004.
Subsequent to the City's designation as financially distressed under Act 47, the State legislature under Act 11 established an Intergovernmental Cooperation Authority (ICA) to provide fiscal oversight for the City for an initial period of seven years. Act 11 stipulated that the ICA is to operate concurrently and equally with the Act 47 coordinators.
In accordance with specific requirements under Act 11 and with the support and approval of both the Act 47 coordinators and ICA oversight committee, the City submitted on November 5, 2004 its 2005 Operating and Capital Budgets and Five-Year Financial Forecast and Performance Plan. The Plan called for both expenditure cut backs and proposed a new tax levy structure.
Expenditure reductions and controls included: salary freezes City-wide for at least two years. Public Safety cost reduction achieved primarily through the renegotiation of the Firefighter contract, reductions to all elected officials' budgets and regular reporting requirements verifying adherence to the Plan's budget.
On November 21, 2004, the State Legislature approved legislation providing the City with new taxing authority that was intended to balance its 2005 and subsequent operating budget allowing for a surplus each year to build a fund balance of $21.9 million by 2009. As of December 31, 2014, the City had exceeded these expectations by having a General Fund balance of $63.1 million. Taxes included: a 0.55% tax on the gross payroll of all for-profit businesses, $52 on
Xlll
individuals working in the City, 3.0% tax on wages earned by non-resident sports players and performers using the stadium and arena, a shift in earned income away from the school district and to the City beginning in 2007, elimination of the $4.0 million payment of regional asset district sales tax to the school district, and a gradual reduction in the City's parking tax beginning in 2007. The tax package provided for the gradual reduction of the business privilege tax and total elimination of the mercantile tax.
In November 2012, the Act 47 Coordinator for the City recommended that the Secretary of DCED rescind the City's status as a financially distressed municipality. On March 13, 2014, the Governor denied the request for the removal of Act 47 and stated that Pittsburgh had not made enough progress. The Act 47 coordinators drafted a third, five year recovery plan, which will budget spending for years 2014-2019. The plan will limit how the City will spend its money including negotiations with unions.
On December 31, 2014, the 2015 Operating and Capital Budgets and Five-Year Financial Forecast and Performance Plan were submitted to and subsequently approved by the Act 47 coordinators and ICA oversight committee. There were no significant changes from the initial five-year plan.
Pension Funding
Commonwealth of Pennsylvania Act 47 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 met this requirement by transferring $45 million to the Comprehensive Trust Fund (Fund) in 2010 and agreeing to dedicate parking tax revenues for the next 30 years. The City contributed $13.4 million of the parking tax revenue to the Fund from 2011 - 2014, and intends to contribute the same amount each year through 2017 and $26.8 million per year from 2018 through 2041.
Casli Position
During 2014, the City continued efforts that had begun in the latter half of 2003 to control cost, improve collections, and maintain solvency. These efforts combined with remaining available fund balance produced benefits into 2014 by allowing the City to meet its beginning of the year obligations without executing a bank note at the beginning of 2014. The City expects cash flows to be sufficient enough in 2014 to maintain a positive cash position.
Due to the revenue increase combined with increased costs in the budget, at the end of 2014, the City projected a 2015 General Fund ending cash balance of $47 million, a decrease of $6 million. This decrease is largely due to a $10 million operating transfer to capital projects. There is every indication at this time that this projection is realistic and that there should be no need to seek outside funding for continuing operations through 2019.
XIV
Requests for Information
This financial report is designed to provide a general overview of the City's finances for all those with an interest in the government's finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Controller's Office, First Floor, City County Building, 414 Grant Street Pittsburgh, PA 15219.
XV
^Tlr-
n cJa ^ ir
I'/n
U) TUT .n.
Basic Financial Statements
D m
CITY OF PITTSBURGH, PENNSYLVANIA
STATEMENT OF NET POSITION
DECEMBER 31,2014
Primary Government
Governmental Component Activities Units
Assets
Current assets:
Cash, cash equivalents, and investments $ 125,709,927 $ 181.086.582 Restricted cash 50,339,052 13,581,201 Real estate taxes (net of allowance for uncollectible
accounts of $20,447,350) 13,406,482 -
Accounts receivable, net . 24,689,821 Accrued interest receivable 71,352 711,253 Due from other governments 4,857,426 14,606,390 Taxpayer - assessed taxes receivable 25,796,598 - Inventory - 3,212,000 Notes receivable . 12,029 Other receivables 13,914,749 16.526,966 Prepaid expenses
- 506,393
Total current assets 234,095.586 254,932,635
Noncurrent assets:
Restricted assets:
Cash and cash equivalents - 73,814,000 Investments - 24,994,504 Non-routine maintenance .
Deposit held for development fund - 2,401,811 Accounts receivable - parking
- 2,598,310
Total restricted assets -
103,808,625
Investments • unrestricted . 13,573,766
Capital assets: Capital assets not being depreciated:
Land and land improvement 45,602,091 39.257.939 Construction-in-progress 5,299,614 33.708.323
Capital assets being depreciated: Buildings and building improvements 88,778,564 85.447,151 Parking facilities - 161,033,598 Machinery and equipment 3,450,447 7,272,782 Utility plant - 802,961.000 Non-utility plant - 22,120,000 Furniture and fixtures 4,192,053 .
Vehicles 68,565,361 -
Infrastructure 179,919,789 2,241,369 Capital lease 15,434,653 -
Less accumulated depreciation (270.707.737) (376,656,731)
Total net capital assets 140,534,835 777,385,431
Net pension asset 91,222.406 .
Leasehold improvements - 9,500,508 Other assets - 800,200 Loans/notes receivable . 77,123.622 Prepaid bond insurance . 892,926 Property held for redevelopment
- 20,930,392
Total noncurrent assets 231,757,241 1,004,015,470
Total Assets 465,852,827 1,258,948,105
Deferred Outflows of Resources
Accumulated decrease in fair value of hedging derivatives - 70,180,000 Deferred charge on refunding 6,183.610 32,277,955
Total Deferred Outflows of Resources 6.183.610 102,457,955
(Continued)
See accompanying notes to financial statements.
1
CITY OF PITTSBURGH, PENNSYLVANIA
STATEMENT OF NET POSITION
DECEMBER 31, 2014 (Continued)
Primary Government
Governmental Component Activities Units
Liabilities
Current liabilities;
Accounts payable - wastewater treatment - 18.148,000 Accounts and retainage payable 2,405,502 2,739,578 Accrued liabilities 23,864,338 43,948,562 Accrued interest payable 9,758,934 11,205,740 Accrued worker's compensation 15,741,864 - Accrued compensated absences 19,383,759 - Accrued claims and judgments 6,131,000 - Unearned revenue - 4,697,996 Other liabilities - 60,855 Due to other governments 4,233,834 . Capital lease liability, current portion 788,067 - Bonds and loans payable, current portion 61,135,000 28,784,251
Total current liabilities 143,442,298 109,584,982
Noncurrent liabilities;
Unearned revenue - 228,000 Other liabilities - 5,400,059 Accrued payroll - related obligations - 1,129,000 Swap liability - 87,197,000 Bonds and loans payable, net of unamortized premiums/
discounts 496,946,184 877,216,894 Accrued workers' compensation 115,440,338 - Unfunded post-retirement employee benefits 102,129,822 - Accrued compensated absences 10,048,894 - Accrued claims and judgments 17,300,000 - Capital lease liability 8,550,523 - Advance from the City of Pittsburgh
- 22,775,168
Total noncurrent liabilities 750,415,761 993,946,121
Total Liabilities 893,858,059 1,103,531,103
Net Position
Net investment in capital assets 48,597,817 39,500,832 Restricted for;
Capital projects 68,006,625 25,245,559 Debt service - 5,686,709 Employee benefits 4,437,078 - Endowments 1.163,219 -
State and Federal Purpose Grants 8,444,387 - Enterprise Resource Planning System 1,873,131 - Indenture funds - 17,875,065 Urban development - 51,467,547 Lending programs - 93,017,769 Housing Program - 2,978,878
Unrestricted (554.343,879) 22,102,598
Total Net Position $ (421,821,622) $ 257,874,957
(Concluded)
See accompanying notes to financial statements.
2
Primary government: Functions/Programs
Govemmental activities:
General government Public safety Highway and streets Sanitation
Economicdevelopment(includes debt subsidies to URA of $14^56.730)
Culture and recreation (includes debt subsidies to Public Auditorium Authority of S268,S21)
Interest on long-term debt and amortization of premiums and discounts
Total primary government
Total component units
CITY OF PITTSBURGH, PENNSYLVANIA
STATEMENT OF ACTIVITIES
YEAR ENDED DECEMBER 31,2014
Net (Expense) Revenue and Changes in Net Position
Primaiy GovernmentProgram Revenues
Chargesfor OperatingGrants Capital Grants and Govemmental Expenses Services and Contributions Contributions Activities Component Units
$ 74,786,585 S 19.717,129 $ 28,412,533 S 7.196,327 $ (19,460,596) $ 300,400,845 27,234,697 15,548,315 246,178 (257,371,655) .
76,957.600 2.743.102 6,314,054 11,845,191 (56,055,253) . 15,237.555 132,200 851,605
- (14,253,750) -
23.201.566 -
2.167,347 4,183,190 (16,851,029) -
16.047,636 1,477,166 397,086 1,048,196 (13,125,188) -
33.349,335 . (33,349.335)
$ 539.981,122 $ 51,304.294 $ 53.690.940 $ 24.519.082 (410.466,806) _
$ 332.001.951 $ 244,090,232 $ 76,165,766 $ 14.708.000 2,962,047
General revenues;
Real estate taxes 129,918,499 Earned income taxes 86,925^234 Business privilege taxes 17.851 Local services tax 14,022,784 Payroll preparation tax 56,416,555 Parking tax 53.248,377 Sales taxes ftom the Regional Asset District 27,018,069 Deed transfer tax 20,114,616 Amusement tax 14,348,201 Facilities usage tax 4,726,069 Public service privilege 1,300,387 Nonprofit payment in lieu of taxes 2,267,059 Unrestricted investment earnings 182,305 884,069 Donations and endowments 829,298 _
Gain (loss) of sale of assets 494,902 1,747.501 Miscellaneous 664.230 311.921
Total general revenues 412.494.436 2.943.491
Change in Net Position 2,027,630 5.905,538 Net position • beginning (423,849.252) 251,969,419
Net position - ending $ (421.821.622) $ 257,874.957
See accompanying notes to financial statements.
3
Fund Financial Statements
fW(H
D
Assets
CITY OF PITTSBURGH, PENNSYLVANIA
BALANCE SHEET
GOVERNMENTAL FUNDS
DECEMBER 31, 2014
General
Debt
Service
Special Revenue
CDBG
Capital Projects
Total
Nonmajor Funds
Cash and cash equivalents Cash and cash equivalents - restricted Receivables:
Real estate taxes (net of allowances for uncollectible accounts of $20,447,350)
Taxpayer - assessed taxes receivable Other receivables
Accrued interest
Advance to other fund
Due from other governments Due from other funds
$ 50,130,664 $ 1,103,040 $ 1,830,290 339,052
48,283,270 S 24,362,663 50,000,000
13,406,482
25,796,598
12,744,946
29,316
1,424,843
696,674
42,036
98,735
1,347,996
1,300,000
1,816,157
64,873
1,071,068
268,430
1,016,985
Total
Governmental
Funds
$ 125,709,927
50,339,052
13,406,482
25,796,598
13,914,749
71,352
1,300,000
4,857,426
1,778,532
Total Assets $ 104,568,575 $ 1,145,076 $ 3,277,021 $ 101,464,300 $ 26,719,146 $ 237,174,118
(Continued)
See accompanying notes to financial statements.
CITY OF PITTSBURGH, PENNSYLVANIA
BALANCE SHEET
GOVERNMENTAL FUNDS
DECEMBER 31,2014 (Continued)
Special Total Total Debt Revenue Capital Nonmajor Governmental
General Service CDBG Projects Funds Funds
Liabilities, Deferred Inflows of Resources,
and Fund Balance
Liabilities:
Accounts payable $ 1,979,522 $ $ 13,706 $ 13,211 $ 399,063 $ 2,405,502 Accrued liabilities 17,002,600 - 1,663,663 3,938,819 1,259,256 23,864,338 Advance from other fiind - - 1,300,000 . . 1,300,000 Due to other funds 863,891 - 215,035 153,094 546,512 1,778,532 Due to other governments 973,844 - - - 3,259,990 4,233,834 Accrued claims and judgments 6,131,000 - - - - 6,131,000
Total Liabilities 26,950,857 . 3,192,404 4,105,124 5,464,821 39,713,206
Deferred Inflows of Resources:
Unavailable revenue - principally real estate taxes 12,213,179 - - - - 12,213,179 Unavailable revenue - Fines and forfeits 2,274,901 - - - - 2,274,901
Total Deferred Inflows of Resources 14,488,080 . . . _ 14,488,080
Fund Balance:
Restricted:
Capital Projects - - - 66,319,873 . 66,319,873 Endowments 1,163,219 - - - - 1,163,219 Employee Benefits 4,437,078 - - - - 4,437,078 State and Federal Purpose Grants - 84,617 - 8,359,770 8,444,387 Enterprise Resource Planning System - - 1,873,131 - 1,873,131
Committed:
Interfund Advance - - 1,300,000 - 1,300,000 Specified Program Services - - - 12,451,375 12,451,375
Assigned: Encumbrances 3,774,771 - - 27,866,172 443,180 32,084,123 Debt Service 1,145,076 - - - 1,145,076
Unassigned 53,754,570 - - - - 53,754,570
Total Fund Balance 63,129,638 1,145,076 84,617 97,359,176 21,254,325 182,972,832
Total Liabilities, Deferred Inflows of Resources, and Fund Balance $ 104,568,575 $ 1,145,076 $ 3,277,021 $ 101,464,300 $ 26,719,146 $ 237,174,118
See accompanying notes to financial statements.
5
(Concluded)
CITY OF PITTSBURGH, PENNSYLVANIA
RECONCILIATION OF THE BALANCE SHEET
OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF NET POSITION
DECEMBER 31, 2014
Total Fund Balance - Governmental Funds $ 182,972,832
Amounts reported for governmental activities in the statement of net position are different because;
Capital assets including construction-in-progress used in governmental activities are not current financial resources and, therefore, are not reported as assets in governmental funds. The cost of the assets Is $411,242,572 and the accumulated depreciation is$270,707,737. 140,534,835
Property taxes receivable and other revenues will be collected in the future, but are not available to pay for the current period's expenditures and, therefore, are treated as deferred inflows in the funds. Receivable
amounts are shown net of allowances, but are not deferred inflows in the government-wide financial statements. 14 488^080
Net pension assets are reported in the government-wide financial statements, but payments for pension are current expenditures in the governmental fund financial statements. 91,222,406
The deferred outflows are related to long-term debt and, therefore, are not reported in the funds. 6,183,610
Long-term liabilities, including notes and bonds payable, are not due and payable in the current period and, therefore, are not reported as liabilities in the funds. Long-term liabilities at year-end consist of:
Bonds payable, net of unamortized premiums/discounts $ (558,081,184) Capital lease liability (9,338,590)
Accrued workers' compensation (131,182,202) Accrued compensated absences (29,432,653)
Unfunded post-retirement employee benefits (102,129,822) Accrued interest payable (9,758,934)
Accrued claims and judgments (17,300,000) (857,223,385)
Total Net Position - Governmental Activities $ (421,821,622)
See accompanying notes to financial statements.
6
CITY OF PITTSBURGH, PENNSYLVANIA
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE
GOVERNMENTAL FUNDS
YEAR ENDED DECEMBER 31, 2014
Special Total Total Debt Revenue Capital Nonmajor Governmental
General Service CDBG Projects Funds Funds Revenues:
Taxes, including penalties and interest $ 399,381,259 S - S . S 1,444.930 $ 5,232,451 $ 406,058,640 Payment in lieu of taxes 2,267,059 - . . . 2,267,059 Interest and dividends 57,650 52,830 - 70,123 1,702 182,305 Fines and forfeits 6,678.485 - - - 967,990 7,646,475 Intergovernmental revenues 40,959,632 - 15.653,921 8,862,315 12,734,156 78,210,024 Charges for user services 35,227,676 - - - 6,155,243 41,382,919 Miscellaneous 906.899 - - - 1,329,820 2,236,719
Total revenues 485,478,660 52,830 15,653.921 10,377,368 26,421,362 537,984,141
Expenditures:
Current:
General government 63.343.168 - 7.661.064 2,448,396 6,168,907 79.621,535 Public safety 263,072,804 - 113.434 2,936,945 4,457,396 270,580,579 Public works 33,027.710 - 2,785,766 25,372,131 7,138,382 68.323,989 Sanitation 16,192,828 - - - . 16,192,828 Community, recreational, and cultural 12,337,776 - 539,915 563,520 2,057,871 15,499.082 Economic and physical development 750 - 4,553,742 1,154,323 3,236,771 8.945,586 Claims and judgments 4,644.247 - - - - 4,644,247
Debt service:
Principal retirement of bonds - 56,705,000 - - . 56,705,000 Interest on bonds - 30,295,546 - - . 30,295,546 Bond issuance costs - - - 758,444 - 758,444 Public Auditorium Authority subsidy 268,521 - - - - 268,521 Urban Redevelopment Authority subsidy 14,256,730 - . - - 14,256.730
Total expenditures 407.144,534 87,000.546 15,653,921 33,233,759 23,059.327 566,092,087
Excess (Deficiency) of Revenues Over Expenditures 78,334.126 (86.947,716) - (22,856.391) 3.362,035 (28,107,946)
Other Financing Sourccs (Uses): Bond proceeds
- - - 44.470.000 - 44,470,000 Bond premium - - - 5.915.402 - 5,915,402 Refunding bond proceeds - - - 62,920.000 - 62,920.000 Refunding bond premium - - . 6,310,682 - 6.310,682 Transfers from other funds 2.315.000 87.000,546 - 25,500.000 763,488 115,579,034 Payments to escrow agents for refunded debt - - - (68.857,640) - (68.857,640) Transfers to other funds (113.218.749) - - - (2.360.285) (115,579.034)
Total other fmancing sources (uses) (110.903.749) 87.000,546 . 76,258.444 (1.596.797) 50.758.444
Net Change In Fund Balances (32,569,623) 52,830 - 53.402.053 1,765,238 22.650,498
Fund Balances:
Beginning of year 95.699,261 1.092,246 84,617 43,957,123 19,489,087 160,322.334
End of year S 63.129.638 S 1.145.076 S 84.617 $ 97,359.176 $ 21,254,325 $ 182,972,832
See accompanying notes to financial statements.
7
CITY OF PITTSBURGH, PENNSYLVANIA
RECONCILIATION OF THE STATEMENT OF REVENUES,
EXPENDITURES, AND CHANGES IN FUND BALANCE OF
GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES
YEAR ENDED DECEMBER 31, 2014
Net Change in Fund Balance - Governmental Funds $ 22,650,498
Amounts reported for governmental activities in the statement of activities are different because:
Governmental funds report capital outlays as expenditures. However, in the statement of activities, the cost of those assets is allocated over their estimated usefial lives as depreciation expense. This is the amount by which depreciation exceeded capital outlays less net deletions in the current period:
Capital outlays $ 9,294,095 Less: net deletions (95,001)
Less: depreciation expense (14,478,640) (5,279,546)
Some taxes and other revenues will not be collected for several months after
the City's year-end, they are not considered as "available" revenues in the governmental fiinds. Deferred inflows changed by this amount during the year. 2,559,515
Net pension assets are reported in the government-wide financial statements, but payments for pension are current expenditures in the governmental fund financial statements. The net pension assets changed by this amount duringthe year. (3,034,000)
The issuance of long-term obligations (e.g., notes and bonds) provides current financial resources to governmental funds, while the repayment of the principal of long-term obligations consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on the statement of activities. Also, governmental funds report the effect of premiums, discounts, interest, and similar items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities. This amount is the net effect of these differences in the
treatment of long-term obligations and related items. 7 597 3g9
In the statement of activities, certain expenses - workers' compensation, compensated absences, other post-employment benefits, and claims and judgments are measured by the amounts incurred during the year. In the governmental funds, however, expenditures for these items are measured by the amount of financial resources used. This amount represents the difference between the amount incurred versus the amount used. ^22 566 226)
Change in Net Position of Governmental Activities $ 2,027,630
See accompanying notes to financial statements.
8
CITY OF PITTSBURGH, PENNSYLVANIA
STATEMENT OF REVENUES, EXPENDITURES. AND CHANGES IN FUND BALANCE -
BUDGET AND ACTUAL (NON-GAAP BUDGETARY BASIS) - GENERAL FUND
YEAR ENDED DECEMBER 31, 2014 (Amounts expressed in thousands)
Budgeted Amounts Variance witli Original Final Actual Final Budget
Revenues:
Taxes, net of refiinds and banking fees: Real estate $ 128,305 $ 128,305 $ 122,073 $ (6,232) Non-profit payment for services 3,591 3,591 3,726 135 Payroll preparation 55,497 55,497 55,990 493 Amusement 12,959 12,959 14,378 1,419 Earned income 83.368 83,368 85,859 2,491 Deed transfer 17,832 17,832 20,059 2,227
Parking 50,928 50,928 50,440 (488) Occupation Privilege - - (24) (24) Local Services Tax 13,960 13,960 13,937 (23) Business privilege 5 5 5 - Institution and service privilege 498 498 477 (21) Facility usage fee 3,743 3,743 4,713 970 Public service 1,222 1,222 818 (404) Penalties and interest 924 924 1,310 386
Act 77 - tax relief 12,637 12,637 12,898 261
Total taxes, net of refunds and banking fees 385,469 385,469 386,659 1,190
Interest earnings 110 no 121 11 Fines and forfeits 9,385 9,385 8,566 (819)
Licenses and fees;
Liquor and malt beverage 422 422 419 (3) General government 8,634 8,634 9,960 1,326 Rentals and charges 28,331 28,331 29,332 1,001
Total licenses and fees 37,387 37,387 39,711 2,324
Federal and state grants 7,321 7,321 4,211 (3,110) Reimbursement, CDBG 190 190 169 (21)
Public Parking Authority 3,000 3,000 3,906 906 PWSA reimbursement 5,300 5,300 5,300 -
Sports and Exhibition Authority 2 2 2 - Urban Redevelopment Authority 1,500 1,500 - (1,500) State utility tax 476 476 471 (5) Miscellaneous 11 11 (115) (126) Sale of public property 6 6 - (6) State aid - pension 15,705 15,705 18,264 2,559 Economic development slots revenue 5,100 5,100 - (5,100) 2% Local share of slots revenue 10,000 10,000 5,700 (4,300)
Total other revenues 48,611 48,611 37,908 (10,703)
Total budgeted revenues 480,962 480,962 472,965 (7,997)
See accompanying notes to financial statements.
9
(Continued)
CITY OF PITTSBURGH, PENNSYLVANIA
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL (NON-GAAP BUDGETARY BASIS) - GENERAL FUND
YEAR ENDED DECEMBER 31. 2014 (Amounts expressed in thousands)
(Continued)
Original Adopted
Budftet
Transfers and
Prior Year
Carryover
Final
Budftet Expenditures Encumbrances
Total
Actual Variance
Expenditures: Current Operating-GeneralGovcnuncnl
City Council and City Clerk's Office: City Council:
Salaries
GF Grants-Other
1,519
40
(30) 1,489
40
1,393
21
1,393
21
96
19
Total City Council 1,559 (30) 1,529 1,414 1,414 115
City Clerk's Office: Salaries
Non-salaries
679
221
(100) 86
579
307
523
217 28
523
245
56
62
Total City Clerk's office 900 (14) 886 740 28 768 118
Total City Council and City Clerk's ofTtce 2,459 (44) 2,415 2.154 28 2,182 233
Mayor's Office: Office of the Mayor
Salaries
Non-salanes
1,094
181
10 1.104
181
1.106
113
. 1,106
113
(2) 68
Total Office of the Mayor 1,275 10 1,285 1.219 1,219 66
Office of Neighborhood Empowerment: Salaries
Non-salaries
386
76
- 386
76
196
57 •
196
57
190
19
Total Office of Neighborhood Empowennent 462 462 253 . 253 209
Office of Managementand Budget Salaries
Non-salaries
1,256
16,131
(60) 492
1.196
16.623
1,183
14.930
1.183
14.930 13
1,693
Total Office of Management and Budget 17,387 432 17.819 16.113 . 16,113 1.706
Innovation & Performance:
Salaries
Non-salaries
3,184 10,700
(300) 156
2.884
10.856
2,790 10,657 97
2,790
10.754
94
102
Toul City Information Systems 13,884 (144) 13,740 13,447 97 13,544 196
Total Mayor's Office 33,008 298 33,306 31.032 97 31,129 2.177
Commission on Human Relations:
Salaries
Non-salaries
239
21 3
239
24
196
7
• 196
7
43
17
Total Human Relations 260 3 263 203 . 203 60
Office of City Controller: Salaries
Non-salaries
3,008 171 45
3,008 216
2,409
154 35
2,409
189
599
27
Total Office of City Controller 3.179 45 3.224 2,563 35 2.598 626
Department of Finance: Salaries
Non-salaries
Pension
Debt service
Debt service subsidy
5,498 2.695
54.728
87,001 268
(600)
545
4.898
3.240
54.728
87,001
268
4,732
3.532
54.728
87,001
268
646
4,732 4.178
54.728
87.001 268
166
(938)
Total Department of Finance 150,190 (55) 150,135 150,261 646 150.907 (772)
Department of Law Salaries
Non-salaries
1,931
2,204
(100) 137
1,831
2,341
1,755
2,152 S5
1,755 2,237
76
104
Total Law 4.135 37 4.172 3,907 85 3,992 180
See accotnpanying notes to financial statements.
10
(Continued)
CITY OF PITTSBURGH, PENNSYLVANIA
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE -
BUDGET AND ACTUAL (NON-GAAP BUDGETARY BASIS) - GENERAL FUND
YEAR ENDED DECEMBER 31,2014 (Amounts expressed in thousands)
(Continued)
Original Adopted
BudRel
Transfers and
Prior Year
Carryover
Final
Budget Expenditures Encumbrances
Total
Actual Variance
Current Operating-General Government, cont: Department of Law - EORC;
Salaries
Non-salaries
.
2 2
.
2 2
.
Total Department of Law • EORC 2 2 _ 2 2
Total Department of Law 4,135 39 4.174 3,907 87 3.994 180
Department of Personnel and Civil Service Commission:
Salaries
Non-salaries
Fringe benefits Severance Incentive Program
1,639
1,392
92.277
6.604
(70) 395
(126)
1,569 1,787
92.151
6.604
1,532
1,345
88,256 1,458
879
62
1.532 2,224
88,318
1,458
37
(437) 3,833
5,146
Total Department of Personnel and Civil Servicc Commission 101.912 199 102.111 92,591 941 93,532 8,579
Department of City Planning: Salaries
Non-salaries
1,862
346
(230) 41
1,632
387
1,404
337
- 1,404
337
228
50
Total Department of City Planning 2,208 (189) 2,019 1,741 _ 1,741 278
Total General Goverrunent 297,351 296 297.647 284,452 1.834 286,286 11,361
Public Safety - Department of Public Safety: Bureau of Administration:
Salaries and wages Non-salaries
1,198
1,684
(220) 150
978
1,834
913
999 736
913
1.735
65
99
Total Bureau of Administration 2,882 (70) 2,812 1,912 736 2,648 164
Bureau of Emergency Medical Services: Salaries and wages Non-salaries
12,611
658
1,700
12
14,311
670
14,063
539 4
14,063
543
248
127
Total Bureau of Emergency Medical Services 13,269 1,712 14,981 14,602 4 14,606 375
Bureau of Policc:
Salaries
Non-salaries
70,196 2.151
1,675
49
71,871
2,200
71.661
2,056 45
71,661 2,101
210
99
Total Bureau of Police 72,347 1,724 74,071 73,717 45 73,762 309
Bureau of Fire:
Salaries and wages Non-salaries
55,349
882
(IN) 19
55,238
901
54,978
803 22
54,978
825
260
76
Total Bureau of Fire 56.231 (92) 56.139 55,781 22 55,803 336
Bureau of Building Inspection: Salaries
Non-salaries
3,424
162
(500) 2.924 162
2,766
94 67
2,766
161
158
1
Total Bureau of Building Inspection 3,586 (500) 3.086 2,860 67 2,927 159
Public Safety; Public Saftty Animal Control Salaries
Non-salaries
735
664
(26) 386
709
1,050
656
623 361
656
984
53
66
Total Public Safety Animal Control 1,399 360 1,759 1,279 361 1,640 119
Department of Law - OMI: Salaries
Non-salaries
478
120
(50) 18
428
138
402
70 3
402
73
26
65
Total Department of Law - OMI 598 (32) 566 472 3 475 91
Total Public Safety • Department of Public Safety 150,312 3.102 153.414 150.623 1.238 151,861 1,553
See accompanying notes to financial statements.
II
(Continued)
CITY OF PITTSBURGH, PENNSYLVANIA
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGETAND ACTUAL (NON-GAAP BUDGETARY BASIS)- GENERAL FUND
YEAR ENDED DECEMBER 31, 2014 (Amountsexpressed in thousands)
(Continued)
Original Adopted
BudRet
Transfers and
Prior Year
Carryover
Final
Budftet Expenditures Encumbrances
Total
Actual Variance
Department of Public Works: Administration:
Salaries
Non-salaries
772
211
(26) 746 211
727
129
- 727
129
19
82
Total Administration 983 (26) 957 856 _ 856 101
Operations: Salaries
Non-salaries
15,515 3.738
(150) 18
15,365 3.756
14,913 3.565 126
14,913 3.691
452
65
Total Operations 19.253 (132) 19.121 18.478 126 18.604 517
Environmental Services:
Salaries
Non-salaries
7,881 3.821
(150) 7,731 3.821
7,212 3,042 25
7,212
3.067
519
754
Total Environmental Services 11.702 (150) 11.552 10.254 25 10.279 1.273
Engineering: Salaries
Non-salaries
2,957 117
(350) 2,607 117
2,500
86
- 2,500
86
107
31
Total Engineering 3.074 (350) 2.724 2.586 _ 2.586 138
Total Department of Public Works 35.012 (658) 34.354 32.174 151 32.325 2,029
Community, Recreational, and Cultural • Department of Parks and Recreation:
Administration:
Salaries
Non-salaries
3.154 767 43
3,154 810
3,154 766 1
3,154 767 43
Total Community, Recreational, and Cultural - Department of Parks and Recreation 3.921 43 3.964 3.920 ! 3.921 43
Citizens Review Board:
Salaries
Non-salaries
325
183
(20) 39
305
222
306
172 1
306
173
(1) 49
Total Citizens Review Board 508 19 527 478 1 479 48
Total Expenditures
Excess (Deficiency) of Revenues over Expenditures
487.104 2.802 489.906 471,647 3.225 474.872 15.034
$ (6.142) S (8.944) $ (1.907) $ 7.037
(Continued)
See accompanying notesto financial statements.
12
CITY OF PITTSBURGH, PENNSYLVANIA
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN
FUND BALANCE - BUDGET AND ACTUAL (NON-GAAP BUDGETARY BASIS) GENERAL FUND
YEAR ENDED DECEMBER 31, 2014 (Amounts expressed in thousands)
(Continued)
Explanation of Differences Between Budgetary Inflows and Outflows and GAAP Revenues and Expenditures:
Sources/Inflows of Resources:
Actual amounts (budgetary basis) revenues from the statement of revenues, expenditures, and changes in fund balance - actual and budget. $ 472,965
Actual amounts not included on budgetary basis. 1,185
Transfer in 2,315
The adjustments to convert to GAAP basis, recording of receivables and revenues, not included in budget. 11,329
Total General Fund revenue and other financing sources on GAAP basis as reported on the statement of revenues, expenditures, and changes in fund balance. $ 487,794
Users/Outflows of Resources:
Actual amounts (budgetary basis) "total expenditures" from the statement of revenues, expenditures, and changes in fund balance - actual and budget. $ 471,647
Actual amounts not included on budgetary basis. 4,850
Transfer out 26,218
The adjustments to convert to GAAP basis, recording of expenditures and liabilities not included in budget. 17,648
Total General Fund expenditures and transfers out as reported on the statementof revenues, expenditures, and changes in fund balance. $ 520.363
(Concluded)
See accompanying notes to financial statements.
13
CITY OF PITTSBURGH, PENNSYLVANIA
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (NON-GAAP BUDGETARY BASIS)
COMMUNITY DEVELOPMENT FUND
YEAR ENDED DECEMBER 31,2014
Budgeted Amounts Variance with
Original Final Actual Final Budget
Revenues:
Intergovernmental $ 35,817,932 $ 35,817,932 $ 13,700,352 $ (22,117,580)
Expenditures:
General government: Council and City Clerk's Office 4,790,149 4,790,149 2,008,897 2,781,252
Finance 55,755 55,755 - 55,755
Department of Personnel and Human Relations 2,065,406 2,065,406 1,161,142 904,264
Department of City Planning 4,902,395 4,902,395 2,148,280 2,754,115
General services 13,474 13,474 - 13,474
Public safety 446,389 446,389 246,178 200,211 Public works:
Public works 8,749,298 8,749,298 2,673,545 6,075,753 Engineering and construction 807,330 807,330 316,821 490,509 Community, recreational, and cultural programs 2,935,620 2,935,620 1,056,105 1,879,515 Intergovernmental programs 11,052,116 11,052,116 4,128,629 6,923,487
Total expenditures 35,817,932 35,817,932 13,739,597 22,078,335
Excess (Deficiency) of Revenues Over Expenditures $ $ $ (39,245) $ (39,24^
See accompanying notes to financial statements.
14
(Continued)
CITY OF PITTSBURGH, PENNSYLVANIA
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN
FUND BALANCE - BUDGET AND ACTUAL (NON-GAAP BUDGETARY BASIS) COMMUNITY DEVELOPMENT FUND
YEAR ENDED DECEMBER 31, 2014
(Amounts expressed in thousands) (Continued)
Explanation of Differences Between Budgetary Inflows and Outflows and GAAP Revenues and Expenditures;
Sources/Inflows of Resources:
Actual amounts (budgetary basis) revenues from the statement of revenues, expenditures, and changes in fund balance - actual and budget. $ 13,700
Actual amounts not included on budgetary basis. 2,363
The adjustments to convert to GAAP basis, recording of receivables and revenues, not included in budget. (409)
Total Community Development Fund revenue on GAAP basis as reported on the statement of revenues, expenditures, and changes in fund balance. $ 15,654
Users/Outflows of Resources:
Actual amounts (budgetary basis) "total charges to appropriations" from the statement of revenues, expenditures, and changes in fund balance - actual and budget. $ 13,740
Actual amounts not included on budgetary basis. 2,326
The adjustments to convert to GAAP basis, recording of expenditures and liabilities not included in budget. (412)
Total Community Development Fund expenditures and other financing uses as reported on the statement of revenues, expenditures, and changes in fund balance. $ 15,654
(Concluded)
See accompanying notes to financial statements.
15
fmT\
Fiduciary Fund Statements
CITY OF PITTSBURGH, PENNSYLVANIA
STATEMENT OF NET POSITION
FIDUCIARY FUNDS
DECEMBER 31, 2014
Pension OPEB
Trust Trust Agency Fund Fund Fund
Assets
Cash and cash equivalents $ 10,516,702 $ 649,851 $ 14,661,807 Investments:
Preferred and common stock 56,903,721 - .
U.S. government and agency obligations 13,051,513 521,214 - Corporate and other obligations 35,008,036 1,947,391 - Mutual funds;
U.S. equities 91.958,257 4,856,682 -
Non-U.S. equities 75,717,711 - - Fixed income 33,105,385 658,627 -
Hedge funds 34,265,364 - - Real estate funds 31,084,310 362,713 -
Private equity 12,613,223 - -
Other assets - - 115,815
Accrued interest and dividend receivables 502,471 - -
Total Assets 394,726,693 8,996,478 14,777,622
Liabilities
Benefits and related withholdings payable 2,633,813 - -
Accounts payable - - 7,500 Deposits held in trust - - 983,178
Accrued liabilities and other payables 27,417 - 13,786,944
Total Liabilities 2,661,230 14,777,622
Net Position
Restricted for Pension Benefits and other purposes $ 392,065,463 $ 8,996,478 $
See accompanying notes to financial statements.
16
CITY OF PITTSBURGH, PENNSYLVANIA
STATEMENT OF CHANGES IN NET POSITION FIDUCIARY FUNDS
YEAR ENDED DECEMBER 31,2014
Pension OPEB
Trust Trust
Fund Fund
Additions:
Contributions:
Employer - pension benefits $ 33,650,738 $ Employer - other benefits 3,263,901 2,500,000 Plan members 10,909,251 -
State Aid 18,263,559 -
Total contributions 66,087,449 2,500,000
Investment income:
Net increase in fair value of investments 19,411,394 99,260
Interest and dividends 5,416,814 267,727
Total investment income (loss) 24,828,208 366,987
Investment expense (713,002) (13,644)
Net investment income (loss) 24,115,206 353,343
Miscellaneous:
Other 187,162 -
Total additions 90,389,817 2,853,343
Deductions:
Benefit payments 86,454,559 - Refund of employee contributions 939,884 - Administrative expense 1,271,604 9,313
Total deductions 88,666,047 9,313
Change in Net Position 1,723,770 2,844,030
Net Position:
Beginning of year
End of year
390,341,693 6,152,448
$ 392,065,463 $ 8,996,478
See accompanying notes to financial statements.
17
Combining Statements of
Discrete Component Units
CITY OF PITTSBURGH, PENNSYLVANIA
COMBINING STATEMENT OF NET POSITION
COMPONENT UNITS
DECEMBER 31,2014
Assets
Current assets:
Cash and cash equivalents
Cash and cash equivalents - restricted
Investments - unrestricted
Investments - restricted
Accounts receivable, net
Due from other governments
Notes receivable
Inventory
Accrued interest receivable and other assets
Other receivables
Prepaids
Total current assets
Noncurrent assets:
Restricted assets:
Cash and cash equivalents
Investments
Non-routine maintenance
Deposits held for development i\md
Reserve/loans escrow
Total restricted assets
Investments - unrestricted
Capital assets:
Buildings and building improvements Land and land improvements
Parking facilities
Machineiy and equipment Utility assets
Non-utility assets
Infrastructure
Constniction-in-progress Less: accumulateddepreciation
Total net capital assets
Leasehold improvements, net
Other assets
Property held for redevelopment
Loans/notes receivable, net
Prepaid bond insurance
Total noncurrent assets
Total Assets
Deferred Outflows of Resources Accumulated decrease in fairvalueof hedging derivatives Deferred charge on refunding
Total Deferred Outflows of Resources
URA
87,078,709
40,383,639
14.606,390
15,419.088
157,487,826
56,176,681
13,204,423
(23,702.850)
45,678,254
800.200
20.930.392
73,921,454
141.330.300
298,818,126
Pittsburgh
Water and
Sewer
Authority
31,219,000
24,003,000
3,212.000
496,000
58,930,000
73,814,000
12,054,000
85,868.000
802,961,000
22,120,000
31,233,000
(261,132.000)
595,182,000
681,050,000
739.980.000
70.180.000
30,501,000
100,681.000
Public
Stadium Parking
Authority Authority Total
S 3,094.610 $ 252,744 $ 121,645,063
2,807,292 10,773,909 13,581,201
- 9,694,473 50,078,112
- 9.363,407 9,363,407
- 686,821 24,689,821
- - 14,606.390
- 12.029 12,029
- - 3.212,000
223 711.030 711,253
1.107,878 - 16,526,966
10,393 - 506,393
7.020.396 31.494,413 254,932,635
73,814,000
- 12,940,504 24,994,504
2,401,811 . 2,401.811
2,598.310 . 2,598.310
5,000.121 12.940,504 103,808,625
_ 13,573,766 13,573,766
29,270,470 85,447,151
• 26,053,516 39,257,939
- 161.033,598 161,033,598
43,588 7,229,194 7,272.782
- - 802.961,000
- • 22,120,000
2,241,369 - 2,241,369
• 2.475,323 33,708,323
{5.834,596} (85,987,285) (376.656,731)
25,720.831 110,804,346 777,385,431
. 9.500,508 9,500.508
- . 800,200
- • 20,930,392
- 3.202,168 77,123,622
- 892.926 892,926
30,720,952 150,914.218 1,004,015,470
37.741,348 182,408.631 1,258,948,105
70,180.000
• 1,776,955 32.277.955
_ 1,776,955 102,457,955
(Continued)
See accompariying notes to financial statements.
18
CITY OF PITTSBURGH, PENNSYLVANIA
COMBINING STATEMENT OF NET POSITION
COMPONENT UNITS
DECEMBER 31, 2014
(Continued)
Liabilities
Current liabilities;
Bonds and loans payable, current portion Accrued payroll and related obligations Accounts payable - City of Pittsburgh Accounts payable - wastewater treatment Unearned revenue
Other liabilities
Accounts payable and other accrued expenses Accrued interest payable
Total current liabilities
Noncurrent liabilities:
Unearned revenue
Other liabilities
Accrued payroll and related obligations Swap liability Bonds and loans payable, net of current portion Advances from the City of Pittsburgh
Total noncurrent liabilities
Total Liabilities
Net Position
Net investment in capital assets Restricted for:
Capital projects
Debt service
Indenture funds
Urban Development Lending programs Housing program
Unrestricted
Total Net Position
URA
2,551,777
3,811,564
28,065,464
34,428.805
39,094,973
39,094.973
73,523,778
39,556,396
51,467,547
93,017,769
2,978,878
38,273,758
Pittsburgh Water and Public
Sewer Stadium Parking Authority Authority Authority Total
20,993.000 779,679 4,459,795 28,784,251 656,000 - - 656,000
- - 2,739,578 2,739,578
18,148,000 - - 18,148,000 - - 886,432 4,697,996 - - 60,855 60,855
11,052,000 276,593 3,898,505 43,292,562
9,639,000 58,285 1,508,455 11,205,740
60,488,000 1,114,557 13,553,620 109,584,982
228,000 228,000
- - 5,400,059 5,400,059
1,129,000 - - 1,129,000
87,197,000 - - 87,197,000
750,749,000 17,240,973 70,131,948 877,216,894 - 22,775,168 - 22,775,168
839,303,000 40,016,141 75,532,007 993,946,121
899,791,000 41,130,698 89,085,627 1,103.531,103
(51,220,000) 7,700,179 43,464,257 39,500,832
9,130,000 5,982,105 10,133,454 25,245,559
- 2,598,310 3,088,399 5,686,709 - - 17,875,065 17,875,065 - - - 51,467,547 - - - 93,017,769 - - - 2,978,878
(17,040,000) (19,669,944) 20,538,784 22,102,598
$ (59,130,000) $ (3.389,350) $ 95,099,959 S 257,874,957
(Concluded)
See accompanyingnotes to financial statements.
19
CITY OF PITTSBURGH, PENNSYLVANIA
STATEMENT OF ACTIVITIES
COMPONENT UNITS
YEAR ENDED DECEMBER 31,2014
Program Revenues Urban Redevelopment Authority
Net (Expense) Revenue and Changes in Net Position
Urban Redevelopment Authority; Governmental activities;
Urban development General government Intereston long-termdebt
Expenses
Charges for Services
Operating Grants and Contributions
Capital Grants and Contributions
Governmental
Activities
Business-type Activities
URA Component Unit
Water and Sewer
Authority Stadium Authority
Public Parking Authority Total
S 75,615,632 $ 9,514,637 1.006.378
8,191,251 2,963,687
S 63,837^44 2,000,000
S S (3,587,137) (4,550,950) (1.006.378)
$ $ S S S - S (3,587,137) (4,550,950) (1.006.378)
Total governmental activities 86.136.647 11.154.938 65.837.244 (9.144.465) (9.144,465)
Business-typeactivities; Lending programs Property management
4,598,331 2.682.745
3,018,072 2.349J282
9,001,808 - -
7,421,549 (333.463)
- - - - 7,421,549 (333.463)
Total business-typeactivities 7.281.076 5.367,354 9.001.808 . . 7.088.086 7.088.086
URA Component Unit 2.008.873 45.634 1.326.714 (636.525) (636,525)
Total URA 95,426.596 16.567.926 76.165.766 . (9.144.465) 7.088.086 (636.525) (2.692,904)
Pittsburgh Water and Sewer Authority 183,172,000 164,255,000 - 14,708,000 - . . (4,209,000) . (4,209,000)
Stadium Authority 4,332.976 6,361,506 - - - - - - 2,028,530 - 2,028,530
Public Parking Authority 49.070.379 56.905.800 . 7.835.421 7.835.421
Total Component Units $ 332.001.9S1 S 244.090.232 S 76.165.766 $ 14.708.000 (9,144,465) 7.088,086 (636,525) (4,209,000) 2.028,530 7.835,421 2.962,047
General revenues;
Investment income, net Gain (loss) on sale of assets Miscellaneous revenue (expense) Transferin (out)
58,213
455,000
279,889
(455.000)
647,501 213,000 4,636
1.100,000 (348,014)
328,331
659,935
884,069 1,747,501
311,921
Total general revenues 513.213 (175.111) 647.501 213.000 756.622 988,266 2,943.491
Change in Net Position (8,631,252) 6,912,975 10,976 (3,996,000) 2,785,152 8,823,687 5,905,538
Net position- beginning 153.314,451 70.719.296 2,967.902 (55.134.000) (6.174.502) 86,276,272 251.969.419
Net position - ending $ 144.683.199 S 77,632,271 $ 2.978.878 $ (59,130.000) $ (3.389.350) S 95.099.959 $ 257.874.957
See accompanying notes to financial statements.
20
Notes to
Financial Statements
CITY OF PITTSBURGH, PENNSYLVANIA
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 2014
1. Summary of Significant Accounting Policies
Primary Government Disclosures:
Description of City
The City of Pittsburgh, Pennsylvania (City or primary government) was incorporated on July 20, 1816 and chartered as a home rule municipality on January 5, 1976. The City operates under a strong mayor form of government and provides the following services as authorized by its charter: public safety (police, fire, and emergency medical services), highways and streets, sanitation, economic development, cultural and recreational, public improvements, planning and zoning, and general administrative services.
The major accounting principles and practices followed by the City are presented below to assist the reader in evaluating the financial statements and the accompanying notes.
(A) The Financial Reporting Entity
The criteria used by the City to evaluate the possible inclusion of related entities (Authorities, Boards, Councils, etc.) outside of the legal City entity within its reporting entity are financial accountability and the nature and significance of the relationship. In determining financial accountability in a given case, the City reviews the applicability of the following criteria:
The City is financially accountable for:
1. Legally separate organizations if City officials appoint a voting majority of the organization's governing body and the City is able to impose its will on the organization or if there is a potential for the organization to provide specific financial benefits to, or impose specific financial burdens on, the primary government.
a. Impose its Will - If the City can significantly influence the programs, projects, or activities of, or the level of services performed or provided by, the organization.
b. Financial Benefit or Burden - Exists if the City (1) is entitled to the organization's resources, (2) is legally obligated or has otherwise assumed the obligation to finance the deficits of, or provide support to, the organization, or (3) is obligated in some manner for the debt of the organization.
2. Legally separate organizations that are fiscally dependent on the City, fiscal dependency is established if the organization is unable to adopt its budget, levy taxes or set rates or charges or issue bonded debt without approval by the City.
Based on the foregoing criteria, the reporting entity has been defined to include all the legally separate-government entities for which the City is financially accountable or for which there is a significant relationship (component units). Specific information on the nature of the various potential component units and a description of how the aforementioned criteria have been considered in determining whether or not to include or exclude such organizations in the City's
21
CITY OF PITTSBURGH, PENNSYLVANIA
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 2014
financial statements are provided in the following paragraphs. Audited financial statements for all of the component units are available for public inspection in the City Controller's office.
(B) Net Position Deficit and Liquidity
As of December 31, 2014, the City, in its statement of net position, shows a total net deficit of $422 million with an unrestricted net position deficit of $554.3 million offset by $132.5 million in net investment in capital and restricted assets. A structural imbalance exists as a result of demographic shifts of residents and businesses, non-profit legislation and a stagnant taxation authority for the City which has led to this deficit. The largest components of the unrestricted deficit are principally the general obligation debt to meet funding requirements to the Pension Trust Fund, borrowings to finance economic development efforts (including projects of the City's Authorities, related principally to the URA), maintenance, and equipment expenditures on City infrastructure. The City's debt service expenditures and debt subsidies in its governmental funds were $87.0 million and $14.3 million, respectively, or a combined 13.6% of its total expenditures and other financing uses; and the City used 25.2% of its current tax revenues to finance debt service requirements.
In November 2003, the City sought municipal self-help as a "financially distressed" municipality under the Municipalities Financial Recovery Act (Act 47) of the Commonwealth of Pennsylvania. The Commonwealth of Pennsylvania legislature also established an Intergovernmental Cooperation Authority (ICA) to provide fiscal oversight for the City for a period of seven years. The Act 47 coordinators appointed by the Commonwealth issued their five-year Recovery Plan, which was originally adopted by the City Council on June 29, 2004. On June 30, 2009, City Council adopted the amended Recovery Plan, making it a City ordinance, which further provided areas for Revenue enhancements and Expenditure reductions. On June 24, 2014, City Council adopted the second amended Recovery Plan, making it a City ordinance. During 2014, the City continued efforts to control costs, improve collections, and maintain solvency. The cash balance available for general operations of the City as of December 31, 2014 was $50.1 million; this was enough to maintain normal function throughout the City in January 2015. Throughout 2014, the City continued its designation as a "financially distressed municipality." Currently, the Act 47 coordinators and the ICA will provide continued oversight to ensure compliance with the operating budget and approved five-year plan until this oversight is formally removed.
In November 2012, the Act 47 Coordinator for the City recommended that the Secretary of DCED rescind the City's status as a financially distressed municipality. On March 13, 2014, the Governor denied the request for the removal of Act 47 and stated that Pittsburgh had not made enough progress. A third Recovery Plan was adopted June 24,2014.
By December 31, 2013, the 2014 Operating and Capital Budgets and Five-Year Financial Forecast and Performance Plan were submitted to the Act 47 coordinators and ICA oversight committee and subsequently approved. There were no significant changes from the initial five- year plan.
22
CITY OF PITTSBURGH, PENNSYLVANIA
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 2014
(C) Individual Component Unit Disclosures
Blended Component Units
Some component units, despite being legally separate from the City government, are so intertwined with the City government, whether through sharing common governing boards with the City or through providing services solely to the City that they are, in substance, the same as the City government and are reported as part of the City government. The blended component units reported in this way are the following:
City of Pittsburgh Equipment Leasing Authority City Pension Trust
City of Pittsburgh Equipment Leasing Authority (ELA)
The ELA was incorporated in 1980 to serve as a financing vehicle for the acquisition of equipment. The Board consists of the Assistant Director of the Office of Management and Budget, the Chief Operations Officer, the President of Pittsburgh City Council, the Budget Director for City Council and the Deputy Directorof the Department of Public Safety.
Although it is legally separate from the City, the ELA is reported as if it were part of the City government, because its sole purpose is to finance the City equipment needs. Its operations are included within other government funds. It operates on a December 31 fiscal year.
City Pension Trust
As described in Note 7, the City has a comprehensive pension trust for financial reporting purposes that is comprised of three defined benefit pension plans: the Municipal Pension Plan (Municipal); the Policemen's Relief and Pension Plan (Police); and the Firemen's Relief and Pension Plan (Fire), which together cover substantially all City employees. As required by Pennsylvania Law, a comprehensive Board oversees funding and investing activities. This Board consists of seven members, four of whom are appointed by the Mayor.
Plan benefit matters are administered by separate boards which include, for all plans, the president of the City Council and the City Controller and additionally, in the case of the Municipal and Fire plans, the Mayor.
The pension plans operate on a fiscal year ending December 31. Their operations are included in the Pension Trust Fund, as a fiduciary fund.
Discretely Presented Component Units
Discretely presented component units are entities that are legally separate from the primary government but the omission of which would cause the primary government's financial statements to be misleading or incomplete. As these component units do not meet the criteria for blended presentation, they are reported separately from the primary government. The component units presented in this manner are the following:
23
CITY OF PITTSBURGH, PENNSYLVANIA
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 2014
Pittsburgh Water and Sewer Authority Stadium Authority of the City of Pittsburgh Public Parking Authority of Pittsburgh Urban Redevelopment Authority of Pittsburgh
Pittsburgh Water and Sewer Authority (PWSA)
PWSA was incorporated in February 1984 under the Municipality Authorities Act of 1945 to assume responsibility for the operation and improvement of the City's water distribution and wastewater collection systems. In 1984, pursuant to a Lease and Management Agreement, PWSA leased the entire City water supply, distribution, and wastewater collection system (System) from the City and assumed responsibility for establishing and collecting user fees and charges and for maintaining and improving the System. The Lease and Management Agreement provided for the City to operate and maintain the System for PWSA subject to the general supervision of PWSA.
The City and PWSA agreed to terminate the Lease and Management Agreement in July 1995 and concurrently entered into a Cooperation Agreement and a Capital Lease Agreement (collectively referred to as the Agreements). The effect of these Agreements, as more fully described in Note 4, was to substantially transfer financial and management responsibility for the System to PWSA.
PWSA is legally separate from the City and is reported as a component unit. The PWSA Board consists of one City Council member, the City Treasurer, the City Finance Director, and four members chosen by the Mayor, which allows the City to impose its will on PWSA. PWSA operates on a fiscal year ending December 31.
The Stadium Authority of the City of Pittsburgh (Stadium Authority)
The Stadium Authority was organized on July 1, 1965 to provide increased commerce and prosperity and to promote educational, cultural, physical, civic, social, and moral welfare to the general public.
The Stadium Authority was responsible for the management of the former Three Rivers Stadium (Stadium) located in the City. The Stadium was home to the Pittsburgh Pirates (Pirates) and Pittsburgh Steelers (Steelers) professional sports teams and was also utilized for various concerts and other events until it as razed in February 2001. Subsequent to the razing of the Stadium, the Stadium Authority is responsible for development of the land between the newly constructed stadium and ballpark.
The Board of Directors (Board) of the Stadium Authority, a five-member group, is appointed by the Mayor of the City. The Board is responsible for all the activities and operations of the Stadium Authority. The City is the guarantor of the Authority's debt. The Stadium Authority operates on a fiscal year ending March 31.
24
CITY OF PITTSBURGH, PENNSYLVANIA
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 2014
Public Parking Authority of Pittsburgh (Parking Authority)
The Parking Authority was created for the purpose of conducting the necessary activity to plan, acquire, construct, improve, maintain and operate, and own and lease land and facilities devoted to the parking of vehicles. In addition, the Authority is responsible for the enforcement of city and state parking codes throughout the City, including the responsibility for the operations of parking court. The Parking Authority is administered by a five-member Board, all of whom are appointed by the Mayor. The Parking Authority obtains its revenue from user charges and from street parking meter revenues. Through 2014, under an agreement between the Parking Authority and the City, street parking revenues were allocated 93.5% to the Parking Authority and 6.5% to the City. Accordingly, the City derives a financial benefit from the Parking Authority. Footnote 14 describes related transactions between the Parking Authority and the City.
Urban Redevelopment Authority of Pittsburgh (URA)
The URA was established in 1946 under the Pennsylvania Urban Redevelopment Law. The URA acquires and clears blighted property; initiates rebuilding with the private sector; negotiates with the federal, state, county, and local governments for public funds and facilities; and works to maintain and improve the City's neighborhoods and business districts. Funding for the URA projects and programs is obtained primarily through revenue bonds and intergovernmental grants.
The URA is considered to be a component unit of the City as the Mayor of Pittsburgh appoints the Board of Directors of the URA, and a financial benefit/burden relationship exists between the City and the URA.
The reporting entity of the URA includes the accounts of all URA operations as well as two entities that qualify as component units of the URA. The component units of the URA are the Pittsburgh Housing Development Corporation (PHDC) and Pittsburgh Urban Initiatives (PUI).
The URA and its component units operate on a fiscal year ending December 31. Separate financial statements for the component units can be obtained through the Finance Department of the URA.
Administrative Offices
City of Pittsburgh Pittsburgh Water and Sewer Authority Equipment Leasing Authority Penn Liberty Plaza I City-County Building, 5'̂ Floor 1200 Penn Avenue 414 Grant Street Pittsburgh, PA 15222 Pittsburgh, PA 15219
25
CITY OF PITTSBURGH, PENNSYLVANIA
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 2014
City of Pittsburgh Finance Department Public Parking Authority of Pittsburgh Combined Pension Trust Funds 232 Boulevard of the Allies City-County Building Pittsburgh, PA 15219 414 Grant Street
Pittsburgh, PA 15219
Stadium Authority of the City Urban Redevelopment Authority of Pittsburgh of Pittsburgh
171 10'" Street, 2"''Floor 200 Ross Street Pittsburgh, PA 15222 Pittsburgh, PA 15219
Joint Venture
The Sports and Exhibition Authority of Pittsburgh and Allegheny County (formerly the Public Auditorium Authority)
The Public Auditorium Authority of Pittsburgh and Allegheny County (Authority) was incorporated on February 3, 1954 pursuant to the Public Auditorium Law Act of July 29, 1953 as a joint authority organized by the City and Allegheny Country to provide educational, cultural, physical, civic, and social events for the benefit of the general public. Effective November 1999, the Public Auditorium Authority legally changed its name to the Sports and Exhibition Authority of Pittsburgh and Allegheny County (SEA). SEA is currently responsible for the management of the David L. Lawrence Convention Center (Convention Center) and leases the Mellon Arena (formerly the Civic Arena), the Benedum Center and the John Heinz History Center to other entities located in the City. SEA was also responsible for the construction of the Pittsburgh Steelers Sports, Inc. (Pittsburgh Steelers) football stadium (Heinz Field), the Pittsburgh Associates' (Pittsburgh Pirates) baseball park (PNC Park), the Convention Center expansion project. New Arena Project, and various associated infrastructure improvements referred to collectively as the Regional Destination Financing Plan. For the year ended December 31, 2014, SEA's operating loss was $43.2 million, and the change in net position was a decline of $25.1 million. SEA had total net position of $376 million.
The Board of Directors (Board) of SEA, a seven-member group, is appointed by the City and Allegheny County. Each executive appoints three members and the Mayor and County Executive jointly appoint the seventh member. The Board is responsible for the overall activities and operations of SEA. The Board members have decision-making authority, the power to designate management, the responsibility to significantly influence operations, and primary accountability for fiscal matters.
In 2004, SEA borrowed $20 million from local banks to be used for both operating and capital needs. These borrowing were refinanced with the 2010 Bank Loans. The following revenues are pledged for repayment of this loan: parking revenues generated at the Convention Center and North Shore parking garages and two North Shore lots, gaming revenues, and residual/discretionary hotel tax receipts. Additionally, as part of the transaction, the City and Allegheny County reaffirmed their responsibilities under a 1978 Cooperation Agreement to finance the Convention Center's operating deficits.
26
CITY OF PITTSBURGH, PENNSYLVANIA
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 2014
SEA has suffered operating deficits and has indicated that it may require funding from the City and Allegheny County in the future. No liability has yet been recorded for any such payments as the City does not anticipate payment during 2014 and no future payments are currently deemed more likely than not.
SEA operates on a fiscal year ending December 31. Complete financial statements for SEA can be obtained from its administrative office at 171 lO^*" Street, 2"^ Floor, Pittsburgh, PA 15222.
Related Organizations
Housing Authority ofthe City ofPittsburgh (Housing Authority)
The Housing Authority was established to acquire and maintain properties for the purpose of providing low-income housing for residents of the City. Rental charges and subsidies from Federal Housing and Urban Development grants are the principal revenue sources.
The Housing Authority is administered by a seven-member Board, all of whom are appointed by the Mayor. City Council approves five of the seven appointments. The City does not subsidize the operations of the Housing Authority and does not guarantee its debt service.
The Housing Authority operates on a fiscal year ended December 31.
Jointly Governed Organization
The Allegheny County Sanitary Authority (ALCOSAN) was organized under the Municipal Authority Act of 1945 to collect, transport, and treat wastewater for the City and seventy-seven (77) other Allegheny County municipalities. ALCOSAN'S Board has seven members: three are appointed by the City, three are appointed by Allegheny County, and one is appointed jointly by Allegheny County and the City. The City has no direct ongoing financial interest or responsibility for ALCOSAN. See Note 4 for transactions between the City and the PWSA.
East Liberty Transit Revitalization Investment District Revitalization Authority (ELTRIDRA). is a governmental authority which was formed to manage the East Liberty Revitalization Investment District. ELTRIDRA's five member Board of Directors includes one representative each from the URA, the City, Pittsburgh Public Schools, Port Authority of Allegheny County, and Allegheny County. The URA provides administrative support to ELTRIDRA. ELTRIDRA is considered a related entity of the representative entities. Financial information is available for ELTRIDRA at the URA's offices.
(D) Financial Statement Presentation
Government-Wide Financial Statements - Financial statements prepared using the economic resources measurement focus and full accrual basis of accounting for all the government's activities are required. These statements include all assets, deferred outflows of resources, liabilities, revenues, and expenses of the primary government and its component units, excluding fiduciary activities.
27
CITY OF PITTSBURGH, PENNSYLVANIA
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 2014
The effect of inter-fund activity has been eliminated from these statements. The City does not allocate indirect expenses. The government-wide statements segregate governmental activities, which are normally supported by taxes and intergovernmental revenues, and business-type activities, if any, which rely on user fees and charges for support. Component units, which are legally separate and discretely presented, are also segregated.
Statement of Net Position - presents both governmental and business-type activities, if any, on the full accrual, economic resource basis, which incorporates long-term assets and receivables; deferred outflows of resources; long-term debt and obligations; and deferred inflows of resources.
Statement of Activities - presents the net cost of each individual function. Program revenues are presented as a reduction of the total cost of providing program services. Program revenues include charges for services, operating grants and contributions and capital grants that are directly associated with a specific function. Taxes and other revenue sources not reported as program revenue are included as general revenue.
Fund Financial Statements - These statements are very similar to financial statements presented in the previous model. However, the emphasis is now on major funds.
The City's accounts are organized on the basis of funds, each of which is considered to be a separate accounting entity. The operation of each fund is accounted for by providing a separate set of self-balancing accounts that comprise its assets, deferred outflows of resources, liabilities, deferred inflows of resources, fund balances or net position, revenues, and expenditures or expenses, as appropriate.
Government resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled. The various funds are grouped in the basic financial statements in this report into two broad fund categories as follows:
Governmental Funds account for expendable financial resources. Governmental fund types use the flow of current financial resources measurement focus. The major governmental funds are:
General Fund - The General Fund is the general operating fund of the City. It finances the regular day-to-day operations of the City. It is used to account for all financial revenues and expenditures, except those required to be accounted for in another fund.
Debt Service Fund - The Debt Service Fund is used to account for the accumulation of
resources for, and the payment of, long-term debt principal, interest, and related costs.
Special Revenue Community Development Block Grant Fund - Community Development Block Grant Fund is used to account for the cost of neighborhood development and improvement projects. These programs are financed primarily by the U.S. Department of Housing and Urban Development (HUD) under the Community Development Block Grant
28
CITY OF PITTSBURGH, PENNSYLVANIA
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 2014
(CDBG) program. A substantive portion of the funds received under the program have been allocated to the Urban Redevelopment Authority of Pittsburgh.
Capital Projects Fund - A Capital Projects Fund is used to account for financial resources to be used for the acquisition or construction of major capital facilities.
Nonmajor Governmental Funds - These funds includes all other non-major governmental funds.
Fiduciary Funds account for assets held by the City in a trustee capacity or as an agent for individuals, other governmental units, or other funds. The fiduciary funds are:
Pension Trust Fund - The Comprehensive Fund accounts for the operations of the City's pension plans as described in Note 7. This is accounted for in the same manner as a proprietary fund type. Measurement focus is upon determination of the change in net position and financial position.
OPEB Trust Fund is used to report resources held in trust for post-employment benefits other than pension benefit. This fund was newly created in 2012 with the establishment of the trust.
Agency Funds - Accounts for assets held for, and due to, employee benefits, payroll withholding, deposits, and other. These funds are custodial in nature and do not involve measurement of results of operations.
The basic financial statements also include the statement of net position and statement of activities of the following component units:
Pittsburgh Water and Sewer Authority Stadium Authority of the City of Pittsburgh
Public Parking Authority of Pittsburgh Urban Redevelopment Authority of Pittsburgh
Budgetary Comparison Statements - The statements are presented to demonstrate whether resources were obtained and used in accordance with the government's legally adopted budget for the General Fund and the Community Development Fund. The City revises the original budget over the course of the year for various reasons. Under the current reporting model, budgetary information continues to be provided and includes a comparison of the government's original adopted budget to the current comparison of final budget and actual results. The City's budget is prepared on a non-GAAP basis as described in Note 2.
(E) Basis ofAccounting
Basis of accounting refers to the point at which revenues and expenditures or expenses are recognized in the accounts and reported in the financial statements. Basis of accounting relates to the timing of the measurements made, regardless of the measurement focus applied.
29
CITY OF PITTSBURGH, PENNSYLVANIA
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 2014
Governmental activities in the government-wide statement are presented using the economic resources measurement focus and the accrual basis of accounting, as are the fiduciary fund financial statements. Revenues are recognized when earned, and expenses are recognized when a liability has been incurred, regardless of the timing of related cash flows.
Governmental funds are accounted for using the current resource measurement focus and the modified accrual basis of accounting. Revenues are recognized when they become measurable and available. General Fund tax revenues are considered measurable when they have been levied. To be considered available and thus susceptible to accrual, the real estate taxes must be collected within the City's period of availability of sixty (60) days. The portion of uncollected real estate taxes that are deemed to be collectible at the end of this period are reported as deferred inflows of resources. Interest income and intergovernmental receivables (state and federal grants to the extent of allowable expenditures) are considered susceptible to accrual. The City considers all non-real estate taxes and other revenues reported in the governmental fund to be available if the revenues are collected within sixty (60) days. Expenditures are generally recognized under the modified accrual basis of accounting when the related fund liability is incurred. However, debt service expenditures and other long-term liabilities, such as workers' compensation, accrued claims and judgments, and both short and long-term compensated absences are recorded only when payment is due and payable.
The City generally uses restricted assets first for expenses incurred for which both restricted and unrestricted assets are available. The City may defer the use of restricted assets based on a review of the specific situation.
Non-exchange transactions, in which the City receives value without directly giving value in return, include real estate and other taxes, grants, entitlements, and donations. On an accrual basis, revenue from property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from grants, entitlements, and donations are recognized in the fiscal year in which all eligibility requirements have been satisfied. Eligibility requirements include timing requirements, which specify the year when the resources are required to be used or the year when use is first permitted; matching requirements, in which the City must provide local resources to be used for specified purpose; and expenditure requirements, in which the resources are provided to the City on a reimbursement basis. On a modified accrual basis, revenue from non-exchange transactions must be available before it can be recognized.
(F) Cash and Cash Equivalents
Cash and cash equivalents include all highly liquid investments, including trust and restricted assets, with an original maturity of three months or less. Note 3, Deposits and Investments, provides a detailed disclosure regarding cash, cash equivalents, and investments held by the City.
(G) Investments
Investments in all funds are carried at fair value, with the exception of the PWSA's guaranteed investment contracts, which are carried at amortized cost. Investments consist of a variety of
30
CITY OF PITTSBURGH, PENNSYLVANIA
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 2014
investments including direct obligations of the U.S. government, money market funds, corporate and other obligations, guaranteed investments, money market trust funds, and repurchase agreements. Note 3, Deposits and Investments, provides a detailed disclosure regarding cash, cash equivalents, and investments.
(H)Due To/From Other Governments
Outstanding balances between the City and other governments are reported as due to/from other governments.
(I) Taxpayer Assessed Taxes Receivable
Local wage taxes and other miscellaneous City taxes are recorded in the City's accounts as taxpayer assessed receivables and revenue at the time of the underlying transactions. In the governmental fund statements, taxes for which there is an enforceable legal claim as of December 31, 2014 which were levied to finance fiscal year 2014 operations have been recorded as deferred inflows of resources until such time as the taxes become due on a modified accrual basis. PA Act 32, signed into law in 2008, restructures and changes the withholding, reporting, and collecting of local wage taxes in PA. Local wage taxes are collected by a third party in accordance with PA Act 32.
(J) Other Receivables
Other City accounts receivable are recorded in the City's accounts as other receivables when earned, less an allowance for uncollectible accounts.
(K) Capital Assets
Capital assets acquired or constructed by the City are reported in the government-wide financial statements. Capital assets are recorded at historical cost or estimated historical cost. Capital assets with an initial individual cost of more than $5,000 and estimated useful life in excess of one year. Gifts or contributions are recorded at fair market value when received. Depreciation is recorded on a straight-line basis over the estimated useful life of each capital asset. No depreciation expense is recorded for land and construction-in-progress. The value of the City's art collection is indeterminable and would not be material to capital assets as a whole. The estimated useful lives for capital assets are as follows:
Furniture and fixtures 3-5 years Building and structures 25-50 years Equipment 2-10 years Infrastructure 20-50 years Vehicles 2-10 years
31
CITY OF PITTSBURGH, PENNSYLVANIA
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 2014
(L) Deferred Outflows/Inflows ofResources
In addition to assets, tiie statement of net position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense) until then. There are two items that qualify for reporting in this category: the accumulated decrease in fair value of hedging derivatives and deferred charge on refunding reported on the statement of net position.
In addition to liabilities, the statement of net position and balance sheet will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of fund balance that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The City has only one type of item, which arises only under a modified accrual basis of accounting that qualifies for reporting in this category. Accordingly, the item, unavailable revenue, is reported only in the governmental funds balance sheet. The governmental funds report unavailable revenues principally from property taxes; $2.3 million relates to fines. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available.
(M) Workers' Compensation
The City is self-insured for purposes of workers' compensation benefits. Both short-and-long- term amounts payable are reported within the government-wide financial statements only.
In order to qualify for and maintain self-insurance status, the City must comply with certain Commonwealth requirements. The requirements for 2014 are as follows:
• Maintain an irrevocable trust fund. The City's contribution to the fund is determined annually in negotiations with the Commonwealth Department of Labor.
• Satisfy the financial responsibility requirements of the Commonwealth of Pennsylvania. • Establish liability reserves based upon expected future payments for all claims outstanding
one year or more at the end of any fiscal year.
Presently, the irrevocable trust may be used by the State of Pennsylvania only in the event of default by the City under the self-insurance regulations. No risk financing activity is currently being recorded in this trust fund.
PWSA is also self-insured for general liability coverage and has established a Self-Insured Escrow Fund (general liability) to cover potential liability claims.
(N) Compensated Absences
It is the City's policy to permit employees to accumulate earned but unused compensated absences. For government-wide reporting, a liability is recorded for compensated absences when services are rendered, and employees have earned the right to receive compensation for such services.
32
CITY OF PITTSBURGH, PENNSYLVANIA
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 2014
Liabilities for compensated absences are not liquidated until leave is actually taken by employees or leave balances are paid upon termination. Accordingly, in the fund financial statements for governmental funds, no expenditure is reported for compensated absences until they are due and payable. Current and non-current portions of compensated absences totaling $29,432,653 are recorded in the government-wide financial statements, and represent a reconciling item between the government-wide and fund presentations.
(O) Pensions
Through 2009, because the City had no prior excess contributions or contribution deficiencies, its annual pension cost on the accrual basis was equivalent to its actuarially determined annual required contributions (see Note 7). Pension expenditures are recognized under the modified accrual basis within governmental funds to the extent of the City contributions. Contributions made to the Plan represent 100% of the PA Act 205 minimum municipal obligation plus, starting in 2010, additional contributions to increase the funding level of the Plan.
(P) Long-Term Obligations
Long-term debt and other long-term obligations are reported as liabilities in governmental activities in the statement of net position in the government-wide financial statements. Bond premiums and discounts are amortized over the life of the bonds using the straight line method. Bond premiums and discounts are recorded as current period costs in the governmental funds.
(Q) Interfund Transactions
On fund financial statements, receivables and payables resulting from outstanding balances are classified as "Interfund receivables/payables." These amounts are eliminated in the governmental column of the statement of net position. Flow of cash or goods from one fund to another without a requirement for repayment is reported as interfund transfers. Interfund transfers are reported as other financing sources/uses in governmental funds.
(R) Encumbrances
The City uses encumbrance accounting for budgetary reporting, wherein purchase orders, contracts, and other commitments for the expenditure of funds are recorded to reserve that portion of the applicable appropriation. Funding for all encumbrance lapses at year-end and re- appropriation is required by the City Council with the exception of capital fund project encumbrances.
(S) Net Position
Net position represents the difference between assets, deferred outflows of resources and liabilities. Net position invested in capital assets net of related debt consist of capital assets, net of accumulated depreciation, and related debt used in the acquisition or construction of capital assets. Net position is reported as restricted when there are limitations imposed on its use through the enabling legislation adopted by the City or through external restrictions imposed by
33
CITY OF PITTSBURGH, PENNSYLVANIA
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 2014
creditors, grantors, laws, or regulations of other governments. The City applies restricted resources first when an expense is incurred for purposes for which both restricted and unrestricted net position is available. Unrestricted net position is available for use in the current period.
(T) Use ofEstimates
Management of the City has made a number of estimates and assumptions relating to the reporting of assets, liabilities, revenues, expenses, and the disclosure of contingent assets and liabilities to prepare their financial statements in conformity with accounting principles generally accepted in the United States of America. Actual results could differ from those estimates.
(U) Fund Balance
In the fund financial statements, governmental funds report fund balance in categories based on the level of restriction placed upon the funds. These levels are as follows:
• Nonspendable - This category represents funds that are not in spendable form.
• Restricted - This category represents funds that are limited in use due to constraints on purpose and circumstances of spending that are legally enforceable by outside parties. This category includes funds that are legally restricted for endowments, employee benefits, state and federal specific grants purposes, the Enterprise Planning Resource System and unused bond proceeds restricted for capital projects.
• Committed - This category represents funds that are limited in use due to constraints on purpose and circumstances of spending imposed by City Council. Such commitment is made via a Council resolution and must be made prior to the end of the fiscal year. Removal of this commitment requires an equal action by Council. Committed funds include funds for specified program services as defined by the creation of the fund and interfund advance.
• Assigned - This category represents intentions of the City to use the funds for specific purposes. This category includes encumbrances and funds remaining for debt service. The City's Charter requires City Council to approve a Resolution to set up encumbrances. The encumbrances are then submitted to individual department Directors for execution.
• Unassigned - This category represents all other funds not otherwise defined.
It is the City's policy to consider restricted fund balance to have been depleted before using any of the components of unrestricted fund balance. Further, when the components of unrestricted fund balance can be used for the same purpose, committed fund balance is depleted first, followed by assigned fund balance. Unassigned fund balance is applied last.
34
CITY OF PITTSBURGH, PENNSYLVANIA
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31,2014
(V) Pending Pronouncements
GASB has issued Statement No. 68, "Accounting and Financial Reporting for Pensions^" effective for periods beginning after June 15, 2014 and Statement No. 71, ''Pension Transition for Contributions Made Subsequent to the Measurement Date" effective for periods beginning after June 15, 2014. These Statements revise existing guidance for the financial reports of most pension plans, and establish new financial reporting requirements for most governments that provide their employees with pension benefits. The effect of implementation of these Statements has not yet been determined.
GASB has issued Statement No. 72, "Fair Value Measurement and Application, " effective for fiscal years beginning after June 15, 2015. This statement addresses accounting and financial reporting issues related to fair value measurements. The effect of implementation of this Statement has not yet been determined.
(W)Adoption ofPronouncement
The City has adopted GASB Statement No. 67, "Financial Reporting for Pension Plans," effective for periods beginning after June 15, 2013. This Statement establishes a definition of a pension plan that reflects the primary activities associated with the pension arrangement and addresses accounting and financial reporting for the activities of pension plans that are administered through trusts that have certain characteristics.
The City has adopted GASB Statement No. 69, "Government Combinations and Disposals of Government Operations," effective for periods beginning after December 15, 2013. This Statement establishes accounting and financial reporting standards related to government combinations and disposals of government operations. As used in this Statement, the term government combinations includes a variety of transactions referred to as mergers, acquisitions, and transfers of operations. The adoption of this Statement has no impact on the financial statements.
The City has adopted GASB Statement No. 70, "Accounting and Financial Reportingfor Non- exchange Financial Guarantees," effective for periods beginning after June 15, 2013. This Statement specifies the information required to be disclosed by governments that extend non- exchange financial guarantees, and requires a government that extends a non-exchange financial guarantee to recognize a liability when qualitative factors and historical data, if any, indicate that it is more likely than not that the government will be required to make a payment on the guarantee.
Component Unit Disclosures:
Property Heldfor Redevelopment
Property held for redevelopment relates mainly to land and buildings held by the URA that is available for redevelopment. Depending on the nature of the redevelopment activity, the transfer of this property may consist of many forms: grant, subsidized or below-market sale, or
35
CITY OF PITTSBURGH, PENNSYLVANIA
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31,2014
an independent, market-based sale. This property is held at cost or estimated net realizable value, if less than cost, and is offset by unavailable revenue in the governmental funds as this property is not considered to be available as current resources. Estimated net realizable value is calculated once plans or disposition agreements are in place to dispose of property at less than cost. When assets are sold, the proceeds are either returned to the program to further its purposes or returned to the grantor agency that funded the original purchase.
Loans Receivable
URA loans receivable are recognized when the loan is established for loans with terms of thirty years or less. Loans with amortization terms greater than thirty years or which are repayable on a contingent basis, such as the sale of the property or completion of development, are treated as grants for accounting purposes and are recorded as expenditures when disbursed or are fully reserved.
It is the URA's policy to provide for future losses on loans based on an evaluation of the current loan portfolio, current economic conditions, and such other factors which, in the URA's judgment, may impact collectability. At December 31, 2014, the total allowance for uncollectible loans, including those only repayable on a contingent basis and fully reserved at the time of issuance, was $143 million.
URA's amortizing loans are recorded at their principal balance due less an allowance for uncollectible accounts.
Other Long-term Liabilities
An Agreement of Sale in Lieu of Condemnation (Agreement) was executed on April 14, 2004 between the Public Parking Authority and Greyhound Lines, Inc. (Greyhound). As stipulated in the Agreement, the Public Parking Authority purchased from Greyhound the property located at the corner of Liberty Avenue and ll"^ street for the purchase price of $6,242,000 for the construction of the bus terminal. Greyhound leases the bus terminal from the Public Parking Authority for an annual base rent of $1 for an initial term of 30 years. There are three consecutive 10-year extension terms, each with an annual base rent of $100,000. The $6,242,000 is being recognized as revenue over the term of the lease, which commenced on October 1,2008. The balance of unearned rent/revenue at December 31, 2014 is $4,941,583.
2. Budgets and Budgetary Accounting
1. General Budget Policies - As required by the Home Rule Charter, the City follows these procedures in establishing the budgetary data reflected in the financial statement:
a. On the second Monday of November preceding the fiscal year, the Mayor presents to City Council a General Fund and Community Development Fund operating budget and a capital budget for the succeeding fiscal year.
36
CITY OF PITTSBURGH, PENNSYLVANIA
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31,2014
b. Public hearings are conducted to obtain the advice of other officialsrand citizens as part of the preparation of these budgets.
c. Before the beginning of the fiscal year. City Council adopts, by resolution, these budgets.
d. The adoption of the operating and capital budgets constitutes an appropriation or setting apart of funds from general resources of the City for purposes set forth in the budgets.
e. City Council may amend, by resolution, the operating budget within five weeks after the beginning of the fiscal year, but not thereafter except with the approval of the Mayor. The capital budget may, by resolution, be amended by City Council at any time.
f City Council at all times may, by resolution, transfer funds from one account to another if the total operating budget amount is not exceeded. No revision to the budget may be made without City Council approval. The operating budget shall in any event, remain balanced at all times.
g. The capital budget is generally based on a proposed six year capital program, which must be updated each year and submitted to City Council by the Mayor at least 30 days prior to the day the operating budget is submitted. The capital budget also includes appropriations for the Community Development Fund. Budget and actual data for the Community Development Fund is reflected in the Community Development Fund. The remainder of the capital budget is reflected in the Capital Projects Fund.
h. Formal budgetary integration is employed as management control device for the General, the Community Development, and the Capital Projects Funds. Formal budgetary integration is not employed for the debt service fund since effective budgetary control is alternatively achieved through general obligation bond indenture provisions, nor for the other governmental funds since control is prepared on a project basis. The General, Community Development, and Capital Projects Funds have legally adopted annual budgets.
i. All budgets are prepared and controlled at the department level by subclass. The Budget Office reviewed all budget deficits and monitored budget to actual by subclass during the year. Further refinement of the budget control matters are expected to be addressed in a future year. Due to the voluminous number of projects, separately issued line item capital budget reports are available from the City Controller's Office. The 2014 budget reflects Breakeven centers as Charges for services.
j. Operating appropriations lapse at year-end. City Council can, however, authorize, by resolution, the carryover of appropriations to the following year. The Community Development and Capital Projects Funds appropriations carry over to subsequent years without formal re-appropriation.
k. Operation budget figures are amended by City Council with Mayoral approval. These budget amendments represent line item transfers between expenditures accounts and carryover of appropriations from the previous year. The approved original General Fund
37
CITY OF PITTSBURGH, PENNSYLVANIA
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 2014
budget includes revenues of $480.9 million and expenditures of approximately $487.1 million in 2014. The budgetary expenditures, as amended, include carryover appropriation and other changes approved by City Council during 2014 of $2.8 million; budgeted revenues were not amended during 2014 and remained as adopted.
2. Budgetary Basis of Accounting
The General Fund budget is adopted on a cash basis. Budgeted encumbrances for purchase commitments are treated as restrictions of available cash and as expenditures. Budgets in Capital Projects Funds are also adopted on a cash basis, except that budgets for each project are adopted on a project basis, which may encompass a period longer than one year. Accordingly, budget figures, as amended, for Community Development and Capital Projects Funds reflect current year appropriations and unexpended prior year's appropriations.
3. Excess Expenditures over Appropriations
The City had several negative variances in the General Fund where the amount spent exceeded the budget. They were:
• Office of the Mayor and Citizen Review Board - Salaries • Department of Finance and Department of Personnel and Civil Service Commission -
non-salaries;
The excess was covered by expenditures under appropriations in other line items. In these cases, the City decided to show the variances rather than amend the budget.
3. Deposits AND Investments
Both Pennsylvania statutes and City code provide guidelines for investment of governmental funds into certain authorized investment types including U.S. Treasury bills, other short-term U.S. and Pennsylvania government obligations, insured or collateral ized time deposits, and certificates of deposit. Both allow the pooling of funds for investment purposes. Neither the statutes, nor City code prescribe regulations related to demand deposits; however, all depositories of City funds must meet qualifying criteria set forth in Section 223 of the City code.
The investment policy of the City compliments state statutes and adheres to prudent business practice. There were no investment transactions during the year that were in violation of either the state statutes or the policy of the City.
(AJPrimary Government Funds and Agency Funds
Cash balances available for investment by most City funds are maintained in pooled bank and investment accounts to improve investment opportunities. Income from investment of pooled cash is recorded in the General Fund. Certain unrestricted and restricted cash and short-term investment balances in the accompanying balance sheet represent the undivided interest of each
38
CITY OF PITTSBURGH, PENNSYLVANIA
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 2014
respective fund in the pooled accounts.
Investment policies permit the City to invest in the following:
1. U.S. Treasury Securities (bills, notes, bonds).
2. Obligations of specific agencies of the federal government where principal and interest is guaranteed by the U.S. government.
3. Fully insured or collateralized certificates of deposit at commercial banks and savings and loan associations accepted as depository institutions under the Pittsburgh City Code.
4. Money market mutual funds authorized by City Council whose portfolio consists of government securities issued by the U.S. government and that are fully guaranteed as to principal and interest.
5. Local government investment pools and or trusts as approved by the state legislature or City Council from time to time.
6. Repurchase agreements collateralized by the U.S. Treasury securities and marked to market. In order to participate in the repurchase agreement market, a depository must execute a master repurchase agreement contract with the City.
To ensure adequate liquidity, at least 10% but no more than 40% of the portfolio shall be in overnight repurchase agreements, money market funds, or other secure and liquid forms of acceptable investments. Unless specifically matched to a cash flow, at least 20% of the portfolio shall mature within 91 days with the maximum maturity of any investment to be no longer than one year from the date of purchase unless specifically approved in writing by the Director of Finance.
The City maintains compensating balances with some of its depository banks to offset specific charges for check clearing and other services.
Governmental Funds
Custodial Credit Risk - Custodial credit risk is the risk that in the event of a bank or
counterparty failure, the City's funds may not be returned to it. The City policy does not specifically address custodial credit risk. As of December 31, 2014, $130,178,364 of the City's combined bank balances of $132,678,364 subject to custodial credit risk were exposed to custodial credit risk, which is collateralized in accordance with Act 72 of the Pennsylvania state legislature, which requires the institution to pool collateral for all governmental deposits and have the collateral held by an approved custodian in the institution's name.
Interest Rate Risk - The City's investment policy limits investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates; the City investments must have maturities no greater than ten years within the constraint of meeting cash
39
CITY OF PITTSBURGH, PENNSYLVANIA
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 2014
flow requirements. As of December 31, 2014, the City's exposure to interest rate risk was limited to $5,008,144, 4% of deposit and investment funds available, with a weighted average maturity period of 375 days.
Credit Risk - The City's investment policy limits its investment choices based on government backed instruments and credit ratings by nationally recognized statistical rating organizations. $65,629,742 of the City's cash and cash equivalents are held in U.S. Treasuries and are therefore not exposed to this type of risk.
Agency Funds
Custodial Credit Risk - As of December 31, 2014, $18,645,319 of the City Agency Funds' combined bank balances of $20,145,319 were exposed to custodial credit risk, which is collateralized in accordance with Act 72 of the Pennsylvania state legislature, which requires the institution to pool collateral for all governmental deposits and have the collateral held by an approved custodian in the institution's name.
Interest Rate Risk - The City's investment policy limits investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates; the City's investments must have maturities no greater than ten years within the constraint of meeting cash flow requirements. As of December 31, 2014, the City's Agency Funds exposure to interest rate risk was $6,019,781, 30% of deposit and investment funds available, with a weighted average maturity period of 365 days.
Credit Risk - The City's investment policy limits its investment choices based on government backed instruments and credit ratings by nationally recognized statistical rating organizations. $2,000,000 of the City's Agency Fund investments are held in U.S. Treasuries and are therefore not exposed to this type of risk.
(B) Pension Trust
Deposits are maintained by all entities within the Funds. The Comprehensive Municipal Pension Trust Fund (CMPTF) holds all investment vehicles on behalf of the Funds. The CMPTF was established on January 1, 1988 by combining the assets and liabilities of the three prior investment plans representing the City of Pittsburgh Police and Fire Departments and Non- uniformed Municipal workers in order to provide a consolidated investment strategy to support the City of Pittsburgh pension obligation.
The CMPTF is governed by a formal investment policy established by its Board of Directors (Board). The policy dictates that investments must be managed in a manner consistent with the Pennsylvania Municipal Pension Plan Funding Standard and Recovery Act (Act 205) and the Pennsylvania Fiduciaries Code. The policy covers the two components of the CMPTF: 1) the Operating Fund and 2) the Long-Term Assets. The Operating Fund is a liquidity pool to accept employee, employer and supplemental state contributions and to make benefit dispersals. As such, the Operating Fund investments are restricted to high quality, very short duration fixed income instruments whose average maturity must not exceed six months and whose quality is
40
CITY OF PITTSBURGH, PENNSYLVANIA
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 2014
restricted to investment grade and above securities. The Long-Term Asset component includes restrictions on both fixed income and equity investments as discussed below.
Deposits
Custodial Credit Risk - For a deposit, custodial credit risk is the risk that in the event of a bank failure, the combined deposits of the City's pension funds may not be returned to it. There are no formal deposit policies specifically addressing custodial credit risk.
As of December 31, 2014, $927,262 of the City's pension cash and short-term investment account deposits of the $10,809,340 combined bank balance was insured by the Federal Deposit Insurance Corporation. The remaining bank balance was exposed to custodial credit risk, which is collateralized in accordance with Act 72 of the Pennsylvania state legislature, which requires the institution to pool collateral for all governmental deposits and have the collateral held by an approved custodian in the institution's name. $3,603,488 of cash and cash equivalents were held at December 31, 2014 in the separate pension funds; the remaining $7,205,852 was held in the CMPTF.
Investments
Long-term investments are all held by the CMPTF. These investments are assigned to professional asset managers that specialize in certain types of investments with oversight by an outside investment consultant and the Board in order to achieve an appropriate, diversified and balanced asset class mix to minimize portfolio risk.
The Investment Policy of the CMPTF dictates an allocation of 60% equity, 40% fixed income with a variation of 10% above or below these targets for each classification. At December 31, 2014, the CMPTF had been in compliance with this policy. Within each investment category there are specific policies to further address various types of risk compared to return. The investment advisors monitor compliance with the City's investment policy on a granular level that is different from the table below.
As of December 31, 2014, the CMPTF had the following cash, cash equivalents, and investments in its pension trust fund:
41
CITY OF PITTSBURGH, PENNSYLVANIA
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 2014
Investment Type
U.S. government and agency obligations Corporate debt Other
Total debt securities
Cash and cash equivalents
Mutual funds:
U.S. equities Non-U.S. equities Fixed income
Preferred and common stocks
Hedge fiinds Real estate funds
Private equity
Total cash, cash equivalents, and other investments
Combined total
Fair Value
13,051,513
30,945,190
4,062.846
48,059,549
10,516,702
91,958,257
75,717,711
33,105,385
56,903,721
34,265,364
31,084,310
12,613,223
346,164,673
$ 394,224,222
Concentration of Credit /?wA:- The CMPTF investment guidelines address this risk by requiring diversity and investment percentage limits. With the exception of Federal Government and Agency obligations, no one issue will comprise more than 10% of the aggregate fixed-income portfolio without the Board's prior approval. In addition, equity investment concentration in any single industry and in any company shall not exceed 25% and 5%, respectively, of the market value of the plan assets. To further reduce risk, diversification will also be achieved by using multiple managers whose styles and strategies are sufficiently distinctive. International managers may be allocated up to 30% of the plan's equity assets, and up to 50% of this allocation may be allocated to emerging markets investments. As of December 31, 2014, these limits have been met.
Interest Rate Risk - The CMPTF has no formal investment policy that limits investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates. The schedule below details maturity by investment type.
Cash or Investment Type
U.S. government and agency obligations
Corporate debt Other
Total debt securities
Investment Maturities from December 31,2014
Fair Market
Value
Less than
I Year
13,051,513 $
30,945,190 882,351
4,062,846 1,560,661
1-5
Years
$ 2,283,569
16,426,578
6-10
Years
More than
10 Years
309,105 $ 10,458,839
5,977,453 7,658,808
2,502,185
$ 48,059,549 $ 2,443,012 $ 18,710,147 $ 6,286,558 $ 20,619,832
42
CITY OF PITTSBURGH, PENNSYLVANIA
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 2014
Credit Risk - The risk that an issuer or other counterparty to an investment will not fulfill its obligations is called credit risk. The policy guidelines of the CMPTF limit investments to Federal Government and Agency issues and corporate issues having a Moody's rating of Aaa to Baa, with the exception that up to 20% of the fixed income assets may be allocated to high yield fixed-income securities. The Pension trust fund's December 31, 2014 investments in corporate bonds have received the following ratings from Moody's:
Corporate debt Corporate debt Corporate debt Corporate debt Corporate debt
Moody's Credit Rating
Aaa
Aa2
Aa3
A1
Other
% of Corporate Debt Portfolio
13.16%
1.74%
2.26%
2.92%
79.91%
100.0%
The City's investment in mutual funds and U.S. Government agencies implicitly guaranteed by the U.S. Government were unrated.
Private Equity Capital Commitments
The CMPTF has entered into agreements to commit capital into various private equity funds. The callable capital can be requested at any time by the fund. The remaining capital commitments as of December 31, 2014 are estimated as follows:
Amount
Committed
Amount
Drawn
Amount
Distributed
Remaining
Capital Commitment
Birchmere Ventures III $ 1,000,000 $ 1,000,000 $ 893,272 $ Draper Triangle Ventures II 1,000,000 1,000,000 699,565 -
Draper Triangle Ventures III 2,000,000 265,431 - 1,734,569 Novitas Capital Partners III 1,000,000 964,904 420,879 - *
Hirtle Callaghan PEP III 8,000,000 7,600,835 11,210,754 - *
Hirtle Callaghan PEP IV 8,000,000 7,418,650 9,221,864 - *
Hirtle Callaghan PEP V 3,000,000 2,481,360 1,474,785 - ♦
Crescent Mezz Partners VI 10,000,000 6,550,593 270,296 3,711,751 **
$ 34,000,000 $ 27,281,773 $ 24,191,415 $ 5,446,320
* The investment period of this fund has ended. As such, no further capital can be called. ** A portion of this fund's distributions can be recalled.
43
CITY OF PITTSBURGH, PENNSYLVANIA
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 2014
fCJ OPEB Trust
As of December 31, 2014, the OPEB trust fund had the following cash, cash equivalents, and investments:
Investment Type Fair Market Value
Cash and cash equivalents $ 649,851 Mutual funds:
U.S. equities 4,856,682 Fixed income 658,627
Corporate debt 1,947,391 U.S. Government Agency 521,214 Real estate funds 362,713
Total cash, cash equivalents, and investments $ 8,996,478
The following is a description of the OPEB Trust Fund deposit and investment risks:
Credit risk - The risk that an issuer or other counterparty to an investment will not fulfill its obligations is called credit risk. The OPEB Trust Fund's investment policy dictates that investments shall include Federal Government and Agency issues and corporate issues having a Standard and Poor's rating of BBB to AAA or a Moody's rating of Baa to Aaa with the exception that up to 20% of fixed income assets may be allocated to high yield fixed-income securities. The target S&P credit rating of the aggregate portfolio shall be A or better. The OPEB Trust Fund's December 31, 2014 investments in corporate bonds have received the following ratings from S&P:
S&P
Credit Rating % of Corporate Debt Portfolio
Corporate debt AA+ 29.36% Corporate debt AA 4.10% Corporate debt AA- 7.06% Corporate debt A+ 10.08% Corporate debt A 9.11% Corporate debt A- 18.28% Corporate debt BBB+ 5.91% Corporate debt BBB 16.11%
100.0%
Interest Rate Risk - Interest rate risk is the risk that changes in interest rates will adversely affect the value of investments. Through its investment policy, the OPEB Trust Fund manages its exposure to interest rate risk by utilizing certain criteria in selecting particular investment funds. The schedule below details maturity by investment type.
44
CITY OF PITTSBURGH, PENNSYLVANIA
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31,2014
Investment Maturities from December31,2014 Fair Market Less than 1-5 6-10 More than
Cash or Investment Type Value 1 Year Years Years 10 Years
Corporate debt $ 1,947,391 $ - $ 813,403 $ 1,133,988 $ U.S. government and agency 521,214 - 521,214 -
Total debt securities $ 2,468,605 $ - $ 1,334,617 $ 1,133,988 $
The asset allocation policies shall seek to produce a net, inflation adjusted, positive total return. The asset allocation policy shall be consistent with the investment objectives of the plan and based on the capital market assumptions.
The Investment Policy of the OPEB Trust Fund dictates an allocation for the Long Term Assets of 60% equity, 40% fixed income with a variation of 10% above or below these targets for each classification. At December 31, 2014, the OPEB Trust Fund had been in compliance with this policy. Within each investment category there are specific policies to further address various types of risk compared to return.
The OPEB Trust's investment in mutual funds was unrated.
(D) Pittsburgh Water and Sewer Authority (PWSA)
PWSA is authorized to invest in obligations of the U.S. government and government-sponsored agencies and instrumentalities; fully insured or collateralized certificates of deposit; commercial paper of the highest rating; repurchase agreements collateralized by government obligations or securities and highly rated bank promissory notes or investment funds or trusts; and, as to trusteed assets, as otherwise permitted by the trust indenture as supplemented and amended in 1998. Throughout the year ended December 31, 2014, PWSA invested its funds in such authorized investments. PWSA does not have a formal investment policy that addresses custodial credit risk, interest rate risk, credit risk, or concentration of credit risk.
Custodial Credit Risk - Custodial credit risk is the risk that in the event of a bank failure, PWSA's deposits may not be returned to it. As of December 31, 2014, $31,030,000 of PWSA's bank balance of $32,030,000 was exposed to custodial credit risk. $12,580,000 of these amounts are collateralized in accordance with Act 72 of the Pennsylvania state legislature which requires the institution to pool collateral for all governmental deposits and have the collateral held by an approved custodian in the institution's name. These deposits have a carrying amount of $31,219,000 as of December 31, 2014, all of which is reported as current assets in the statement of net position.
In addition to the deposits noted above, included in cash and cash equivalents as noncurrent restricted assets on the statement of net position are the following short-term investments: money market funds of $73,814,000.
At December 31, 2014, PWSA held the following investment balances:
45
CITY OF PITTSBURGH, PENNSYLVANIA
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 2014
Maturity in years
Less
Carrying value than 1year
Commonwealth of PA:
Revenue Bonds (Guaranteed
Investment Contracts) $ 8,549,000 $ 8,549,000 Money market 73,814,000 73,814,000
Fixed income 881,000 881,000 Commercial paper 2,624,000 2,624,000
Total Investments $ 85,868,000 $ 85,868,000
The fair value of PWSA's investments is the same as their carrying amount, with the exception of the guaranteed investment contracts, which are carried at amortized cost. Investments of $12,054,000 are included as noncurrent restricted investments on the statement of net position. Investments of $73,814,000, consisting of money market funds, are included as noncurrent restricted cash and cash equivalents on the statement of net position.
Interest Rate Risk - Interest rate risk, the risk that changes in the interest rates will adversely affect the fair market value of the PWSA's investments. PWSA is not subject to interest rate risk, as all of its investments at December 31, 2014 had maturities of less than one year.
Credit Risk-Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligation. As of December 31, 2014, PWSA's investments in the guaranteed investment contracts were rated AAA by Standard & Poor's. The counterparty to PWSA's guaranteed investment contracts is the Commonwealth of Pennsylvania. PWSA's investments in money markets were rated AAA by Standard & Poor's. PWSA's investments in both fixed income and commercial paper at December 31, 2014 were rated A-1+ by Standard & Poor's.
Concentration of Credit Risk - Concentrations of credit risk is the risk of loss attributed to the magnitude of a government's investments in a single issuer. PWSA places no limit on the amount it may invest in any one issuer. PWSA has no investments of greater than 5% with one issuer.
As further described in Note 9, PWSA has a derivative instrument that is accounted for as an investment. Credit and interest rate risks related to this investment are described in Note 9.
(E) The Stadium Authority ofthe City ofPittsburgh (Stadium Authority)
The carrying amounts of the Stadium Authority included cash deposits and money market pooled investments held with banks as of March 31, 2014.
Interest Rate Risk - Although the Stadium Authority does not have a formal investment policy, it limits investment maturities as a means of managing its exposure to fair value losses arising
46
CITY OF PITTSBURGH, PENNSYLVANIA
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31,2014
from increasing interest rates, maturities.
All the Stadium Authority's investments have short-term
Credit Risk - The Stadium Authority is subject to credit risk on investments. The maximum amount of loss the Stadium Authority would incur, if any, if the parties failed to perform on their obligation is limited to the amount recorded in the financial statements. The Stadium Authority does not hold any type of collateral on these investments.
Concentration of Credit Risk - The Stadium Authority places no limit on the amount that may be invested in any one issuer. The Stadium Authority maintains its cash and cash equivalent balances at three financial institutions. At March 31, 2014, all of the Stadium Authority's cash and cash equivalent deposits were either insured under federal insurance programs or collateralized.
(F) Public Parking Authority ofPittsburgh (Parking Authority)
Cash and Deposits
The Parking Authority's cash deposits are insured by the Federal Deposit Insurance Corporation or were not insured or collateralized in the Parking Authority's name, but were collateralized in accordance with Act 72 of the Pennsylvania State Legislature, which requires the institution to pool collateral for all governmental deposits and have the collateral held by an approved custodian in the institution's name. At December 31, 2014, the Parking Authority had a bank and book balance of $10,648,973 and $11,026,653 (including $10,773,909 of restricted cash), respectively.
Investments
As of December 31, 2014, the Parking Authority had the following investments, of which $22,303,911 are restricted as to their use. Blackrock and J.P. Morgan investments are in Mutual Fund investment pools.
December 31,2014 Rating
Investment Amount
Percentage of Total
Investment Maturity
Standard &
Poor's
Moody's Investors
Service
J.P. Morgan U.S. Government Securities $ 19,448,011 42.7% AAAm Aaa-mf BlackrockPif Temporaiy Fund 22,576,291 49.5% AAAm Aaa Federal Home Loan Bank Discount 3,547,848 7.8% 5/30/2015 A-1 + P-1
Total $ 45,572,150 100%
Interest Rate Risk - The Parking Authority does not have a formal investment policy that limits investments maturities as a means of managing its exposure to fair value losses arising from increasing interest rates.
47
CITY OF PITTSBURGH, PENNSYLVANIA
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 2014
Credit i?wA:-The Parking Authority has no investment policy that limits its investment choices. The deposit and investment strategy of the Parking Authority adheres to State statutes, related trust indentures, and prudent business practice. There were no deposit or investment transactions during the year that were in violation of either the state statutes or the strategy of the Parking Authority.
Concentration of Credit Risk-T\iQ Parking Authority places no limit on the amount the Parking Authority may invest in any one issuer.
(G) Urban Redevelopment Authority (VRA)
The URA is authorized to make investments of the following types pursuant to the Redevelopment Act which requires investments meet a "reasonable man" standard. Under the URA's policy, authorized investments include (1) United States Treasury bills, (2) short-term obligations of the United States government or its agencies or instrumentalities, (3) deposits in savings accounts or time deposits or share accounts of institutions which are insured, (4) obligations of the Commonwealth of Pennsylvania or any of its agencies or instrumentalities or any political subdivision thereof, and (5) shares of an investment company registered under the Investment Company Act of 1940, whose shares are registered under the Securities Act of 1933, provided that the investments of that company meet the criteria of (1) through (4) above.
The deposit and investment practices of the URA and its component unit adhere to statutory and contractual requirements and prudent business practice. Deposits of the governmental funds are either maintained in demand deposits or savings accounts, and certificates of deposit. There were no deposit or investment transactions during the year that were in violation of either the state statutes or the trust indentures.
Custodial Credit Risk - Custodial credit risk is the risk that in the event of a bank failure, the URA's deposits may not be returned to it. The URA does not have a formal policy for custodial credit risk. As of December 31, 2014, $85,636,445 of the URA's bank balance of $87,946,383 was exposed to custodial credit risk, which is col lateralized in accordance with Act 72 of the Pennsylvania state legislature, which requires the institution to pool collateral for all governmental deposits and have the collateral held by an approved custodian in the institution's name. As of December 31, 2014, the carrying amounts of the URA's deposits were $86,988,127.
As of December 31, 2014, none of the component unit's bank balance was exposed to custodial credit risk. As of December 31, 2014, the carrying amounts of the component unit's deposits were $90,582.
In addition to the deposits noted above, included in the investments were the following:
48
CITY OF PITTSBURGH, PENNSYLVANIA
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31,2014
Maturity in years Fair market Less 1-5 6-10 11-15 16-20 21-25 26-28
value than 1 year years years years years years years
Money Market Funds $ 32,938,929 $ 32,938,929 $ $ $ - $ - $ $
U.S. Treasury Bonds 3,109,410 3,109,410
Freddie Mac 714,067 - - - - 608,926 105,141
GNMA 2,931,126 - 4,392 457,103 - 2,469,631 -
FNMA 690,107 - - 152,705 - 537,402 .
Total $ 40,383,639 $ 32,938,929 $ 4,392 $ 3,719,218 $ - $ - $ 3,615,959 $ 105,141
Interest Rate - Interest rate risk is tiie risk that changes in interest rates will adversely affect the fair market value of the URA's investments. The URA's policy is to attempt to match its investments with anticipated cash flow requirements. Unless matched to specific cash flow requirements, the URA will not directly invest in securities maturing more than five years from the date of purchase or in accordance with state and local statutes and ordinances.
Certain investments are comprised of assets securitized in the secondary market from loans issued from the loan programs. The maturities noted in the table above reflect the final maturity of the respective security and does not take into consideration non-routine repayments on principal as it is not possible to forecast these repayments. It is management's intention to hold these securities until maturity. Interest rates on these investments are fixed and principal and interest repayments from these investments will be used to repay the related debt service.
Credit Risk - Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. The URA has an investment policy that limits its investment choices based on credit qualifications by investment type. As of December 31, 2014, the URA's investments in money market funds were rated AAA by Standard & Poor's. The URA's investments in Freddie Mac and FNMA were not rated as of December 31, 2014.
4. Transactions with the Pittsburgh Water and Sewer Authority (pwsa)
In July 1995, the City entered into a Cooperation Agreement and a Capital Lease Agreement (collectively referred to as the Agreements with PWSA).
(A) Cooperation Agreement
On January 1, 1995, the City water department employees became employees of PWSA. PWSA assumed workers' compensation and compensated absence liabilities, which had accrued during the era of the City's Water Department.
49
CITY OF PITTSBURGH, PENNSYLVANIA
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 2014
Direct costs of tiie System's water operations are now generally paid directly by PWSA under the Cooperation Agreement. The City continues to provide PWSA with various services in accordance with the Cooperation Agreement, and PWSA reimburses the City for direct and indirect costs attributed by the City to the operation and maintenance of the System.
Under the Agreements, PWSA provides up to 600 million gallons of water annually for the City's use without charge. PWSA also continues to reimburse the City for the cost of subsidizing water service to those residents of the City situated beyond PWSA's service area so that those water users pay charges that mirror the rates of PWSA.
(B) System Lease
The City and PWSA entered into a Capital Lease Agreement (Capital Lease), effective July 27, 1995, with a term of thirty years, commencing as of July 15, 1995 and ending on September 1, 2025. The Capital Lease stipulates minimum lease payments of approximately $101,000,000, including interest, all of which were satisfied during the initial three years of the capital lease. PWSA has the option to purchase the System in 2025 for $1.
(C) Pension
As of December 31, 2003, the City has retained the pension obligation for PWSA's employees who participate in the City's Municipal Pension Plan. The extent of PWSA's participation in such obligation with respect to these employees whose membership continued upon becoming employees of PWSA is determined by the shared interpretation of the City and the PWSA of the intent of the Cooperation Agreement.
Uncertainty exists about the future obligation of PWSA and its employees to make contributions to the Plan. Such contributions are contingent upon the continuing eligibility of PWSA's employees to participate in the City's Plan. Eligibility for ongoing employee participation in the City's Plan could end if PWSA was to introduce another pension plan. At this time, PWSA and the City have no definite plans to establish another pension plan for PWSA, other than an agreement in principle that PWSA should have its own plan in the future. Future obligations of PWSA to make contributions to the Plan may also be subject to other amendments of the existing arrangement agreed upon by PWSA and the City.
See additional related party transaction disclosures for the URA, Stadium Authority, and Parking Authority in Note 14.
5. Real Estate Taxes and Property Tax Reassessments
Real Estate Taxes
The City has the power to levy and collect ad valorem taxes on all taxable real estate within its boundaries. Real estate is assessed by Allegheny County Office of Property Assessment pursuant to the terms of the General County Assessment Law and the Second Class County Assessment Law,
50
CITY OF PITTSBURGH, PENNSYLVANIA
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 2014
which require property to be assessed at actual market value. Property is assessed by the Board at 100% of fair market value. The taxable assessed value for 2014 was $18,662,994,911.
A unified tax levy for land and buildings is made annually on January 1 and collected by the City. Taxes are payable annually or in three installments, at the taxpayers' option, normally due the last day of February, April 30, and July 31. A 2% discount is allowed on either the first installment or the full year tax payment, normally if paid by February 10. If no payment is received by the last day of February, the installment payment privilege is forfeited, and the entire tax for the year is considered delinquent. Penalty and interest is imposed on delinquent payments.
Delinquent taxes are liened every three years after the levy date. The City provides programs of tax abatement, administered by Allegheny County, for new construction and rehabilitation of residential and commercial/industrial properties pursuant to Commonwealth legislative authority. The residential abatement program provides for the abatement of taxes for a period of three years on the increased assessment attributable to new construction or rehabilitation up to an annually indexed average housing construction cost ceiling. The City makes tax abatements available for commercial/industrial properties for the assessment increase attributable to new construction.
Propertv Tax Reassessments
The City taxes land and building at the same unified rate and plans to maintain a unified rate unless land values are reassessed in the future. A court-ordered reassessment for Allegheny County, including the City of Pittsburgh, occurred during 2012. These reassessed values will continue to be used until the next reassessment. No "windfall" to the municipality can occur due to state law.
City and School Real Estate Taxes (property taxes) are based on the assessed value of the property as determined by the Allegheny County Board of Assessors. The assessed value of a property is broken down by land value and building value. For 2014, the City's tax rate was 7.56 mills on the assessed value of the property. The School District of Pittsburgh's tax rate was 9.84 mills on the assessed value. A mill is 1/10 of a cent. For example, on a property assessed at $1,000, the City Real Estate tax would be $7.56. The School District of Pittsburgh Real Estate Tax would be $9.84.
Taxes are billed on a calendar year. There are two tax relief programs in the City. They are Homestead and Senior Tax Relief.
The City has accrued for tax refunds and tax credits within accounts payable on the statement of net position and governmental funds balance sheet (General Fund) for payments received that are subject to refund.
51
CITY OF PITTSBURGH, PENNSYLVANIA
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 2014
6. Capital Assets
Balance Balance
January 1, 2014 Additions Deletions December 31, 2014
Governmental activities:
Non-depreciable assets: Land $ 45,602,091 $ $ $ 45,602,091 Construction-in-progress 5,214,692 84,922 - 5,299,614
Total 50,816,783 84,922 50,901,705
Depreciable assets:
Buildings and systems 88,778,564 - - 88,778,564 Accumulated depreciation (81,991,751) (1,071,060) - (83,062,811)
Net 6,786,813 (1,071,060) 5,715,753
Furniture and fixtures 4,192,053 4,192,053 Accumulated depreciation (4,169,069) (16,984) - (4,186,053)
Net 22,984 (16,984) 6,000
Machinery and equipment 4,325,887 (875,440) 3,450,447 Accumulated depreciation (4,307,735) (2,136) 875,440 (3,434,431)
Net 18,152 (2,136) . 16,016
Vehicles 67,644,872 9,209,173 (8,288,684) 68,565,361 Accumulated depreciation (49,433,547) (8,196,495) 8,193,683 (49,436,359)
Net 18,211,325 1,012,678 (95,001) 19,129,002
Infrastructure 179,919,789 179,919,789 Accumulated depreciation (117,807,756) (4,420,232) - (122,227,988)
Net 62,112,033 (4,420,232) 57,691,801
Capitalized leases 15,434,653 15,434,653 Accumulated depreciation (7,588,362) (771,733) - (8,360,095)
Net 7,846,291 (771,733) 7,074,558
Total depreciable assets 360,295,818 9,209,173 (9,164,124) 360,340,867 Total accumulated depreciation (265,298,220) (14,478,640) 9,069,123 (270,707,737)
Net 94,997,598 (5,269,467) (95,001) 89,633,130
Governmental activities, capital assets, net $ 145,814,381 $ (5,184,545) :i (95,001) $ 140,534,835
Depreciation expense was charged to functions/programs of the primary govemment as follows:
52
CITY OF PITTSBURGH, PENNSYLVANIA
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 2014
General government Public safety Highways, streets, and other capital improvements Sanitation
Public works
Culture and recreation
1,094,114 7,263,233
4,814,478
269,056
981,225
56,534
$ 14,478,640
Component unit's capital asset activity as presented for the year ended December 31, 2014 was as follows:
Balance Transfers/
Deletions
Balance
Additions
Component Units: Non-depreciable assets:
Land $ 39,257,939 $ - $ - $ 39,257,939 Construction-i n-progress 24,449,260 26,144,848 16,885,785 33,708,323
Total 63,707,199 26,144,848 16,885,785 72,966,262
Depreciable assets: Building and building improvements 84,607,902 839,249 - 85,447,151 Parking facilities 164,750,133 - 3,716,535 161,033,598 Machinery and equipment 7,104,267 201,546 33,031 7,272,782 Utility assets 772,596,000 30,365,000 - 802,961,000 Non-utility assets 21,950,000 170,000 - 22,120,000 Infrastructure 2,241,369 - - 2,241,369
Total 1,053,249,671 31,575,795 3,749,566 1,081,075,900
Less: accumulated depreciation (361.074,379) (20,888,649) (5,306,297) (376,656,731)
Net $ 755,882,491 $ 36,831,994 $ 15,329,054 $ 777,385,431
7. Pension Plans
(A) Organization and Description ofPlans
The City is responsible for the funding of retirement benefits for the three pension plans described below. Investments of the plans are held by the Comprehensive Municipal Pension Trust Fund (Comprehensive Trust), in accordance with the Municipal Pension Plan Funding Standard and Recovery Act of 1984 (Act 205), and are administered under the direction of that fund's Board.
In accordance with Act 205 and the Acts under which the Municipal Pension Plan of the City of Pittsburgh, the Policemen's Relief and Pension Plan of the City of Pittsburgh, and the Firemen's
53
CITY OF PITTSBURGH, PENNSYLVANIA
NOTES TO FINANCIAL STATEMENTS
• YEAR ENDED DECEMBER 31,2014
Relief and Pension Plan of the City of Pittsburgh were established; a separate accounting for the activities of these three plans is maintained including the employees' contributions, allocation of state aid and the City's annual contribution and a calculation of each Plan's undivided interest in the investments held by the Comprehensive Trust. Additionally, separate actuarial valuations are performed annually for each plan. However, the individual plans do not record the undivided interest in the investments in their individual plans since the assets of the Comprehensive Trust are available for the payments of benefits and expenses of any of the three pension plans without limitations. Therefore, in accordance with Governmental Accounting Standards, the City is considered to be administering a single plan for financial reporting purposes. The three pension plans plus the Comprehensive Trust constitute the City's Pension Plan.
The retirement plans issue a publicly available combined financial report that includes financial statements and required supplementary information. This report may be obtained by contacting the following:
City of Pittsburgh Combined Pension Fund
C/0 Department of Finance City/County Building Pittsburgh, PA 15219
Key provisions of the Municipal Pension Fund, the Policemen's Fund and the Firemen's Fund are summarized below. The actual plan provisions should be reviewed to capture all the details.
The Municipal Pension Plan
The Municipal Pension Plan of the City of Pittsburgh (Municipal Plan) was established by Act 259 of May 28, 1915, P.L. 596. Every full-time employee of the City and the PWSA who is not covered by the Policemen's Plan or the Firemen's Plan is required to join the Municipal Plan after serving a 90-day probationary period. The Municipal Plan is a single employer defined benefit plan, and its purpose is to provide retirement, disability, and other benefits to its members. The City and members of the Municipal Plan are required to make contributions to the Municipal Plan for the purpose of paying benefits and administrative expenses. At January 1, 2013, the date of the most recent actuarial valuation, the Municipal Fund has 3,434 total members, of which 1,784 are active members; 1,584 are inactive plan members or beneficiaries currently receiving benefits; and 66 inactive plan members entitled to but not yet receiving benefits.
Effective January 1, 1995, the City terminated employment of the 255 employees of its Water Department. As part of a Cooperation Agreement with PWSA, the 255 terminated employees became employees of PWSA. The PWSA employees' membership in the Municipal Plan continued with no break in service, as provided for by the Municipal Pension Act, because PWSA has no retirement plan. The City considers PWSA a part of the reporting entity and thus believes the plan continues to be a single employer plan. As of the date of these financial statements, no separate allocations of contributions to the Plan, Plan assets, or Plan liabilities
54
CITY OF PITTSBURGH, PENNSYLVANIA
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31,2014
have been allocated to the employees of PWSA, nor have any actuarial determinations been made. PWSA reimburses the City's General Fund for its portion of employer contributions in an amount which is not actuarially determined.
Retirement benefits are available, for all employees other than Emergency Medical Services, at the employee's option upon the later of attainment of age 60 or completion of 8 years of service, normal retirement. For Emergency Medical Service employees, normal retirement is available at the later of attainment of age 55 or 8 years of service. A plan member is eligible for early retirement upon attainment of age 50 and completion of eight years of service. For early retirees, benefit payments may be deferred until 60 years of age, or paid immediately at reduced amounts, as defined by the Plan. Upon completion of eight years of service and attainment of age 40, an employee may terminate and remain eligible to receive benefits by continuing to make contributions to age 50. An employee who was a member prior to January 1, 1975 may terminate at any age after 15 years of service and be vested by continuing contributions to age 50.
Employees who become permanently disabled during the performance of their duties and who are unable to continue to perform those duties are eligible to receive a disability pension. Employees who become otherwise disabled are eligible for a disability pension if eight years of service have been completed.
Normal monthly retirement benefit is equal to 50% of average compensation (as defined) and service increment, if any. The service increment is an additional monthly benefit of 1 percent of average compensation for each completed year of service in excess of 20 years to a maximum of $100 per month. The monthly benefit is prorated for service less than 20 years. On a limited basis, reductions could apply for certain plan members related to social security benefits received after reaching 65 years of age and certain other benefit provisions could apply for members hired prior to January 1, 1975.
A survivor benefit is available to the surviving spouse upon the death of an active member eligible for early retirement. The benefit amount is equal to 50% of the member's pension had the member retired at the date of death. A survivor benefit equal to the excess of the member's contributions over the retirement benefits paid is provided to the beneficiary of a member whose death occurs after the retirement date. The member's contributions are returned to the beneficiary of a member whose death occurs prior to eligibility for early retirement.
Prior to January 1, 2002, upon termination and prior to vesting, a member's contributions were refundable without interest to the member. Beginning January 1, 2002, contributions were refundable with 5% interest for certain classes of employees. Employee contributions to the Plan are 5% of pre-tax pay for employees hired prior to January 1, 1988 and 4% of pre-tax pay for those hired thereafter.
The Policemen's Relief and Pension Plan
The Policemen's Relief and Pension Plan of the City of Pittsburgh (Policemen Plan) was established by Act 99 of May 25, 1935, P.L. 233. The Policemen Plan is a single employer
55
CITY OF PITTSBURGH, PENNSYLVANIA
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31,2014
defined benefit plan and its purpose is to provide retirement, disability, and other benefits to its members. P.L. 233 requires the City and members of the Policemen Plan to make contributions to the Policemen Plan for the purpose of paying benefits and administrative expenses.
All employees of the Bureau of Police, including substitute uniformed employees, are eligible for membership in the Plan. At January 1, 2013, the Policemen's Fund has 2,404 total members, of which 883 are active members; 1,496 are inactive plan members or beneficiaries currently receiving benefits; and 25 are inactive plan members entitled to but not yet receiving benefits.
Retirement benefits are available at the employee's option upon completion of the later of 20 years of service or attainment of age 50. Employees who become permanently disabled in the line of duty, and who are unable to perform the duties of their position, are eligible to receive a disability pension. Employees who become permanently disabled other than in the line of duty become eligible to receive a disability pension if they have completed ten years of service.
The normal monthly retirement benefit is equal to 50% of average compensation (as defined) plus service increment, if any.
Service increments of $20 per month for each year of service between 20 and 25 years and $25 per month for each year in excess of 25 years are included in the retirement benefit. If so elected, a death benefit is available for the survivors, as defined by the plan, of any member who dies in the performance of his duties. A surviving spouse benefit, which is applicable to deaths not in the line of duty, may also be elected by plan participants.
An employee, who terminates employment after 20 years of service, and before age 50, may collect the normal retirement benefit based on average compensation at termination, providing the terminated member continues contributions at the rate in effect at termination. The benefit is deferred until age 50. If contributions continue at the same rate in effect at termination and continue to age 50, member may receive monthly benefit based on rate of pay in effect had the officer worked until the age of 50. If a member terminates employment before completing 20 years of service, accumulated employee contributions are refundable.
Employee contributions to the Policemen Fund are 6% of pay plus $1 per month, until age 65. Those electing the surviving spouse benefit contribute an additional 1/2% of pay.
The Firemen's Relief and Pension Plan
The Firemen's Relief and Pension Plan of the City of Pittsburgh (Firemen Plan) was established by Act of May 25, 1933, P.L. 1050. The Firemen Plan is a single employer defined benefit plan. Its purpose is to provide retirement, disability, and other benefits to its members. P.L. 1050 requires the City and members of the Firemen Plan to make contributions to the Firemen Plan for the purpose of paying benefits and administrative expenses.
Any uniformed employee of City of Pittsburgh Bureau of Fire is eligible for membership in the Firemen Plan. At January 1, 2013, the Fund has 1,696 total members, of which 584 are active members; 1,111 are inactive plan members or beneficiaries currently receiving benefits; and 1
56
CITY OF PITTSBURGH, PENNSYLVANIA
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 2014
inactive plan member entitled to but not yet receiving benefits.
Normal retirement benefits are available at the employee's option upon completion of 20 years of service for any participant employed before January 1, 1976, or for those years employed thereafter, the later of completion of 20 years of service or attainment of age 50. Employees who become permanently disabled in the line of duty and who are unable to perform the duties of their position are eligible to receive a disability pension. Employees who become permanently disabled other than in the line of duty become eligible to receive a disability pension if they have completed ten years of service.
The regular pension benefit is equal to 50% of the average compensation (as defined). A service increment of $20 per month for each year of service in excess of 20, excluding years of service after age 65, is also payable for those members hired before January 1, 2005. For those hired on or after January 1, 2005, the service increment is $10 per month for each completed year of service in excess of 20 years, excluding years of service after age 65. The service increment is only payable after age 50. A surviving spouse benefit may also be elected by plan participants. A lump-sum death benefit of $1,200 is paid to the beneficiary of any deceased member.
Normal vesting occurs upon attainment of 20 years of service. If a retiree is under the age of 50, they must make contributions to the plan until the age of 50 to qualify for a monthly pension at age 50. Upon termination of employment, a member's contributions, without accumulation of interest, are refundable.
Employee contributions to the Firemen Plan are 6.5% of pay plus $1 per month until age 65. Those electing the surviving spouse benefit contribute an additional 1/2% of pay.
(B) Funding Status and Progress
In 1984, the Pennsylvania General Assembly passed the "Municipal Pension Plan Funding Standard and Recovery Act" (Recovery Act), which has improved the administration and funding of all municipal pension plans. The Recovery Act made changes to the actuarial reporting requirements for municipalities, set forth minimum municipal pension contributions, and established the framework for customized recovery programs for municipalities with large unfunded pension liabilities.
In accordance with the Municipal Pension Plan Funding Standard and Recovery Act of 1984 (Act 205), the City established the Comprehensive Municipal Pension Trust Fund Board (Comprehensive Trust) in August 1987. The Board's purpose is to oversee the activities of the City's pension plans and to receive and invest the City's pension assets.
The City has three defined benefit pension plans (Municipal, Policemen, and Firemen), which are administered by respective pension boards, the majority of whose members are elected by the employees. The Policemen and Firemen Plans cover all employees of the Bureau of Police and the Bureau of Fire, respectively. Each full-time employee not covered under either the Policemen's or Firemen's Plan is required to join the Municipal Plan after serving a 90-day probationary period.
57
CITY OF PITTSBURGH, PENNSYLVANIA
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 2014
The Commonwealth pension contributions are determined under Act 205. The City is eligible for the maximum remedies available under Act 205. To qualify, the City is required to fund an amount equal to normal cost and the amortization payment required to eliminate the unfunded liability over a 40-year period less any member contributions.
Act 205 contains both mandatory and optional remedies for municipalities to design a program for dealing with unfunded pension liabilities. The mandatory remedies implemented by the City were the development and adoption of an administrative improvement plan for its pension fund, the establishment of lower cost pension plans for new hires, and the aggregation of all the City's pension assets for investment purposes under the guidance of a new oversight board (the Comprehensive Municipal Pension Trust Fund Board). The Comprehensive Trust, which is comprised of seven members, four appointed by the Mayor and approved by Council and one elected from each plan, manages the investments of all pension assets and provides funds for each plan's monthly payment of benefits and administrative expenses from plan net position. The optional remedies initially selected by the City were: 40-year amortization of the unfunded liability, level percent amortization, and a 15-year phase-in allowing the City to gradually increase its pension contributions.
Act 189 of 1990 amended the provisions of Chapter 3 of Act 205. Amendments require (1) annual payroll used in the calculation of financial requirements to be that of the current year (of the calculation) plus projected payroll to the end of the year and (2) an estimated state aid amount not be deducted from the total financial requirements in determining the minimum municipal obligation. The revised definition of the Minimum Municipal Obligation (MMO) is effective for MMOs developed and adopted for budgeting purposes subsequent to 1991. Additionally, the provisions for payment of the MMO were revised to require any one of three alternative methods, more fully described in Act 189, and payment of the MMO is to occur by December 31 of each year. The Commonwealth of Pennsylvania provides pension aid grants to local municipalities.
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 included transferring approximately $45 million to the Comprehensive Trust Fund which was in the Debt Service Reserve Fund in 2010 and dedicating parking tax revenues for the next 31 years. Per Council legislation, the City intends to contribute parking tax revenues of $13.4 million per year from 2011 through 2017 and $26.8 million per year from 2018 through 2041. While the present value of the dedicated future parking tax revenues for future pension contributions did not meet the criteria for recognition as an asset in the City's financial statements or those of the Comprehensive Trust Fund, it was treated as an actuarial asset for purposes of funding levels under Commonwealth of Pennsylvania Act 44 of 2009 and the City was determined to have met the required funding level to avoid takeover of the City pensions by the Pennsylvania Municipal Retirement System and continues to be treated as an actuarial asset for funding purposes.
58
CITY OF PITTSBURGH, PENNSYLVANIA
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 2014
For the year ended December 31, 2014, the City did contribute $55.2 million to the Pension Trust Fund; contributions made to the Plan represent 100% of the Act 205 MMO plus additional contributions including $13.4 million of dedicated parking tax revenue.
Disclosures Required by GASB Statement No. 67
Net Pension Liability (NFL)
The components of the net pension liability of the City at December 31,2014, were as follows:
Policemen Firemen Total
Total pension liability $ 337,813,333 $ 455,283,679 $ 410,129,176 $ 1,203,226,188 Plan fiduciary net position (138,852,263) (121,197,138) (132,016,062) (392,065,463)
Net pension liability $ 198,961,070 $ 334,086,541 $ 278,113,114 $ 811,160,725
Plan fiduciary net position as a percentage of the total pension liability 41.10% 26.62% 32.19% 32.58%
Actuarial assumptions. The total pension liability was determined by an actuarial valuation on January 1,2013 and rolled forward to December 31,2014 using the following actuarial assumptions, applied to all periods in the measurement:
Actuarial cost method
Actuarial assumptions: Investment rate of retum
Projected salary increases Underlying inflation rate Merit and longevity
Municipal
Entry Age Normal
7.50%
4.00%
3.00%
1.00%
Policemen
Entry Age Normal
7.50%
4.50%
3.00%
1.50%
Actuarial assumptions based on the January 1,2013 actuarial experience study
RP-2000 Healthy Annuitant Mortality Table, with adjustment for mortality improvements based on Scale AA
59
Firemen
Entiy Age Normal
7.50%
5.75%
3.00%
2.75%
CITY OF PITTSBURGH, PENNSYLVANIA
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 2014
Changes in Actuarial Assumptions - There were no changes in actuarial assumptions made in connection with the rollforward of the 1/1/2013 actuarial valuation.
Long Term Expected Rate ofReturn ~ The long-term expected rate of return on Plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation.
The following was the asset allocation policy and best estimates of arithmetic real rates of return for each major asset class included in the Plans' target asset allocation as of December 31, 2014:
Long Term Expected Target Allocation Real Rate of Return
Asset Class
Domestic equity 40.00% 8.4%
International equity 20.00% 9.3% Private equity 5.00% 8.3% Fixed income 30.00% 3.9%
Cash 5.00% 0.0%
100.00%
Rate of Return - The money-weighted rate of return expresses investment performance, net of investment expense, adjusted for the changing amounts actually invested. For the year ended December 31, 2014, the annual money-weighted rate of return on the Plan investments, net of investment expense, was 6.48%.
Discount rate. The discount rate used to measure the total pension liability for the Municipal, Policemen, and Firemen funds was 7.50%. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate and that the City's contributions will be made in accordance with the City's June 24, 2014 Amended Recovery Plan and equal to the yearly MMO calculation. Based on those assumptions, the Plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability.
Sensitivity of the net pension liability to changes in the discount rate - The following presents the net pension liability of the City calculated using the discount rates described above, as well as what the City's net pension liabilities would be if they were calculated using a discount rate that is one-percentage-point lower or one-percentage-point higher than the current rates:
60
CITY OF PITTSBURGH, PENNSYLVANIA
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 2014
1% Decrease Current Discount 1% Increase
(6.50%) Rate (7.50%) (8.50%)
Municipal $ 231,788,451 $ 198,961,070 $ 170,587,490
Policemen 379,810,146 334,086,541 295,010,399
Firemen 318,611,208 278,113,114 243,194,211
Total $ 930,209,805 $ 811,160,725 $ 708,792,100
Disclosures Required by GASB Statements No. 25,27 and 50
The information below is with regard to employer pension activity for the year ended December 31, 2014. Costs and contributions were based upon an actuarial valuation performed as of January 1, 2013, as required by Act 205.
The City's annual required contribution for the past three years is depicted in the following table.
($ in Thousands) Fiscal Year Ended Municipal Policemen Firemen
December 31,2014:
Annual required contribution $ 10,179 $ 16,575 $ 14,429 Contribution made 13,525 18,946 19,442
December 31,2013:
Annual required contribution $ 10,166 $ 16,422 $ 14,159 Contribution made 13,160 18,080 18,394
December 31,2012:
Annual required contribution $ 7,851 $ 11,599 $ 11,273 Contribution made 14,256 21,065 20,473
Significant assumptions underlying the actuarial computations include mortality, termination, vesting, marital status, and retirement estimates, as well as the following:
61
CITY OF PITTSBURGH, PENNSYLVANIA
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 2014
Municipal Policemen Firemen
Actuarial valuation date 1/1/2013 1/1/2013 1/1/2013
Actuarial cost method Entry age Entry age Entry age normal normal normal
Amortization method Level dollar Level dollar Level dollar
Closed Closed Closed
Remaining amortization period 30 years 30 years 30 years Asset valuation method Tabular Tabular Tabular
Smoothing Smoothing Smoothing
Actuarial assumptions:
Investment rate of return 7.50% 7.50% 7.50%
Projected salary increases 4.00% 4.50% 5.75% Inflation rate 3.00% 3.00% 3.00%
Merit and longevity increases 1.00% 1.50% 2.75%
There were no benefit changes made to the Municipal, Policemen, or Firemen actuarial valuations for January 1, 2013.
Changes in Actuarial Assumptions - Multiple assumption changes were made to the Municipal, Policemen, and Firemen actuarial valuations for January 1, 2013. The most significant is the change in the interest rate assumption, which was lowered by the Comprehensive Trust Board from 8.0% to 7.5% per year to present a more reasonable and conservative assumption.
The Municipal actuarial valuation also recognized the following assumption changes: the mortality and retirement assumptions were changed, the retirement rates for non-EMS employees were extended two more year to age 70, and the projected increase in Medicare premiums was reduced from 6.5% to 5.5% per year. The net effect of these assumption changes, including the change in the interest rate assumption, was an increase in the actuarial accrued liability (AAL) of $31,572,286, which will be amortized over 15 years.
The Policemen actuarial valuation also recognized the following assumption changes: the salary increase assumption was reduced from 5.0% to 4.5% per year, the employee turnover assumption was changed to reflect higher rates of withdrawal in the first five years of employees (the same rates were retained for once participants are beyond six years of employment), and the mortality assumption was changed. The net effect of these assumption changes, including the change in the interest rate assumption, was an increase in the AAL of $41,759,441, which will be amortized over 15 years.
The Firemen actuarial valuation also recognized a change in the mortality assumption. The interest rate and mortality assumption changes increased the AAL by $41,016,905, which will be amortized over 15 years.
62
CITY OF PITTSBURGH, PENNSYLVANIA
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31,2014
Required contributions were impacted by the City's 1998 general obligation bond issue, which was used to make a $250,000,000 contribution to the plan and reduce an accumulated unfunded actuarial liability.
Employer contributions reported in the statement of changes in fiduciary net position include contributions for other post-employment benefits which are not included in the Annual Required Contribution calculation, as further discussed in Note 8.
The City has a net pension asset (a negative net pension obligation (NPO)) as of December 31, 2014 calculated as follows:
(Amounts expressed in thousands)
Municipal Policemen Firemen
Annual required contribution $ 10,179 $ 16,575 $ 14,429 Interest on NPO (438) (381) (734) Adjustment to the ARC 494 281 1,167
Annual pension cost 10,235 16,475 14,862 Contribution made 10,040 14,065 14,433
Change in NPO 195 2,410 429
NPO, 12/31/2013 (22,776) (40,278) (31,202)
NPO, 12/31/2014 $ (22,581) $ (37,868) $ (30,773)
For purposes of the NPO Calculation, contribution amounts are net of the dedicated parking revenue contributions already actuarially factored into the annual required contribution.
63
CITY OF PITTSBURGH, PENNSYLVANIA
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31.2014
Three Year Trend Information
(Amounts expressed in thousands)
Annual Total Contributions as
Pension a Percentage of Net Pension Fiscal Year Pension Cost Annual Obligation
Ending Plan (APC) Pension Cost (Asset)
12/31/2014 Municipal $ 10,235 98.1% $ (22,581) Policemen 16,475 85.4% (37,868) Firemen 14,862 97.1% (30,773)
12/31/2013 Municipal $ 10,222 94.1% $ (22,776) Policemen 16,322 80.9% (40,278) Firemen 14,592 91.1% (31,202)
12/31/2012 Municipal $ 7,939 177.4% $ (23,426) Policemen 11,650 180.8% (43,365) Firemen 11,693 175.1% (32,342)
The information in the table below presents assets reflected in the pension financial statements along with the dedicated stream of revenues created by Ordinances 42 and 44 of 2010, treated as an asset for purposes of submission to the Commonwealth of PA for Act 205 of 1984 and Commonwealth Act of 2009. The City's funded status and related information as of the actuarial valuation date, January 1,2013, under Act 205, is as follows (in thousands):
Actuarial Excess of
Actuarial Accrued Assets
Value of Liability (AAL) Over (Under) Funded Assets Entry Age AAL Ratio
Covered
Payroll
Municipal: $ 202,530 $
Policemen:
$ 248,872 $
Firemen:
$ 224,051 $
324,697 $ (122,167) 62.38% $ 81,916
440,022 $ (191,150) 56.56% $ 68,562
395,324 $ (171,273) 56.68% $ 52,375
Excess (Deficiency) as a Percentage
of Covered
Payroll
(149.14)%
(278.80)%
(327.01)%
The required schedule of funding progress included as required supplementary information immediately following the notes to the financial statements presents multiyear trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability for benefits. Schedules of funding progress are presented on page 98.
64
CITY OF PITTSBURGH, PENNSYLVANIA
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 2014
8. Other POSTEMPLOYMENT Benefits
In addition to the pension benefits disclosed in Note 7, resolutions of City Council, State statutes, and labor agreements have provided for certain postemployment benefits, other than pension benefits, known as ("OPEB") to be provided to retirees or their beneficiaries. Through December 31, 2014, the City funds all City contributions on a pay-as-you-go basis. During 2012, the City established an irrevocable OPEB Trust. For 2014, the City continued to pay all OPEB benefits consistent with past practice and no benefit payments were made from the OPEB Trust. Such benefits are primarily funded through annual appropriations from the City's General Fund and trusts designated for those purposes. Post-retirement benefits consisting of health care benefits. Medicare reimbursements and life insurance for firefighters and police officers and life insurance for certain municipal employees. Separate financial statements are not available.
Benefit provisions for the plan is established and amended through negotiations between the City and the respective unions.
Funding Policy. The City's contribution is based on projected pay-as-you-go financing requirements. For fiscal year 2014, the City contributed $21,959,268 to the plan. During the year ended December 31, 2014, the City contributed $2.5 million into the OPEB irrevocable trust. Employees are not required to make contributions for basic life insurance. Employees contribute to health care costs at a flat rate based on wages and family size.
Annual OPEB Cost. The City's annual OPEB cost (expense) for the plan is calculated based on the annual required contribution of the employer (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement No. 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and to amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years.
Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information following the notes to financial statements, presents multi-year trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits.
Actuarial Methods and Assumptions. Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short- term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. The 1/1/2014 valuation includes a change in assumptions as the mortality assumption was updated for all three employee groups.
65
CITY OF PITTSBURGH, PENNSYLVANIA
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 2014
The following table shows the components of the City's annual OPEB cost for the year, the amount actually contributed to the Plans, and changes in the City's net OPEB obligations, as well as the assumptions used to calculate the net OPEB obligation:
Annual required contribution $ 42,439,328 Interest on net OPEB obligation 3,849,844 Adjustment to annual required contribution (5,252,175)
Annual OPEB cost 41,036,997 Contribution made 21,959,268
Contributions to OPEB Trust 2,500,000
Increase (decrease) in net OPEB obligation 16,577,729
Net OPEB obligation (asset), beginning of year 85,552,093
Net OPEB obligation (asset), end of year $ 102,129,822
Actuarial valuation date 1/1/2014
Actuarial cost method Entry Age
Amortization method Level dollar
Assetvaluation method Market value of assets plus accrual adjustments, if any
Remaining amortization period 30 years - Open
Actuarial assumptions:
Investment rate of return 4.5%
Health care inflation rate 6.5% in 2014, grading to 5% in 2022
For the Actuarial Valuation report dated January 1, 2014, the actuarial value of assets is $6,152,448; the actuarial accrued liability is $570 million, for a funded ratio of 1%.
Three-Year Trend Information
Annual OPEB Percentage of Net OPEB Year Ending Cost (AOC) AOC Contributed Obligation (Asset)
December 31,2014 $ 41,036,997 60% $ 102,129,822
December 31,2013 $ 36,887,703 74% $ 85,552,093 December 31,2012 $ 37,166,764 62% $ 76,390,893
66
CITY OF PITTSBURGH, PENNSYLVANIA
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31,2014
Component Unit;
Parking Authority
The Parking Authority Post Employment Healthcare Plan is a single-employer defined benefit healthcare plan administered by the Parking Authority. There is no separate audit requirement. The plan provides medical, dental, and life insurance benefits to eligible retirees and their spouses. The following table shows the components of the Parking Authority's annual OPEB cost, the amount actuarially contributed to the plan, and the changes in the net OPEB obligation for the year ended December 31, 2014:
Annual required contribution $ 109,961 Interest on net OPEB obligation 39,703
Adjustment to annual required contribution (1 18,538)
Annual OPEB cost (expense) 31,126
Contribution made (31,731)
Change in net OPEB obligation (605)
Net OPEB obligation - beginning of year 661,727
Net OPEB obligation-end of year $ 661,122
The Parking Authority's annual OPEB cost and the percentage of annual OPEB cost contributed to the plan was $31,126 and 100.00%, respectively. As of January 1, 2013, the date of the most recent actuarial valuation date, the actuarial accrued liability for benefits was $602,901, all of which was unfunded. The covered payroll was $2,710,122, and the ratio of unfunded actuarial accrued liability to covered payroll was 22.20%. The contributions made as a percentage of required contributions were 100.00%. The contributions were made on a pay-as-you-go basis.
In the January 1, 2013, actuarial valuation, the following actuarial assumptions were used: Actuarial cost method - Entry age normal; Interest rate - 6%; Amortization method - Level dollar; Amortization period - Seven years.
9. Long-term Liabilities
The maximum amount payable for future maturities of bond and interest on general long-term debt at December 31, 2014 and changes in bond principal for the year then ended are summarized below:
67
CITY OF PITTSBURGH, PENNSYLVANIA
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 2014
Bonds paid or Outstanding at defeased and discount Bonds issued Outstanding at
December 31,2013 amortized during 2014 during 2014 December 31,2014 Interest
Council and Public Election General Obligation Bonds:
Nine general obligation bond issues with rates ranging from 0.443% to 6.60%. The bonds are payable from general revenues.
2014 $ 56,700,000 $ 56,700,000 :S $ $ 2015 59,725,000 - 1,410,000 61,135,000 29,276,801 2016 62,995,000 4,945,000 5,780,000 63,830,000 25,785,341 2017 66,550,000 17,075,000 16,000,000 65,475,000 22,401,823 2018 54,550,000 41,310,000 39,755,000 52,995,000 19,507,978 2019 139,290,000 - 2,615,000 141,905,000 16,079,350
2020-2024 104,480,000 - 13,500,000 117,980,000 52,515,915 2025-2029 - - 15,825,000 15,825,000 12,005,250 2030-2032 - - 12,505,000 12,505,000 1,457,250
Subtotal 544,290,000 120,030,000 107,390,000 531,650,000 179,029,708
Less:
Unamortized bond discounts/premiums 20,890,727 6,685,627 12,226,084 26,431,184 -
$ 565,180,727 $ 126,715,627 !B 119,616,084 $ 558,081,184 $ 179,029,708
68
CITY OF PITTSBURGH, PENNSYLVANIA
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31,2014
Discretely Presented Component Units
Future maturities of bond principal on URA related indebtedness supported by the City as of December 31,2014 are as follows:
Debt related to URA supported by the City (debt not recorded in the separate URA financial statements)
Principal Outstanding at
December 31, 2013
Urban Redevelopment Authority Taxable Revenue Bonds:
Seven tax increment financing (TIP) bonds with interest rates ranging from 5.4% to 8.1% and one TIP note with
variable interest rates. Terms of the TIP
require repayments of principal and interest soley from tax increment generated in districts and related
agreements.
Bonds paid Bonds issued Outstanding at during 2014 during 2014 December 31,2014 Interest
2014 $ 1,603,439 !B 1,603,439 $ - $ $ 2015 1,446,024 319,241 1,126,783 669,052 2016 1,336,784 - 1,336,784 559,874 2017 1,431,569 - 1,431,569 467,668 2018 1,532,064 - 1,532,064 366,803 2019 1,335,118 - 1,335,118 319,651
2020-2024 3,096,638 - 3,096,638 667,062 2025 601,716 - 601,716 35,381
12,383,352 1,922,680 10,460,672 3,085,491
Total Urban Redevelopment Authority debt supported by the City $ 12,383,352 3) 1,922,680 $ - $ 10,460,672 $3,085,491
69
CITY OF PITTSBURGH, PENNSYLVANIA
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 2014
URA debt recorded by URA (includes PDF Trust Bonds supported by the City)
The following is a summary of changes in long-temi obligations of the URA for the year ended December 31,2014:
Balance at Balance at
December 31, 2013 Additions Retirements December 31, 2014
URA:
Mortgage Revenue Bond Program PDF Trust bonds
Bank loan
$ 17,315,000 11,175,000
2,718,680
$ $ 3,275,000 $ 11,175,000
123,822
14,040,000
2,594,858
Total proprietar>' ftjnd debt 31,208,680 _ 14,573,822 16,634,858
Bank loan
HUD Section 108 loans
Compensated absences
3,627,927
21,288,000
498,577
8,005,000
7,494
3,449,326
5,203,000
8,183,601
16,085,000
506,071
Original issue premium 88,677 - 88,677 .
Total debt and other long-term obligations 56,711,861 8,012,494 23,314,825 41,409,530
URA Component Units:
Pittsburgh Housing Development Corporation:
Bank construction loans 54,703 232,175 49,658 237,220
Total Component Unit Debt 54,703 232,175 49,658 237,220
Total debt and other long-term obligations - reporting entity $ 56,766,564 $ 8,244,669 $ 23,364,483 $ 41,646,750
70
CITY OF PITTSBURGH, PENNSYLVANIA
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31,2014
Parking Authority Debt
Future maturities of bond and note principal on Parking Authority indebtedness at December 31, 2014 are as follows:
Outstanding at December 31,2013
Parking Authority Revenue Bonds and Notes:
Six revenue bond issues with interest rates
ranging from 3.95% to 5.0%. These bonds are payable from revenue from Parking Authority operations.
Principal Bonds paid or defeased and
discount
amortized
during 2014
Bonds and
notes issued Outstanding at during 2014 December 31. 2014 Interest
2014 $ 4,503,814 $ 4.503,814 $ - $ $
2015 4,459,795 4,459,795 4,336,335
2016 4,347,586 4,347,586 4,321,244
2017 4,188,362 4,188,362 4,225,467
2018 4,191,166 4,191,166 4,214,664
2019 5,985,000 5,985,000 2,504,380
2020-2024 29,940,000 29,940,000 8,326,610
2025-2026 17,165,000 17,165,000 1,153,370
74,780,723 4,503,814 70,276,909 29,082,070
Plus: Appreciated value on Cap. Apprec. Bonds 4,028,215 (707,717) 3,320,498 -
Plus: Bond premium 1,114,352 (86,272) 1,028,080 -
Less: Unamortized discount (36,576) 2,832 (33,744) -
Total $ 79,886,714 $(5,294,971) $ - $ 74,591,743 $29,082,070
71
CITY OF PITTSBURGH, PENNSYLVANIA
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 2014
Pittsburgh Water and Sewer Authority Debt
Future maturities of bond and note principal on PWSA indebtedness at December 31, 2014 are as follows:
Principal
Pittsburgh Water and Sewer Authority Revenue Bonds:
Four revenue refunding bonds with interest rates ranging from 4.04% to 6.61%, Sixteen state loans and a swap borrowing with variable interest rates. The bonds are payable from revenue from Water and Sewer operations.
Outstanding at December 31, 2013
Bonds paid or defeased and
discount
amortized
during 2014
Bonds and
notes issued
during 2014
Outstanding at December 31, 2014 Interest
2014 $ 19,263,000 $19,385,000 $ 122,000 $ - $ 2015 20,835,000 - 581,000 21,416,000 30,322,000
2016 21,425,000 - 656,000 22,081,000 29,680,000
2017 20,480,000 - 668,000 21,148,000 30,451,000
2018 21,399,000 - 679,000 22,078,000 29,424,000
2019 22,574.000 - 461,000 23,035,000 28.358,000
2020-2024 123,454,000 - 4,890,000 128,344.000 125.426,000
2025-2029 65,902,000 - 4,373.000 70,275,000 193,834,000
2030-2034 144,524,000 - 1,916,000 146,440,000 84,788,000
2035-2039 195,325,000 - 88,000 195,413,000 33,883,000 2040 61,795,000 - - 61,795,000 1,308,000
716,976,000 19,385,000 14,434,000 712,025,000 587,474,000
Net bond discount (premium) 16,764,000 1,649,000 25,000 15,140,000 Accretion on 1998 bonds 40,636,000 - 3,941,000 44,577,000 -
Total $ 774,376,000 $21,034,000 $18,400,000 $ 771,742,000 $587,474,000
72
CITY OF PITTSBURGH, PENNSYLVANIA
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 2014
Guaranteed Debt of Non-Component Unit
The Public Auditorium Authority is now a part of the Sports and Exhibition Authority, which is not a component unit of the City. The following debt was guaranteed by the City when the Public Auditorium Authority was a component unit of the City. As of December 31, 2014, the City continues to guarantee the debt.
Principal
Outstanding at December 31, 2013
Public Auditorium Authority Revenue Bonds:
One bond issue with interest rates
Bonds paid or defeased and
discount
amortized
during 2014
Bonds and
notes issued
during 2014 Outstanding at
December 31,2014 Interest
ranging from 3.45% to 4.0%. The City's share of debt service on these bonds is payable from general revenues.
2014 $ 232,500 $ 232,500 $ $ $ 2015 237,500 - 237,500 27,651 2016 250,000 - 250,000 18,983
2017 117,500 - 117,500 9,483
2018 122,500 - 122,500 4,900
Total $ 960,000 $ 232,500 $ $ 727,500 $ 61,017
(A) Council and Public Election General Obligation Bonds
General Obligation Bonds - Series of2014
On August 28, 2014, the City issued $44,470,000 of General Obligation Bonds, Series 2014 with an average interest rate of 2.454%. These consisted of serial bonds all bearing a fixed rate from 2.0% to 5.0% with maturities commencing on September 1, 2017 and continuing annually through September 2032. Net proceeds of $50,000,000 (including a premium of $5,915,402 and bond issuance costs of $385,402) will be used to fund future capital projects.
General Obligation Refunding Bonds - Series of2014 A & B
On November 25, 2014, the City issued $16,395,000 of General Obligation Refunding Bonds, Series 2014A with an average interest rate of 1.0% and $46,525,000 of General Obligation Refunding Bonds, Series 2014B with an average interest rate of 1.0%. These consisted of serial bonds all bearing a fixed rate from .443% to 5.0% with maturities commencing on September 1, 2015 and continuing annually through September 2018. Net proceeds of the Series A Bonds of $16,297,960 were used to advance refund the General Obligation Bonds, Series 2005A with a remaining amount due of $19,995,000. Net proceeds of the Series B Bonds of $52,559,680
73
CITY OF PITTSBURGH, PENNSYLVANIA
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31,2014
were used to advance refund the General Obligation Bonds, Series 2006C with a remaining amount due of $47,800,000.
The City's advance refunding decreased the total debt service over the next 4 years by $3.5 million. The transaction resulted in an economic gain (difference between the present value of the debt service on the old and new bonds) of approximately $3.4 million.
General Obligation Bonds - Series of2012 A & B
On February 28, 2012, the City issued $43,220,000 of General Obligation Bonds, Series 2012A with an average interest rate of 4.266% and $71,275,000 of General Obligation Bonds, Series 20123 with an average interest rate of 5.0%. These consisted of serial bonds all bearing a fixed rate from 2.0% to 5.0% with maturities commencing on September 1, 2012 and continuing annually through September 2026. Net proceeds of the Series A Bonds of $47,724,946 (including a premium of $4,638,645 and bond issuance cost of $133,699) were used to advance refund the General Obligation Bonds, Series 2002A with a remaining amount due of $46,455,000, with an average interest rate of 5.3%.
The net proceeds of the Series B Bonds of $80,025,056 (including a bond premium of $8,974,227 and bond issuance costs of $224,171) were used to fund capital projects from 2012 to 2014.
General Obligation Bonds - Series of2008 A
On September 11, 2008, the City issued $66,775,000 of General Obligation Refunding Bonds, Series A with an average interest rate of 5.08%. These consisted of serial bonds all bearing a fixed rate ranging from 5.0% to 5.25% with maturities commencing on September 1, 2009 and continuing annually through September 2017. Net proceeds of $69,573,696 (including a bond premium of $3,292,711 and bond issuance costs of $494,016) were used to advance refund the General Obligation Bonds, Series 1998D for $69,400,000.
General Obligation Bonds - Series of2006 A, B,&C
On May 10, 2006, the City issued $53,615,000 of General Obligation Bonds, Series 2006A with an average interest rate of 5.44%, $140,560,000 of General Obligation Bonds, Series 2006B with an average interest rate of 5.16% and $47,800,000 of General Obligation Bonds, Series 2006C, with an average interest rate of 5.25%. These consisted of serial bonds all bearing a fixed rate from 4.00% to 5.54% with maturities commencing on September 1, 2006 and continuing annually through September 2018. Net proceeds of $201,483,507 (including a bond premium of $9,650,477 and bond issuance costs of $2,341,970) were used to advance refund various series of bonds.
The net proceeds of the General Obligation Bonds of $50 million (including a bond premium of $3,466,728, bond issuance costs of $679,249 and a transfer of debt service of $585,515) were used to fund capital projects from 2006 through 2008.
74
CITY OF PITTSBURGH, PENNSYLVANIA
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31,2014
The City's General Obligation Bonds Series 1993A, 2003A, 2005A, and 2005B were issued to refunding previous series issued for capital projects. The 1998 Series ABC bonds were issued to fund the City's Pension Fund.
Below is a schedule of the City's General Obligation Bonds as of December 31,2014:
Coupon or Ceiling Amount
Serial Bonds Rate of Interest Outstanding
1998A, B, C 6.30% - 6.60% $ 200,440,000 2005A 5.00% 4,690,000 2006 B 5.00% - 5.25% 87,645,000 2008 A 5.00%-5.25% 20,975,000 2012 A 2.00%-5.00% 39,235,000 2012 B 5.00% 71,275,000 2014 5.00% 44,470,000
2014 A 0.443%-1.34% 16,395,000 2014 B 2.00%-5.00% 46,525,000
Subtotal 531,650,000
Add: Unamortized bond discounts/premiums 26,431,184
Total general obligation bonds payable _$ 558,081,184
The City's Bond Debt ratings are Moody's Al, Fitch A and Standard & Poor's A+ as of December 31, 2014.
From 1998 through 2014, the City refunded certain bonds by placing the proceeds of new bonds in irrevocable trusts to provide for all future debt service payments on the refunded bonds. Accordingly, neither the assets held in trust nor the refunded bonds appear in the accompanying financial statements. The outstanding balance of defeased bonds at December 31, 2014 is $287,440,000.
(B) Stadium Authority
During the Stadium Authority's fiscal year March 31, 2006, the Stadium Authority obtained three long-term loans to finance the West General Robinson Street Garage. On February 14, 2012, the Stadium Authority refinanced the loan with notes from PNC Bank and Dollar Bank. A $10,400,000 fixed rate loan issued by PNC Bank has a 20-year amortization and a 63-month term. Principal was due on the loan beginning in March 2012 and interest is payable at 3.8%. A $5,000,000 fixed rate loan issued from Dollar Bank has a 20-year amortization and a 63-month term. Principal was due on the loan beginning in March 2012 and interest is payable at 3.8%. A $3,000,000 variable rate loan issued by PNC has a 20-year amortization and 63-month term. Principal was due on the loan beginning in March 2012 and interest is based on the sum of 70% of LIBOR plus 195 basis points (1.95%) for the applicable LIBOR Interest period. The
75
CITY OF PITTSBURGH, PENNSYLVANIA
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 2014
Infrastructure Development Program loan for $1.25 million has a term of 20 years with a 2% interest rate. The outstanding balances at March 31, 2014 are $14,261,811 (combined PNC/Dollar Bank fixed rate loans), $2,687,500, and $1,071,341, respectively, for the four loans.
(C) Pittsburgh Water and Sewer Authority
During March 2007, PWSA issued $158,895,000 Series 2007 First Lien Water and Sewer Revenue Bonds ("2007 Bonds"): $43,720,000 Series A of 2007 (fixed rate), $57,585,000 Series B-1 of 2007 (variable rate demand), and $57,590,000 Series B-2 of 2007 (variable rate demand). The purpose of this bond issue was to refund the Series 2002 and Series 2005 Bonds (the refunded bonds). In connection with the debt refundings, PWSA recorded a deferred refunding loss of $6,032,000 which is being amortized as an adjustment to interest expense over the life of the bonds using the effective interest method. At December 31, 2014, the principal of the defeased 2005 Bonds outstanding was $40,845,000. The Series 2007 B-1 and B-2 bonds were currently refunded during 2013.
The 2007 Bonds were issued at a bond premium of $2,660,000, which is being amortized as an adjustment to interest expense over the life of the bonds using the effective interest method.
The 2007 Series A Bonds bear interest at rates ranging from 4.00% to 5.00%. Interest is payable in semi-annual installments on March 1 and September 1 until maturity. The 2007 Series A Bonds are subject to extraordinary redemption prior to maturity at the option of PWSA in the event of a condemnation, damage or destruction of the water and sewer system.
During May 2008, PWSA issued $93,635,000 Series 2008 Water and Sewer System First Lien Revenue Bonds ("2008 Fixed Rate Bonds"): $68,970,000 Series A of 2008 (fixed rate, taxable) and $24,665,000 Series D-1 of 2008 (fixed rate). The purpose of this bond issue was to advance refund portions of certain maturities of the Series 1993A and Series 2003 Bonds, to fund the costs of certain capital additions, to fund the premium for the Bond Insurance Policy securing payments on 2008 Fixed Rate Bonds, and to fund termination payments on certain interest rate swaps.
During June 2008, PWSA issued $320,515,000 Series 2008 Water and Sewer System First Lien Revenue Bonds ("2008 Variable Rate Demand Bonds"): $145,495,000 Series B of 2008 (variable rate demand), $51,910,000 Series C-1 of 2008 (variable rate demand), $51,885,000 Series C-2 of 2008 (variable rate demand), and $71,225,000 Series D-2 of 2008 (variable rate demand). The purpose of this bond issue was to currently refund the Series 1998A and Series 1998C, to currently refund certain maturities of the Series 2007 B-1 and Series 2007 B-2 Bonds, to advance refund certain maturities of the Series 1998B Bonds, to fund approximately $98 million of certain capital additions, to fund the premium for the Bond Insurance Policy securing payments on 2008 Variable Rate Demand Bonds, and to fund termination payments on certain interest rate swaps.
In connection with these advance refundings, portions of the proceeds of the 2008 Bonds were deposited into irrevocable trusts with an escrow agent to provide for certain debt service payments on the refunded bonds. The advance refunding resulted in a deferred refunding loss of
76
CITY OF PITTSBURGH, PENNSYLVANIA
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31,2014
$18,119,000 that will be amortized as an adjustment to interest expense over the life of the 2008 Bonds using the effective interest method. At December 31, 2014, the principal of the defeased 2003 Bonds outstanding was $17,700,000. The maturity value of defeased 1998B compound interest bonds outstanding at December 31,2014 was $19,800,000.
The Taxable 2008 Series A Bonds bear interest at rates ranging from 6.36% to 6.61%. Interest is payable in semi-annual installments on March 1 and September 1 until maturity. The Taxable 2008 Series A Bonds are subject to optional redemption, in whole or in part, on any date, at the option of the Authority. The Taxable 2008 Series A Bonds that mature in 2018 and 2024 are subject to mandatory sinking fund payments beginning in 2017 and continuing through 2024.
The 2008 Series D-1 Bonds (together with the Taxable 2008 Series A Bonds are the 2008 Fixed Rate Bonds) bear interest at rates ranging from 4.50% to 5.00%. Interest is payable in semi annual installments on March 1 and September 1 until maturity. The 2008 Series D-1 Bonds which mature on or after September 1, 2019 are subject to optional redemption, in whole or in part, on any date, at the option of the PWSA at any time on or after September 1, 2018, at 100% of the principal amount plus accrued interest.
The 2008 Series B, C, and D-2 Bonds (2008 Variable Rate Bonds) as originally offered bear interest at a variable rate with interest payments due on the first business day of each month. Interest rates are reset weekly; the fluctuating rate per annum to be determined by the respective remarketing agents. The weekly rate is subject to a cap of 12% per annum.
The Series B Bonds were reoffered on October 16, 2009. The reason for this reoffering was the replacement of expiring standby bond purchase agreements on these variable rate bonds with letters of credit. The reoffering did not change the interest rate mode on these variable rate bonds. During 2013 the Series B-1 letter of credit was renewed for five years with Bank of America and will expire on October 21, 2018. During 2013 the Series B-2 letter of Credit was renewed with Royal Bank of Canada for three years and will expire on October 21, 2016.
During August 2011, the 2008 Series C-l-A, B, and C bonds were reoffered. The bonds were reoffered at a term rate of .45% through September 2012. During August 2012, the 2008 Series C-l-A, B, and C bonds were again reoffered. The bonds were reoffered at a term rate of .40% through September 2013.
During November 2009, the remaining C-1 Bonds were reoffered as the Cl-D Series of $26,910,000. These bonds were also issued in a term interest rate mode, fixing the interest rate at 2.625% through September of 2012. During August 2012, the Cl-D Series were again reoffered. The bonds were reoffered at a term rate of 1.40% through August 2015.
During September 2013, the 2008 Series C-l-A, B and C bonds were converted and reoffered. The bonds were converted to index interest rate mode. The reoffered bonds are as follows:
Series Cl-A $10,000,000; Series Cl-B $10,000,000, and Series Cl-C $5,000,000.
During November 2014, the 2008 Series C-1 A, B, C, and C-2 were reissued and restructured to bear interest based upon 70% of one-month LIBOR. The fixed rate was amended from 3.998%
77
CITY OF PITTSBURGH, PENNSYLVANIA
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 2014
to 3,50%. Liquidity facilities provided by Bank of America Merrill Lynch (C-IA, IB, IC) and JP Morgan Chase (C-2) were also renewed as of November 3, 2014.
Liquidity facilities provided by PNC on the 2008 D-2 Series bonds were renewed as of July 9, 2014.
Variable Rate Bonds are subject to optional redemption, in whole or in part, on any date, at the option of the Authority. The 2008 Series B Bonds that mature on September 1 of 2039 are subject to mandatory sinking fund redemption. The 2008 Series C Bonds that mature on September 1 of 2035 are subject to mandatory sinking fund redemption. The 2008 Series D-2 Bonds that mature on September 1 of 2040 are subject to mandatory sinking flind redemption.
The 2008 Series Bonds are subject to extraordinary redemption prior to maturity at the option of PWSA in the event of a condemnation, damage, or destruction of the water and sewer system.
The 2008 Fixed Rate Bonds were issued at a bond premium of $824,000 which is being amortized as an adjustment to interest expense over the life of the bonds using the effective interest method.
Variable rate bonds require a liquidity facility and/or a letter of credit. PWSA is subject to the risk that the bank does not renew the credit facility and/or that the pricing changes throughout the life of the bonds. Additionally, PWSA purchased insurance as a credit enhancement on the variable rate bonds. Trading spreads on the bonds and the preservation of the liquidity facility may be largely linked to the credit quality of the insurance provider. Therefore, if there is an event that would adversely affect the investor's perception of the credit quality of the insurer, PWSA could be subject to paying higher credit spreads on the bonds and risk losing the liquidity facility.
During December 2013, the PWSA issued $130,215,000 Series A First Lien Revenue Refunding Bonds ("2013 Series A Bonds"), the proceeds of which were used to defease through current refunding the entire balance of the Series 2003, Series 2007 B-1, and Series 2007 B-2 and pay certain amounts in respect of termination of certain interest rate swap agreement related to the Series 2007 B-1 and B-2 bonds; $86,695,000 Series B First Lien Revenue Bonds ("2013 Series B Bonds"), the proceeds of which are to fund certain water and sewer system capital improvement projects and reimburse the Authority for certain capital expenditures paid for by the Authority. In connection with the debt refundings and swap termination, the Authority recorded a deferred refunding loss of $16,389,000, which is being amortized as an adjustment to interest expense over the life of the bonds. The refunding was completed to reduce the Authority's debt service payments over the next 20 years by approximately $813,000 and to obtain an economic gain (difference between present values of old and new debt service payments) of $844,000.
The 2013 Bonds were issued at a bond premium of $14,828,000, which is being amortized as an adjustment to interest expense over the life of the bonds.
78
CITY OF PITTSBURGH, PENNSYLVANIA
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31,2014
During November 2014, the Authority terminated the original 2008 Series 2008 C-1A, C-IB, C- IC and C-2 swaps and reissued and restructured to bear interest based upon 70% of one month LIBOR. Those derivative instruments had an aggregate fair value of ($9,471,392), which is considered a swap borrowing from the counterparty.
Swap Transactions
Current Interest Interest Counterparty 12/31/2014 Notional Effective Maturity Rate Rate Credit Underlying Market Amount Date Date Paid Received Rating Bonds Value*
Hedging derivatives, cash flow hedges, receive variable - pay fixed, interest rate swaps:
$ 72,747,500 6/12/2008 9/1/2039 4.038% SIFMA A- Series 2008 B-1 $ (22,323,381) 41,464,000 6/12/2008 9/1/2035 3.998% SIFMA A- Series 2008 C # -
70%
41,464,000 11/3/2014 9/1/2035 2.000% ImoLIBOR A- Series 2008 C (1,873,220) 72,747,500 6/12/2008 9/1/2039 4.038% SIFMA A+ Series 2008 B-2 (22,323,381) 71,225,000 6/12/2008 9/1/2040 4.103% SIFMA A+ Series 2008 D-2 (23,659,774)
(70,179,756)
Investment derivatives, receive variable -- pay fixed. interest rate swaps:
$ 62,196,000 6/12/2008 9/1/2035 3.998% SIFMA A+ Series 2008 C (17,016,919) 70%
$ 62,196,000 11/3/2014 9/1/2035 3.500% ImoLIBOR A+ Series 2008 C -
Total $ (87,196,675)
* The market value is an estimated net present value of the expected cash flows calculated using relevant mid-market data inputs and based on the assumption of no unusual market conditions or forced liquidation.
# - This swap was restructured and reissued during November 2014.
During fiscal year 2008, PWSA entered into five pay-fixed, receive-variable interest rate swap contracts. The interest rate swaps were effective June 12, 2008. Beginning September 1, 2008, PWSA began to make semi-annual interest payments on the 1®' of each March and September through September 1, 2035 (two swaps); September 1, 2039 (two swaps); and, September 1, 2040 (for one swap), respectively. The Counterparties make monthly interest payments on the
of each calendar month, which began July 1, 2008 through September 1, 2035 for two of the swaps; September 1, 2039 for two of the swaps; and, September 1, 2040 for one swap.
The intention of the 2008 swaps is to effectively change PWSA's variable interest rate on the $145,495,000 Water and Sewer System (Variable Rate Demand) First Lien Revenue Refunding Bonds Series B of 2008, on the $71,225,000 Water and Sewer System (Variable Rate Demand) First Lien Revenue Bonds Series D-2 of 2008, and on the $103,795,000 Water and Sewer
79
CITY OF PITTSBURGH, PENNSYLVANIA
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 2014
System (Variable Rate Demand) Subordinate Revenue Refunding Bonds Series C of 2008 (the bonds) to synthetic fixed rates of 4.038%, 4.103%, and 3.998%, respectively. During November 2014, the 2008 Series C Bonds were reissued and restructured to bear interest based upon 70% of one-month LIBOR. In conjunction with this reissuance/restructuring, the floating rate on the Series 2008 C swaps was converted from SIFMA to 70% of one-month LIBOR and the fixed rate was amended from 3.998% to 3.50%. With respect to the Series 2008 C swap treated as an effective hedge, this "off-market" swap is considered to be a hybrid instrument consisting of an on-market swap and a borrowing. The on-market swap rate is calculated as of the date of reissuance. The borrowing will be amortized over the remaining life of the swap and is included in bonds and loans payable on the statement of net position.
The bonds will accrue interest at a weekly rate that is determined by a remarketing agent on each effective rate date. The interest rate on the bonds may not exceed 12%. Per the interest rate swap agreements, PWSA will receive SIFMA Municipal Swap Index while paying fixed rates as noted in the chart above.
The interest payments on the interest rate swaps are calculated based on notional amounts, all of which reduce, beginning on September 1, 2012 for the 2008 C Bonds, September 1, 2032 for the 2008 D2 Bonds, and September I, 2035 for the 2008 B Bonds, so that the notional amounts approximate the principal outstanding on the respective bonds. The interest rate swaps expire consistent with the final maturity of the respective bonds.
Accounting and Risk Disclosures
During the year ended December 31, 2014, PWSA paid $13,418,000, fixed and received $171,000, variable related to their outstanding swap agreements.
As noted in the tables above, current period changes in market value for the interest rate swaps that are accounted for as hedges are recorded on the statement of net position as deferred outflows. Additionally, current period changes in market value for the interest rate swap accounted for as an investment is recorded on the statement of revenues, expenses and changes in net position as a component of investment income.
The cumulative fair market value of the outstanding interest rate swaps of December 31, 2014 are reported on the statement of net position as a swap liability.
PWSA has the ability to early terminate the interest rate swaps and to cash settle the transaction on any business day by providing at least two business days written notice to the counterparty. Evidence that PWSA has sufficient funds available to pay any amount payable to the counterparty must be provided at the time notice is given. At early termination, PWSA will be required to pay or receive a settlement amount which is comprised of the market value of the terminated transaction(s) based on market quotations and any amounts accrued under the contract(s).
80
CITY OF PITTSBURGH, PENNSYLVANIA
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 2014
Through the use of derivative instruments such as this interest rate swap, PWSA is exposed to a variety of risks, including credit risk, interest rate risk, termination risk, basis risk, and rollover risk.
• Credit risk is the risk that a counterparty will not fulfill its obligations. The credit ratings by Moody's Investors Service, Inc., a nationally recognized statistical rating organization for the respective counterparties are listed in the table above. If a counterparty failed to perform according to the terms of the interest rate swap agreement, there is some risk of loss to PWSA, up to the fair market value of the swaps.
PWSA currently does not enter into master netting arrangements with its counterparties; as such, each derivative instrument should be evaluated on an individual basis for credit risk. As PWSA's derivative instruments are all currently have a negative fair market value position to PWSA at year-end, PWSA is not exposed to credit risk at December 31, 2014.
Concentration of credit risk: PWSA currently has two counterparties, with three and two outstanding interest rate swaps respectively. PWSA's outstanding market value as of December 31, 2014 is $(63,000,074) with one counterparty and $(24,196,601) with the second counterparty. Both counterparties operate in the same markets and could be similarly impacted by changes in economic or other conditions.
It is PWSA's policy to require counterparty collateral posting provisions in its non-exchange traded derivative instruments. Their terms require collateral to be posted if the respective counterparty's credit rating falls below BBB+ by Standard & Poor's and the swap insurer becomes bankrupt. The amount of collateral to be posted is calculated based on derivatives in asset positions to PWSA. As of year-end, the counterparties had not and were not required to post collateral for these transactions.
• Termination risk is the risk that a derivative's unscheduled end will affect PWSA's asset/liability strategy or will present PWSA with potentially significant unscheduled termination payments to the counterparty. The counterparties to the interest rate swaps do not have the ability to voluntarily terminate the interest rate swap; however, PWSA is exposed to termination risk in the event that the one or more of the counterparties default. During 2014, 2008 C swaps were terminated and reissued.
• Interest rate risk is the risk that changes in interest rates will adversely affect the fair values of a government's financial instruments or cash flows. The interest rate swap that is accounted for as an investment exposes PWSA to interest rate risk. The interest rate swap is highly sensitive to changes in interest rates; changes in the variable rate will have a material effect on the swap's fair market value. The interest rate swap will terminate on September 4, 2035.
• Basis risk is the risk that arises when variable interest rates on a derivative and an associated
bond or other interest-paying financial instrument are based on different indexes. PWSA is subject to basis risk as the interest index on the variable rate arm of the swaps is based on the SIFMA Municipal Swap Index and the variable interest rate on the bonds is based on a
81
CITY OF PITTSBURGH, PENNSYLVANIA
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 2014
different index, a weekly rate that is determined by a remarketing agent. Although expected to correlate, the relationships between different indexes vary and that variance could adversely affect PWSA's calculated payments and, as a result, cost savings or synthetic interest rates may not be realized.
PWSA is further subject to basis risk in the event that the underlying bonds become fixed rate Bank Bonds or that the maturity of the underlying bonds is accelerated.
• Rollover risk is the risk that a derivative associated with PWSA's debt does not extend to the maturity of that debt. When the derivative terminates, the associated debt will no longer have the benefit of the derivative. PWSA is not exposed to rollover risk as the swap agreements terminate on the same day the last payment is due on the respective bonds.
Contingencies
All of PWSA's derivative instruments, include provisions that require PWSA to post collateral in the event that the credit ratings of its credit support provider's senior long term, unsecured debt credit rating falls below BBB+ by Standard & Poor's and FSA, the swap insurer, becomes bankrupt. The amount of collateral to be posted is calculated based on derivatives in negative market value positions to PWSA. The collateral is to be posted in the form of cash, U.S. Treasuries or other approved securities. As of year-end, PWSA had not and was not required to post collateral for these transactions.
(D) Debt Related to Urban Redevelopment Authority ofPittsburgh (URA) supported by the City
(1) URA - PDF - Special Tax Development Bonds, Taxable Series of 2005 (Debt recorded by URA)
On September 1, 2005, the URA issued $57,470,000 of Special Tax Development Refunding Bonds (2005 Bonds). The proceeds of the 2005 Bonds were used to provide funds for the current refunding of the 1995 Bond Series.
The 2005 Bonds matured in 2014 and were paid off in the amount of $11,175,000.
(2) Urban Redevelopment Authority of Pittsburgh (URA) Tax Increment Financing Bonds and Notes - Noncommitment Debt (Debt not recorded in the separate URA financial statements)
Tax Increment financing bonds are used to finance economic development within the City. The Bond proceeds are used to fund various construction projects within the City. Real estate value is thus increased and will provide increased future tax revenue to the City. Under a Tax Increment Financing Cooperative Agreement (the TIF Agreement) with the City, County, and the School District of Pittsburgh, each entity agrees to assign its respective rights to the incremental taxes derived from the TIF project to the URA for the term of the Bonds. The difference in the amount of real estate taxes attributable to the TIF property prior to and subsequent to the development of the property constitutes the "increment" that is
82
CITY OF PITTSBURGH, PENNSYLVANIA
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31,2014
available to pay debt service on the Bonds.
The Bonds are not guaranteed by the full faith and credit of the City, and as a result of being jointly funded are not recorded in the City's financial statements.
In the event that real estate tax revenues generated under the TIF Agreements are insufficient at any time to pay debt service on the Bonds, the respective parties under the Minimum Payment Agreements have agreed to make payments sufficient to remedy such shortfalls. Amounts payable under the Minimum Payment Agreements correspond to debt service requirements on the respective Bonds. Pursuant to the Tenant Agreement, each tenant has agreed to guarantee the full and punctual payment when due of all obligations. During 2014, the City's share of the TIF revenue was $6,756,730, whereas the City's share of the principal and interest paid on the TIF Bonds andNote were $2,392,055.
In 2011, a Series A Bond was issued to refund the 2003 A&B Bonds.
As of December 31, 2014, the following is a list of the TIF Bonds and Notes outstanding:
Coupon Rate Total City Serial Bonds of Interest Outstanding Portion
09 Refunded (Mellon) 7.95%-8,05% $ 5,775,000 $ 2,336,122 01 (Heinz) 6.71%-7.16% 1,550,000 587,041 03 Note (Panther Hollow) Variable 2,710,000 994,302 06 Bond (Fifth and Market) 5.40%-5.88% 14,020,000 5,143,940 11A Refunded (Station Square) 5.57% 4,195,000 1,399,267
Total $ 28,250,000 $ 10,460,672
(E) Urban Redevelopment Authority of Pittsburgh (URA) Debt Recorded by URA and not Supported by the City
The URA has various Bonds and Loans, which are the obligation of the URA and are not guaranteed or financed by the City. The proceeds of these Bonds and Loans are used to provide mortgages, loans, or grants to individuals or companies within the City to be used for urban redevelopment. The Bonds and Loans are payable from repayment of mortgages and loans andfrom other revenue and grants received by the URA. Debt issued for the URA as of December 31,2014 is as follows:
Mortgage Revenue Bonds
The Mortgage Revenue Bond Program was created to provide below market rate mortgages for the purchase and rehabilitation of residential property within the City. The Bonds,
83
CITY OF PITTSBURGH, PENNSYLVANIA
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 2014
including various series and term bonds, bear interest at rates from 4.05% to 4.85% and mature through 2036. At December 31, 2014, $14,040,000 is outstanding. $1,130,000 is due on these bonds in 2015.
Bank Loans
The URA received a loan to finance renovations to the Lexington Technology Park buildings. The loan is fixed at an interest rate of 4.57%. At December 31, 2014, $2,594,858 is outstanding. Final maturity is February 28, 2019. Monthly payments are based on a twenty year amortization with a balloon payment due at maturity. $132,208 is due on this loan in 2014.
In April 2011, the URA received a bank loan totaling $4,575,000. The proceeds of the loan were used to consolidate and refinance the debt on the South Side Works garages' loans. The loan was paid off in the amount of $3,449,326 during 2014.
During 2013, the URA received a bank loan totaling $500,000. The proceeds of the loan are to be used to issue a loan to the PHDC for the purpose of paying development costs to acquire, rehabilitate, and resell seven homes in the Sheraden Neighborhood. Interest is payable monthly at the prime rate and the loan matures in 2015. At December 31, 2014, $178,601 was current, drawn, and is outstanding.
During 2014, the URA received a bank loan totaling $8,005,000. The proceeds of the loan were used to partially consolidate and refinance the debt on the South Side Works garages' loans and to provide financing for the Open Hearth Garage in the South Side Works. The loan is fixed at an interest rate of 3.83%. At December 31, 2014, $8,005,000 is outstanding. Final maturity is January 1, 2025. Monthly payments are based on a 10-year amortization with a balloon payment due at maturity. $181,748 is due on this loan in 2015.
HUD Section 108 Loans
During 2003, the URA received two HUD Section 108 loans to provide funding for the construction of garages at South Side Works. The first loan, in the original principal amount of $4.5 million was for an 850-space parking garage, known as Garage #3. The loan was paid off in the amount of $1,953,000 during 2014.
The second loan, in the original principal amount of $6.5 million was for the construction of a 367-space parking garage (Garage #2) and site improvements in the South Side. The loan was paid off in the amount of $2,585,000 during 2014.
During 2008, the URA received two HUD Section 108 loans to provide funding for the Pittsburgh Technology Center. The first loan, in the original principal amount of $3 million is for site improvements and streets and utilities relocation. The loan bears interest at 4.8% with semiannual principal and interest payments due February 1 and August 1. The loan matures on August 1, 2026. At December 31, 2014, $2,515 million is outstanding. $142,000 is due in 2015.
84
CITY OF PITTSBURGH, PENNSYLVANIA
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 2014
The second loan, in the original principal amount of $2 million is for the construction of a 160-space parking condominium. The loan bears interest at 4.8% with semiannual principal and interest payments due February 1 and August 1. The loan matures on August 1, 2026. At December 31, 2014, $1,677 million is outstanding. $95,000 is due in 2015.
The 2008 loans are secured by future Community Development Block Grant grants, the pledged increment for the Pittsburgh Technology Center Tax Increment Financing District, and payments under the minimum payment agreement.
During 2009, the URA received a HUD Section 108 loan for the South Side Works Infrastructure Project, for an amount not to exceed $4,000,000. $3 million was drawn during 2009 representing interim financing, which was converted into permanent financing with HUD on June 17, 2010. The new loan bears interest at 2% with semiannual principal and interest payments due February 1 and August 1. The loan matures on August 1, 2018. At December 31, 2014, $1,893 million is outstanding. $455,000 is due in 2015. The loan is secured by pledged tax increment revenues of the project.
In 2010, the URA received a $10,000,000 HUD Section 108 loan to provide funding for the East Liberty Portal Project (the Project). The loan bears interest at 3.30% and is interest only until maturity on August 1, 2019. The proceeds of the loan were used to provide a portion of the financing for the Project through certain qualified community development entities (CDEs). The loan is secured by a note receivable and a Pledge and Assignment of CDE membership interest to URA which is expected to generate proceeds to repay the note receivable and HUD 108 loan once the property is sold. Additional collateral includes a partial personal guarantee from the developer and two pledged reserve accounts. The loan is also secured by the URA's future Community Development Block Grant grants. The note receivable bears interest at 5% and principal is due on August 1, 2018. Any excess of interest received on the note receivable over interest paid on the HUD 108 loan must be held in trust until the HUD 108 loan is repaid in full.
Annual debt service requirements on outstanding bonds and loans of the URA are as follows:
Years Principal Interest Total
2015 $ 2,314,557 $ 1,323,035 $ 3,637,592 2016' 2,214,052 1,289,199 3,503,251 2017 1,742,527 1,224,829 2,967,356 2018 2,279,615 1,167,235 3,446,850
2019 13,571,510 1,360,147 14,931,657
2020-2024 8,441,458 2,613,854 11,055,312
2025-2029 9,314,740 376,435 9,691,175
2030-2034 700,000 94,875 794,875 2035-2036 325,000 12,250 337,250
$ 40,903,459 $ 9,461,859 $ 50,365,318
85
CITY OF PITTSBURGH, PENNSYLVANIA
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 2014
URA Component Unit Debt consists of the following:
PHDC-Bank Loans
The PHDC had outstanding construction loans payable to banks of $237,220. Interest accrues on the loans at rates that range from 4.00% to 4.25%. Loans are due on demand.
Future Maturities
Loans payable to the URA from PHDC are $1,733,604. For reporting purposes, this activity is netted on the Combing Statement of Net Position - Components Units.
All interest expense on loans of the URA and its component units is reported as program expense as the borrowings are essential to the programs and the financial statements would be misleading to exclude these charges as direct expenses.
(F) Other Long-Term Obligations
The following is a summary of transactions affecting other long-term obligations of the City during 2014:
Accrued Accrued Accrued Capital Workers' Compensated Claims and Lease
Compensation Absences Judgments Obligation
Balance, January 1, 2014 $ 131,874,828 $ 28,616,530 $ 14,216,000 $ 10,080,874 Additions 14,779,258 13,805,030 15,575,000 -
Reductions/payments (15,471,884) (12,988,907) (6,360,000) (742,284)
Balance, December 31, 2014 131,182,202 29,432,653 23,431,000 9,338,590 Less amounts accrued
within short-term (15,741,864) (19,383,759) (6,131,000) (788,067)
Long-term portion, December 31, 2014 $ 115,440,338 $ 10,048.894 $ 17,300,000 $ 8,550,523
1. The General Fund is used to liquidate the workers' compensation, compensated absences, claims andjudgments, and capital lease obligations.
2. Commencing on July 3, 2002, the City entered into a twenty year, noncancelable (unless there is a default of the terms by either party) lease for office space to be used by the Department of Public Safety, Police Bureau. The lease includes additional renewal options to extend the lease for four consecutive terms of five years each. The terms of the lease did not start until the Police Bureau took possession of the property in March 2004. The first lease payment was made for March 2004. $15,434,653 is included in capital assets as capital leases.
86
CITY OF PITTSBURGH, PENNSYLVANIA
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 2014
3. The minimum future rental payments required by the lease are as follows:
Year Ended
December 31,
2015 $ 1,385,300
2016 1,385,300
2017 1,385,300
2018 1,524,600
2019 1,524,600
2020-2023 5,959,100
Total 13,164,200
Less interest: (3,825,610)
Present value $ 9,338,590
During the first quarter of 2014, the City offered a Severance Incentive Program (SIP) to all eligible employees. A SIP eligible employee was a non-union, non-uniform employee who was in good standing and whose combined age and years of service equaled or exceeded a sum of 70 years. Approximately 180 employees were eligible and 65 accepted the offer. Total cost for the SIP is $3,667,381. The amounts to be paid out in 2015 and 2016 are $1,767,292 and $441,823, respectively.
10. Due From/To Other Governments
(A) Due From Other Governments
The City receives funds from various government agencies as reimbursements for their share of City projects and as grants for City programs. The following amounts, as described below, are due from other governments at December 31, 2014:
87
CITY OF PITTSBURGH, PENNSYLVANIA
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 2014
General Fund:
Commonwealth of Pennsylvania $ i ,424,843
Special Revenue CDBG:
Housing and Urban Development 1,347,996
Other Governmental Funds:
Regional Asset District 268,430 Capital Projects:
Commonwealth of Pennsylvania - Highway Fund 55,051 Federal Government - Highway Fund 1,761,106
1,816,157
Total due from other governments - governmental funds $ 4,857,426
(B) Due To Other Governments
Funds are collected by the City on behalf of other governments. The following amounts, as described below, are due to other governments at December 31, 2014:
General Fund:
Carnegie Library $ 154,186 Pittsburgh Board of Education 819,658
973,844
Other Governmental Funds:
Commonwealth of Pennsylvania 921,977 Federal Government - HUD 2,338,013
3,259,990
Total due to other governments - governmental funds $ 4,233,834
11. INTERFUND RECEIVABLE AND PAYABLE BALANCES
Due From
Due To:
General
Other Governmental
Capital Projects
Capital Other Special Revenue General Projects Governmental CDBG Total
$ $ $ 546,512 $ 150,162 $ 696,674 863,891 153,094 - - 1,016,985
- - - 1,364,873 1,364,873
$ 863,891 $ 153,094 $ 546,512 $ 1,515,035 $ 3,078,532
88
CITY OF PITTSBURGH, PENNSYLVANIA
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 2014
Except as described below, interfund balances represent timing differences resulting from the difference between the dates that (1) interfund goods and services are provided or reimbursable expenditures occur, (2) transactions are recorded in the accounting system, and (3) payments are made.
The Capital Projects Fund advanced funds to the CDBG Special Revenue Fund in the amount of $1.3 million, which is included in the total above.
12. Transfers
Transfers between primary government funds:
Transfer From
General
Other
Governmental Total
Transfer To:
General Fund $ $ 2,315,000 $ 2,315,000 Debt Service 87,000,546 - 87,000,546 Capital Projects 25,500,000 - 25,500,000 Other Governmental 718,203 45,285 763,488
Total $ 113,218,749 $ 2,360,285 $ 115,579,034
Transfers are used (1) to move revenues from the funds that are required by statute or budget to collect them to the ftinds that are required by statute or budget to spend them, (2) to move receipts restricted for debt service from the funds collecting them to the Debt Service Fund as debt service payments become due and (3) to move unrestricted revenues collected in the General Fund, which finance various programs accounted for in other funds in accordance with budgetary authorizations.
13. Net Position Deficit
Stadium Authority Deficit
The net position deficit of the Stadium Authority of $3,389,350 is expected to be subsidized through future revenues.
PWSA Deficit
The net position deficit of PWSA of $59,130,000 is expected to be subsidized through future rate increases.
89
CITY OF PITTSBURGH, PENNSYLVANIA
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 2014
14. Related Party Transactions
(A) Under the terms of agreements dated July 1, 1965 and amended on various dates through June 17, 1992, the City of Pittsburgh made total grants of $22,775,168 to the Stadium Authority to cover the excess of the aggregate cost of operation and maintenance of the stadium and debt service on the stadium bonds over the total funds available to the Stadium Authority for those purposes, to be repaid if funds are available. The Stadium Authority has this reflected as a long-term note due to the City. However, the City does not have a corresponding receivable recorded due to the unlikelihood of collection.
(B) The URA, acting as the City's agent under a 1981 cooperation agreement, made two loans from prior years' Urban Redevelopment Action Grant (UDAG) funds to a development company to assist in the construction of the Parkway Center Mall in the City's West End, which was completed in November 1982. Neither of these loans are reflected as a receivable in the City's financial statements due to the contingent nature of repayments and unspecified terms when the loans were made.
The loans were evidenced by two notes, a $2,000,000 note funded by UDAG funds dated April 2, 1984, as amended by amendments dated July 13, 1992 and December 17, 1993 to finance construction of the mall (UDAG Note) and a $6,971,172 note funded by non-UDAG funds to construct highway ramps to connect the mall with 1-279 (Improvements Note). The Improvements Note dated April 2, 1984 and following amendments dated May 31, 1984 and July 13, 1992, was replaced and superseded by a Second Amended and Restated Note dated December 17, 1993. The Second Amended and Restated Note provided that payments made by the borrower on the Improvements Note would also be credited toward reducing principal and interest on the UDAG Note. As a result, the UDAG Note is now deemed to be paid in full.
As a result of a Modification Agreement dated August 10, 2005, the Improvements Note became an equity participation loan on June 1, 2009. The outstanding principal balance is $4,936,275. No payments are due except from net proceeds of the operation of the mall, refinancing or sale. No payments were made in 2014.
(C)In February 2000, the Parking Authority and the City amended the cooperation agreement between them dated February 5, 1995. Among other things, the amended cooperation agreement increased the Parking Authority's annual payment in lieu of real estate taxes to the City from $1.4 million to $1.9 million. Under the terms of the agreement, however, the payment to the City is made only upon the Parking Authority successfully meeting its annual debt service requirements, determined each year on December 15. This amendment effectively subordinates the Authority's annual payment in lieu of taxes, providing additional security for Authority bondholders. The City has agreed that the annual payment in lieu of real estate taxes will be offset for two items. In June 2005, the Parking Authority paid off outstanding URA Bonds on the Oliver Parking Facility with proceeds from the June 2005 Refunding Series. Since the URA Bonds were paid in full, the Oliver Parking Tax TIF lapsed. In consideration of the increase in parking taxes received by the City for the Oliver Garage as a result of the lapsed TIF, the City agreed to a reduced payment in lieu of real estate taxes in amount equal to the Oliver Garage Parking Tax, being revenue neutral for both parties. The reduction has reduced the annual
90
CITY OF PITTSBURGH, PENNSYLVANIA
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31,2014
payment in lieu of real estate taxes from $1.9 million to $1,301,716 for the year ended December 31, 2014. Effective for 2015, the City and the Authority amended the Cooperation Agreement, eliminating the reduction to the payment in lieu of real estate taxes by the Oliver Garage Parking. The payment will be due on March 15th of each year.
Beginning in 2015, the City and the Authority have also agreed, in the event that total amounts of all payments from the Authority to the City (excluding parking tax payments), exceeds $18.5 million with respect to any fiscal year of the Authority, any such excess amounts will be split equally by the City and the Authority. The parties also agree to negotiate in good faith beginning in 2019, a reduction to the $18.5 million beginning in 2020, to allow the Authority to engage in long-term capital needs planning.
At the City's request, the Parking Authority Board authorized additional payments of $2.6 million to the City of Pittsburgh, provided the Authority was able to meet its debt service ratio coverage. The Authority made the additional payments of $2.6 million dollars to the City in 2014.
15. Construction and Lease Commitments
As of December 31, 2014, the City had the following commitments with respect to unfinished capital projects:
RemainingConstruction Capital Project Commitment
Penn Ave. Reconstruction, Phase I $ 2,496,556 Reconstruction of Brookline Blvd 291,406
Forbes-Market Reconstruction 4,405,141 CBD Signalization 39,787 Charles Anderson Bridge 34,577 Automated Fuel Management System 277,455 South Side Market House HVAC 189,684 South Side Market House General 142,034
$ 7,876,640
Component Units:
PWSA is proceeding with a capital improvement program which the PWSA's independent engineer has estimated will entail expenditure of the existing construction funds and potential future bond issues. As of December 31, 2014, budgeting $75 million from the Series 2013 bond issue is committed for the 2014-2016 capital improvement program.
PWSA has contracted with Veolia Water North America (Veolia), an outside management company to direct its operations. Monthly payments under the contract for 2014 were $135,000. In addition, there are various Key Performance Indicators (KPIs) and OPEX initiatives which Veolia will be
91
CITY OF PITTSBURGH, PENNSYLVANIA
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 2014
paid for if or when the requirements are met. During 2014, payments to Veolia for KPIs and OPEX totaled approximately $3.1 million. During November 2014, the Authority contracted with Veolia for the term January 1, 2015 through December 31, 2015 (unless earlier terminated) with two optional 6 month extensions. Veolia will be paid between $100,000 and $120,000 per month for the calendar year 2015, $75,000 per month for the first optional 6 month extension, and $50,000 per month for the second optional 6 month extension.
At December 31, 2014, the URA had entered into contracts for professional services and construction totaling approximately $7.8 million. These commitments include: approximately $800,000 for the Bakery Square project; approximately $610,000 for the Downtown Preservation project; approximately $4.7 million for the East Liberty project, approximately $450,000 for the SS Marina parking lot project, and the remaining contract commitments are for various smaller projects.
16. Regional Asset District Revenues
In December 1993, the Commonwealth legislature approved Act 77 of 1993 authorizing the creation of RAD by Allegheny County. RAD is a special purpose district whose primary purpose is to provide support and financing for regional community assets that were historically funded by the City, Allegheny County, or local municipalities. The City does not include RAD within its reporting entity since the City is not financially accountable for RAD's operations. These community assets include regional parks of the City and Allegheny County, municipal libraries, the Pittsburgh Zoo, the National Aviary, Phipps Conservatory, the old Three Rivers Stadium debt, PNC Park, Heinz Field, and community cultural facilities.
RAD revenue allocated to the City totaled approximately $26 million in 2014. The City allocated approximately $1.6 million to park operations.
The City has irrevocably allocated/pledged a portion of its future Regional Asset District revenues to the URA for the establishment of the Pittsburgh Development Fund. As further discussed in Note 9, the Pittsburgh Development Fund is an economic development fund that is used for making loans to and investments in certain projects located within the City. The amounts are pledged for 19 years, with $6,200,000 annually allocated for the first nine years and $7,500,000 annually through 2014.
17. CONTINGENCIES
The City has been named as a defendant in a number of lawsuits arising in the ordinary course of its operations against which the City is not insured. In the opinion of the City Solicitor, adequate accrual has been made in the financial statements for such lawsuits.
There are currently a number of real estate appeals in process for which the outcome and possible further reduction in the real estate tax levy cannot be determined at this time. The City has accrued an estimate for tax refunds within accounts payable on the statement of net position and governmental funds (general) balance sheet.
92
CITY OF PITTSBURGH, PENNSYLVANIA
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 2014
The City receives federal and state grants under a number of programs. The expenditures of the City under such programs are subject to audit and possible disallowance. Historically, such audits have not resulted in significant disallowances of program costs, and City management believes that audits of existing programs will not result in significant liability to the City. Any contingent liability accrual deemed appropriate has been reflected in the financial statements as presented.
Component Units
The PWSA is subject to federal regulation under the Clean Water Act (1977) and regulations adopted under that Act. Among the specific requirements applicable to the PWSA's system are those imposed by the United States Environmental Protection Agency's Combined Sewer Overflow (CSO) Policy (1994). On January 29, 2004, the PWSA and the City of Pittsburgh executed a Consent Order and Agreement (Order) regarding wet weather sewer overflows within the City. The other signatories to the Order are the Pennsylvania Department of Environmental Protection (DEP) and the Allegheny County Health Department (ACHD).
Generally, the Order requires the PWSA and the City to assess the City sewers in order to develop a plan with ALCOSAN to address wet weather sewer overflows within the City. The Order is part of a sewer assessment program for all municipalities served by ALCOSAN. To date, assessment activities have been completed for all accessible critical sewers and separate sanitary sewers with the exception of any additional sewers discovered through continued research and investigation. Ongoing pipe and manhole repairs are being completed in order to provide CCTV access to remaining inaccessible critical/sanitary sewer pipes. Assessment activities for non-critical sewers are to be completed on a longer schedule, including completing CCTV at an annual average rate that was utilized to complete the critical/sanitary televising. The majority of accessible non-critical manholes have been inspected with ongoing efforts to complete any remaining or newly identified. In addition to the assessment, the Order requires the PWSA and the City to implement the Nine Minimum Controls to reduce combined sewer overflows, and to perform repairs and maintenance of deficiencies revealed by the assessment. The PWSA maintains an expedited response to significant structural failures of the sewer system where imminent structural failures are determined by a professional engineer and prioritized for repair. Ongoing sewer line replacement, point repair, lining, point lining, and Gunite projects have been implemented to address structural deficiencies.
Given the scope of the Order, the size of the City sewer system, and the various conditions and/or deficiencies that may be discovered by the assessment, it is difficult to predict the total cost of compliance with the Order. Moreover, it is difficult to predict what, if any, large-scale and/or regional capital improvements may be required after the completion of the assessment to address wet weather sewer overflows in the City and in the ALCOSAN service area. The Authority hired two engineering firms to assess and model the sewer system, and submitted its plans to comply with the Order to DEP in July of 2013 as required. The Authority, along with the other impacted local municipalities, is awaiting a response from DEP on its proposed plan. Costs associated with Order compliance will be reflected in the capital improvement program and funded by proceeds of potential future bond issuances.
During 2013, a complaint was filed against the Authority arising out of a flooding incident that occurred in August 2011 on Washington Boulevard, at the intersection of Negley Run Road and
93
CITY OF PITTSBURGH, PENNSYLVANIA
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 2014
Allegheny River Boulevard in the City of Pittsburgh. The plaintiffs have asserted that the Authority was negligent in the maintenance and operations of the sewer lines beneath Washington Boulevard. The Authority has recorded a provision for their liability limitation on the statement of net position.
18. Risk Management
The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; and natural disasters. The risk of loss to which the City is exposed for the above mentioned items is handled through various insurance coverages. As of December 31, 2014, there were no settlements exceeding coverage for the past three years. The City also covers certain claim settlements and judgments from its General and Capital Projects Fund resources due to the prohibitive cost of carrying certain commercial insurance. The City currently reports all risk management activities out of its General Fund. Claims liabilities are reported when it is probable that a loss has occurred and the amount of that loss can be reasonably estimated. These losses include an estimate of claims that have been incurred but not reported. Provisions are recorded within current liabilities for amounts payable within one year. Amounts not payable within one year are reported within long-term liabilities.
Changes in the accrued claims and judgments liability during the year ended December 31, 2014 are as follows:
Accrued claims and judgments, January 1 $ 14,216,000 Current year claims 15,575,000 Claim payments (6,360,000)
Accrued claims and judgments, December 31 $ 23,431,000
These accruals are subject to potential losses in excess of the amount recorded at year-end; it is unlikely that the amount for such potential losses would be material.
Also, the City is fully self-insured for workers' compensation benefits. The City monitors its liability through periodic actuarial studies. A self-insurance reserve fund in the amount of $339,052 (classified as restricted within the General Fund) is maintained, due to a legal requirement under self-insurance regulations of the State of Pennsylvania, in the General Fund.
Changes in the accrued workers' compensation liability during the year ended December 31, 2014 are as follows:
Accrued worker's compensation, January 1 $ 131,874,828 Current year claims 14,779,258 Claim payments (15,471,884)
Accrued worker's compensation, December 31 $ 131,182,202
94
Required Supplementary Information
Required Supplementary Information - Pension Trust Fund
Disclosures - GASB Statement No. 67
CITY OF PITTSBURGH, PENNSYLVANIA
SCHEDULES OF REQUIRED SUPPLEMENTARY INFORMATION -
PENSION PLAN
SCHEDULE OF CHANGES IN THE CITY'S NET
PENSION LIABILITY AND RELATED RATIOS
PENSION PLAN
YEAR ENDED DECEMBER 31, 2014
Total Pension Liability; Service cost $ 22,015,630 Interest 87,049,771 Benefit payments, including refunds of member contributions (87,394,443)
Net Changes in Total Pension Liability 21,670,958
Total Pension Liability - Beginning 1,181,555,230
Total Pension Liability - Ending (a) $ 1,203,226,188
Plan Fiduciary Net Position;
Contributions - employer $ 51,914,297 Contributions - member 10,909,251 Net investment income 24,302,368 Benefit payments, including refunds of member contributions (87,394,443) Administrative expense (1,271,604) Other 3,263,901
Net Change in Plan Fiduciary Net Position 1,723,770
Plan Fiduciary Net Position - Beginning 390,341,693
Plan Fiduciary Net Position - finding (b) $ 392,065,463
Net Pension Liability - Ending (a-b) $ 811,160,725
Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 32.58%
Covered Employee Payroll $ 202,853,143
Net Pension Liability as a Percentage of Covered Employee Payroll 399.88%
See accompanying notes to required supplementary schedules.
95
CITY OF PITTSBURGH, PENNSYLVANIA
SCHEDULES OF REQUIRED SUPPLEMENTARY INFORMATION PENSION PLAN
SCHEDULE OF TEDE CITY'S CONTRIBUTIONS
AND INVESTMENT RETURNS
YEAR ENDED DECEMBER 31, 2014
Schedule of City's Contributions
Actuarially determined contribution $ 31,438,297 Contributions in relation to the actuarially determined contribution 51,914,297 Contribution deficiency (excess) $ (20,476,000)
Covered employee payroll $ 202,853,143
Contributions as a percentage of covered employee payroll 25.59%
Investment Returns
Annual money-weighted rate of return, net of investment expense 6.48%
See accompanying notes to required supplementary schedules.
96
CITY OF PITTSBURGH, PENNSYLVANIA
NOTES TO SCHEDULES OF REQUIRED SUPPLEMENTARY INFORMATION - PENSION PLAN
YEAR ENDED DECEMBER 31, 2014
Pension Information
Actuarial Methods and Assumptions Used in Calculation of Actuariallv Determined Contribution
The contribution and contribution rate information presented in the required supplementary pension schedules was determined as part of the actuarial valuations at the dates indicated. Additional information as of the latest actuarial valuation follows:
Municipal Policemen Firemen
Actuarial valuation date 1/1/2013 1/1/2013 1/1/2013
Actuarial cost method Entry Age Entry Age Entry Age Normal Normal Normal
Amortization method Level Dollar Level Dollar Level Dollar
Closed Closed Closed
Amortization period 30 years 30 years 30 years
Asset valuation method Tabular Tabular Tabular
Smoothing Smoothing Smoothing
Actuarial assumptions: Investment rate of return 7.50% 7.50% 7.50%
Projected salary increases 4.00% 4.50% 5.75%
Inflation rate 3.00% 3.00% 3.00%
Merit and longivity increases 1.00% 1.50% 2.75%
The actuarially determined contribution of $31.4 million is based on the City's actuarially prepared Minimum Municipal Obligation under PAAct 205 as amended and the contribution excess includes $13.4 million in payments originating from dedicated parking revenue and $7.1 million originating from gaming revenue.
There were no benefit changes or changes in actuarial assumptions made in connection with the rollforward of the 1/1/2013 actuarial valuation.
97
^ ID Q o
,¥LV.^
Tur i.ni
Required Supplementary Information - Employer Pension
Plans and OPEB Disclosures
D
D) E
CITY OF PITTSBURGH, PENNSYLVANIA PENSION TRUST FUNDS
SCHEDULES OF FUNDING PROGRESS
(Dollar Amounts in Thousands)
Actuarial Excess of Excess as a
Actuarial Actuarial Accrued Assets Percentage Valuation Value of Liability (AAL) Over (Under) Funded Covered of Covered
Date Assets • Entry Age AAL Ratio Payroll Payroll
Municioal:
1/1/2003 $ 91,604 $ 212,206 $ (120,602) 43.17% $ 69,034 -174.70% 1/1/2005 109,791 234,134 (124,343) 46.89% 67,412 -184.45% 1/1/2007 117,692 237,314 (119,622) 49.59% 70,189 -170.43% 1/1/2009 115,323 267,616 (152,293) 43.09% 73,072 -208.41% 1/1/2011 132,461 282,683 (150,222) 46.86% 81,444 -184.45% 1/1/2013 202,530 324,697 (122,167) 62.38% 81,916 -149.14%
Policemen:
1/1/2003 $ 106,340 $ 323,466 $ (217,126) 32.88% $ 54,308 -399.80% 1/1/2005 117,822 353,479 (235,657) 33.33% 50,253 -468.94%
1/1/2007 114,889 353,522 (238,633) 32.50% 54,862 -434.97% 1/1/2009 105,565 387,858 (282,293) 27.22% 63,787 -442.56% 1/1/2011 127,118 390,254 (263,136) 32.57% 67,225 -391.43% 1/1/2013 248,872 440,022 (191,150) 56.56% 68,562 -278.80%
Firemen:
1/1/2003 $ 114,527 $ 230,092 $ (115,565) 49.77% $ 54,006 -213.99% 1/1/2005 145,995 255,770 (109,775) 57.08% 56,591 -193.98% 1/1/2007 142,787 308,412 (165,625) 46.30% 47,573 -348.15% 1/1/2009 118,292 334,060 (215,768) 35.41% 47,509 -454.16% 1/1/2011 133,839 339,135 (205,296) 39.46% 49,516 -414.61% 1/1/2013 224,051 395,324 (171,273) 56.68% 52,375 -327.01%
Total:
1/1/2003 $ 312,471 $ 765,764 $ (453,293) 40.81% $ 177,348 -255.60% 1/1/2005 373,608 843,383 (469,775) 44.30% 174,256 -269.59% 1/1/2007 375,368 899,248 (523,880) 41.74% 172,624 -303.48% 1/1/2009 339,180 989,534 (650,354) 34.28% 184,368 -352.75% 1/1/2011 393,418 1,012,072 (618,654) 38.87% 198,185 -312.16% 1/1/2013 675,453 1,160,043 (484,590) 58.23% 202,853 -238.89%
Note 1:1/1/2011 reflects the valuation dated August 31,2011. Note 2: The 1/1/2013 valuation presents assets reflected in the pension financial statements along with the dedicated stream of
revenues created by Ordinances 42 and 44 of 2010, treated as an asset for purposes of submission to the Commonwealth of PA for Act 205 of 1984 and Commonwealth of PA Act 44 of 2009.
See accompanying note to required supplementary pension schedules.
98
CITY OF PITTSBURGH, PENNSYLVANIA PENSION TRUST FUNDS
SCHEDULES OF CONTRIBUTIONS FROM EMPLOYERS
AND OTHER CONTRIBUTING ENTITIES
(Dollar Amounts in Thousands)
Calendar
Year
Annual
Required
Contributions
Employer
Contributions
Employer
Contributions as
a Percentage of
Annual Required
Contributions
Commonwealth
of
Pennsylvania
Pension Aid (1)
Commonwealth
of Pennsylvania
Pension Aid as
a Percentage of
Annual Required
Contributions
Total
Contributions
Total
Contributions
as a Percentage
of Annual
Required
Contributions
Municioal:
2009 $ 10,158 $ 4,589 45.2% $ 5,569 54.8% $ 10,158 100.0% 2010 10,334 19,678 190.4% 3,568 34.5% 23,246 224.9% 2011 10,637 8,766 82.4% 6,156 57.9% 14,922 140.3% 2012 7,851 9,934 126.5% 4,322 55.1% 14,256 181.6% 2013 10,166 6,370 62.7% 6,790 66.8% 13,160 129.5% 2014 10,179 8,707 85.5% 4,818 47.3% 13,525 132.9%
Policemen:
2009 $ 20,241 $ 14,584 72.1% $ 5,657 27.9% $ 20,241 100.0% 2010 20,429 38,899 190.4% 7,053 34.5% 45,952 224.9% 2011 21,028 17,337 82.4% 12,169 57.9% 29,506 140.3% 2012 11,599 14,682 126.6% 6,383 55.0% 21,065 181.6% 2013 16,422 11.422 69.6% 6,658 40.5% 18,080 110.1% 2014 16,575 12,239 73.8% 6,707 40.5% 18,946 114.3%
Firemen:
2009 $ 14,116 $ 10,312 73.1% $ 3,804 26.9% $ 14,116 100.0% 2010 14,408 27,436 190.4% 4,974 34.5% 32,410 224.9% 2011 14,831 12,228 82.4% 8,583 57.9% 20,811 140.3% 2012 11,273 14,270 126.6% 6,203 55.0% 20,473 181.6%
2013 14,159 13,819 97.6% 4,575 32.3% 18,394 129.9%
2014 14,429 12,704 88.0% 6,738 46.7% 19,442 134.7%
Total:
2009 $ 44,515 $ 29,485 66.2% $ 15,030 33.8% $ 44,515 100.0%
2010 45,171 86,013 190.4% 15,595 34.5% 101,608 224.9%
2011 46,496 38,331 82.4% 26,908 57.9% 65,239 140.3%
2012 30,723 38,886 126.6% 16,908 55.0% 55,794 181.6%
2013 40,747 31,611 77.6% 18,023 44.2% 49,634 121.8%
2014 41,183 33,650 81.7% 18,263 44.3% 51,913 126.1%
(1) Allocation of State funding is based upon State-determined eligibility units for each plan.
See accompanying note to required supplementary pension schedules.
99
CITY OF PITTSBURGH, PENNSYLVANIA
NOTE TO REQUIRED SUPPLEMENTARY PENSION SCHEDULES
YEAR ENDED DECEMBER 31, 2014
The information presented in the required supplementary pension schedules was determined as part of the actuarial valuations at the dates indicated. Additional information as of the latest actuarial valuation follows:
Municipal Policemen Firemen
Actuarial valuation date 1/1/2013 1/1/2013 1/1/2013
Actuarial cost method Entry Age Entry Age Entry Age Normal Normal Normal
Amortization method Level Dollar Level Dollar Level Dollar
Closed Closed Closed
Remaining amortization period 30 years 30 years 30 years
Asset valuation method Tabular Tabular Tabular
Smoothing Smoothing Smoothing
Actuarial assumptions: Investment rate of return 7.50% 7.50% 7.50%
Projected salary increases 4.00% 4.50% 5.75% Cost-of-living adjustments 3.00% 3.00% 3.00% Merit and longivity increases 1.00% 1.50% 2.75%
100
C IT
Y O
F P
IT T
S B
U R
G H
, P
E N
N S
Y L
V A
N IA
S C
H E
D U
L E
O F
F U
N D
IN G
P R
O G
R E
S S
O T
H E
R P
O S
T E
M P
L O
Y M
E N
T B
E N
E F
IT P
L A
N S
Y E
A R
E N
D E
D D
E C
E M
B E
R 3
1 .2
0 1
4 (D
ol la
rA m
ou nt
s in
T ho
us an
ds )
A c tu
a ri
a l
V a lu
a ti
o n
D a te
(a )
A c tu
a ri
a l
V a lu
e o
f A
s s e t
(b )
A c tu
a ri
a l
A c c ru
e d
L ia
b il
it y
(O v
er fu
n d
ed )
U n
fu n
d e d
A c tu
a ri
a l
A c c ru
e d
L ia
b il
it y
(a ^
) F
u n
d e d
R a ti
o
(c )
C o
v e re
d
P ay
ro ll
(O v
er fu
n d
ed )/
U n
fu n
d ed
A c tu
a ri
a l
A c c ru
e d
L ia
bi li
ty (b
-a )
as a
P er
ce nt
ag e
o f
C o
v er
ed P
ay ro
ll ((
b -a
)/ c)
0 1
/0 1
/0 8
$ $
3 5
9 ,1
4 0
$ 3
5 9
,1 4
0 0
.0 %
$ 1
7 2
,6 2
4 2
0 8
.0 5
% 0
1 /0
1 /1
0 -
4 8
8 ,6
3 1
4 8
8 ,6
3 1
0 .0
% 1
8 4
,3 6
8 2
6 5
.0 3
% 0
1 /0
1 /1
2 -
4 9
5 ,7
6 1
4 9
5 ,7
6 1
0 .0
% 1
9 8
,1 8
5 2
5 0
.1 5
% 0
1 /0
1 /1
4 6
,1 5
2 5
7 0
,2 6
3 5
6 4
,1 1
1 1
.1 %
2 0
2 ,8
5 3
2 7
8 .0
9 %
N o
te 1:
C o
v er
ed pa
yr ol
l re
fl ec
ts in
fo rm
at io
n fr
om P
en si
o n
F u
n d
A ct
u ar
ia l
V al
u at
io n
s.
1 0
1
E
Supplementary Information
Combining and Individual Other Fund
Statements and Schedules
D) D
Assets
Cash and cash equivalents Other receivables
Due from other governments Due from other funds
Total Assets
Liabilitiesand Fund Balance
Liabilities: Account payable Accrued liabilities
Due to other funds
Due to other governments
Total Liabilities
Fund Balance: Restricted - State and Federal Purpose Grants Committed - Specified Program Services Assigned - encumbrances
Total Fund Balance
Total Liabilities and Fund Balance
CITY OF PITTSBURGH, PENNSYLVANIA COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
DECEMBER 31,2014
Equipment
Leasing
Authority
Liquid
Fuels
Tax JTPA
$ 824,497 $ 2,030,659 $ 2,846,209 $
Public
Safety
8,032,951
626,190
20,081
Civic and
Cultural
7,899,633
185,108
268,430
843,810
Grants and
Donations
2,728,714
259,770
153,094
Total
$ 24,362,663 1,071,068
268,430
1,016,985
S 824,497 $ 2,030,659 $ 2,846.209 $ 8,679.222 $ 9,196.981 $ 3,141,578 $ 26,719.146
$ 235,305 $ 388,643
235,305 388,643
589,192 1,642,016
589,192 1,642,016
87,797
193,915 201,914
2,338,013
2,821,639
24,570
24,570
73,609 232,713
921,977
1.228,299
1,621,971
5,778,400
50,552
7,450,923
75,961
548,981 111,885
736,827
1,983,743
6,083,783 392,628
8,460,154
54,108
54,108
3,087,470
3,087,470
399,063
1,259,256
546,512
3.259.990
5,464.821
8,359,770
12.451,375
443,180
21,254.325
$ 824.497 $ 2,030.659 $ 2,846,209 $ 8,679,222 $ 9,196,981 $ 3,141,578 $ 26,719,146
102
CITY OF PITTSBURGH, PENNSYLVANIA COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE
NONMAJOR GOVERNMENTAL FUNDS
YEAR ENDED DECEMBER 31,2014
Equipment Liquid Leasing Fuels Public Civic and Grants and
Authority Tax JTPA Safety Cultural Donations Total Revenues:
Taxes, including penalties and interest $ $ $ - $ $ 5,232,451 $ $ 5,232,451 Interest and dividends - 1,667 35 1,702 Fines and forfeits
- - - 967,990 . . 967,990 Intergovernmental revenues
- 6,233,245 2,645,606 447,155 423,166 2,984,984 12,734,156 Charges for user services - - - 3,666,271 2,488,972 6,155,243 Miscellaneous 494,812 - - 12,205 - 822,803 1,329,820
Total revenues 494,812 6,234,912 2,645,606 5,093,656 8,144,589 3,807,787 26,421,362
Expenditures: General government 2,902,610 - 2,645,606 41,576 274,064 305,051 6,168,907 Public safety - - - 4,256,335 - 201,061 4,457.396 Public works - 2,283,202 - . 4,745,386 109,794 7,138,382 Community, recreational, and cultural - - - . 2,057,871 2,057,871 Economic and physical development
- - - - - 3,236,771 3,236,771
Total expenditures 2,902,610 2,283,202 2,645,606 4,297,911 7,077,321 3,852,677 23,059,327
Excess (Deficiency) of Revenues Over Expenditures (2,407,798) 3,951,710 - 795,745 1,067,268 (44,890) 3,362,035
Other Financing Sources (Uses): Transfers in 763,488 - - - - - 763,488 Transfers out
- (2,315,000) - - - (45,285) (2,360,285)
Total other financing sources (uses) 763,488 (2,315,000) _ _ (45,285) (1,596,797)
Net Change in Fund Balance (1,644,310) 1,636,710 - 795,745 1,067,268 (90,175) 1,765,238
Fund Balance:
Beginning of year 2,233,502 5,306 24,570 6,655,178 7,392,886 3,177,645 19,489,087
End of year $ 589,192 $ 1,642,016 $ 24,570 $ 7,450,923 $ 8,460,154 $ 3,087,470 $ 21,254,325
103
CITY OF PITTSBURGH, PENNSYLVANIA
COMBINING STATEMENT OF NET POSITION
PENSION TRUST FUNDS
DECEMBER 31,2014
Comprehensive Municipal Policemen's Firemen's Trust Fund Fund Fund Total
Assets
Cash and cash equivalents $ 7,205,852 $ 150,871 $ 3,139,796 $ 20,183 $ 10,516,702 Investments:
Preferred and common stock 56,903,721 - - _ 56,903,721 U.S. government and agency obligations 13,051,513 - - - 13,051,513 Corporate and other obligations 35,008,036 - - _ 35,008,036 Mutual funds:
U.S. equities 91,958,257 - - - 91,958,257 Non-U.S. equities 75,717,711 - - - 75,717,711 Fixed income 33,105,385 - - - 33,105,385
Hedge funds 34,265,364 34,265,364 Real estate funds 31,084,310 - - - 31,084,310 Private equity 12,613,223 - - - 12,613,223
Due from (to) other fund (435,783) - 435,783 - - Accrued interest and dividend receivables 502,471 - - - 502,471
Total Assets 390,980,060 150,871 3,575,579 20,183 394,726,693
Liabilities
Benefits and related withholdings payable 2,633,813 2,633,813 Accrued liabilities and other payables - 16,358 - - 16,358 Due to City of Pittsburgh Trust and Agency Fund - - 6,640 4,419 11,059
Total Liabilities 16,358 2,640,453 4,419 2,661,230
Net Position - Restricted for Pension Benefits $ 390,980,060 $ 134,513 $ 935,126 $ 15,764 $ 392,065,463
104
CITY OF PITTSBURGH, PENNSYLVANIA
COMBINING STATEMENT OF CHANGES IN NET POSITION
PENSION TRUST FUNDS
YEAR ENDED DECEMBER 31,2014
Comprehensive Municipal Policemen's Firemen's Trust Fund Fund Fund Total
Additions:
Contributions:
Employer - pension benefits $ 33,650,738 $ $ $ - 35 33,650,738 Employer - other benefits 2,235,506 _ 1,028,395 3,263,901 Plan members 10,909,251 - - 10,909,251 State Aid 18,263,559 - - - 18,263,559
Total contributions 65,059,054 1,028,395 66,087,449
Investment income:
Net increase in fair value of investments 19,411,394 _ _ 19,411,394 Interest and dividends 5,415,225 - - 1,589 5,416,814
Total investment income (loss) 24,826,619 - - 1,589 24,828,208
Investment expense (713,002) - - . (713,002)
Net investment income 24,113,617 - - 1,589 24,115,206
Miscellaneous:
Transfer in - 24,369,681 32,979,798 30,204,000 87,553,479 Other 159,705 18,051 - 9,406 187,162
Total additions 89,332,376 24,387,732 34,008,193 30,214,995 177,943,296
Deductions:
Benefit payments - 23,627,122 32,994,914 29,832,523 86,454,559 Refund of employeecontributions - 555,816 254,730 129,338 939,884 Transfer out 87,553,479 - - . 87,553,479 Administrative expense 407,294 249,160 362,792 252,358 1,271,604
Total deductions 87,960,773 24,432,098 33,612,436 30,214,219 176,219,526
Net Increase (Decrease) in Net Position 1,371,603 (44,366) 395,757 776 1,723,770
Net Position:
Beginning of year 389,608,457 178,879 539,369 14,988 390,341,693
End of year $ 390,980,060 $ 134,513 $ 935,126 $ 15,764 5K 392,065,463
105
CITY OF PITTSBURGH, PENNSYLVANIA
STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
AGENCY FUNDS
YEAR ENDED DECEMBER 31, 2014
Balance at
December 31.2013 Additions Deletions
Balance at
December 31,2014
EMPLOYEE BENEFITS
Assets
Cash and cash equivalents Other assets
$ 13,051,386 71,797
$ 77,713,430 115,815
$ 79,688,918 71,797
$ 11,075,898 115,815
Total Assets $ 13,123,183 $ 77,829,245 $ 79,760,715 S 11,191,713
Liabilities
Accrued liabilities $ 13,123,183 $ 77,829,245 S 79,760,715 $ 11,191,713
Total Liabilities $ 13,123,183 $ 77,829,245 $ 79,760,715 $ 11,191,713
DEPOSITS
Assets
Cash and cash equivalents $ 3,101,472 $ 24,023,248 $ 24,720,187 $ 2,404,533
Total Assets $ 3,101,472 $ 24,023,248 $ 24,720,187 $ 2,404,533
Liabilities
Accrued liabilities
Deposits held in trust $ 2,107,144
994,328 $ 23,414,368
608,880 s 24,100,157
620,030 s 1,421,355
983,178
Total Liabilities $ 3,101,472 $ 24,023,248 $ 24,720,187 $ 2,404,533
OTHER
Assets
Cash and cash equivalents $ 879,293 $ 737,569 $ 435,486 $ 1,181,376
Total Assets $ 879,293 $ 737,569 $ 435,486 $ 1,181,376
Liabilities
Accrued liabilities
Accounts payable $ 871,793
7,500 $ 737,569 $ 435,486 s 1,173,876
7,500
Total Liabilities $ 879,293 $ 737,569 $ 435,486 $ 1,181,376
TOTAL AGENCY FUNDS
Assets
Cash and cash equivalents Other assets
$ 17,032,151 71,797
$ 102,474,247 115,815
$ 104,844,591 71,797
s 14,661,807 115,815
Total Assets $ 17,103,948 $ 102,590,062 $ 104,916,388 $ 14,777,622
Liabilities
Accrued liabilities
Accounts payable Deposits held in trust
$ 16,102,120 7,500
994,328
$ 101,981,182
608,880
$ 104,296,358
620,030
$ 13,786,944 7,500
983,178
Total Liabilities $ 17,103,948 $ 102,590,062 $ 104,916,388 s 14,777,622
106
M ,n.
M¥,
im
CITY OF PITTSBURGH, PENNSYLVANIA
COMBINING SCHEDULE OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL (NON-GAAP BUDGETARY BASIS)
CAPITAL PROJECTS FUND
Revenues:
Intergovernmental
Total revenues
Expenditures: Capital projects:
Engineering and construction Parks and recreation
Public works
General services
Urban Redevelopment Authority Other
Total expenditures
Excess (Deficiency) of Revenues Over Expenditures
Other Financing Sources (Uses); Transfers in
Total other financing sources (uses)
Net Change in Fund Balance
Budget Actual Variance
$ 11,972,730 $ 11,972,730 $
11,972,730 11,972,730
11,723,883 1,925,484 9,798,399
2,463,985 704,273 1,759,712
52,252,297 24,103,048 28,149,249
535,399 129,516 405,883 3,085,000 950,000 2,135,000
26,611,451 5,330,405 21,281,046
96,672,015 33,142,726 63,529,289
(84,699,285) (21,169,996) 63,529,289
25,500,000 25,500,000 .
25,500,000 25,500,000
$ (59,199,285) $ 4,330,004 $ 63,529,289
(Continued)
107
CITY OF PITTSBURGH, PENNSYLVANIA
BUDGETARY COMPARISON SCHEDULE
CAPITAL PROJECTS FUND
YEAR ENDED DECEMBER 31, 2014 (Amounts expressed in thousands)
(Continued)
Explanation of Differences Between Budgetary Inflows and Outflows and GAAP Revenues and Expenditures:
Sources/Inflows of Resources:
Actual amounts (budgetary basis) revenues, net bond proceeds and transfers in from the budgetary comparison statement.
The adjustments to convert to GAAP basis, recording of receivables, revenues, and debt transactions not included in
budget.
Total Capital Projects Fund revenue and other financing sources on GAAP basis as reported on the statement of revenues, expenditures, and changes in fund balance.
Users/Outflows of Revenues:
$ 37,473
Actual amounts (budgetary basis) of expenditures and transfers out from the budgetary comparison statement.
The adjustments to convert to GAAP basis, recording of expenditures, liabilities, and debt transactions not included in budget.
Total Capital Projects Fund expenditures and transfers out as reported on the statement of revenues, expenditures, and changes in fund balance.
108
118,020
$ 155,493
$ 33,143
68,948
$ 102,091
(Concluded)
D)IU
Statistical Section
Statistical Section
This section of the City of Pittsburgh (City) Comprehensive Annual Financial Report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says
Contents Page
Financial Trends
These schedules contain trend information to help the reader understand how the City's financial performance and well-being have changed over time. 109
Revenue Capacity
These, schedules contain information to help the reader assess the City's most significant local revenue sources, the property tax, and the earned income tax. 115
Debt Capacity
These schedules present information to help the reader assess the affordability of the Township's current levels of outstanding debt and the Township's ability to issue additional debt in the future. 120
Demographic and Economic Information
These schedules offer economic and demographic indicators to help the reader understand the environment within which the City's financial activities take place. 129
Operating Information
These schedules contain service and infrastructure data to help the reader understand how the information in the City's financial report relates to the services the City provides and the activities it performs. 133
Sources: Unless otherwise noted, the information in these schedules is derived from the
Comprehensive Annual Financial Report for the relevant year. The City implemented GASB Statement No. 34 in 2002.
Prinuuy Govemmemal Activities; Investedin CapitalAssets,Net of Rdaled Debt Restricted
Unrestricted
TotalPrimary Government Net Position
48,597,817 83,924,440
(554.343.879)
2013
40.908.517
35,528,918
(500.286.687)
CITY OF PITTSBURGH, PENNSYLVANIA
NET POSITION BY COMPONENT
LAST TEN YEARS
ACCRUAL BASIS OF ACCOUNTING
2012
30,418,047 80,232,094
(535.262.684)
2011
43,879,623
18,207,346
(544.694.171)
36,763,941 5,325,151
(603.655.738)
32,478,809 50.937,825
(640.869,765)
2008
28,406,314
50,312,990
(640,595,818)
28,068,983 3,590,593
(623.499.122)
2006
19,855,494
17,410,647
(665.435.571)
S 32,093,268 2,024,893
(729,337.724)
$ (421,821.622) $ (423.849.252) $ (424.612.543) S (482.607.202) S (561.566.646) $ (557.453.131) $ (561.876.514) S (591.839.546) $ (628.169.430) $ (695.219.S63)
109
E»peiM«;
Govenunental Activities;
General government Public safety Highwaysand streets Sanitation
Economicdevelopment Cultural and recreation
Interest on long-term debt and debt subsidies
Totalprimarygovtmmtnl expenses
Program Revenues;
CITY OF PITTSBURGH, PENNSYLVANIA
CHANGES IN NET POSITION
LAST TEN YEARS
ACCRUAL BASIS OF ACCOUNTING
2014 2013 2012 2011 2010 2009 2008 2007 2006 2005
$ 74,786,585 $ 84,139,729 $ 76,848,176 $ 72,151,719 S 71,614,406 $ 68,959,502 S 72,646,015 $ 67,454,774 $ 57,794,631 S 63,221,610 300,400,845 283,064,565 247,872,443 256,878,936 265,453,864 269,028,114 230,989,104 242,305,419 207,121,913 213,197,078
76,957,600 84,122.828 70,901,338 60,616,098 65,409,264 62,239,814 67,275,379 57,079,918 56.458.755 55.024.821 15,237,555 16,179.754 13,934,766 15,570,885 16,830,263 16,905,288 16,568,056 20.615.151 18,398,474 14,693.283 23,201,566 25,125,815 23,355,059 29,713,751 40,566.038 22,208,871 19,732,650 21.227.314 16,056.706 27.981,189 16,047,636 14,061.771 12,102,441 12,300,170 13,104,511 11,680,075 11,818,117 9,218,087 11,754,122 10,516,854 33.349.335 29.031.125 33.561.747 34.804.447 36.743.860 52.693.640 56.511.220 56.806.611 57,886.827 45.374.017
S 539.981.122 S 535.725.587 $ 478.575.970 $ 482.036.006 S 509.722.206 $ 503.715.304 $ 475.540.541 S 474,707,274 $ 425.471.427 S 430,008,852
Governmental Activities;
Charges for services: Geneni government S 19,717,129 S 23,756,687 S 22,041,417 S 22,147.599 S 22,366,390 S 20,792,352 S 20,182,426 S 20,122,440 S 19,621,666 S 17,833,330 Public safety 27,234,697 21.042,591 20,474,148 16,993,800 17,203,765 18,320,376 18,821,117 19.366,360 19,348,266 20,600,780 Highwayand streets 2,743,102 2.943,398 3,271,768 2,780,705 2,190,565 2,858,972 2,983,073 3,013,764 1,702.493 935,553 Sanitation 132,200 96.425 77,555 84,718 102,560 271,931 232,010 501,152 655,512 718,066 Culture and recreation 1,477,166 1.511.920 2,058,061 1,679,201 2,322,421 1,975,903 1,673,694 1,841,009 1.701,979 1,520.052
Operating grants and contributions 53.690.940 59,058,978 67.020,105 94,414,438 65,673,104 62,569,988 72,632,131 65,906,114 50,681,637 43,884,590 Capital grants and contributions 24.519,082 32.275.773 25.776.563 31,865.907 32.006.053 36,680.498 20.766.859 24.720.948 17,611,527 26.728.759
Totalprimary governmentprogram revenues S 129,514,316 S 140.685.772 $ 140,719,617 S 169.966,368 S 141.864.858 s 143,470,020 S 137.291.310 S 135,471,787 $ 111.323,080 s 112.221.130
Net (Expense) Revenue:
Governmental activities s (410,466.806) s (395,039,815) S (337.856.353) $ (312.069.638) s (367,857,348) s (360,245,284) s (338.249.231) s (339.235.487) S (314.148,347) $ (317,787,722)
General Revenues and Other Changes in Net Position:
Governmental Activities:
Taxes;
Real estate s 129,918,499 $ 125,749,849 s 139,203,730 s 135,744,044 s 131,832,591 $ 131,913,614 s 128,532,482 s 129,076,234 s 138,586,332 s 132,619,472 Earned income 86,925,234 82,711,518 75,358,073 74,537,388 70,217,088 67,717,310 65,108,103 57,329,470 50,031,453 48,436,582 Business privilege 17,851 39,539 103,906 231,821 833,142 9,647,008 9,460,665 9,298,694 15,171,511 14,291,935 Local services 14,022,784 13,901,193 14,227,654 16,592,287 13,963,285 13,512,620 13,743,861 16,448,473 16,159,663 16,339,969 Payrollpreparation 56,416,555 54,366,168 51,833,425 51,057,843 46,620,284 46,519,083 46,733,471 44,436,947 41,361,676 38,377,704 Parking 53,248.377 51,986,310 50,920,051 48,242,776 46,655,098 45,299,789 45,920,603 49,294,644 52,098,912 52,241,679 Sales tax from Regional Asset District 27,018,069 24,608,395 26,032,524 20,857,014 20,440,182 20,014,023 20,178,425 20,869,051 20,326,691 20,943,521 Deed transfer 20,114,616 20,739,834 15,575,701 18,729,805 14,108,533 12,283,957 17,071,424 16,677,181 18,033,290 18,170,377 Amusement 14,348,201 13,716.588 11,282.494 13,132,370 10,847,981 11,453,330 11,593,318 8,919,870 8,480,222 10,730,856 Nonprofit payment for munidpal services 2,267,059 2.010.873 4,894,760 3,555,369 294,268 849,978 778,417 5,311,595 5,873,622 5,373,497 Mercantile - - - 1,330 10,051 16,368 34,388 64,609 148,658 358,600 Other 6,026,456 5,801,064 4,960.016 2,403,662 4,922,118 4.609.767 4,145,482 5,130,963 3,820,311 2,861,880
Unrestricted investmentearnings 182,305 97,006 204,587 72,903 244,691 590.130 4,147,306 9,497,563 6,757,044 2,231,226 Donations and endowments 829,298 1,731,297 53,282 4,209,467 287,500 204,000 575,000 482,521 168,209 100 Amortization of bond premium - - - - . - - . 3,035,368 - Miscellaneous 1.159.132 1.597.830 1.200.809 1.661.003 2.467.021 37.691 189.317 2.727.556 1.145.517 1.550.712
Total primarygovernment s 412.494.436 s 399,057,464 s 395,851,012 s 391,029.082 s 363.743.833 s 364.668.668 s 368,212.262 s 375,565.371 s 381,198,479 s 364.528.110
Change in Net Position:
Primary government - govenunental activities $ 2.027.630 s 4,017,649 s 57,994.659 s 78,959,444 s (4,113,515) s 4,423.384 s 29.963.031 s 36,329.884 s 67,050,132 s 46.740,388
no
Function/ProRram
Governmental Activities:
General government Public safety Highways and streets Sanitation
Economicdevelopment Culhiral and recreation
2014
$ 55,325,989
43,029,190 20,902,347
983,805
6,350,537
2,922,448
2013
64,910,815 40,131.320 25,098,423
529,956
6,556,494
3,458.764
Tables
CITY OF PITTSBURGH, PENNSYLVANIA
PROGRAM REVENUES BY FUNCTION/PROGRAM
LAST TEN YEARS
ACCRUAL BASIS OF ACCOUNTING
2012 2011 2010 2009 2008 2007 2006 2005
73,130.821
36,962,644
19,951,205 452,759
6,614,201
3,607,987
85,450,651
40,436,474
32,381,395
657,406
6,017,455
5,022,987
68,630,131
34,577,088 22,453,872
588,240
10,426,726
5.188.801
$ 72,158,419 $ 71,287,551 $ 68,318,461 S 54,018,594 $ 41,685,156 36,872,062
20,333,685
304,727
8,973,109
4,828,018
34,142,202
19,977,958
767,921
5,783,512
5.332.166
33,789,076
19,590,563 573,092
8,149,974 5,050,621
32,358,373
14,037,094
943,637
5,374,674
4.590.708
37,581,019 17,875,858
1,235,374
8,701,367 5,142,356
Total primary government $ 129.514.316 $ 140,685,772 $ 140.719.617 $ 169,966,368 $ 141,864,858 $ 143,470.020 $ 137,291,310 S 135,471.787 $ 111,323,080 S 112.221.130
111
2014
Table 4
CITY OF PITTSBURGH, PENNSYLVANIA
FUND BALANCES, GOVERNMENTAL FUNDS
LAST TEN YEARS
MODEFED ACCRUAL BASIS OF ACCOUNTING
2013 2012 2011 (2) 2010 2009
$ 5,600,297 $ 10,022,616 $ 7.696,849 S 6,269,674 $ 3.774,771
53.754.570
63,129,638
76,637,391
13.751,375 29,454,428
119,843,194
3,646,559
82,030,086
95,699,261
25,506,302 12,799,191
26,317,580
64,623,073
3,004,873
81,410,445
92.112,167
72,535,265 9,768,475
16,151,126
98,454.866
4,563,061
58,449,103
11,937,672
20,693,629 16,349,228
6,320,807
42,610,199
48.931,006
3,567,405 31,713,615
604,075
84,617
11.759.863
47.729.575
5,941,959
55,446,599
61.388.558
103,111,551
84,617
12,590,970
115,787,138
6,426,664
46,459,249
52.885.913
127,434,810
84,617
13,250.599
140.770.026
2007
5,430,635
84,099,737
89.530.372
20,731,177
84,617
74.557,072
95,372,866
2006
6,631,354
73,942,764
80,574,118
59,115,022
84,617
12,593,863
71,793,502
2005
4,070,482
34.057.309
38,127,791
10,856,290
84,617
13,890,134
24,831,041
General Fund:
Restricted
Assigned Unassigned Reserved
Unreserved
Total General Fund
All Other Governmental Funds:
Restricted
Committed
Assigned Reserved and designated for subsequent (1)
years expenditures, Reported in; Debt service fiinds
Capital project fimds Other governmentalfimds - Special Revenue
Unreserved, Undesignated,Reported in: Communi^ development fimds Capital project fimd Other govenunental fiinds - Special Revenue
Total All Other Governmental Funds
Total Governmental Funds S 182,972,832 $ 160.322.334 S 190,567.033 S $ 96.660.581 S 177,175,696 S 193.655.939 S 184,903,238 $ 152j67,620 S 62,958.832
(1) Fund breakoutnot readily availablefor 2009-2001; was presentedfor 2010. (2) The City implementedGASB 54 beginning in 2011.
112
Table S
CITY OF PITTSBURGH, PENNSYLVANIA
CHANGES IN FUND BALANCES, GOVERNMENTAL FUNDS (1)
LAST TEN YEARS
(MODIFIED ACCRUAL BASIS)
($'s in Thousands)
2014 2013 2012 2011 2010 2009 2008 2007 2006 2005
Revenues:
Taxes $ 406,059 $ 397,548 $ 388,218 $ 380,769 $ 360,761 $ 363,582 $ 366,220 $ 357,226 $ 360,836 $ 352,034 Payment in lieu of taxes 2,267 2,011 4,894 3,555 294 850 778 5,312 5,874 5,373 Interest earnings 182 97 205 73 245 590 4,147 9,498 6,757 2,231 Fines and forfeits 7,646 9,699 11,491 8,374 9,225 7,768 6,409 7,387 8,256 4,239 Intergovernmental 59,946 73,308 75,897 99,372 84,614 86,755 80,781 77,974 53,663 55,972 Charges for user services 41,383 39,652 36,432 35,312 34,961 36,452 37,484 37,458 34,774 37,369 Pension state aid 18,264 18,027 16,900 26,908 15,595 15,030 15,148 15,182 14,630 17,166 Miscellaneous 2,237 1,885 1,268 6,079 921 436 924 3,243 1,314 1,634
Total revenues 537,984 542,227 535,305 560,442 506,616 511,463 511,891 513,280 486,104 476,018
Expenditures:
General government 79,622 82,485 82,947 68,743 66,253 55,122 57,277 54,357 53,179 60,119 Public safety 270,581 268,116 258,272 256,416 289,149 250,384 220,309 209,937 205,168 208,740 Public works 68,324 77,625 67,664 55,730 62,416 54,564 61,109 56,304 50,877 48,053 Sanitation 16,193 16,014 15,181 15,501 17,059 14,960 15,721 16,825 15,394 13,668 Community, recreational, and
cultural 15,499 13,524 12,510 12,077 13,866 11,536 11,670 10,909 11,045 7,324 Claims and judgments 4,644 2,443 568 1,245 539 5,361 1,047 962 552 728 Miscellaneous - - - 6,576 5,893 5,175 5,112 3,818 1,696 1,038 Economic and physical development 8,946 11,621 8,786 14,370 26,465 22,221 19,694 21,227 16,057 17,962 Capital outlay - - - 5,462 6,046 9,973 10,299 7,207 4,737 3,003 Bond issue costs 758 - 358 - - - 744 - 3,026 2,538 Debt service/authorities:
Interest 30,296 33,062 32,981 36,257 37,765 40,699 42,717 44,410 41,528 43,845 Principal 56,705 53,805 49,280 51,845 49,410 44,325 44,490 40,670 36,035 40,420 Debt subsidies to component units 14,524 13,776 14,836 14,618 14,142 13,623 13,444 14,118 13,547 13,726
Total expenditures 566,092 572,471 543,383 538,840 589,003 527,943 503,633 480,744 452,841 461,164
Excess (Deficiency) of Revenues Over Expenditures (28,108) (30,244) (8,078) 21,602 (82.387) (16,480) 8,258 32,536 33,263 14,854
(Continued)
113
Table 5
CITY OF PITTSBURGH, PENNSYLVANIA
CHANGES IN FUND BALANCES, GOVERNMENTAL FUNDS (1)
LAST TEN YEARS
(MODIFIED ACCRUAL BASIS)
($'s in Thousands) (Continued)
2014 2013 2012 2011 2010 2009 2008 2007 2006 2005
Other Financing Sources (Uses): Bond issuance 44,470 - 114,495 - - - 66,775 - 241,975 -
Refunding bond issuance 62,920 - - - - - - - 194,995 Proceeds from capital asset disposition - - - - - - - - - Bond premium 12,226 - 13,613 - - 3,293 - 13,117 12,151 Capitd lease - - - - - - - - - Insurance proceeds - - - 1,872 - - - - - Transfers from other funds 115,579 110,369 92.654 106,713 138,023 96,560 170,519 135,725 96,713 86,679 Transfer from agency fimds - - - - - - - - - - Transfer from discretely presented
component units - - - - - - - - 2,530 - Payments to escrow agents (68,858) - (47,725) - - - (69,574) - (201,480) (204,732) Transfers to other funds (115,579) (110,369) (92,654) (106,713) (138,023) (96,560) (170,519) (135,725) (96,713) (86,679) Transfer to agency funds - - - - - - - - - -
Pension state aid - - - - - - - - - -
Total other financing sources (uses) 50,758 80,383 1,872 _ 494 _ 56,142 2,414
Net Change in Fund Balance $ 22,650 $ (30,244) $ 72,305 $ 21,602 $ (80,515) $ (16,480) $ 8,752 $ 32,536 $ 89,405 $ 17,268
Debt service (principal and interest) as a percentage of noncapital expenditures 16.3% 16.6%
Notes:
(1) Includes General, Special Revenue, Debt Service, and Capital Projects Funds.
16.2% 14.2%
114
12.4% 14.5% 12.2% 14.3% 10.6% 11.4%
(Concluded)
Table 6
CITY OF PITTSBURGH, PENNSYLVANIA
GOVERNMENTAL FUND TAX REVENUES BY SOURCES
LAST TEN YEARS
2014 2013 2012
($'s in Thousands)
2011 2010 2009 2008 2007 2006 2005
Real estate tax $ 127,354 $ 127,606 $ 137,411 $ 134,558 $ 131,625 $ 131,313 $ 130,970 $ 127,263 $ 133,735 $ 128,080 Mercantile tax - 6 - 2 5 8 12 28 99 249 Amusement tax 14,338 13,714 11,280 13,128 10,845 11,450 11,589 8,914 8,468 10,722 Payroll preparation tax 55,972 54,151 51,553 50,641 46,346 46,235 46,479 44,248 41,172 38,290 Earned income tax 86,860 84,103 75,228 74,146 69,674 67,483 65,296 57,100 49,815 48,238 Facilities usage fee 4,688 4,287 3,333 3,909 3,375 3,163 2,791 2,986 2,397 1,931 Deed transfer tax 20,115 20,740 15,576 18,730 14,109 12,284 17,071 16,677 18,033 18,170 Parking tax 53,233 51,977 50,911 48,217 46,651 45,274 45,902 49,272 52,067 52,186 Local/Emergency services tax 13,907 13,831 14,128 13,138 13,962 13,416 13,271 16,387 15,599 16,445 Business privilege tax 3 20 57 143 612 9,315 9,113 8,927 14,680 13,748 Institution/service tax 480 494 457 455 457 125 48 823 430 323
Penalties and interest 1,273 1,023 2,250 1,515 1,328 2,166 2,201 2,604 3,089 2,356 Public service privilege 818 989 1,165 1,330 1,332 1,336 1,299 1,128 925 352 Regional Asset District 27,018 24,608 24,869 20,857 20,440 20,014 20,178 20,869 20,327 20,242
Total tax revenues $ 406,059 $ 397,549 $ 388,218 $ 380,769 $ 360,761 $ 363,582 $ 366,220 $ 357,226 $ 360,836 $ 351,332
Note:
In 2005, the occupation privilege tax was replacedby the emergencyservices tax. The business privilegetax was reduced. Two additional revenues were the payroll preparation tax and the facility usage fee. The mercantile tax was eliminated.
In 2008, the emergency services tax became known as the local services tax.
115
Table 7
CITY OF PITTSBURGH, PENNSYLVANIA
ASSESSED VALUATION AND ESTIMATED ACTUAL VALUES OF TAXABLE PROPERTY
LAST TEN YEARS
($'s in Thousands)
Year
Total Assessed
Value
Less: Tax-
Exempt Property
Total Taxable
Assessed Value
Taxable
Assessed Value
as a Percentage of Estimated
Actual Value
Taxable Rate
(mills)
Estimated
Taxable Value
2005 19,984,708 6,750,063 13,234,645 1.08% 10.800 142,934
2006 20,562,685 7,191,577 13,371,108 1.08% 10.800 144,408
2007 21,084,308 7,759,074 13,325,234 1.08% 10.800 143,913
2008 21,032,626 7,777,749 13,254,877 1.08% 10.800 143,153
2009 21,299,162 7,950,341 13,348,821 1.08% 10.800 144,167
2010 21,549,437 8,108,433 13,441,004 1.08% 10.800 145,163
2011 21,980,818 8,494,384 13,486,434 1.08% 10.800 145,653
2012 22,380,149 8,737,987 13,642,162 1.08% 10.800 147,335
2013 32,939,892 12,707,501 20,232,391 0.76% 7.560 152,957
2014 31,120,498 12,457,503 18,662,995 0.76% 7.560 141,092
Note: Information by major component of assessed value is not available.
116
Table 8
CITY OF PITTSBURGH, PENNSYLVANIA
PROPERTY TAX RATES
DIRECT AND OVERLAPPING GOVERNMENTS
LAST TEN YEARS
City of Pittsburgh School
Fiscal Land Building district County Total
Year millage millage Average (1) millage millage Millage
2005 10.800 10.800 10.800 13.920 4.690 29.410
2006 10.800 10.800 10.800 13.920 4.690 29.410
2007 10.800 10.800 10.800 13.920 4.690 29.410
2008 10.800 10.800 10.800 13.920 4.690 29.410
2009 10.800 10.800 10.800 13.920 4.690 29.410
2010 10.800 10.800 10.800 13.920 4.690 29.410
2011 10.800 10.800 10.800 13.920 4.690 29.410
2012 10.800 10.800 10.800 13.920 5.690 30.410
2013 (2) 7.560 7.560 7.560 9.650 4.730 21.940
2014 7.560 7.560 7.560 9.650 4.730 21.940
Notes:
(1) Determined by multiplying the respective assessed valuation bythe millage rate and dividing by the total assessed valuation.
(2) Millage reduced due to increase in assessed values. No "windfall" provisions enacted dueto reassessed values.
The basis for the property tax rates is per each $1,000 of assessed valuation.
117
Table 9
CITY OF PITTSBURGH, PENNSYLVANIA
PRINCIPAL PROPERTY TAXPAYERS
CURRENT YEAR AND NINE YEARS AGO
2014 2005
Taxable Percentage of Total City Taxable Percentage of Total City Taxpayer Assessed Value Rank Taxable Assessed Value Assessed Value Rank Taxable Assessed Value
500 Grant St. Assoc/Mellon Bank $ 372,004,000 1 1.99% $ 457,943,000 1 3.46% PNC 281,631,500 2 1.51% 174,660,000 4 1.32% Holdings Acquisition Co LP 248,136,300 3 1.33% - 600 GS PropLP 233,211,300 4 1.25% 160,000,000 5 1.21%. Buncher Company 229,613,800 5 1.23% 194,923,000 2 1.47% HRLP Fourth Avenue LLC 179,400,000 6 0.96% -
Oxford Development 154,000,000 7 0.83% 112,000,000 6 0.85% IX Liberty Center Owner LP 123,500,000 8 0.66% - Liberty Avenue Holdings LLC 79,000,000 9 0.42% 45,210,000 10 0.34% North Shore Developers 71,209,000 10 0.38% - Market Assoc. Limited - 185,000,000 3 1.40% Grant Liberty Dev. Group - 111,000,000 7 0.84% Gateway Trizec, Inc. - 71,700,000 8 0.54% Penn Liberty Holding - - Harrahs Forest City Assoc. - 54,798,000 9 0.41%
$ 1,971,705,900 10.56% $ 1,567,234,000 11.84%
Total Taxable Assessed Valuation $ 18,662,994,911 $ 13,234,645,000
Note: Information obtained from Real Estate Department assessments.
118
Taxable
Assessed
Table 10
CITY OF PITTSBURGH, PENNSYLVANIA
ASSESSED VALUE, TAX RATE, LEVY, AND COLLECTIONS
LAST TEN YEARS
($'s in Thousands)
Year of original levy
Percent Percent
Delinquent taxes
Fiscal
Year
valuation of
land and
buildings Land
millage
Building millage
Original net levy
Adjusted net levy (1) Budgeted
(2) Receipts
of original net levy collected
of adjusted net levy collected
Percent
ofbudget collected
Collection
Budget Receipts
Percent
ofbudget
collected
2005 $13,234,645 10.80 10.80 $142,934 $126,124 $124,000 $124,906 87.4 99.0 100.7 4,500 3,173 70.5
2006 13,371,108 10.80 10.80 143,649 129,451 121,000 127,114 88.5 98.2 105.1 3,758 6,622 176.2
2007 13,325,234 10.80 10.80 144,972 128,926 121,257 127,505 88.0 98.9 105.2 2,741 289 10.5
2008 13,254,877 10.80 10.80 143,383 129,768 122,300 127,273 88.8 98.1 104.1 3,245 3,697 113.9
2009 13,348,821 10.80 10.80 145,967 128,830 123,673 125,104 85.7 97.1 101.2 3,201 4,972 155.3
2010 13,441,004 10.80 10.80 145,163 134,998 127,118 124,250 85.6 92.0 97.7 6,454 3,672 56.9
2011 13,486,434 10.80 10.80 145,653 139,547 128,790 129,924 89.2 93.1 100.9 3,830 3,928 102.6
2012 13,642,162 10.80 10.80 147,335 131,841 130,578 126,821 85.9 95.2 97.1 3,525 5,551 157.5
2013 20,232,391 7.56 7.56 153,382 123,150 130,578 122,632 80.0 99.6 93.9 3,406 5,144 151.0
2014 18,662,995 7.56 7.56 141,411 121,775 128,770 120,087 84.9 98.6 93.3 4,673 5,144 109.4
Notes:
(1) Represents net levy as of December 31 of the tax year (i.e., net of exonerations, discounts, and additions granted in that year).
(2) Receipts are net of refunds.
119
Table 11
CITY OF PITTSBURGH, PENNSYLVANIA
RATIOS OF OUTSTANDING DEBT - BY TYPE
LAST TEN YEARS
Debt
Fiscal Obligation Capital Outstanding Percentage of per
Year Bonds (1) Leases Debt Personal Income (2) Population (3) Capita
Governmental Activities:
2005 $ 786,656,199 $ 14,675,442 $801,331,641 3.01% 334,563 $ 2,395
2006 803,285,040 14,215,587 817,500,627 2.94% 334,563 2,443
2007 764,123,906 13,727,355 777,851,261 2.71% 334,563 2,325
2008 723,092,248 13,209,022 736,301,270 2.42% 334,563 2,201
2009 680,380,610 12,658,713 693,039,323 2.06% 334,563 2,071
2010 633,338,316 12,074,466 645,412,782 2.07% 305,704 2,111
2011 581,007,897 11,454,180 592,462,077 1.81% 305,704 1,938
2012 612,114,556 10,780,033 622,894,589 1.90% 305,704 2,038
2013 565,180,727 10,080,874 575,261,601 1.72% 305,704 1,882
2014 558,081,184 9,338,590 567,419,774 1.64% 305,704 1,856
1. Presented net of original issuance discounts and premiums 2. Personal income is disclosed on Table 19
3. United States Census Bureau
120
Table 12
CITY OF PITTSBURGH, PENNSYLVANIA
RATIO OF NET GENERAL OBLIGATION BONDED DEBT TO ASSESSED VALUE
AND NET GENERAL OBLIGATION BONDED DEBT PER CAPITA
LAST TEN YEARS
($'s in Thousands)
Ratio of Net
Net net general general
General Less general bonded debt bonded
Fiscal Assessed bonded debt service bonded to assessed debt per
Year Population value debt funds debt value capita
2005 335 $ 13,234,645 $ 786,656 $ 177 $ 786,479 5.94% $ 2,348
2006 335 13,371,107 803,285 15,360 787,925 5.89% 2,352
2007 335 13,325,234 764,124 1,433 762,691 5.72% 2,277
2008 335 13,254,877 723,032 48,287 674,745 5.09% 2,014
2009 335 13,348,821 680,381 48,627 631,754 4.73% 1,886
2010 306 13,441,004 633,338 3,567 629,771 4.69% 2,058
2011 306 13,486,434 581,008 1,050 579,958 4.30% 1,895
2012 306 13,642,162 612,115 1,087 611,028 4.48% 1,997
2013 306 20,232,391 565,181 1,092 564,089 2.79% 1,843
2014 306 18,662,995 558,081 1,103 556,978 2.98% 1,820
121
Table 13
CITY OF PITTSBURGH, PENNSYLVANIA
RATIO OF ANNUAL DEBT SERVICE EXPENDITURES FOR GENERAL OBLIGATION BONDED DEBT (1) TO TOTAL GENERAL
GOVERNMENTAL EXPENDITURES
LAST TEN YEARS
($'s in Thousands)
Total Ratio of debt
Total general to general
Fiscal debt governmental governmental
Year Principal Interest (2) service expenditures expenditures
2005 $ 40,420 $ 43,690 $ 84,110 $ 461,164 18.24%
2006 36,035 41,528 77,563 452,841 17.13%
2007 40,670 44,410 85,080 480,744 17.78%
2008 44,490 42,717 87,207 503,633 17.32%
2009 44,325 40,699 85,024 527,943 16.10%
2010 49,410 37,765 87,175 589,003 14.80%
2011 51,845 36,257 88,102 538,840 16.35%
2012 49,280 32,981 82,261 543,383 15.14%
2013 53,805 33,061 86,866 572,471 15.17%
2014 56,705 30,295 87,000 566,092 15.37%
Notes:
(1) City of Pittsburgh bonds only. (2) Excludes bond issuance and other costs.
122
Table 14
CITY OF PITTSBURGH, PENNSYLVANIA
COMPUTATION OF DIRECT AND OVERLAPPING DEBT
DECEMBER 31, 2014
($s in Thousands)
Jurisdiction
Direct debt:
City of Pittsburgh: General obligation Capital lease Auditorium Authority Urban Redevelopment Authority Parking Authority
Total direct debt
Overlapping debt: Pittsburgh Water and Sewer Authority (1) The School District of Pittsburgh Allegheny County
Total overlapping debt
Total direct and overlapping debt
Debt
outstanding
558,081
9,339 728
11,242
74,781
654,171
638,954
338,703 861.736
1,839,393
$ 2,493,564
Percentage
applicable to City
100%
100%
50%
55%
100%
0%
100%
25%
(2) (3)
(4)
(1) - Direct obligations of the Pittsburgh Water and Sewer Authority are notconsidered debtof theCity of Pittsburgh. (2) - Subsidized equally by the City of Pittsburgh and Allegheny County (3) - Based on percentage of contribution by the City of Pittsburgh (4) - Basedon percentof population of the City of Pittsburgh compared to Allegheny County
123
Amount
applicable to City
558,081
9,339 364
6,183
74,781
648,748
338,703 215,434
554,137
1,202,885
finfW
Table 15
CITY OF PITTSBURGH, PENNSYLVANIA
NET DEBT AND REMAINING DEBT INCURRING MARGIN
IN ACCORDANCE WITH ACT NO. 52, APPROVED APRIL 28, 1978
LOCAL GOVERNMENT UNIT DEBT ACT
DECEMBER 31, 2014
Gross debt (1): Principal amount of bonds issued and outstanding:
General obligation Capital Leases Auditorium Authority
Urban Redevelopment Authority
Total gross debt
Items deductible from gross debt: Cash and legal investments held in sinking fund
for payment of bonds and notes Delinquent real estate taxes Self-liquidating and subsidized debt:
Taxable General Obligation Pension Bonds, 1996B (2) Taxable General Obligation Pension Bonds, 1998ABC
Total deductions
Net debt
Nonelectoral
debt
$ 558,081,184 $
558,081,184
1,103,040
8,338,865
7,045,000
200,440,000
216,926,905
Lease
rental
debt
9,338,590
727,500
11,241,517
21,307,607
$ 341,154,279 $ 21,307,607
(Continued)
(1) Direct obligations of the Pittsburgh Water and Sewer Authority in the amount of $638,954,000 are not considered debt of the City of Pittsburgh for purposes of this calculation.
(2) Refunded by General Obligation Bonds, 2006B
124
Table 15
CITY OF PITTSBURGH, PENNSYLVANIA
NET DEBT AND REMAINING DEBT INCURRING MARGIN
IN ACCORDANCE WITH ACT NO. 52, APPROVED APRIL 28,1978
LOCAL GOVERNMENT UNIT DEBT ACT
DECEMBER 31, 2014
(Continued)
Allocation of Total Net Debt
Net nonelectoral debt
Net lease rental debt
Net nonelectoral and lease rental debt
Debt Incurring Margin
2012
Total net revenue of the City
Borrowing base (arithmetic average of total net revenue for said three fiscal years)
Debt limitations
Less existing net debt
Remaining debt incurring margin
125
$ 341,154,279
21,307,607
$ 362,461,886
2013 2014
$ 451,133,320 $ 453,756,162
$ 448,560,976
Net
Net nonelectoral
nonelectoral and lease
debt rental debt
(borrowing (borrowing
base X250%) base X350%)
$ 1,121,402,441 $ 1,569,963,417
(341,154,279) (362,461,886)
$ 780,248,162 $1,207,501,531
(Concluded)
Table 16
CITY OF PITTSBURGH, PENNSYLVANIA
LEGAL DEBT MARGIN INFORMATION
LAST TEN YEARS
(dollars in thousands)
Total Net Debt
applicable to Legal debt Legal debt Debt limit limit margin margin %
2014 $ 1,121,402 $ (341,154) $ 780,248 69.58%
2013 1,108,747 (338,265) 770,482 69.49%
2012 1,092,625 (372,206) 720,419 65.93%
2011 1,075,235 (332,419) 742,816 69.08%
2010 1,073,609 (373,994) 699,615 65.16%
2009 1,080,213 (374,738) 705,475 65.31%
2008 1,088,171 (411,568) 676,603 62.18%
2007 1,056,263 (496,983) 559,280 52.95%
2006 993,016 (490,894) 502,122 50.57%
2005 933,880 (511,500) 422,380 45.23%
Note: The State of Pennsylvania's Local Government Unit Debt Act determines the calculation of the Legal Debt Margin. See Table 15.
126
Tabie 17
CITY OF PITTSBURGH, PENNSYLVANIA
REVENUE BOND COVERAGE
PITTSBURGH WATER AND SEWER AUTHORITY
LAST TEN YEARS
($'s in Thousands)
Fiscal
Year
Gross
revenues
(1) Operating expenses
Net revenue
available
for debt
service Principal Interest Total Coverage
2005 $ 85,031 $ 39,403 $ 45,628 $ 17,159 $ 23,180 $ 40,339 1.13
2006 86,325 42,597 43,728 17,824 26,021 43,845 1.00
2007 92,526 46,375 46,151 17,299 30,493 47,792 0.97
2008 129,938 89,162 40,776 15,531 24,223 39,754 1.03
2009 134,175 93,799 40,376 14,625 37,984 52,609 0.77
2010 139,753 93,157 46,596 16,435 39,202 55,637 0.84
2011 140,552 92,227 48,325 14,885 36,747 51,632 0.72
2012 144,138 93,305 50,833 15,064 37,243 52,307 0.97
2013 142,657 95,823 46,834 144,184 33,053 177,237 0.26
2014 164,255 111,454 52,801 19,249 37,146 56,395 0.94
Notes:
(1) Total operating expenses exclusive of depreciation and amortization.
127
Table 18
CITY OF PITTSBURGH, PENNSYLVANIA
REVENUE BOND COVERAGE
THE STADIUM AUTHORITY OF THE CITY OF PITTSBURGH (1)
LAST TEN YEARS
($'s in Thousands)
Net revenue
available
Fiscal Gross Operating for debt Debt service requirements (4)
Year revenues (2) expenses (3) service Principal Interest Total Coverage (5)
2005 $ 1,458 $ 358 $ 1,100 $ 3,485 $ 1,204 $ 4,689 0.23
2006 1,912 185 1,727 3,730 966 4,696 0.37
2007 2,859 825 2,034 1,855 954 2,809 0.72
2008 4,074 1,449 2,625 2,306 2,063 4,369 0.60
2009 3,857 1,712 2,145 2,620 1,862 4,482 0.48
2010 4,113 1,636 2,477 2,600 1,539 4,139 0.60
2011 4,302 1,712 2,590 241 1,387 1,628 1.59
2012 4,750 2,262 2,488 841 1,238 2,079 1.20
2013 5,490 1,949 3,541 735 665 1,400 2.53
2014 6,366 2,237 4,129 757 643 1,400 2.95
Notes:
(1) Figures presented are for the fiscal year end of March 31. (2) Total revenues including interest. (3) Total operating expenses exclusive of depreciation, interest, baseball lease credit adjustments,
and loss on disposal of turf. (4) Debt service payments on notes are excluded. (5) The City of Pittsburgh guarantees the payment of Stadium Authority debt service and/or operating losses.
128
Table 19
CITY OF PITTSBURGH, PENNSYLVANIA
DEMOGRAPHIC AND ECONOMIC STATISTICS
LAST TEN YEARS
Fiscal
Year
(1) Population
(2) Per
capita income
(2) Personal
income
(2) Median
age
(3) School
enrollment
(4) Unemployment rate percentage
2005 334,563 $ 34,897 $ 79,478 40.9 32,529 5.2%
2006 334,563 36,680 83,116 38.4 31,148 4.2%
2007 334,563 36,894 85,876 39.0 29,445 4.2%
2008 334,563 38,550 91,101 41.9 28,265 6.0%
2009 334,563 42,819 100,675 35.5 26,123 8.8%
2010 305,704 44,191 102,135 35.5 25,326 6.5%
2011 305,704 43,787 106,800 35.6 24,997 6.6%
2012 305,704 50,922 107,300 33.2 24,727 7.7%
2013 305,704 49,700 109,124 33.2 24,525 6.7%
2014 305,704 51,798 112,834 33.2 24,103 4.6%
Data Sources:
(1) Census Bureau (2) U.S. Department of Commerce, 12-month lag (3) School District of Pittsburgh (4) U.S. Department of Labor, Bureau of Labor Statistics
129
Table 20
CITY OF PITTSBURGH, PENNSYLVANIA
PRINCIPAL EMPLOYERS
CURRENT YEAR AND NINE YEARS AGO
2014 2005
Employer Employees Rank
Percentage of Total Municipal
Employment Employees Rank
Percentage of Total Municipal
Employment
University of Pittsburgh Medical Center 43,000 1 12.72 % 26,664 1 8.32 % Highmark Health 19,000 2 5.62 U.S. Government 18,028 3 5.33 19,404 2 6.05 Commonwealth of Pennsylvania 13,081 4 3.87 13,355 3 4.17 University of Pittsburgh 11,982 5 3.54 10,133 5 3.16 Giant Eagle 10,577 6 3.13 5,703 10 1.78 BNY Mellon (2) 7,600 7 2.25 Allegheny County 7,150 8 2.11 Wal-Mart Stores Inc. 6,200 9 1.83 6,000 9 1.87 Westinghouse Electric 5,600 10 1.66 West Penn Allegheny Health System 10,753 4 3.36 Mellon Financial Corp. (1) 6,125 8 1.91 PNC Financial Services Group, Inc. 6,895 7 2.15 US Airways, Inc. 6,994 6 2.18 Total 142,218 42.06 % 112,026 34.96 %
Total Employees
Source: Pittsburgh Business Times
(1) Pre-merger (2) Post-merger
338,147 320,478
130
Table 21
CITY OF PITTSBURGH, PENNSYLVANIA
PROPERTY VALUE, CONSTRUCTION, AND BANK DEPOSITS
LAST TEN YEARS
($'s in Thousands)
Number of
Fiscal Property permits Dollar Bank
Year value (1) issued (3) value (2) deposits
2005 $ 13,234,645 1,844 $ 389,030 $ 77,701,953
2006 13,371,108 2,069 484,249 75,738,573
2007 13,325,234 2,377 595,143 84,948,351
2008 13,254,877 2,277 980,645 95,371,463
2009 13,348,821 2,222 624,954 100,194,959
2010 13,441,004 2,893 325,449 110,870,210
2011 13,486,434 2,518 402,186 81,120,698
2012 13,642,162 2,488 394,669 129,951,213
2013 20,232,391 3,044 593,153 73,876,193
2014 18,662,995 3,485 567,714 77,659,293
Notes:
(1) Assessed value from Table 7 (2) Value of Construction Project
Data Sources:
(3) Bureau of Building Inspection, City of Pittsburgh
131
Table 22
CITY OF PITTSBURGH, PENNSYLVANIA
CITY EMPLOYMENT
LAST TEN YEARS
Regular Actual subsequent budgeted January
Fiscal Year positions payroll
2005 3,634 3,007 2006 3,313 3,221 2007 3,341 3.281 2008 3.363 3,177 2009 3,310 3,213 2010 3,326 3,157 2011 3,303 3,131 2012 3,303 3,128 2013 3,301 3.077 2014 3,303 3,067
132
Table 23
CITY OF PITTSBURGH, PENNSYLVANIA
FULL-TIME EQUIVALENT MUNICIPAL EMPLOYEES BY FUNCTION/PROGRAM
LAST TEN YEARS
2014 2013 2012 2011 2010 2009 2008 2007 2006 2005
Function/oroeram
General Government:
City Council-City Clerk 41 39 39 39 39 39 39 39 21 22
Mayor's Office 16 16 16 15 14 14 16 16 17 22
Innovation & Performance (C.I.S.) 61 60 59 55 58 55 51 58 63 59
Magistrates Court 0 0 0 0 0 0 0 0 0 34
Human Relations Commission 5 8 8 8 8 8 8 8 8 8
City Controller 56 53 58 58 58 58 72 72 72 72
Finance Department 83 99 98 98 103 101 III 113 108 99
Finance-Fleet & General Services 0 20 20 21 22 22 24 26 17 0
Law 42 42 44 43 45 43 46 43 43 44
Personnel & Civil Service 64 68 80 83 83 83 86 87 87 87
City Planning 52 49 47 48 49 46 48 41 36 35
Bureau ofNeighborhood Empowerment 10 0 0 0 0 0 0 0 0 0
Bureau of Management & Budget 24 0 0 0 0 0 0 0 0 0
General Services-Administration 0 0 0 0 0 0 0 0 0 26
General Services-Facilities 0 0 0 0 0 0 0 0 0 50
General Services-Fleet Management 0 0 0 0 0 0 0 0 0 2
Public Safely: Administration 23 17 17 17 17 15 4 3 3 4
Police I09I 1092 1090 1090 1116 1116 III9 1102 1127 1227
Emergency Medical Services 180 180 180 180 181 180 183 183 183 182
Fire 674 674 674 676 660 660 668 669 644 834
Bureau of Building Inspection 76 76 75 75 75 74 72 72 72 67
Animal Control 16 16 16 16 16 16 18
Public Works:
Administration 14 13 13 12 12 12 12 12 12 12
Operations 346 327 320 312 317 317 323 323 327 323
Environmental Services 201 201 196 196 196 196 196 215 216 217
Redd Up Program 0 0 0 0 0 0 8 8 0 0
Engineering 61 37 37 36 35 34 39 37 34 37
General Services-Facilities 0 39 42 50 48 48 43 42 48 0
General Services-Fleet 0 0 0 0 0 0 0 0 2 0
Parks and Recreation 160 168 167 168 167 166 170 165 166 164
Non-Departmental 7 7 7 7 7 7 7 7 7 7
Totals:
Note: In 2006, General Services was split between i
3303 3301 3303 3303 3326 3310 3363 3341 3313 3634
^ublic Works and Finance.
Regular budgeted positions are displayed.
133
iT f^(
'Y
U:^
o DJ
'AN"
TUf Ini
Other Information
CITY OF PITTSBURGH, PENNSYLVANIA
SALARIES AND SURETY BONDS OF PRINCIPAL OFFICIALS
YEAR ENDED DECEMBER 31, 2014
Official
Mayor Director of Finance
Controller
Members of City Council (9)
134
Budgeted Annual
Salary
107,500
100,889
70,343
63,505
Amount
of
Surety Bond
10,000
20,000
10,000
CITY OF PITTSBURGH, PENNSYLVANIA
SCHEDULE OF BONDS AND NOTES PAYABLE
YEAR ENDED DECEMBER 31, 2014
Date of Amount Amount
Coupon or Ceiling Rate
2015 Maximum Debt
Service Requirements
Serial Bonds Issue Sold Outstanding Maturity Information of Interest Interest Principal
General Obligation Bonds, 1998 Series ABC 3/01/1998 $ 255,865,000 $ 200,440,000 $12,715,000 in 2015 $13,560,000 in 2016 $18,245,000 in 2017 $13,235,000 in 2018 $20,030,000 in 2019
$21,400,000 in 2020 $22,860,000 in 2021 $24,425,000 in 2022
$26,095,000 in 2023 $27,875,000 in 2024
6.50
6.50
6.50
6.50
6.60
6.60
6.60
6.60
6.60
6.60
$ 12,758,048 $ 12,715,000
General Obligation Bonds, 2005 Series A 5/01/2005 116,860,000 4,690,000 K690.000in2015 5.00 1,011,000 4,690,000
General Obligation Bonds, 2006 Series B 5/10/2006 140,560,000 87,645,000 $31,395,000 in 2015 $33,230,000 in 2016 $23,020,000 in 2017
5.25
5.25
5.25
4,601,362 31,395,000
Carry forward 292,775,000 18,370,410 48,800,000
(Continued)
135
Serial Bonds
Brought forward
General Obligation Bonds, 2008 Series A
General Obligation Bonds, 2012 Series A
General Obligation Bonds, 2012 Series B
Carry forward
Date of
Issue
9/11/2008
2/07/2012
CITY OF PITTSBURGH, PENNSYLVANIA
SCHEDULE OF BONDS AND NOTES PAYABLE
YEAR ENDED DECEMBER 31,2014 (Continued)
Amount
Sold
Amount
Outstanding
292.775,000
66,775,000 20,975,000
39,235,000 39,235,000
Maturity Information
Coupon or
Ceiling Rate of Interest
2/07/2012 71,275,000 71,275,000
$7,800,000 in 2015 5.00
$8,195,000 in 2016 5.25 $4,980,000 in 2017 5.25
$3,125,000 in 2015 4.00
$3,065,000 in 2016 4.00 $2,230,000 in 2017 4.00
$1,000,000 in 2017 3.00 $5,000 in 2018 2.13
$4,475,000 in 2019 5.00
$4,695,000 in 2020 5.00 $4,190,000 in 2021 2.70
$860,000 in 2021 4.00 $4,060,000 in 2022 5.00 $1,000,000 in 2022 4.00
$5,310,000 in 2023 5.00 $5,330,000 in 2024 5.00
$245,000 in 2024 5.00
$34,650,000 in 2025 5.00
$36,380,000 in 2026 5.00
424.260,000
136
2015 Maximum Debt
Service Requirements
Interest
18,370,410
1,081,688
1,743,537
3,563,750
24,759,385
Principal
48,800,000
7,800,000
3,125,000
59,725,000
(Continued)
Serial Bonds
Brought Forward
General Obligation Bonds, 2014
General Obligation Bonds, 2014, Series A
General Obligation Bonds, 2014, Series B
Subtotal
Less: Excess costs on debt reflnancing
Total: General obligation bonds payable
Date of
Issue
CITY OF PITTSBURGH, PENNSYLVANIA
SCHEDULE OF BONDS AND NOTES PAYABLE
YEAR ENDED DECEMBER 31,2014 (Continued)
Amount
Sold
08/28/14 44,470,000
Amount
Outstanding
424,260,000
44,470,000
Maturity Information
510,000 in 2017 $15,000 in 2018
$2,615,000 in 2019 $2,495,000 in 2020 $2,590,000 in 2021 $2,720,000 in 2022 $2,855,000 in 2023 $2,840,000 in 2024 $2,410,000 in 2025 $2,545,000 in 2026
$3,490,000 in 2027 $3,600,000 in 2028 $3,780,000 in 2029 $3,965,000 in 2030 $4,165,000 in 2031 $4375.000 in 2032
$1,410,000 in 2015 $5,775,000 in 2016 $9,210,000 in 2017
10/23/14 16,395,000 16,395,000
10/23/14 46,525,000 46,525,000
531,650,000
26.431.184
$ 558.081.184
137
$5,000 in 2016 $6,780,000 in 2017
$39,740,000 in 2018
Coupon or Ceiling Rate of Interest
5.00
5.00
5.00
5.00
5.00
5.00
5.00
5.00
5.00
5.00
5.00
5.00
5.00
5.00
5.00
5.00
0.443
0.870
1.343
2.00
4.00
5.00
2015 Maximum Debt
Interest Principal
24,759,385 59.725.000
2,036,632
138,137 1,410,000
1,731,363 -
28,665.517 61,135,000
$ 28,665,517 $ 61,135,000
(Continued)
Serial Bonds
Public Auditorium Authority Revenue Bonds (City Share)
Auditorium Bonds (Refunding), 2005 Series A
Total Auditorium Authority Revenue Bonds
CITY OF PITTSBURGH, PENNSYLVANIA
SCHEDULE OF BONDS AND NOTES PAYABLE
YEAR ENDED DECEMBER 31,2014
(Continued)
Date of
Issue
9/15/2005
Amount
Sold
Amount
Outstanding
$ 4,172,500 $ 727,500
$ 727,500
138
Maturity Information
$237,500 in 2015 $250,000 in 2016
$117,500 in 2017 $122,500 in 2018
Coupon or Ceiling Rate
of Interest
3.65
3.80
3.90
4.00
2015 Maximum Debt
Service Requirements
Interest Principal
$ 27,651 $ 237,500
27,651 $ 237,500
(Continued)
Serial Bonds
CITY OF PITTSBURGH, PENNSYLVANIA
SCHEDULE OF BONDS AND NOTES PAYABLE
YEAR ENDED DECEMBER 31,2014 (Continued)
Date of
Issue
Amount
Sold
Amount
Outstanding Maturity Information
Urban Redevelopment Authority Tax Increment Financing 3/15/2000 Bonds, 2000 Refund Series, Rei\mded by 2009 Refund Series
$ 6,115,500 $ 2,336,122 $503,510 in 2015 $525,933 in 2016 $574,857 in 2017
$625,820 in 2018 $106,002 in 2019
Carry forward 2,336,122
139
Coupon or Ceiling Rate
of Interest
7.95
8.05
8.05
8.05
8.05
2015 Maximum Debt
Service Requirements
Interest Principal
$ 167,540 $ 503,510
167,540 503,510
(Continued)
Serial Bonds
Brought Forward
Urban Redevelopment Authority Tax IncrementFinancing Bonds, 2001 Series
Urban RedevelopmentAuthorityTax IncrementFinancing Note, 2003 Series
Carry forward
CITY OF PITTSBURGH, PENNSYLVANIA
SCHEDULE OF BONDS AND NOTES PAYABLE
YEAR ENDED DECEMBER 31,2014 (Continued)
Date of
Issue
12/15/2001
8/7/2003
Amount
Sold
1,456,593
1,515,297
Amount
Outstanding
2,336,122
587,041
994,302
3.917,465
140
Maturity Information
$100,898 in 2015
$108,236 in 2016
$117,408 in 2017
$124,746 in 2018
$135,753 in 2019
in 2015
in 2016
in 2017
in 2018
in 2019
in 2020
in 2021
in 2022
in 2023
$84,387 $89,891
$93,560
$104,567 $115,574
$121,077 $133,919 $146,760
$104,567
Coupon or
Ceiling Rate of Interest
7.16
7.16
7.16
7.16
7.16
Variable
Variable
Variable
Variable
Variable
Variable
Variable
Variable
Variable
2015 Maximum Debt
Service Requirements
Interest
167,540
38,420
71,941
277,901
Principal
503,510
100,898
84,387
688,795
(Continued)
Serial Bonds
Brought Forward
Urban RedevelopmentAuthority of Pittsburgh Bonds, 2006 Series
CITY OF PITTSBURGH, PENNSYLVANIA
SCHEDULE OF BONDS AND NOTES PAYABLE
YEAR ENDED DECEMBER 31,2014 (Continued)
Date of
Issue
Amount
Sold
Amount
Outstanding
3,917.465
Coupon or Ceiling Rate
Maturity Information of Interest
10/15/06 18,790,000 5,143,940 $348,555 in 2015
$368,735 in 2016
$388,914 in 2017
$410,928 in 2018
$434,777 in 2019
$460,460 in 2020
$487,977 in 2021
$515,495 in 2022
$546,681 in 2023 $579,702 in 2024 $601,716 in 2025
5.40
5.40
5.88
5.88
5.88
5.88
5.88
5.88
5.88
5.88
5.88
Urban Redevelopment Authority of Pittsburgh 9/15/11 2,166,545 1,399,267 $ 229,312 in 2015 5.57 Bonds, 2011 Series $ 243,989 in 2016 5.57
$ 256,830 in 2017 5.57
$ 266,003 in 2018 5.57
$ 403,133 in 2019 5.57
Total Redevelopment Authority Bonds $ 10,460,672
141
2015 Maximum Debt
Service Requirements
Interest Principal
277,901 688,795
299,021 348,555
79,344 229,312
656,266 $ 1,266,662
(Continued)
Serial Bonds
Public Parking Authority of Pittsburgh Parking Authority Current Interest Bonds, Series 2005A
Parking Authority Capital Appreciation Bonds, Series 2005A
Carry forward
CITY OF PITTSBURGH, PENNSYLVANIA
SCHEDULE OF BONDS AND NOTES PAYABLE
YEAR ENDED DECEMBER 31,2014 (Continued)
Date of
Issue
01/15/2005
01/15/2005
Amount Amount
Sold Outstanding
$ 2,010,000 $ 1,400,000
4,439,665 2,556,155
3,956,155
142
Maturity Information
$700,000 in 2019
$500,000 in 2020
$200,000 in 2026
$1,113,420 in 2015 $602,490 in 2016
$570,020 in 2017
$270,225 in 2018
Coupon or
Ceiling Rate of Interest
4.00
4.10
4.30
4.22
4.33
4.43
4.50
2015 Maximum Debt
Service Requirements
Interest Principal
$ 57,100 $
636,580
693,680
1,113,420
1,113.420
(Continued)
Sena] Bonds
Brought Forward
Parking Authority Current Interest Bonds, Series 2005 B
CITY OF PITTSBURGH, PENNSYLVANIA
SCHEDULE OF BONDS AND NOTES PAYABLE
YEAR ENDED DECEMBER 31,2014 (Continued)
Date of
Issue
01/15/2005
Amount
Sold
29,780,000
Amount
Outstanding
3,956,155
29,650,000
Coupon or Ceiling Rate
Maturity Information of Interest
Parking Authority Capital Appreciation Bonds, Series 2005 B 01/15/2005 9,444,297 5,990,754
$2,850,000 in 2020 4.00 $3,100,000 in 2021 5.00
$2,850,000 in 2022 5.00 $2,950,000 in 2023 5.00 $3,100,000 in 2024 5.00
$3,250,000 in 2025 4.75 $5,755,000 in 2026 4.75
$5,795,000 in 2027 4.75
$1,341,375 in 2015 4.25 $1,645,096 in 2016 4.36 $1,408,342 in 2017 4.46 $1,595,941 in 2018 4.53
$2,005,000 in 2015 5.00 $2,100,000 in 2016 5.00 $1,960,000 in 2017 5.00 $2,325,000 in 2018 5.00 $2,435,000 in 2019 5.00 $2,565,000 in 2020 5.00
$2,695,000 in 2021 5.00 $2,845,000 in 2022 5.00 $2,970,000 in 2023 5.00 $3,115,000 in 2024 5.00 $3,115,000 in 2025 5.00 $2,300,000 in 2026 4.50
Parking Authority Refunding Bonds, Series 2005 A 05/15/2005 34,745,000 30,430,000
Carry forward 70,026,909
143
2015 Maximum Debt
Service Requirements
Interest
693,680
1,372,900
773,625
1,486,130
4,326.335
Principal
1,113,420
1,341,375
2,005,000
4.459.795
(Continued)
CITY OF PITTSBURGH, PENNSYLVANIA
SCHEDULE OF BONDS AND NOTES PAYABLE
YEAR ENDED DECEMBER 31,2014 (Continued)
Coupon or 2015 Maximum Debt Date of Amount Amount
Serial Bonds Issue Sold Outstanding Maturity Information of Interest Interest Principal
Brought Forward 70,026,909 4,326,335 4,459,795
Parking Authority Refunding Bonds, Series 2005 B 05/15/05 3,160,000 250,000 $250,000 in 2018 4.00 10,000 -
Subtotal 70,276,909 4,336,335 4,459,795
Plus: Appreciated value on Cap. Apprec. Bonds 3,320,498 - -
Plus: Bond premium 1,028,080 - -
I ,e,ss: Unamortized discount (33,744) - -
Total Public Parking Authority Bonds and Notes Payable $ 74,591,743 $ 4,336,335 $ 4,459,795
(Continued)
144
Serial Bonds
Water and Sewer Authority Bonds
First Lien Revenue Bonds, 1998 Series B
(zero coupon bonds)
First Lien Revenue Refunding Bonds, 2007 Series A
Carryforward
CITY OF PITTSBURGH, PENNSYLVANIA
SCHEDULE OF BONDS AND NOTES PAYABLE
YEAR ENDED DECEMBER 31, 2014 (Continued)
Date of
Issue
3/1/1998
3/15/2007
Amount
Sold
Amount
Outstanding
$ 36,440,070 $ 76,977,000
43,720,000 15,645,000
92.622.000
145
Maturity Information
Coupon or
Ceiling Rate
of Interest
$2,300,000 in 2017 5.18 $2,300,000 in 2018 5.21
$2,300,000 in 2019 5.22 $2,300,000 in 2020 5.22
$2,300,000 in 2021 5.26 $2,305,000 in 2022 5.26 $2,300,000 in 2023 5.26 $4,160,000 in 2024 5.27 $4,160,000 in 2025 5.27
$30,655,000 in 2026 5.26 $30,728,000 in 2027 5.31
$30,771,000 in 2028 5.28 $30,827,000 in 2029 5.30
$14,660,000 in 2030 5.23
$4,945,000 in 2015 5.500
$5,220,000 in 2016 5.000 $5,480,000 in 2017 5.000
2015 Maximum Debt
Service Requirements
Interest Principal
806,975 4,945,000
806.975 4.945,000
(Continued)
CITY OF PITTSBURGH, PENNSYLVANIA
SCHEDULE OF BONDS AND NOTES PAYABLE
YEAR ENDED DECEMBER 31,2014 (Continued)
Coupon or 2015 Maximum Debt Date of Amount Amount Ceiling Rate Service Requirements
Serial Bonds Issue Sold Outstanding Maturity Information of Interest Interest Principal Brought Forward 92,622,000 806,975 4,945,000
First Lien Taxable Revenue Bonds, 2008 Series A 06/12/08 68,970,000 68,970,000 $8,005,000 in 2017 6.360 4,531,492 $8,070,000 in 2018 6.520
$5,930,000 in 2019 6.610 $9,595,000 in 2020 6.610
$10,235,000 in 2021 6.610 $10,930,000 in 2022 6.610 $11,805,000 in 2023 6.610
$4,400,000 in 2024 6.610
First Lien Taxable Revenue Bonds, 2008 Series B 06/12/08 145,495,000 145,495,000 $26,870,000 in 2035 4.038 5,875,088 $34,020,000 in 2036 4.038 $35,520,000 in 2037 4.038 $37,085,000 in 2038 4.038 $12,000,000 in 2039 4.038
Subordinate Revenue Refunding Bonds, 2008 Series C 06/12/08 103,795,000 103,660,000 $2,940,000 in 2030 Variable 4,620,087 $15,345,000 in 2031 $25,505,000 in 2032 $26,475,000 in 2033 $27,645,000 in 2034
$5,750,000 in 2035
Carry forward 410,747,000 15,833,642 4,945.000
(Continued)
146
Serial Bonds
Brouffht Forward
First Lien Revenue Bonds, 2008 Series D-1
First Lien Revenue Bonds, 2008 Series D-2
First Lien Revenue Refunding Bonds, 2013 Series A
CITY OF PITTSBURGH, PENNSYLVANIA
SCHEDULE OF BONDS AND NOTES PAYABLE
YEAR ENDED DECEMBER 31,2014 (Continued)
Date of
Issue
06/12/08
06/12/08
12/12/13
Amount
Sold
Amount
Outstanding
410,747.000
24,665,000 24,665,000
71,225,000 71,225,000
130,215,000 118,290,000
147
Maturity Information
Coupon or Ceiling Rate of Interest
S8,380,000in2024 4.46 $13,950,000 in 2025 4.51
$2,335,000 in 2031 4.80
$240,000 in 2032 4.103 $395,000 in 2033 4.103
$3,475,000 in 2034 4.103 $26,675,000 in 2039 4.103 $40,440,000 in 2040 4.103
$11385,000 in 2015 3.000 $11,620,000 in 2016 4.000
$1,460,000 in 2017 4.000 $7,705,000 in 2018 5.000
$10,690,000 in 2019 5.000 $8,010,000 in 2020 5.000 $8,190,000 in 2021 5.000 $8,530,000 in 2022 5.000 $8,885,000 in 2023 5.000 $7,390,000 in 2024 5.000 $7,840,000 in 2025 5.000
$350,000 in 2026 3.875 $375,000 in 2027 4.000 $360,000 in 2028 4.125 $385,000 m 2029 4.250
$9,535,000 in 2030 5.000 $9,765,000 in 2031 5.000 $2,860,000 in 2032 4.500 $2,955,000 in 2033 4.500
2015 Maximum Debt
Service Requirements Interest
15.833.642 Principal
4,945,000
1,221,575
2,922,362
5,427,813 11,385,000
(Continued)
Serial Bonds
First Lien Revenue Bonds, 2013 Series B
Pennvest Revolving Loan
Carry forward
CITY OF PITTSBURGH, PENNSYLVANIA
SCHEDULE OF BONDS AND NOTES PAYABLE
YEAR ENDED DECEMBER 31,2014 (Continued)
Date of
Issue
12/12/13
Various
Amount
Sold
86,693,000
14,165.000
Amount
Outstanding
86,695,000
35,645,000
747,267.000
148
Maturity Information
Coupon or Ceiling Rate of Interest
S1,815.000in201S 3.000 Sl,860,000in2016 3.000 Sl,920,000in2017 4.000 Sl,995,000in2018 4.000 52,075,000 in 2019 5.000 S2,180,000in2020 5.000 $2,285,000 in 2021 5.000 $2,400,000 in 2022 5.000 $2,520,000 in 2023 5.000 $2,645,000 in 2024 5.000 $2,780,000 in 2025 5.000 $2,920,000 in 2026 4.000 $3,035,000 in 2027 5.000 $3,185,000 in 2028 4.125 $3,320,000 in 2029 5.000 $3,485,000 in 2030 5.250 $3,665,000 in 2031 5.000 $3,850,000 in 2032 4.500
$17,405,000 in 2036 5.250 $21,355,000 in 2040 5.250
$2,847,727 in 2015 Variable $2,949,465 in 2016 $2,992,797 in 2017 $3,055,621 in 2018 $3,120,007 in 2019 $3,185,997 in 2020 $3,253,334 in 2021 $3,128,498 in 2022 $2,248,792 in 2023 $1,982,072 in 2024 $1,536,699 m 2025 $1,278,244 in 2026 $1,310,068 in 2027 $1,029,709 in 2028
$340,405 in 2029 $257,722 in 2030 $260,312 in 2031 $262,927 in 2032 $265,568 in 2033 $268,236 in 2034
$70,800 in 2035
Service Requirements Interest Principal
4,237,781 1,815,000
480,071 2,847,727
30.123,244 20.992,727
(Continued)
Serial Bonds
Brought Forward
SWAP Borrowing, 2014
CITY OF PITTSBURGH, PENNSYLVANIA
SCHEDULE OF BONDS AND NOTES PAYABLE
YEAR ENDED DECEMBER 31.2014 (Continued)
Date of
Issue
11/03/14
Amount
Sold
9,471,000
Amount
Outstanding
747,267,000
9,335,000
Maturity Information
Coupon or
Ceiling Rate of Interest
$423,000 in 2015 2.160 $432,000 in 2016 2.160 $441,000 in 2017 2.160 $451,000 in 2018 2.160 $461,000 in 2019 2.160 $471,000 in 2020 2.160 $481,000 in 2021 2.160 $491,000 in 2022 2.160 $502,000 in 2023 2.160 $513,000 in 2024 2.160
$524,000 in 2025 2.160 $535,000 in 2026 2.160 $547,000 in 2027 2.160
$559,000 in 2028 2.160 $571,000 in 2029 2.160 $575,000 in 2030 2.160
$532,000 in 2031 2.160 $421,000 in 2032 2.160 $273,000 in 2033 2.160 $116,000 in 2034 2.160
$17,066 in 2035 2.160
Gross Water and Sewer Authority Revenue Bonds and other borrowings
Plus; Net bond discount
Net Water and Sewer AuthorityRevenue Bonds and other borrowings
756.602.000
15,140,000
$ 771.742.000
149
2015 Maximum Debt
Service Requirements
Interest Principal 30,123,244 20,992.727
199,176 423,000
30.322.420 21.415.727
$ 30.322,420 $ 21,415.727
(Concluded)
414 Grant Street Pittsburgh Pennsylvania 15219
- CAFR 2014 1
- CAFR 2014 2
- CAFR 2014 3
