A message from the Controller
Residents of Allegheny County:
As I approach one year into my tenure as County Controller, the impact of this office has only become more evident. We have improved the efficiency of many of our duties, identified funds for recovery, and conducted impactful audits that can improve government functions. You can read about some of our recent work on pages 4 and 5. I look forward to more accomplishments and improvements to come.
As our government approaches changes in leadership and challenging decisions that will help to define its future, only the Controller’s office can provide reliable, unbiased and comprehensive information on our financial standing to our policymakers and residents. This will be crucial in navigating challenges such as the expiration of federal emergency aid, attracting and retaining workers, and approaching the future of the County’s public safety functions compassionately and effectively.
Expiring federal funds authorized in response to the COVID-19 pandemic have prevented the depletion of the County’s fund balance in the past several years and contributed to many essential functions. Financial stability and the effectiveness of these functions will have to be maintained and bolstered moving forward, a major challenge for the current and future County administrations.
Shortages and strains on workers in areas such as the Jail and 911 are continuing challenges. New investments in our workforce will be crucial. Bringing in more workers can also increase payments into the County’s pension system, in which alarming deficits of assets to benefits owed continue. As a member of the Retirement Board, I have taken steps to increase confidence for our workers and retirees by enacting a new ethics code for our board members, but a vast financial challenge remains to be addressed.
Our County Jail continues to attract criticism of its policies and practices, and horrific incidences of death and illness inside the Jail bear out that reform must occur. As a member of the Jail Oversight Board, I took part in an unannounced inspection of the Jail and put forward best practices on releasing information on health emergencies to the loved ones of incarcerated individuals. An audit of staffing in the Jail will be issued this year.
The future of juvenile detention in the County must also be determined amid calls for a new facility to replace the former Shuman Center, shuttered in 2021. We must approach these decisions both fiscally responsibly and humanely.
Demographic challenges continue to weigh down our efforts to grow and prosper. Census data shows the 10th largest population decline among counties across the nation between 2021 and 2022. While unemployment remains low, our labor pool is smaller than before the pandemic, and racial and ethnic minorities experience vastly higher poverty rates than white residents. Investments in affordable housing, environmental quality in struggling communities, and workforce development must continue to be made to address these challenges.
Despite our large senior population, the County-run Kane Community Living Centers for specialized residential care have rapidly lost population and revenue. To maintain these services, especially for low-income residents and families, a new approach must be taken to promoting and assuring the quality of these facilities.
I am excited for a dialogue among County and regional leaders about meeting these challenges and more. My office will continue to closely examine the County’s finances and functions and bring informed analysis and recommendations to these discussions. We will also continue to bring useful and accessible information to the public, including new transparency efforts such as position-based budgeting to be instituted in the coming year (see page 19). I welcome your feedback on our efforts and the initiatives you would like to see our office undertake.
As always, I am honored by the opportunity to serve you.
Sincerely,
Corey O’Connor
Controller, Allegheny County
2022 Popular Annual Financial Report & Annual Comprehensive Financial Report
Finances in Brief
The County ended 2022 with a General Obligation Bond Debt of $939 million, a decrease of $43 million over 2021. Debt levels represent about $761 for every County resident as compared to $793 as of December 2021. A refunding that occurred in 2020 resulted in debt service savings of $13.9 and $11.9 million in 2021 and 2020 respectively. However, debt service payments will increase to $73 million in years 2023 through 2029.
A chronic concern for the County is an underfunded pension liability. Typically, a “healthy” pension fund has a funded ratio of at least 80 percent. Despite increasing the contribution rate in three of the past five years, the County’s pension fund stood at 33.26 percent funded status in 2022, a slight improvement from 32.44 percent in 2021, with a net pension liability of $1.9 billion, down from $2.3 billion in 2021. The funded status remains low despite increased interest rates in 2022. The low funded status persisted due to a drop of 9.02 percent in the market value of plan assets and benefit payments increasing by $10 million, or 8.1 percent. While changes to the pension plan’s benefit structure approved under Act 125 of 2013 could save an estimated $340 million, the changes do not improve the immediate outlook of an underfunded pension. Additionally, since based upon current trends the County in future years will likely employ fewer persons than it does now, the hypothetical future pension system will have fewer active employees paying into the system to provide liquidity.
Revenue
Federal Aid
The funds can be used for costs incurred since March 3, 2021, and must be obligated by December 31, 2024, and spent by December 31, 2026. Using federal guidelines, Allegheny County has budgeted $220 million of its SLFRF money for Government Services, $88 million for Public Health, $63 million for aid to combat negative economic impact, $9 million for stormwater mitigation, and $1 million for administrative expenses.
Expenditures
- The Allegheny County Health Department protects and improves public health through a variety of programs, including pollution monitoring, food poisoning prevention, rodent control, water testing, dental clinics, solid waste management, recycling, health education, and maternal and infant care.
- The Kane Community Living Centers offer skilled nursing, long-term care and rehabilitation to the chronically ill and elderly who have limited financial resources through four facilities with a total of 1,166 licensed beds. Average daily occupancy at the four Kane Centers fell to 600 (below 52 percent capacity) from over 900 in 2019, prior to the COVID-19 pandemic. Expenditures outstripped revenues by over $19.5 million in each of the last two years, a deficit that stood at under $4 million as recently as 2018.
- In September 2022, County Executive Rich Fitzgerald announced his administration would lead an effort with the Court of Common Pleas to reestablish a County-run facility, or to create a public-private partnership, preferably with a not-for-profit 501(c)(3) provider, to provide juvenile detention in the County. In March 2023, County Council created a Juvenile Justice Study Group to complete a full and transparent overview of the current needs of the County’s juvenile justice system within the context of a juvenile detention facility prior to any final determination regarding the use of the former Shuman Center site.
- Court Programs provide alternative sentencing programs for adults and juveniles, including placement facilities and home detention.
Allegheny County operates nine regional parks, which together comprise nearly 12,000 acres. These parks offer a wide range of amenities including wooded areas with nature centers, biking and walking trails, picnic grounds, a golf course, the only downhill skiing available in Allegheny County, and other year-round sports and recreation facilities.
The Allegheny Regional Asset District (RAD) is funded through one half of the proceeds from Allegheny County’s 1 percent Sales & Use Tax. The 2022 RAD budget authorized grants totaling $118.5 million, the highest in RAD’s history. This included grants to 101 organizations. Parks and libraries received 61 percent of the funds, arts and culture: 15 percent, sports and civic facilities: 12 percent, regional attractions (Zoo, Phipps, and Aviary): 8 percent, and transit: 3 percent.(Source: Allegheny Regional Asset District 2022 Final Operating and Capital Budget)
Controller O’Connor has released Climate Action Recommendations that he will advocate for the County to pursue in the coming years. They cover areas including increasing the share of electric vehicles (EVs) in the County’s fleet; better connecting residents, small businesses and municipalities with support for energy efficiency improvements; improving land use and purchasing policies; and more transparently tracking County energy usage and sustainability efforts. The recommendations can be found here.
Previously known as Port Authority Transit, Pittsburgh Regional Transit (PRT) provided over 32 million public transit trips in Fiscal Year 2021-22, about 30 million fewer than before the COVID-19 pandemic in 2019.
In March 2023, PRT’s Board approved a $28 million contract to construct the first phase of the Downtown-Uptown-Oakland Bus Rapid Transit (BRT) project. The $291 million BRT will provide more reliable, convenient, and faster service with improved amenities and transit connections. The project is being paid for with federal, state, county, and PRT funding.
- Sheriff: Chief law enforcement officer of the Courts; serves all writs and injunctions issued by the Courts; provides transportation of prisoners to and from Court and place of confinement.
- Public Defender: Provides legal counsel for indigent defendants and for respondents.
- Emergency Services: Oversees the countywide 911 network, responds to natural and man-made disasters, assists municipalities with training of firefighters, and investigates fires of suspicious origin.
- District Attorney: Responsible for the prosecution of all Allegheny County criminal cases.
- County Jail: Detains and supervises persons awaiting trial, accused of violating probation or parole, or serving given sentences.
- County Police: Investigates all criminal activity which occurs on County-owned property and provides assistance to local police departments and other criminal justice agencies.
- Medical Examiner: Investigates the circumstances, cause and manner of sudden and unexpected, medically unattended deaths; provides laboratory services, technical assistance and consultation to police departments, municipal officials, and County agencies
- Community College of Allegheny County: A $40 million Workforce Development and Training Center on CCAC’s North Side campus, delayed during the COVID-19 pandemic, is expected to open in late 2023. This new facility will house programs for in-demand fields such as cybersecurity, information technology, autonomous and process technology, machine learning, advanced manufacturing and robotics. The center will also feature experiential classrooms and labs, collaborative areas, and a new culinary school.
- Sanitary Authority (ALCOSAN): Construction on several aspects of the expansion of the Treatment Plant on Pittsburgh’s North Side are underway, part of the authority’s $2 billion Clean Water Plan. As a result of expanding, the current capacity of 250 million gallons per day (mgd) will be increased to 480 mgd by the end of 2025 and to 600 mgd by the end of 2029. This additional capacity will help reduce the number of overflows caused by excess stormwater entering the system.
- Sports and Exhibition Authority (SEA): The SEA approved funding for new scoreboards and related improvements at PNC Park and PPG Paints Arena during 2022. The board authorized a $1 surcharge on all tickets sold to PNC Park for its new scoreboard, which was unveiled for the 2023 season, and a $6.8 million reimbursement to the Penguins for a new scoreboard and sound system to be installed during 2023.
County Facts
In Allegheny County, 19.7% of residents are over the age of 65; nationally only 16.8% of the population was in that age bracket. At the other end of the age scale, 18.8% of Allegheny County residents were under 18, well below the national average of 22.2%.
The older age structure means that Allegheny County loses residents to natural population change: between 2021 and 2022 there were 2,876 more deaths than births in Allegheny; this was the eighth highest decline due to natural population loss of any county in the U.S.
Many indicators show that Allegheny County’s economy has mostly bounced back to its pre-pandemic condition: Unemployment in 2022 was back to the near record lows of 2019. However, the number of employed persons is still 2.4% lower than it was in 2019, and Allegheny County’s older age structure means there is little room for the labor pool to grow without attracting more workers to the area.
Median household income in Allegheny County was $66,659 according to the most recent five-year ACS estimate (2017-21), slightly less than the median of $69,021 across the entire U.S.
The poverty rate rose from 10.5% in 2020 to 11.3% in 2021, but this is still the lowest rate for any other year since 2003 and below the U.S. average of 11.6%. However, these obscure inequality across Allegheny County’s municipalities. For example, Braddock had a median household income of just $22,670, while Fox Chapel’s median household income was more than 10 times that. There are also huge racial gaps in the County, with a 26.8% poverty rate for Black residents versus 7.9% for white residents.
At the end of 2022, the median home sales price in Allegheny County was $207,500 (compared to $388,387 nationally), according to data collected by the real estate site Redfin. This was slightly less than the median sales price at the end of 2021 ($213,000), a sign that the real estate market is cooling off somewhat, likely due to higher interest rates. The previous year, according to an analysis of data from the Federal Housing Finance Agency by the University of Pittsburgh’s Center for Social and Urban Research, residential housing prices in the Pittsburgh metropolitan area increased at the fastest rate since the 1970s.
Accountability
VisitPITTSBURGH
VisitPITTSBURGH Funding
In 2022, 2019, and 2018, VisitPITTSBUGH was allocated more than $10 million in Hotel Room Excise Tax funds annually. In 2022, County-directed funds accounted for 93% of the organization’s total revenues.
Reserves Maintained by VisitPITTSBURGH
While not-for-profit organizations are permitted to maintain reserves and the IRS does not set restrictions on reserve amounts, excessive reserves have the potential to negatively impact an organization’s ability to carry out its exempt purpose. Not included in the chart are Capital Reserves equaling $5,350 in both years.
Department of Human Services
DHS Program Eligibility for Incarcerated Caregivers
During the audit period, there were 5,220 caregivers incarcerated at Allegheny County Jail (ACJ) and 4,808 of those caregivers had been released by Sept. 30, 2022. A caregiver’s length of stay at ACJ impacts their eligibility to participate in DHS programming due to program length.
Ages of Children with Incarcerated Caregivers at Allegheny County Jail
Breakdown of the 11,969 children’s ages at the time their caregiver was incarcerated at the ACJ between Jan. 1, 2021, and Sept. 30, 2022.
Resources
Data Dashboards
New Data Dashboards at put a variety of County government information at users’ fingertips and will be periodically expanded with new additions.
The dashboards augment the Controller’s OpenGov platform which illustrates many County finance data sets in nearly real time, and an improved searchable Contracts Online function.
The Controller’s office has developed informational brochures for County residents on important topics including utility bills and assistance, the property tax appeals process, and avoiding fraud and scams. These brochures are downloadable from AlleghenyController.com and available by request to info@alleghenycontroller.com.
About this Report
Although this report is largely based on Allegheny County’s 2022 Annual Comprehensive Financial Report, this report is not prepared in accordance with generally accepted accounting principles (“GAAP”). Only the financial data for the general government is included in this report and, therefore, all of the County’s discretely presented component units are excluded.
Additionally, information is presented in a summarized manner and certain financial statements and note disclosures required by GAAP are omitted.
“The Government Finance Office Association of the United States and Canada (GFOA) has given an Award for Outstanding Achievement in Popular Annual Financial Reporting to Allegheny County Pennsylvania for its Popular Annual Financial Report for the fiscal year ended December 31, 2021. The Award for Outstanding Achievement in Popular Annual Financial Reporting is a prestigious national award recognizing conformance with the highest standards for preparation of state and local government popular reports.
In order to receive an Award for Outstanding Achievement in Popular Annual Financial Reporting, a government unit must publish a Popular Annual Financial Report, whose contents conform to program standards of creativity, presentation, understandability, and reader appeal.
An Award for Outstanding Achievement in Popular Annual Financial Reporting is valid for a period of one year only. We believe our current report continues to conform to the Popular Annual Financial Reporting requirements, and we are submitting it to GFOA.
A preliminary version of the 2022 Popular Annual Financial Report was released on May 9, 2023. You can view that report here.
