CONTROLLER RELEASES 2011 REPORT ON STATE OF COUNTY FINANCES (CAFR)

Allegheny County government continues to have fiscal concerns, and greater challenges loom on the horizon, even as the County economy recovers from the Great Recession, according to County Controller Chelsa Wagner.

“County government can no longer exist in a constant state of financial instability with little flexibility and inadequate resources to invest in the future,” Wagner said in her State of County Finances Report for 2011. “We must invest in the future and own our failures and challenges in the same manner that we own our successes.”

The areas of greatest concern include:

  •     A drastic decrease in the General Fund balance, which stands below that of many County school districts.
  •     Reliance on one-time, non-recurring or unbudgeted funding sources.
  •     Revision of the outlook on the County's general obligation debt to “negative” from “stable” by major rating agencies.
  •     Further state funding cuts to critical areas such as transportation, human services and community colleges proposed by Governor Corbett.

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Reliance on
One Time
Budget Fixes

Inadequate
Fund Balance

Increased Debt

Declining State
Support

The General Fund balance stands as one of the County’s most pressing financial issues, Wagner said. Rating agencies recommend maintaining a balance of at least million, but at the conclusion of 2011 only .2 million remained, down from .4 million in 2010. By comparison, in 2002, Allegheny County had a fund balance of .4 million.  Raising the fund balance will help the County capitalize on historically low borrowing rates.

In addition, the County continued to employ budgetary sleight-of-hand to meet expenses in 2011, Wagner noted. This included a million transfer of Pennsylvania Department of Transportation reimbursements from the Capital Fund; use of million in Drink Tax collections for Port Authority-related debt service; shifting million in Hotel/Motel Tax funds to meet the obligations of the Parks Department; and other one-time payments for a total of .6 million in one-time, non-recurring or unbudgeted items.

Wagner said that resolving these issues could determine whether the County can overcome critical challenges at the Port Authority and Pittsburgh International Airport.

“As with many public and private budgets in challenging economic times, solutions are not easy to come by,” she said. “However, we must begin to have honest discussions about our priorities as a county government as even more pressing challenges approach.”

Still, unemployment rates well below state and national averages, state-high personal income levels and increasing home sales and tax revenues are positive indicators for the County.

“Our relative economic strength gives Allegheny County the opportunity to set lofty yet reachable goals, and more important, take real action to achieve them,” Wagner said.

One positive development for County government in 2011 was an inter-governmental agreement with the City of Pittsburgh enabling the City to use the County's financial management system, which the County has used since September 2002, Wagner noted. The City began active use of the system on Jan. 16, 2012, replacing an obsolete and unsupported system the City had previously used. In addition to direct savings and efficiency, the pooling of system costs will encourage other government entities to collaborate with the County in their financial management, she said.

“This is emblematic of the type of creative, self-sufficient solutions needed for the problems facing municipal governments in our Region,’’ the Controller said. “Allegheny County must spearhead other similar efforts in the coming years.”

Controller Wagner noted that in her own office a renewed focus has been placed on ensuring effective, efficient operations across County departments. This includes the current examination of the reassessment process, and inspections of County construction projects, which daily identify deficiencies that can lead to increased costs.

The Controller’s comprehensive annual financial report contains the government-wide financial statements of the County and related authorities. It provides information to County taxpayers, investors, creditors and governmental officials.

PDF Download the Controller's
Transmittal Letter to the
Citizens of Allegheny County
PDF Download the Comprehensive Annual Financial Report for the Fiscal Year ended December 31, 2011