Controller: 2025 ended with $44.6 million net loss as ARPA funds wind down; pension and debt service give mixed signals

The city's controller told Pittsburgh City Council on June 24 that the 2025 Annual Comprehensive Financial Report (ACFAR) shows a $44.6 million net loss after accounting for accruals, reversing a $7.1 million gain in 2024. Controller Heisler said the loss principally reflects the first year without American Rescue Plan Act (ARPA) funds flowing into interest-bearing accounts and into the general fund.

Heisler said the controller's office "brought in $687,000,000 in 2025, and we had $732,000,000 leave the general fund. This is a net loss of $44,600,000," and added that ARPA dollars had masked structural spending pressures during the federal-relief period. "ARPA counts for almost exactly the net loss," Heisler said.

Why it matters: the ACFAR is an accrual-based, audited statement under generally accepted accounting principles (GAAP); it shows a different picture than the city's cash-based operating budget and is intended to inform Council and the Office of Management and Budget (OMB) during budget work. Heisler stressed the difference between a budget (a plan) and the ACFAR (a record of results).

Key figures and context: Heisler reported the city's unassigned fund balance (the rainy-day fund) at about $166,100,000, roughly 22.7% of 2025 expenditures, down from $199,900,000 in 2024. He warned that current budget projections would push the fund balance toward the statutory minimum (10% of expenditures) by the end of the decade if no corrective action is taken. "The reason we are seeing a $44,000,000 net loss is because we no longer have the American Rescue Plan dollars to rely upon," Heisler said.

Revenue and expenses: the controller said taxes — especially real estate tax — remain the city's most stable revenue source but also noted real estate receipts and interest earnings fell versus 2024. On the spending side, the city's largest outlays remain public safety and roads; Heisler highlighted higher fleet maintenance costs and continued pressure on overtime, particularly in public safety.

Debt and pensions: the controller highlighted a large bond payment in 2025 and a net increase to gross bonded debt to about $512 million. Heisler described pensions as a "bright spot," reporting a substantial increase in pension investments and noting the combined pension funds were about 78% funded at the last measurement.

Controller recommendations and next steps: Heisler urged council and OMB to treat transfers and prior-year roll-forwards more transparently in the budget documents, so the true cost of government is visible. He said the controller's office will continue conversations with OMB and council to identify cost-containment measures and growth strategies.

What's next: council members pressed for clarifications on deed-transfer revenues, the local services tax proposal and reassessment mechanics during the Q&A; the matter will be revisited when OMB and finance present subsequent quarterly reports.