The City of Pittsburgh has already spent about 39% of its budget for holiday and overtime pay, reigniting concerns that its spending plan this year may not be feasible.
Controller Rachael Heisler projects Pittsburgh will likely end up about $15 million over budget in premium pay if expenses continue at the current pace.
That means officials would have to move money around to cover the overtime or draw an additional $15 million from the city’s reserves.
Pittsburgh Mayor Ed Gainey said this week there’s no cause for alarm.
“We’re very comfortable with our overtime,” he told reporters Wednesday.
The premium pay projections represent just a sliver of the $665.6 million operating budget.
When asked if the administration would make any operational changes to curb overtime for the rest of the year, Gainey said officials would “talk about some things internally.”
City Council Finance Chair Erika Strassburger, in a letter to council colleagues and Pittsburgh’s task force on city finances, predicted the city could outspend its overtime budget by between $5 million and $19 million.
Even the lower number would wipe out the $3.2 million surplus officials expect to have at the end of the year, she said.
The 2025 budget projects Pittsburgh will end the year with nearly $146 million in its rainy day fund.
But officials are planning to draw from that pot in coming years to support housing initiatives, the Stop the Violence Fund and capital projects.
Budget projections show the city’s reserves are expected to drop to about $72.3 million by the end of 2029.
Looking for answers
Strassburger said understaffing may be contributing to the overtime spending spikes.
She called for more information about how the city has spent so much of its overtime budget already and what could be done to mitigate the impact.
“I am seeking an explanation for how we could have possibly eaten this far into our premium/overtime pay allocation in three months, and if it’s even feasible to stretch the remaining funds over the final three quarters of the year,” she wrote.
Strassburger was one of several council members who have joined Heisler in raising alarms that Gainey’s 2025 budget, which reduced funding for premium pay in the public works and public safety departments, was unrealistic.
But Gainey’s top budget officials have said new measures are in place to rein in overtime spending.
Changes included a new system that decreases the amount of overtime snowplow drivers collect while waiting for bad winter weather and pairing paramedics with EMTs to make staffing more efficient.
Despite those changes, the city is still on track to outspend its budget for premium pay this year, data from the controller’s office shows.
‘Terrifying’ situation
Councilman Bob Charland, D-South Side, a vocal Gainey critic, has repeatedly raised concerns about the city’s fiscal health.
The first quarter spending report that shows the city is on course to outspend its premium pay budget, he said, is “terrifying.”
Charland worries police could be forced to cut back on overtime hours essential to maintaining safety in the South Side’s bustling entertainment district and in neighborhoods across Pittsburgh.
“It’s not just a number in a book — it’s real services that our residents need,” Charland said.
Heisler urged officials to be honest with residents about the city’s fiscal position and to work together on solutions to keep the city on stable financial footing. These issues, she said, shouldn’t be politicized.
“Numbers are numbers,” she said.
Heisler said she was most concerned with premium pay expenses incurred by EMS and the fire bureau.
In a letter to council members, Heisler highlighted that public works operations — which includes streets, parks and heavy equipment maintenance — by early April had already used 75% of its $1.2 million, while EMS spent 66% of its $3.5 million premium pay budget.
For all of last year, EMS spent nearly $7.3 million on premium pay.
“Staffing shortages in public safety and public works may continue to drive elevated overtime and premium pay costs,” she said.
‘Not running out of money’
The city’s EMS bureau at the end of February was on track to spend 115% of its salary and overtime budget by the end of the year. At the same time last year, it was trending toward spending about 102%.
Featured Local Businesses
In the fire bureau, if spending continues to follow the trend it showed in the first two months, it will spend nearly 114% of its salary and premium pay budget this year. At the same time last year, it was on track to spend about 109% of that budget.
The city last year outspent its premium pay budget. The police bureau spent nearly $2.8 million more than the $17 million projected. The Department of Public Works spent about $2.2 million over its premium pay budget, while the fire bureau went about $2.5 million beyond its spending plan.
“We’re not running out of money to pay people,” Jake Pawlak, director of the Office of Management and Budget, said.
Pawlak acknowledged the city seems to have spent a “significant portion” of its overtime budget in the first quarter, but said he remains confident the budget provides enough flexibility to manage the costs.
He pointed out that the St. Patrick’s Day parade — a major event the city pays public safety personnel overtime to staff — is included in first-quarter figures.
The city also will pay first responders overtime to man the annual Fourth of July parade.
Additional first-quarter data will be released in the coming weeks.
Tough times ahead
Gainey pointed out — and Heisler agreed — that the city often uses a good chunk of public works overtime in the early part of the year when crews are responding to snowfall overnight and on weekends.
The city is bracing for difficult financial years as federal covid-19 relief money dries up and Downtown office towers have lost value since a pivot to remote work, which has cut into property tax revenue.
“The financial situation is a byproduct of the economy we’re in and other pandemic-related issues,” Heisler said.
Gainey and his top budget officials have sought to alleviate concerns about the budget.
They point to the city’s favorable bond ratings and their ability to end last year with a roughly $4 million surplus without raising taxes or slashing city services.