For two years, Pittsburgh Controller Rachael Heisler raised one red flag after another about the city’s precarious finances.
She wrote letters, held press conferences and mercilessly skewered former Mayor Ed Gainey’s final budget proposal as “not an honest document.”
Few took her alerts to heart. Public officials, from the former mayor to City Council, didn’t act on her warnings.
To some, Heisler may have seemed like a Pittsburgh Chicken Little.
But last week came some measure of vindication.
Mayor Corey O’Connor sketched out a grim portrait of the city budget — a shortfall that could hit $40 million this year. Heisler stood in the mayor’s conference room listening to his doom-and-gloom scenario.
Finally, someone in power was seeing what she was seeing.
Heisler’s deputy put the onus on council — his former employer — and Gainey for not heeding her.
“The controller’s office has been talking about a lack of revenue to pay for core services for years at this point,” said Peter McDevitt, Heisler’s deputy. “Someone’s raising an alarm bell, and the elected officials who vote on the budget need to listen.”
Since becoming Pittsburgh’s independent fiscal watchdog, Heisler has kept busy sending warnings to other elected officials and raising concerns about the city when presenting annual financial reports.
Just two months after taking office in January 2024, she cautioned that Downtown real estate values were plummeting post-pandemic — and so were the corresponding property tax dollars funneled to the city.
That May, she voiced concerns that the city was relying too heavily on federal covid-19 relief money to prop up its budget.
She cautioned officials to minimize Pittsburgh’s reliance on its “jock tax,” a levy on out-of-town professional athletes and performers the Pennsylvania Supreme Court ultimately struck down.
Throughout last year, she sounded alarms about ballooning overtime costs. Then came Gainey’s budget plan for this year, which she said contained “glaring omissions.”
The Gainey administration, eyeing reelection, pushed back. The city’s finances were fine, they stressed.
Jake Pawlak, who headed the Office of Management and Budget under Gainey, in a May 2024 press conference said Heisler’s warnings were “based on speculative assumptions” that may or may not come true.
“We just simply haven’t seen evidence to suggest some of the assumptions that underpin the scenarios she’s talking about,” Pawlak said at the time.
Then, last week, a new Pittsburgh mayor called a press conference.
The sky was falling, according to O’Connor.
After taking office, O’Connor and his team were able to see up close how bad things were.
They discovered, he said, that Pittsburgh’s finances were worse than they thought.
In effect, O’Connor’s analysis showed Heisler’s warnings that the city was facing serious financial troubles were true.
“I believe that the controller’s office has made every effort to be straightforward, direct and honest with the public about the trajectory of the city’s finances,” Heisler told TribLive Friday, a day after O’Connor held a press conference discussing the city’s financial woes.
“The reason you put out warnings, though, is not so you can be proven right,” she added. “The reason you put out warnings is so action can be taken.”
She ‘nailed this’
Still, she was proven right, said McDevitt, who previously had been council’s budget director.
“Someone’s raising an alarm bell, and the elected officials who vote on the budget need to listen,” McDevitt said.
McDevitt had raised similar concerns over the last several years to his bosses on council.
“I’m just glad that they are taking action now,” he said.
Joseph Sabino Mistick, who served as deputy mayor to former Mayor Sophie Masloff, said Heisler “pretty much nailed this.”
“She told everybody what the problems were,” he said. “I think Controller Heisler sounded the alarm. To some extent, some council members heard that alarm and thought it was necessary to take steps to address that. But of course, there was more to be alarmed about than they were aware of. And so here we are.”
O’Connor, the former Allegheny County controller, seems to be more in tune with Heisler’s concerns.
On Thursday, he outlined projections that showed the city needs another $30 million to $40 million to cover all of its expenses this year.
“The goal of my communication from the beginning has been to prompt action, so I’m glad someone is finally taking our concerns seriously,” Heisler said.
“I approached my commentary over the last two years to spur action, because the longer you wait to address financial matters, the harder they become and the more painful they become.”
‘Good watchdogs’
Council also finally heeded Heisler’s concerns and acted.
Late last year, it rejected Gainey’s budget proposal and overhauled it. Operating against a deadline and with some level of desperation, council tacked on a 20% property tax hike — a far cry from Gainey’s spending plan, which had no tax increase.
Heisler was among the most vocal critics of the former mayor’s budget proposal, warning it didn’t set aside enough for numerous expenses, from public safety overtime to utility bills.
Councilman Anthony Coghill credited Heisler and McDevitt for urging council members to take budget concerns seriously.
The Beechview Democrat has frequently erred on the side of being more conservative with city spending.
He refused to support a $6 million master plan for the city and opposed a bond to support affordable housing programs, which will cost Pittsburgh $62.5 million over 25 years.
“I feel like they’re being good watchdogs and warning us,” Coghill said of Heisler and McDevitt. “She has been wonderful, and I’m glad she’s there to point out, bring attention to unnecessary spending on so many things.”
A ‘limited role’
Though Coghill gave Heisler glowing reviews, the controller’s repeated alarms couldn’t force council and the mayor to rein in spending.
At O’Connor’s press conference on Thursday, Heisler listened as he voiced budget concerns similar to those she had been airing for years.
She admitted being gratified to see the new administration taking her warnings to heart. But she wishes officials would’ve jumped into action sooner.
As controller, Heisler audits city departments, roots out fraud and waste and updates the public on Pittsburgh’s fiscal health. She lacks authority, however, over setting the budget.
Despite Heisler’s repeated urging to rein in spending in recent years, she was powerless to force council members or the mayor to make changes she sought.
The controller’s office does not have access to the city’s budgeting software. She and her staff don’t know when the administration receives bills or sends them out for payment until they end up in her hands to process.
“We exposed everything we could from where we sit,” Heisler said. “But until invoices are routed to our office, there are things we just can’t see. Because of the segregation of duties, there are things we just don’t have access to.”
Former Pittsburgh Controller Michael Lamb said he can relate to the position’s “very, very limited role when it comes to the budget.” Lamb’s four terms stretched from 2008 to 2024.
“Being a watchdog, when there are concerns about spending, that falls to the controller — but not because of any fixed role with the city budget,” Lamb said.
“It was always our position — and Rachael has the same philosophy — that you investigate, you learn what you can and you let the chips land where they may,” he added.
Staying on message
Heisler, who was Lamb’s deputy from 2021 to 2023, said her position on city finances has remained consistent throughout her tenure as controller.
Last week, she echoed the same talking points: The city should’ve spent covid-19 relief money more carefully; Pittsburgh officials should have avoided hiring a slew of new employees; spending and overtime should have been better controlled.
“I feel like, from day one, all I have been saying is that the city’s finances are in a really delicate position,” Heisler said. “My message hasn’t changed.”
Lamb said Heisler’s position is just falling now on more receptive ears.
“That’s one thing she and (O’Connor) have in common,” Lamb said, “they like to get out in front of things and they’re very transparent.”
