Revenues are stable and expenses will continue to rise if a course correction is not implemented at Williamsport within the next five years.
It was one of several assessments of the city’s financial situation presented to the city council on Thursday in a study by EConsult Solutions Inc., a Philadelphia-based company hired by the city under a contract signed there. one year old.
The contract was for $64,625, but the cost to the city was $19,387 due to a grant from the Pennsylvania Department of Community and Economic Development (DCED) Strategic Financial Management Planning Program.
This program provides matching grants to help municipalities develop comprehensive multi-year financial plans and set short- and long-term financial goals.
Mayor Derek Slaughter said some of the study concepts have been floated and others can be offered immediately.
There is no cap or end to the assistance available and the state covers 70% of the cost of any project while the city is responsible for 30%, he said.
Opportunities and Challenges
“It’s encouraging the way you work together” as a board and administration, said Steven Wray, senior vice president and director of the company, who served as Lt. Governor and Acting Governor Mark Singel’s policy director from 1992 to 1995, he praised the city in using their creativity and by analyzing and prioritizing projects.
The study, he said, is interesting because it comes at a time when city officials are considering how best to spend the $25.4 million in the U.S. bailout on various projects, a- he declared.
Wray underscored the value of investing ARPA in the land reserve, parks, flood levee and recreation. He said “These are long-term strategies.”
He warned city leaders and the community not to rely on those ARPA dollars for figuratively “just plug the holes” but continue to make investments, find economic economic development and use these funds to promote and diversify investments in the future.
On the spot
EConsult Solutions Melissa Wright, associate director of the firm, presented the main part of the study. In highlights, she noted that the city has been able to maintain fiscal stability through a combination of increasing its tax mileage rate and cost containment strategies.
The combination has been able to maintain a relatively healthy financial position.
“It is not an entirely dire situation and there is no need for an urgent financial plan within DCED standards, however, there are challenges to overcome,” she says.
In recent years, the city’s deficit has necessitated transfers and the property tax mileage has been used as a tool to “compensate for the stagnation that occurs.”
One of the main cost drivers remains pensions which put pressure on the operating budget and increase at a faster rate than income.
An annual budget deficit and a deterioration in the fund balance will continue unless new sources of revenue are identified, as expenditures increase and revenues do not decrease but remain relatively stable.
Without intervention, there will be a “growing structural deficit” she says.
A conservative goal
The firm recommends that the City maintain a fund balance greater than or equal to zero.
Initial interventions are not recommended such as large-scale plans such as regionalization or the possibility of cost sharing or contract negotiations.
They are not represented in the analysis, Wright explained.
Instead, the key findings determined ways to immediately put projects in place to combat the city’s declining population and its crumbling housing stock – both of which are major factors in slowing income growth. .
Additional pressures related to revenue growth include staffing shortages and suggestions have been made to address these in the areas of community and economic development, finance and recreation.
“It would create an opportunity to generate revenue,” says Wright.
The COVID Factor
The virus remains in various variant forms. The city needs to be flexible, adaptable and have the ability to imagine what might happen next and envision the future before it happens in terms of the impact of COVID-19.
The city is geographically well positioned for economic improvement. He must consider reducing labor costs, although it is never easy and does not happen overnight.
The audit shows that a significant portion of the general fund budget is affected by labor costs. The city has competent employees and it is important to retain this expertise and realize that sometimes these employees may be a single employee working in a specific department.
Therefore, the city must be prepared and have plans in place to replace departing employees and those who are or are nearing retirement.
The company hailed the city’s plan to invest some of the federal COVID relief in efforts that can pay dividends such as the land bank to tackle degraded residential, commercial and industrial properties and get them listed. on the tax lists. However, the city must defend itself and pressure Lycoming County for a reassessment to fully capture the value of the investment in the properties and turn them into taxable parcels, as without county tax reassessment “you don’t capture the value,” according to the study.
Green spaces and parks and more business-friendly
Studies used by EConsult Solutions show that residences located near green spaces or a park have a land value premium of 7 to 9%. “These properties are worth more”, says Wright.
The company wants to see the city make its government operations more user-friendly by modernizing and investing in software and systems that allow transactions and businesses to happen without individuals physically walking into an office.
Responses from municipal authorities
in the finance committee and in council meetings
Slaughter said the city administration, with council review, has begun a number of those proposals found in the study. Among them is a plan to add computer software to provide “real-time” data on city finances for use in the human resources office.
Board Chairman Adam Yoder asked company representatives what the proposed timeline would be and how it would fit into a package.
It can begin once the Council has defined certain priority projects. Yoder noted his appreciation for the study and that he raised some of these concerns about revenue growth several months into the pandemic.
To that end, Councilwoman Liz Miele, Chair of the Finance Committee, said she hopes the administration does not allow certain past plans that have not fully materialized for one reason or another, which have been proposed. months and years ago and that would fit. well in strategy moving forward, to languish and gather dust.
The community insights and surveys done to create a parks master plan could be considered and used in various forms that would make sense today and be incorporated into economic development strategy in the future.
Yoder echoed his suggestion. The city should prepare an economic development strategy and list quantifiable items and projects it can put on a priority list now rather than later, Miele said.
Such a strategy will help the city try to take advantage of this opportunity.
Globally, “We are on the right path” Miele said.