City Council Monday night began to wrap its arms around Mayor Gabriel J. Campana's $21.1 million 2013 budget that calls for a real estate tax increase of 0.85 mills.
It was the first of two budget work sessions. The second at 7 p.m. Wednesday will review proposed police and fire budgets.
Campana's spending plan would reduce the police department by three positions and eliminate two Streets and Parks employees.
City council members Jonathan Williamson, left, and Bill Hall discuss a line item during the budget meeting Monday night.
His budget would mean another $85 more per year for a household assessed at $100,000.
Councilman Randall J. Allison, quoting a literary reference, said, "It was the worst of times it was the best of times," in describing the city's situation.
Despite 15 large projects planned for next year, and building permits and project anticipated to yield $500,000, there appears little wiggle room other than to impose a real estate tax increase due to employee benefits costing another $1.7 million and health care increasing by 11 percent across the board.
That, and the city is using carry-over funds to pay for unfunded mandates, such as the recertification of the flood-control levee and must complete several infrastructure projects that are close to completion, according to William E. Nichols Jr., city finance director.
"Mayor Campana is trying to maintain the same level of services and has addressed a 2013 budget shortfall that was approaching a 3-mill tax increase," Nichols said.
An anticipated savings of $1 million by switching health care administration and cutting personnel costs, along with increased revenues from a one-time pension reimbursement, are expected to save money, Nichols explained.
"We believe we present a budget that best meets the needs of the city," he said.
"Costs are rising faster than what we can afford," Councilman Jonathan Williamson said. He also commended the administration for pursuing projects and proposals that endeavor to bring in additional revenue to lessen the blow on taxpayers.
In fact, he said, the efforts are paying off by reviewing a two-year period of earned-income taxes, showing them to have risen by 22 percent, mercantile taxes by 24 percent and business privilege by 23 percent over that period.
Still, the city may end up with a potential increase in taxes and that doesn't sit well with council.
"That never hits us well, the taxpayer included," Williamson said.
Campana's assertion of the city receiving $250,000 for the sale of a parking lot on Mulberry Street that may become a building for senior housing if the developer receives tax credits through the Pennsylvania Housing Finance Agency, was challenged. The budgeted income for the property is $100,000, but Williamson said the real estate closing might not take place next year and the project may not happen should the tax credits not be received.
"A truly conservative income estimate would be $3,000 up to $15,000," he said.
Council questioned the capital projects budget and wondered how the natural gas drilling impact fee money would be spent.
The city has received a check for $560,000 and anticipates another in July, said Joe Pawlak, city fiscal and budget officer.
Council President Bill Hall said he didn't want the city to lose track of impact fee money and did not want the money to become part of the general fund.
Another project challenged was Destination 2014, the reuse of the YMCA block and transformation of the Pickelner Arena into a multi-purpose civic arena.
It is proposed the strategy to make it happen will involve partners such as Lycoming County Visitors' Bureau and First Community Foundation Partnership of Pennsylvania. The city anticipates $500,000 from the bureau and $1 million from the foundation.
The critical part of the destination project happening is to receive redevelopment funds, proposed at $6.5 million, to transform the Pickelner Arena, a field house without seating, into a multi-purpose civic arena with ice. That would require use of redevelopment money that can be obtained through a competitive process by applying for it through state government.
"Those redevelopment (dollars) can be used for whatever you want - Brodart or the Pajama Factory," Hall said.
The whole concept of the city as a facilitator of the destination project confused Allison, who asked, "We're the developer?" as Hall broke in, "No! We're not! Not on my watch."
Campana took time to issue another challenge to the Williamsport Municipal Water and Sanitary Authority that has refused to provide the city a one-time in-lieu-of-taxes payment toward its budget.
Campana said authorities in cities such as Hazleton have contributed $400,000.
"We don't receive a penny," Campana said. "If other cities are receiving, why not Williamsport?" he asked.
In terms of transportation, for the sixth consecutive year, River Valley Transit has reached $1.4 million trips, Nichols said.
The transit service anticipates putting its first-ever compressed natural gas fueled bus into service in December and buying three more next year using federal highway transportation funds.