Reserve fund nearly drained; council continues to whittle
City Hall’s reserve fund is nearly empty, city officials acknowledged Monday as they prepare to work closely with City Council to erase the deficit. Mayor Gabriel J. Campana has proposed a tax increase and council had to up it further in light of the city financial picture.
Residents with a house assessed at $100,000 will pay $1,547 a year if the 0.75-mills tax increase proposed by council passes on final adoption.
But the reserve, or bank savings is at $12,000, and there are not many places to get out the scissors and cut, according to William E. Nichols Jr., city finance director.
The proposed budget accounts for 87 percent of employee salaries, pensions and health care costs, Nichols said. The other 13 percent include professional contract services, operations expenses and maintenance costs, he said.
One area the administration wants to review is the contracted services, which no longer will go with open-ended contracts, Campana said.
“We can look at options on contracted professional services,” Nichols said, adding he planned to give council the option of transferring money reserved for Delta Development Group, a consulting firm that has helped River Valley Transit and the city to obtain at least nine worthwhile grants, into the general fund for its bottom line.
“To financially assist the city,” Nichols said. “I have to get with council and go over options to cut more expenditures,” he said Monday.
Currently, too, the city pays Penn Strategies Inc., an economic development consulting firm based in Harrisburg with local agents, $200,000 in a two-year contract for such service.
“I am looking at Penn Strategies, which has produced, but I must count every dollar to save for taxpayers in the year ahead,” Campana said.
Penn Strategies contract is fully funded through the end of next year and has helped to secure $1 million in levee recertification funding projects, brought $2 million to Lycoming Enginees and continues to work on a flood mitigation project with the state Department of Environmental Protection at Grafius Run, said Jason Fitzgerald, its president.
With hardly anywhere to turn to cut without increasing property tax millage, council was at a loss for words, as it went through and trimmed the pennies late into Thursday night.
The city begins its year with a $1.5 million budget deficit that could be addressed. The proposed budget eliminates seven positions through attrition, including four in police, two codes officers and an unfilled assistant general manager job in streets and parks department.
It shows a complement of 47 personnel for police, 33 for fire; and two less in codes and one less position in streets and parks.