Williamsport taxpayers are projected to see a one-third-of-a-mill real estate tax increase in 2025.

Mayor Derek Slaughter presented the proposed 2025 budget to the City Council this week.

The income estimates show that tax millage would generate $290,000 in additional real estate tax revenue, according to Slaughter.

This year’s budget was $32.5 million. Council approved a half-mill tax increase in 2024. The tax rate in 2024 was 16.72 mills, making those with a house assessed at $100,000 levied $1,672 in annual city taxes, not including the school district and Lycoming County taxes.

A projected 8 to 9 % increase in medical insurance coverage, on average, was the main cost-driver, according to a summary for council.

Additionally, the city will no longer have American Rescue Plan Act funds in which to transfer as they must be allocated by the end of this year and spent by the end of 2026.

The package given to council included the 2022 and 2023 unaudited figures as well as 2024 projection and the 2025 proposed budget.

The 2025 general fund budget is projecting a $3.3 million deficit, Slaughter said.

In 2024, he said, one-time revenues from the transfer of the (ARPA), lost revenue, funds from prior Bowman Field activities, proceeds from the sale of fire equipment, and the shifting of annual expenditures to ARPA helped offset the $3 million anticipated deficit to the $753,000 deficit approved in the 2024 budget.

Current projections anticipated that the city in 2024 was about $133,000 in surplus, rather than a budget deficit. “This is due largely to a strong investment income performance and a reduction in anticipated expenditure cost in 2024,” Slaughter said.

The 2024 projected revenue and expenditures will leave the 2025 budget with an anticipated beginning cash balance in the general fund of $4.5 million, he said.

Overall, the 2025 proposed budget shows a 4% decrease in anticipated revenue.

This decrease reflects the one time transfers, as noted, and includes a $1.3 million transfer from the emergency and reserve fund.

The 2025 general fund expenditures will increase by an estimated 5% due, largely, to rising medical costs and shifting annual expenditures back into the general fund budget that were moved to ARPA in 2024.

With the exception of adding back the community development office manager, which was erroneously removed from the 2024 budget, the 2025 proposed salary budget includes no additional positions. The proposed salary budget includes a 0% increase for police union staff and a 1% increase for fire union staff due to ongoing union contract negotiations.

However, the proposed budget includes dollar figures that will need to be added to expenditures for various increases in different scenarios depending on how the negotiations end up, according to the mayor.

This year, the city added a grant administrator position, which is now managing $52 million dollars in grants and earmarks awarded to the city, Slaughter said.

With the assistance of the grant administrator the police department was able to secure a state earmark to be able to purchase an armored rescue vehicle to help aid in the protection of the city residents.

The grant administrator has helped the fire department to secure grants to make much needed improvements to their facilities.

The fire department was also able to utilize ARPA funds to purchase state-of-the-art equipment to enhance the city’s public safety.

Other departments, such as the city’s public works and Bureau of Codes were able to upgrade equipment with ARPA dollars.

The public works department was able to purchase multiple new vehicles to help with maintenance and upkeep of the city’s infrastructure.

Also in 2024, the city upgraded through a grant its financial processing and software to function on a more efficient level.

Looking ahead, the city has a much clearer picture on reported revenues and expenditures, Slaughter remarked but he added it is “faced with extreme financial challenges in the coming years.”

He then said with the help of the council coordinating with the administration the city intends to develop an “action plan” to ensure the city’s financial health and ability to thrive next year and in future years.

During the first budget work session, budgets for council, clerk, mayor, Bureau of Law, controller, treasurer, human resources, finance and administration, public works and engineer were reviewed.

Finance director Jamie Livermore said revenue is projected to be down 4 % while real estate tax proposes show a $285,000 increase.

The city does not expect as many street excavation permits due to less work anticipated next year, she noted.

Moreover, she said, the pension contribution is down due to removal of River Valley Transit employees and the city will no longer have the American Rescue Plan lost revenue in which to transfer, she said. Additionally, ARPA interest will be down because the funds are being spent.

“Last year, we had a one time transfer from the ballpark funds and that will not be in this budget,” she said.

Further, a capital sale of a fire truck is removed as well.

Councilman Eric Beiter asked Livermore and Mayor Derek Slaughter about a UPMC lump sum annual contribution, which is not required in their annual contract.

“Are we negotiating that contract because that is a huge number we are going to be losing out on in 2025 and hopefully regain in 2026?” Beiter asked.

Slaughter replied he met with UPMC representatives earlier Monday and would be briefing the council on the negotiation.

Council President Adam Yoder asked the administration what the city would have done if it would not have had the emergency and reserve funding. “That is kind of saving us this year,” he remarked, adding that discussion could be part of the action plan moving ahead in 2025.

Slaughter acknowledged he was not sure, and believed the city will need to take a hard look at the fund.

“I know it’s none of our fault sitting in this room, but we’re kind of paying for the sins of the past, frankly,” Slaughter said.

Contracted services of $85,000 includes money for the anticipated BKV City Hall and facilities study, which began in 2024.

The firm is using experts in the fields of architecture and engineering to study the cost of making condemned city hall functional and looking at other possible buildings that could serve as a city government facility or what the cost would be to construct a city hall. A preliminary analysis was provided earlier in the fall but not a final report.

On Wednesday, the budget work session will look at projected budgets for public safety departments, such as police, fire and codes.

It also will review liquid fuels, natural gas impact fee (Act 13), capital projects, City Hall operating fund facilities, information technology and the emergency and reserve fund.

Council holds a first reading of the proposed budget on Dec. 5 and Dec. 12 as projected adoption and final council meeting of 2024.