Public Financial Management (PFM) officials are interviewing departments in Williamsport to get a sense of what they do and why as part of a “prioritization” process to address a threatening multi-million 2026 budget deficit.

Members of the Philadelphia-based financial management team said they began after a July 24 meeting with City Council to spend time talking with department heads and employees to find out more to get a sense for prioritization as they prepare a series of recommendations for the administration and council to address the projected deficit of $3 million to $4.6 million.

The analysis indicated Williamsport officials will need to make “hard choices” to exit this path.

Gordon Mann, managing director of PFM, in July suggested next steps while preparing to return in mid-September with more specifics.

“We are going to come back and talk about headcount because what you spend money on is people,” he said.

“It does not mean it will be in the final report but will be looked at.”

“When we come to the end of this process we are going to have to talk about service cuts,” he said.

The city won’t erase a $3 million deficit (the most optimistic estimate) by hoping revenues increase, he noted.

“This deficit is large enough where we have to put everything on the table,” Mann said.

“It would be a lot of fun and maybe gratifying to take an ideological position now by saying ‘we’re not going down and tax increase, ‘we’re not going to touch public safety’ … we are going to look at it because it is a $3 million deficit and you don’t really have a choice.”

The city’s $3 million deficit will not be solved $10,000 at a time; Mann noted.

“You have some resources to work with,” Mann said.

For example, the city has $7.4 million in cash it brought in this year.

He urged city officials to take the challenge seriously because the budget is badly out of balance at least as it is presented on paper, equal to 12 months of expenditures and 10 months of revenue.

“We need to get that back into balance,” Mann said.

“I want to prepare you that we will come back with some big ideas,” he said. “We will come back and say, ‘This is what this type of tax increase will be worth.’ It may be painful … it is going to be on the list,” he said.

PFM will look at short-term ideas, which are not great but might be necessary to get the city to the out-years.

That means if the city has $7.4 million in cash and the city uses $2 million of it this year it might need another $1 million or so next year as it does not want to drop below a danger point and also point where it is concerned about making payroll.

It may need the $1 million to get to longer range solutions, according to the consultant.

The city imposed a .33 mill tax increase on property owners in 2025 and .25 mills the year before.

A mill of tax is $861,055 and the tax rate is 17.05 mills, according to the 2025 budget.

PFM is engaged in this deep dive as part of a strategic management plan, STMP 2.0, under the state Department of Community and Economic Development (DCED).

It cost $124,000, 90 % of which was picked up by the DCED and the remainder by the city.