Smaller wage increases or wage freezes for the City of Williamsport.

These are also options on how city officials could choose in their budget to draw down a deficit next year with a trajectory of at least $3 million upwards to $5.1 million should no action be taken to limit the possible deficit.

A wage freeze has savings over a course of time because every future wage increase gets added to a lower bonus, said Gordon Mann, managing director, Public Financial Management (PFM). The consultants are assisting the city on its strategic management plan.

Better than having people take zero, which is extremely unlikely with collective bargaining, and not something that can be done unilaterally, is a smaller wage increase.

Some 87 % of the city employees are in a union.

If done it might impact about 20 people, or 13 % of the workforce.

The firm’s baseline projection shows 3 to 3.5 % wage increases every year.

“That is what you are doing,” he said. “That is what the recent wage increases are.”

If those wage increases came down to 2 % – that is $294,000, or about the same as a payment-in-lieu of tax from a nonprofit, he said.

However, over time, that increases in 2027 to $400,000; $635,000 in 2028, $820,000 in 2029 and $1,013,000 in 2030, a year when the firm projects a budget deficit of $6.4 million should no corrective action be taken.

“That’s not five years of wage freeze … that’s five years of people getting a little smaller wage increase,” he said.

This is why PFM does not only focus on not only cutting costs, but also controlling cost growth – where $10 was going to grow to $20 but is $15 instead.