City budget passes with eye on possible bump in millage

Williamsport City Council approved on first reading a $28.3 million budget Thursday that has no tax increase.

However, several of its membership hinted at amendments being needed to possibly bump up that tax millage. That could happen this coming week.

Currently, the millage is 16.22 or $1,622 per property valued at $100,000.

Mayor Derek Slaughter, who fielded questions from council, said he presented a budget that started at zero and covered the contractural obligations, and nothing else.

That was because he was uncertain whether to add the carry-over or reserve funds because the administration was not sure if the prior year expenses are accurate until an audit is done.

Without the audit, he said, the city does not know how much “co-mingling of money” occurred in the prior administration.

Instead, Slaughter said his administration is working on getting better financial software to provide “real time” data.

He noted he presented a budget, working closely with Joseph Pawlak, city interim finance director, that reflects the “numbers” as accurately as possible.

“We are fixing it,” he said, adding the city was not sure what or whether it will owe back state and federal transit funds. He assured the taxpayers the proper procedures have been followed since he took office in early January 2020. “We are headed on the right path.”

Adam Yoder, one of two council members who voted against the $28.3 million city budget for 2022 that has no tax increase, said the city faces a $1.8 million deficit if the $900,000-plus in American Rescue Plan funds and what is in reserve funds would be removed. Councilwoman Bonnie Katz also registered a “no” vote.

Yoder said he was “conflicted” primarily by the process and strategy and said the budget was “barebones with not a lot of solutions to mitigate that.”

Council had eight days to review and understand the budget and a total of 15 days in which to pass it, he said, adding, “I think we need concrete plans to address the deficit.”

Yoder said had the administration presented the budget proposal earlier in the year it would have resulted in a more collaborative effort and provided more context for council to make what arguable is the most important decision it makes on an annual basis on behalf of the taxpayers.

Afterward, Slaughter said “extreme circumstances” put the city “between a rock and a hard place.”

Moreover, a recent audit of River Valley Transit indicated an $11 million deficit and possible co-mingling of state and federal funds related to bus operation and operation of the Hiawatha riverboat.

Meanwhile, the city remains under a criminal investigation by state Attorney General Josh Shapiro regarding the use by management of the Bureau of Transportation (RVT) of federal and state grants between 2009 and 2019.

Begrudgingly, Miele, chair of the finance committee, said she would be voting in favor of the plan with an eye toward changes, which may include a slight increase in millage to provide a cushion and prevent future taxpayer shock.

“I will support this budget with an eye toward amendments next week,” Miele said.

She also asked for the administration to include a written budget narrative briefly explaining each of the department’s roles in the future budgets.

“I don’t think we can fix it by next week but we can make it more fair to employees and taxpayers,” Miele said. By raising the tax rate by a small millage the city can make up for any shortfall when it does not have the $900,000-plus from the American Rescue Plan to invest and to avoid shock down the road, she said.

In an effort to provide some context as to why the city might need a tax rate increase and fully engage in a comprehensive strategic economic development plan, Council President Randall Allison compared 2017 wage tax, business privilege tax and real estate taxes to those proposed in this budget.

Wage tax showed an improvement of only $50,000 over the period, which indicated a need for more job creation and higher wages.

Secondly, he said, business privilege tax was flat and the increase for property tax was $1 million.

That $1 million is “getting us by,” Allison said.

The economic formula moving ahead is a strategy to improve the economic outlook for the city because these are “bare-bone” budgets with little ability to cut the workforce, most of which is unionized and protected under collective bargaining agreements.

In terms of a City Hall update, Gannett-Fleming will be inspecting City Hall, which remains condemned due to water damage.

From the inspection, it will be determined how much cost is involved to repair the building. Adam Winder, general manager of River Valley Transit and former acting general manager of the public works department, said he had heard those costs, to include removal of load-bearing walls, would be $20 million.

However, Gannett-Fleming was expected to provide a real-time analysis of the building’s needs.

Council’s next meeting is 7 p.m. Thursday. These are in-person at Trade and Transit Centre II and on broadcast over live stream.