A state-appointed board to oversee Harrisburg’s finances rejected the city’s 5-year spending plan this week, citing alleged deficits and a lack of detailed information.
The Intergovernmental Cooperation Authority voted 4-0 against the proposal at its meeting Wednesday.
The board was created by the General Assembly in late 2018 when legislators agreed to allow the city to keep its expanded taxing authority even after it exits Act 47.
Under state law, the city is required to submit a five-year plan for the board’s review during every year. The plan is supposed to “eliminate projected deficits, implement sound budgetary practices, and provide procedures to avoid a fiscal emergency condition in the future,” according to a news release issued by the board Friday afternoon.
The law, known as Act 124, also mandates that the board reply in writing to the city to express any issues with the proposal. But Harrisburg Mayor Eric Papenfuse said he still had not received any official correspondence from the board.
“I’m confident the city submitted a plan in compliance with Act 124,” Papenfuse said. “The fact that this was communicated by press release and not the process laid out in Act 124 raises red flags, but I’m confident once we receive the correspondence we’ll be able to address the concerns.”
The relationship between Papenfuse and the some members of the board have been fraught since the beginning. The city filed a lawsuit against the board earlier this year alleging its members wouldn’t allow the city finance director to attend monthly board meetings. The two sides also clashed over a proposed economic development symposium planned by the board without input from the city.
The authority cited five alleged reasons for rejecting the city’s five-year plan. The board members said:
The Neighborhood Services Fund, which accounts for revenue and expenses of the city’s trash collection services, demonstrated annual deficits and “points to a trend of this fund balance approaching depletion.”A schedule of projected capital commitments for the Neighborhood Services Fund was not included.Financial information from an Inter-municipal Sanitation Agreement with the Borough of Steelton appears “defective” because it didn’t detail possible additional costs such as travel time involved in collection, depreciation costs on the trucks, fuel costs, etc.The plan lacked supporting information for capital improvement projects, including details, descriptions, and all sources of funding.The plan lacked supporting information for new initiatives, including “a significant increase in headcount from 462 to 512 FTEs and a new Community Services Division.”
Papenfuse disagreed with the points outlined in the news release and said the Neighborhood Services Fund is balanced as required by law and that the agreement with Steelton isn’t defective.
He said the 2021 budget and proposed new initiatives have been approved by City Council after weeks of budget hearings and public input. The city has 15 days to submit revisions.
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