City controller says budget revenue estimates are too optimistic
Allentown may end up putting a bigger-than-anticipated dent in its cash reserves to balance the 2021 budget.
That’s because the city’s fiscal watchdog says Mayor Ray O’Connell’s revenue projections are too optimistic, and because City Council wants to fund a handful of initiatives not included in the administration’s proposed spending plan.
City Council on Monday night considered about a dozen proposed amendments to the 2021 budget — and approved most of them. The initiatives ranged from a new $100,000 line item to address homelessness issues to a $40,000 proposal that would jump-start a community policing program with Cedar Crest College.
Council also reviewed a report by City Controller Jeff Glazier, who expects the O’Connell administration to bring in $1.9 million less than the $118 million in taxes and fees estimated in the 2021 proposed budget, about a 1.5% difference.
O’Connell initially planned to draw about $641,000 from the city’s roughly $12 million cash balance to cover a general fund deficit. Depending on how many of Glazier’s suggested revenue revisions and council’s additional spending items the mayor accepts, the budgeted shortfall could approach $3 million.
Glazier took a closer look this year at the assumptions supporting more than 70 city revenue streams. While most estimates are reasonable, he said, the data doesn’t support about a half dozen.
For example, the administration budgeted $500,000 in revenue from city property sales. But the administration didn’t indicate which properties it plans to sell or howmucheach will go for, Glazier said. He suggested revising the line item to $50,000.
Glazier also thinks the estimate for $5.1 million in state pension aid is unrealistic. The tax is derived from fire insurance written in Pennsylvania by out-of-state companies, and the city expects to get about 8.5% less than budgeted this year (also $5.1 million). Given the pandemic’s impact on economic conditions will extend into the new year,
Glazier recommended basing next year’s estimate on this year’s actual windfall, a $442,000 difference.
Additionally, Glazier took issue with the administration’s budgeting $300,000 of income from the Allentown Parking Authority. The city hasn’t received any revenue from the authority this year after budgeting $300,000, he noted, and there are no formal agreements obliging the parking authority to share enforcement revenue. He suggested going with a zero-dollar projection rather than a sum “supported by nothing but best wishes.”
Glazier also questioned estimates related to building and permit fees, cable television franchise fees, EMS transit fees and district court fees.
“It would be my recommendation that council proceed with very light feet in how they take money from the unappropriated balance. ... Next year will not be a flush year,” he said.
Council thanked Glazier for his due diligence but proceeded to approve $270,000 in additional spending as of 8 p.m., with votes remaining on other proposals.
O’Connell indicated that he would prefer to revisit the budget with council as 2021 unfolds if Glazier’s revenue predictions start to play out. He also noted that the city’s 2020 revenue projections were much more bearish this spring than what ultimately occurred.
“Bottom line, things change,” he said.
Rather than proposing a largescale reallocation of the police budget to various social services, progressive council members Ce-Ce Gerlach and Joshua Siegel worked to build coalitions supporting more targeted reforms.
Gerlach, Siegel and Mota backed Vice President Julio Guridy’s proposal to earmark $100,000 to address issues facing the homeless population. The funding matches a similar $100,000 earmark in Lehigh County’s budget.
Gerlach hopes the city money can support projects recommended by the Commission on Homelessness she spearheaded this year, in conjunction with the Regional Homeless Advisory Board. A number of council members expressed hope that the funding represents real momentum after years of talk.
Council passed the spending proposal by a 7-0 vote.
Mota, Siegel and Gerlach also proposed setting aside another $100,000 to help arts and culture organizations financially battered by the pandemic.
In a joint letter, nine organizations including the Allentown Art Museum, the Allentown Symphony Association and Discover Lehigh Valley said they need help remaining afloat until programs can resume at pre-pandemic levels.
The financial commitment, the letter said, will also “send a message to private funders” that the organizations need all the help they can get.
“Arts and culture organizations enhance and enrich the lives of so many in our city,” the letter said. “The City budget should ensure that we have the resources to make it through the COVID-19 pandemic so we can continue our important cultural work for years to come.”
Added Mota, whose husband is an artist: “Beauty creates hope. ... This is a commitment by our city to create a sense of hope in the community.”
After much discussion, council voted unanimously to provide $75,000.
Amongother initiatives, Council also unanimously approved a $40,000 increase to the police department’s budget to kick off its Community Engagement Center collaboration with Cedar Crest College.
The police department and Cedar Crest will use the funds to help establish a community policing program. They will also research the feasibility of implementing various types of community policing or alternative policing programs launched in other cities across the nation.
Siegel, who has expressed skepticism about community policing’s benefits, said he was confident the research conducted over the next few years will “reflect there are better ways to address certain societal issues that have little to no police dynamic” and “yield an environment I’ve been advocating for.”