City revives capital plan
Altoona officials are working with their Act 47 coordinator team to fortify the city’s system for funding long-term improvements in anticipation of a $24 million bond issue later this year.
The changes are being made in conjunction with Altoona’s Act 47 plan to get out of the distressed municipalities program.
The recovery plan called Altoona’s old system for its capital budget “inadequate” with department heads making requests to the city manager and the manager submitting an informal list to go with the regular annual budget.
In recent years, some projects included in those informal capital plans haven’t been funded, due to the city’s financial troubles, according to the recovery plan.
The new process should help the city adjust the capital budget so items named get funded, while the city stays within its means.
City Manager Joe Weakland and Finance Director Omar Strohm expect to issue a new five-year plan in June.
Based on that plan, the city can issue bonds in September to refinance $15 million in existing debt at a better rate, while borrowing at least $9 million to fund new projects.
On the recommendation of budget expert Marita Kelly of the state Department of Community and Economic Development, which paid for the recovery plan, Altoona will model its capital budget on that of Naperville, Ill., a city in suburban Chicago with a population of 142,000.
The Naperville plan is about 200 pages, with a separate page for each project that includes justifications, a history of need, location information and funding details, he said.
Asked if he thinks producing such a document will be worth the effort, Weakland said yes.
It will be time-consuming, he said. But once created, it should be fairly easy to keep updated.
It would allow the city to compare original estimates with final costs and projected completion dates with actual ones, track cumulative expenditures and measure the effect of projects on the financial condition of the city, according to the recovery plan.
The recovery plan cautioned against including projects that cost less than $50,000 or that have a short useful life. The city should pay for those out of its annual general fund, according to the recovery plan.
But city officials argued that there wasn’t enough revenue coming into the general fund to pay for those projects, which include items like police cruisers.
The city has struggled for years with a shortage of general fund revenue, partly because of state caps on property and earned income taxes.
Because there is no limit on debt service millage, capital borrowing was a convenient way to pay for items the city couldn’t afford to pay for through the general fund.
Now that the city is in Act 47, the general fund is more flush, because the act lifts those tax caps.
The city took advantage by boosting the earned income tax past the old limits.
Altoona did succeed in convincing the Act 47 officials that they should relent on the shorter term, less expensive projects.
At least it seems that way.
“The preliminary indication is that they’re willing to go for a lot of our needs,” Weakland said. “I think it’s a reversal.”
In addition to elaborate formal documentation, the new capital plan should be created in consultation with City Council, which will make it more “transparent” and more subject to public scrutiny, according to the recovery plan.
Mirror Staff Writer William Kibler is at 949-7038.