Altoona City Council has talked for years about entering the state's distressed municipalities program, even as they struggled to avoid it with stopgap measures.
Councilman Bruce Kelley urged colleagues in October to learn the pros and cons, after finding out the city faced a $1.6 million deficit for 2012 that would exhaust all reserves. Last month, council heard about the process from a state official.
Monday during a planning meeting, members finally agreed to seek the cure: at their regular meeting Feb. 22, they'll consider a resolution to petition the state to "go distressed."
"What recourse do we have?" Mayor Bill Schirf asked. "If somebody has a solution, please come forward."
"Sooner or later, we have no choice," City Manager Joe Weakland said.
The city could make ends meet beyond this year with more personnel cuts, beyond the extensive ones made by attrition over the past decade, Kelley said.
"But I have yet to talk to anybody who says we should cut more police and firefighters," he said.
When some members suggested it might make sense to wait, Councilman Mark Geis said, "If this is what we have to do, we might as well start the bus running."
Otherwise, given the eight-plus months it will take for the required state analysis, waiting periods, hearings, coordinator appointment and recovery plan creation, the city might not have the help the program can offer in place in time to meet the potential crisis next year, he said.
Why take the chance of not being able to make payroll, Geis asked.
In a discussion of initiatives to ensure solvency, some of which are available to the city already, some of which would become available only through Act 47, a couple of major tools and many minor ones emerged.
The big ones, available through Act 47, are: increasing the basic earned income tax for both residents and non-residents beyond the current 0.5 percent - an amount that goes to most non-residents' home municipalities; the city would earn $545,000 for every 0.1 percent levied on residents; and increasing the property tax beyond the state's hard cap of 30 mills.
Far more recovery plans hike the income tax than the property tax, officials said.
Among lesser initiatives discussed, some to cut expenses, some to earn revenue are: applying for a federal grant of up to $570,000 for up to four additional firefighters for two years, with numbers dependent on how many retirements are coming; it's a program that doesn't require the city to retain those firefighters afterwards, although Altoona's self-funding of unemployment compensation would make letting them go expensive.
The department's current personnel deficit of seven helps make Altoona a high-priority potential grantee.
The city could also push for consolidation of vehicle maintenance with the Altoona Water Authority, Amtran and the Altoona Housing Authority and push for a consortium for health care.
Several officials said they don't want distress to become permanent.
No other third-class city that has entered the program has left yet, but the city could use the help, then get out if it would persuade the county to reassess taxes, which would reset property tax millage to create headroom under the cap, and if it adopted home rule, which provides taxing flexibility, Weakland said.
Mirror Staff Writer William Kibler is at 949-7038.
