After little discussion in recent months about a consultant's work on a financial recovery plan for Altoona, city officials let loose Wednesday with worries the plan won't be done in time to keep the city out of the red for 2013.
The city needs the recovery plan done in time to incorporate probable revenue enhancements into its 2013 budget, so those enhancements can go into effect at the beginning of next year.
Otherwise, a projected $1.5 million to $2 million deficit would force the city to adopt a budget calling for layoffs - endangering public safety, officials said.
Or else declare bankruptcy, solicitor Larry Clapper said.
City staff will write to the state Department of Community and Economic Development demanding that it urge the consultant the department hired to do the Act 47 plan to hurry up.
Staff have been trying to push consultant Stevens & Lee for information about the plan's progress with little success, City Manager Joe Weakland said.
Weakland said he doesn't expect the plan until November.
Getting it adopted and coordinated with the budget will mean dealing with the Thanksgiving and Christmas holidays and may mean working late in the year, he warned.
"Things are going to jam up," Weakland said.
The problem centers around review periods for the plan and the budget and deadlines for adoption of the revenue enhancements - such as a likely increase in earned income tax, as permitted by Act 47, officials said.
The city cannot raise earned income tax - or property tax - without authorization in the recovery plan, because it's at the state maximum for both.
The recovery plan must go in front of the public for 15 days before council can hold a mandatory public meeting and adopt it, officials said.
The budget must go before the public for 20 days as a tentative document, then must be adopted before the end of the year.
Any increase in earned income tax requires notification of the employers who withhold the tax by the end of the year - or the city can't include the additional revenue in the budget - which is a legally binding ordinance, Weakland and Clapper said.
If the city fails to notify employers on time, it would need to wait until the middle of the next year to raise the tax, Clapper said.
The city can't afford to forfeit that half year of extra income, Clapper said.
"It would be devastating," he said.
Council needs to adopt a balanced budget by law and it must reflect the actual amounts of money available, and municipalities must follow their budget outlines by law, Weakland said.
Without special court approval, the city cannot reopen the budget after the new year, because it's not an election year, with new council members coming on board, Clapper said.
"I'm concerned that we're pushing a lot of stuff to the end of the year," Councilman Bruce Kelley said. "What happens if their time frame doesn't line up with our time frame?"
Council and managerial staff will need time to digest it, the employees will need time to review it and the public will need time to see what it says, Kelley said.
He doesn't want the public after Jan. 1 to ask "You guys did what?" he said.
One possible "fallback position" would include stating in the budget that the city would make up the deficit with revenues that the plan would allow it to collect, Weakland said.
But that seemed to contradict requirements detailed at other times in Wednesday's meeting.
Weakland hopes to have a schedule Friday for the plan's submission and approval - in coordination with the city's adoption of the budget.
Councilman Mike Haire has recommended that staff begin work on an alternate plan, in case the consultant's is so unsatisfactory that council rejects it wholesale.
"The 11th hour is already here," Councilman Mark Geis said. "Someone has got to light some fires."
Mirror Staff Writer William Kibler is at 949-7038.
