The City of Altoona faces an operational deficit of about $2.5 million for next year - with less than half that much in the unreserved fund balance to offset the shortfall, according to Finance Director Omar Strohm, who presented a draft 2013 budget Wednesday.
Officials knew for about a year that this projected inability to make ends meet was coming, and they prepared for it by gaining entry into the state's Act 47 distressed municipalities program early this year.
Act 47 may provide the remedy to the unresolved shortfall through a recovery plan, with revenue enhancements made possible by eliminating caps on earned income and real estate taxes and probable cost cuts.
But the consulting team that has been working on the plan since early June won't be presenting it until Nov. 13.
So the draft is going to need major revisions, if only to close the funding gap, City Manager Joe Weakland said.
It would have been more efficient to have had the plan a month ago, before staff put the budget together, Councilman Bruce Kelley said. Failing that, it would have helped had the consulting team shared with city officials what they expected will be in the final plan,Weakland said.
But they did not.
Team members said it wouldn't be advisable, and that preliminary disclosure was not part of Act 47, Weakland said.
The team may not have wanted to lay out the plan "piecemeal," Kelley said.
But getting the plan late, when there won't be much time to review or revise it before council will need to approve a budget and slate of taxes for next year is what is causing "some of our angst," Kelley said.
At a public meeting on Act 47 Tuesday, team leader John Espenshade said he expects the plan to be 300 to 500 pages long.
"[Meanwhile] we'll have to use our Magic 8 ball and our Ouija board" to do the budget, Kelley said.
City officials expected the plan earlier, given provisions in Act 47 that call for consultants to finish 90 days after they sign a contract with the state Department of Community and Economic Development.
That deadline, however, became academic when the consultant worked for almost four months on an emergency purchase order. The parties signed a contract a little more than a week ago.
Mirror Staff Writer William Kibler is at 949-7038.