ICA Transmits Annual Report | ICA for Harrisburg

FOR IMMEDIATE RELEASE

Contact: Jeffrey Stonehill, Authority Manager

Intergovernmental Cooperation Authority for Harrisburg

(717) 645-5431
hbgica@gmail.com
www.hbgica.org

Harrisburg, Pennsylvania – The Intergovernmental Cooperation Authority for Harrisburg (ICA) today transmitted its first annual report to Governor Tom Wolf and the General Assembly on the fiscal progress for the City of Harrisburg. The ICA, an independent state agency created under Act 124 of 2018, is responsible for advising the City on matters of finance and management with the intent of resolving fiscal problems, eliminating deficits and regaining access to capital markets.

In the report the ICA finds that the City’s current financial condition is sound and includes surplus funds generated in part through the Harrisburg Strong Plan developed by the City Receiver while it was classified as distressed municipality under the Commonwealth’s Act 47. It also notes positive steps such as acceleration of debt repayment and a new agreement with police employees intended to stabilize the force and promote longevity of service.

The report identifies a need for sound financial management to include improved fiscal
administration and planning, addressing a series of audit findings of material weaknesses in
accounting, developing a comprehensive capital budget and plan, and exploring cooperative services agreements with adjacent municipalities.

Further the report notes that the initial five year financial plan developed by the City pursuant to Act 124 represents a structural deficit, balancing each year’s budget by relying both on spending down fund surpluses year over year, and on revenues derived from the Act’s grant of a five-year extension of the City’s special taxing authority under Act 47.

The report notes as well that the City’s financial condition, like its peers nationwide, could be
affected in as-yet unknown ways by the economic conditions and service demands brought on by the COVID-19 pandemic.

In addition to sound financial management, the ICA recommendations to the City for overcoming its structural deficit include two additional themes: Strong planning for community and economic development; and fostering operational excellence.

The ICA finds a forward-looking community and economic development plan and program to be a key need if the City is to build a revenue base to replace the special tax authority set to expire five years after its exit from Act 47 status. The report notes that city revenues are relatively stagnant, and growth is best achieved by development of business and residential capacity, in cooperation with local and regional government and private sector partners.

The ICA report calls for city-wide commitment to operational excellence, which includes
development and implementation of a strong system of program measures, commitment to
compliance management of state and federal funding, and developing a workplace culture that no longer accepts and expects errors. It also includes updating an outdated technology infrastructure, a project currently underway.

The report expresses frustration, however, that the City has failed to develop an appropriate working relationship with the ICA, citing in particular failure of City leadership to negotiate a statutorily-required operating agreement, rejection of any ICA role in community and economic development, and a disregard toward other ICA recommendations as well.

“Having spent so many years under Act 47, we understand the City feels as if it has been micromanaged with oversight, feeling in the end that they ‘have tried it all’ and there is nothing that has not already been tested and rejected,” said Audry Carter, ICA Chair. “That perspective manifests itself in a general dismissal of the Authority and its oversight responsibilities as outlined in the Act.”

Still, she indicates the board members of the ICA remain committed to bringing their diverse
backgrounds and experience to help the City promote growth and sustainability. Acknowledging that the City has a new, experienced community and economic development director, she said the ICA looks forward to “working with the City and its partners to optimize its vibrancy and move forward with disciplined outward focused energy.”

The full report can be found at the ICA website, www.hbgica.org or by clicking on this direct link: https://hbgica.org/download/424/

About the ICA:

The ICA, composed of members experienced in finance and management, advises the City of Harrisburg, the General Assembly and the Governor concerning solutions to fiscal problems the City of Harrisburg may face.

The powers and duties of the Authority are exercised by a governing board composed of five appointed members. All five members are residents of the city and/or have their primary place of business or employment in the city. In addition there are two ex officio, non-voting members of the board representing the city and the Secretary of the Budget.

The governing board of the Authority employs an Authority Manager and Independent General Counsel to assist them in their mission.

If you have any questions about the Section 203 Annual Report, please contact Authority Manager Jeffrey Stonehill at hbgica@gmail.com.