Harrisburg, Pennsylvania – The Intergovernmental Cooperation Authority for Harrisburg (the Authority) has disapproved the City of Harrisburg’s proposed update to the Mayor’s Five-Year Financial Plan.
The Authority voted unanimously to disapprove at its public meeting on December 16, 2020.
Under state law, the City is required to prepare and submit a proposed five-year plan for the Board’s review during each fiscal year. The requirements of the plan include components that will eliminate projected deficits, implement sound budgetary practices, and provide procedures to avoid a fiscal emergency condition in the future.
Audry Carter, chairperson of the Authority board, stated, “The City of Harrisburg’s proposed Five- Year Financial Plan demonstrates a stable fiscal position, with a strong General Fund balance and relatively resilient revenues in spite of the global pandemic and economic crisis.
“However there remain areas of significant concern highlighted in the proposed plan, which we will work with the City to address. We look forward to reconsidering a revised plan for approval.”
Authority Manager Jeffrey Stonehill explained, “The Authority is charged with review of the annual plan. If the Board finds deficiencies and thus disapproves, the Mayor is given an opportunity to amend the plan. The Authority members and I look forward to working with the administration on resolving these issues.”
The Authority identified specific, material issues preventing the approval of the proposed plan as submitted. In this respect, the Authority specifically pointed to:
- The Neighborhood Services Fund, a principal proprietary fund of the City of Harrisburg, demonstrated annual deficits in the proposed plan update, which is not permitted pursuant to state law. The plan points to a trend of this fund balance approaching depletion.
- A schedule of projected capital commitments for the Neighborhood Services Fund was not included, as required by state law.
- Financial information associated with an Intermunicipal Sanitation Agreement with the Borough of Steelton appeared defective and not in accordance with generally accepted accounting principles.
- The plan lacked supporting information for capital improvement projects, including details, descriptions, and all sources of funding.
- The plan lacked supporting information to demonstrate proper planning procedures for new initiatives, including a significant increase in headcount from 462 to 512 FTEs and a new Community Services Division. Additionally, the Board is concerned that while the Plan acknowledges the effects of COVID-19 on the current fiscal year and reasonably pushes off any consideration of recovery for affected funds and services until the 2022 fiscal year, more consideration needs to be shown of worst-case scenarios. Under state law, the Authority shall deliver a written notification of disapproval to the City, and the City shall submit a revised plan within 15 days. However, the Authority board indicated it would be willing to grant a reasonable extension of time, if the City were to request it. The Board noted that the submission of the plan, originally intended for adoption by June 30, 2020, had already been delayed to December 2020. The Board further noted that COVID-19 issues, administrative demands, and the unprecedented nature of fiscal projections based on revenue streams and service demands upended by the virus will continue to be matters of discussion as the City and Authority enter the next cycle of plan updates, set to begin in April 2021.
About the ICA
The Intergovernmental Cooperation Authority for Harrisburg (ICA) is a public authority and instrumentality of the Commonwealth of Pennsylvania. The ICA was created for the general purpose of fostering the fiscal integrity of the City of Harrisburg, pursuant to the Intergovernmental Cooperation Authorities Act for Cities of the Third Class (Act of October 24, 2018, P.L. 751, No. 124).
The Intergovernmental Cooperation Authority for Harrisburg (ICA) was created by an act of the General Assembly. The Authority, 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. The current four 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 ICA retains an Authority Manager and Independent General Counsel to assist them in their mission.
If you have any questions about the ICA, please contact Authority Manager Jeffrey Stonehill at email@example.com.