Act 47 Coordinators Release Financial Recovery Plan for City of Reading

Recovery Plan Available for Public Comment; Public Meeting Scheduled for May 19

HARRISBURG, Pa., May 6 /PRNewswire-USNewswire/ -- The commonwealth's Act 47 coordinators today submitted a financial recovery plan to the City of Reading, marking the start of a public comment period that will last until May 21, the Pennsylvania Department of Community and Economic Development announced today.  

The financial recovery plan addresses Reading's increasing deficits, cash-flow shortfalls and inadequate financial monitoring, and sets a strategy for long-term recovery, growth and sustainability.

Reading has been operating with an annual deficit since 2007. The estimated deficit for 2009 is approximately $11.1 million. If current trends continue, Reading will face a cumulative fund deficit that exceeds 90 percent of its operating budget by 2014, according to the coordinators.

The plan's key goals include:

• More efficient government operations that rely on less revenue while focusing on core services;
• Improved financial reporting and transparency;
• Stronger partnerships with county and adjacent local governments, and stakeholders;
• Promoting diversity and inclusiveness in the recovery process; and
• Forging an economic development partnership that includes a comprehensive economic development strategy.

Major initiatives to stabilize Reading's finances, grow its tax base and implement the plan's goals include:

• Reducing by 15 percent the budgets of the mayor's office and city council;
• Freezing wages and salary increases for three years;
• Restructuring health benefits;
• Strengthening financial management systems and building fiscal and technological capacity;
• Using shared services with the county or neighboring municipalities, including 911 dispatch, vehicle fleet maintenance, recreation and library services;
• Transferring tax collection to the county;
• Improving the collection of current and delinquent taxes and fees;
• Updating service fees to match the increased cost of those services; and
• Establishing an economic development partnership that realigns the city's community development, housing and economic development strategies to increase investment and enhance housing opportunities.

The recovery plan offers two options to infuse revenue in the short-term:

• Increase the property tax by 10 percent in 2011 and 5 percent in each of the subsequent four years; and implement a parking surcharge through 2014. These measures would generate $20.3 million in additional revenue over five years.
• Increase the property tax by 10 percent in 2011 and 5 percent in each of the subsequent four years; and increase the resident and non-resident earned income tax for 2011 – 2013. These measures would generate $22.7 million in additional revenue over five years.

The Act 47 coordinators are seeking public comment until May 21 on the two options for generating revenues and on the full financial recovery plan. Written comments should be submitted to the coordinator, Dean Kaplan, Public Financial Management, Two Logan Square, Suite 1600, 18th and Arch streets, Philadelphia, PA 19103-2270, or to [email protected].

In addition, a formal public hearing to receive comment will be held on at 6:30 p.m. on Wednesday, May 19, at the Miller Center, Reading Area Community College, 4 North 2nd St., Reading, PA 19601.

The coordinator may revise the recovery plan based on public comments, and will file the final plan with the city within 10 days of the hearing. City council will then have 25 days to act on it.

The City of Reading was deemed financially distressed under the guidelines of Act 47, The Municipalities Financial Recovery Act, in November. It is the 19th Pennsylvania municipality currently active in the program.

For more information on Act 47 or to download a copy of the financial recovery plan, visit www.newpa.com or call 1-866-466-3972.

Media contact: Jamie Yates, 717-720-1387

SOURCE Pennsylvania Department of Community & Economic Development