Williamsport’s financial puzzle is still

Williamsport, Pennsylvania — One month later Williamsport City Council informed of dire financial situation in city.

At the time, Tracy Rush, who had been brought into the Treasury Department on a contractual basis after the departure of Treasurer Joe Paulak, said that the city had an IRS, an uncompleted state audit, inaccurate information on bank accounts, and an inability to keep up. to allow reports.

Since then, Mayor Derek Slaughter said one of the IRS’ problems has been resolved.

Slaughter said Rash was able to avoid a $12,000 fine the city faced for late filing taxes for the fourth quarter of 2021. He said he didn’t know those taxes were filed late.

If you still did not submit the City’s W2, 1095, and 1094 to the IRS, the City would be fined $160,000 by the IRS. Slaughter says it’s still “very unlikely” that this will be abandoned.

Slaughter also said some of the more than 50 bank accounts the city maintains have been reconciled. He said the city’s financial situation should become clearer in the next “a month or so.”

“[Rash] It’s going to be a place where we can start to sort of understand where we stand,” Slaughter said.

The city is also still working to complete state audits for 2019, 2020, and 2021.

“Tracy is working in parallel with the auditor, so we are coordinating. [accounts] At the same time, she’s getting information from them when they’re reconciling,” Slaughter said.

Slaughter said that once the audit firm receives the information, it must independently verify everything, a time-consuming process. Companies also have to complete yearly audits in sequence and cannot work on multiple years at the same time.

These problems date back several years, but their depth is still unknown. The issues currently identified date back to the administration of former Mayor Gabe Campana, who was in office from 2008 until 2020. State Attorney General’s Investigation into Diversion of Funds Through River Valley Transit (now River Valley Transit Authority entity separate from the city).

“All the different incoming streams came in. [grants, taxes, etc.]and it was essentially in one big pot,” Slaughter said. We were not in compliance with the grant agreement.”

Council Chairman Adam Yoder described the financial situation as “baffling, frustrating and scratching my head”.

“We’ve been three years as a new group of elected officials and I don’t understand how this wasn’t discovered three years ago,” Yoder said. “It’s just as frustrating and baffling. I don’t understand how this wasn’t caught in its first year. Regime change.”

Still, there are cities to act on and some challenges to move forward when it comes to opening budget negotiations.

Congressman Elizabeth Miele said she wanted to start budget negotiations in July, but Slaughter said that was not possible.

“Until July, it was really difficult to get in front of the mayor and be heard,” Yoder said. “There’s a perception that he’s not interested in doing it, or just doesn’t want to, and I don’t know why.”

Regarding the ongoing Attorney General’s investigation, Slaughter said once the expected payments to federal and state governments were made, the problem would be to start budget negotiations while the city didn’t know what cash it had on hand. He argues that it can happen.

Slaughter said entering budget negotiations without accurate information could exacerbate problems of fraud, misappropriation of funds and account mixing, according to audit firm RKL.

“We could start from scratch, but we know we owe the federal government some form of repayment,” says Slaughter. “So we’re not starting from scratch. But I don’t know how it will be.”

Yoder said the concern was understandable, but said it was a “nosy excuse.”

“We’re doing a two-year budget right now, and we’re going into year three,” Yoder said. “We have very accurate revenue projections. We have real-time data on collection locations. And we have pretty accurate data on spending.”

“We may not be auditing, but we have a pretty good understanding of money coming in and money going out,” Yoder continued.

It is also frustrating to Yoder that past budgets submitted to Congress have not addressed deficit spending. Government spending in excess of revenue.

Yoder said the board, especially Miele, is trying to “clarify” the need to address deficit spending, but “it’s falling on deaf ears.”

Slaughter said he was committed to starting budget negotiations but didn’t want to have “imaginary conversations.”

“In the last few years [council has been developing a budget] But they don’t use exact numbers,” Slaughter said. “They were doing it without adjusting their accounts.”

Republican Yoder praised Slaughter for joining former Republican alderman Joel Henderson for sounding the alarm about city finances and making it a bipartisan issue, but he is beyond his depth.

“He’s not a finance person. He’s a math teacher,” Yoder said. “There’s a big difference between finance and math. He doesn’t have that skill set and doesn’t play a complementary role to that skill set.”

Mr. Slaughter said he had been interested in finance since he was a city councilor.

“I’ve been talking about this since I was a city councilor,” Slaughter said. “I’ve been talking about finances for a long time. That’s what I ran into. That’s why I wanted to be mayor.”

River Valley Transit Authority

There is also the issue of the move of the transit building from Williamsport to the RVTA, which was due to be approved by Congress on September 1st.

Slaughter said the problem with relocating buildings is that federal and state interests in those buildings supersede city interests.

Slaughter said if the city wanted to take full ownership of one of these buildings, it would have to pay back federal interest, which is between $40 million and $50 million.

Slaughter pointed out that buildings that the city thought were wholly owned actually referred to public works buildings, and federal interest ended up attached to them.

Slaughter said he believes the administration has given the council everything it needs regarding federal and state interests tied to RVTA buildings that are hindering the transfer of ownership.

Yoder says the government’s problem is not a lack of information. It is a “lack of motivation or interest” in working with the Council.

“for [council] “For good faith surveillance, we have to get the cooperation of the government,” Yoder said. “We have to trust what they give us, and it’s been difficult.”

Who are you going to hire next?

Yoder said he believes many of these financial issues could be alleviated by hiring new staff. He and the council have been asking the mayor to hire a new administrator for the past few years.

“We basically changed the name of the managing director,” says Yoder. “There is a managerial director who has been open for years….he refuses to go ahead with it.”

Yoder said it’s a skill set the city needs and a skill set the mayor doesn’t have.

Slaughter didn’t mention hiring a new administrative director, but said he hopes to hire more people in the finance department once he has a better understanding of where the city’s money is.

Slaughter said that as part of the deal with the city, Rash will also make recommendations for the future of the city’s finance department as it transitions from the city’s finance department. She also works with people who were hired before retirement so that their career change goes smoothly.

Yoder says if Slaughter is worried about the city’s finances, “he probably shouldn’t be asking.” [council] Use it like water. ”

“He shouldn’t have given people raises last year if he didn’t know what we were dealing with,” Yoder said. “He brought in a contractor [referring to Rash] If they worked full-time salaries, it would cost them $300,000.”

Yoder said Rash was great and “a pleasure to work with”, but pointed out that she was not a city employee.

Looking ahead, Slaughter said his administration is looking to make things more digital and is currently looking at software that will allow citizens to easily access the city’s financial information.

“All public finances will be forward on our website,” said Slaughter. “You can click on the mayor’s office, ordinances, public works projects, etc. to see your income and expenses. It’ll all be there. We’re not there yet, but that’s what we’re seeing now. .”

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