City hopes to retain state-appointed financial coordinator after leaving Law 47 later this year

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Reading administrators hope to retain the city’s state-appointed financial coordinator after the city exits Bill 47 this year.

The reading has been part of the state’s Law 47 program for cities in financial difficulty since 2009.

Public Financial Management, a Philadelphia consulting firm with offices across the country, has been tasked with developing a plan to help Reading regain fiscal solvency.

“In response to the question ‘Do we want to keep PFM after Act 47?’ the administration’s answer is ‘yes,'” said Frank Denbowski, chief of staff for Mayor Eddie Moran and acting city manager.

Denbowski and Jamar Kelly, director of city administrative services, explained the administration’s rationale and outlined what PFM’s services could look like in the future during a meeting of the city council’s full committee on Monday.

Kelly said PFM’s services are critical in three areas: collective bargaining and benefits consultation, annual budget analysis, and quarterly capital project reviews.

The company did the latter two, he said.

After the city leaves Law 47 in July, it will have four labor agreements to negotiate, Denbowski said.

The contracts will be with the Fraternal Order of Police, the International Association of Fire Fighters and two with the American Federation of State, County and Municipal Employees.

“These negotiations start right away,” Denbowski said. “So it’s really beneficial to have someone to help us analyze those labor costs that we have to renegotiate.”

Trustees will also need help renegotiating the Reading Area Water Authority’s contribution to the city, he said.

The authority and the city signed a lease in July 2017 for the authority to continue to operate Reading’s water system for the next 30 years.

Under the agreement, the authority continued to pour approximately $9.75 million into city coffers, increasing by 2% for the next three years and then by 1.5% for the next two years. .

The agreement provides that the contribution rate will be renegotiated this year based on the current economic outlook.

“All of this happens immediately, as soon as we get out of Act 47,” Denbowski said.

Kelly said a state grant program could offset up to 50% of the cost of PFM’s services. The city would be responsible for the other half.

Grants of up to $200,000 are available, he said. The annual cost of PFM services was unclear.

The application should be made soon, he said, to ensure funding is in place and there are no gaps in service when the city exits financial scrutiny.

“Having that precision spine and extra eyes is going to be even more valuable in the years to come outside of Act 47,” Council Chairman Jeffrey S. Waltman said. “I think PFM is the right team. They did a great job.

Keeping the business going would provide continuity as the city moves forward, he said, and would be beneficial in the critical areas Kelly mentioned.

“I think that will help the city during the negotiations,” Waltman said, “but also the unions themselves, because we can deal with honest and clear numbers and be as fair as possible.”

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