The plan would also address the potential financial impact of the city of Erie moving to a home rule form of government.
Fred Biletnikoff’s appearance at Erie’s Jefferson Educational Society
Tech Memorial graduate and Pro Football Hall of Famer Fred Biletnikoff returned home on May 21 to speak at the Jefferson Educational Society.
- Erie seeks state grant to develop a five-year financial management plan.
- The plan aims to address projected budget deficits and build on previous financial successes.
- A consultant will be hired to create the plan, with the state grant covering a portion of the cost.
- The plan would also explore the potential financial impact of shifting to a home rule government.
For the second time since 2019, the city of Erie could be getting state help to create a long-range financial management plan.
Erie City Council on May 21 approved a resolution that allows Mayor Joe Schember’s administration to submit a grant application to the Pennsylvania Department of Community and Economic Development’s Strategic Management Planning Program.
That program provides funding to municipalities that have financial challenges, and the money can be used to forge five-year financial management plans that include short-term and long-term term goals/objectives.
City Council approved the resolution without discussion.
Financial strategy
The city would work with a consultant to create the plan. The state funding would be used to help pay for the consultant and the city would be required to provide matching funds.
The resolution passed by City Council said the anticipated cost of creating a long-range financial plan would be $210,000 and the city would contribute up to $94,500.
Renee Lamis, Schember’s chief of staff, said the city worked with the state’s Early Intervention Program, starting in 2019, to create a five-year financial plan to stabilize its finances.
With the help of Public Financial Management, a Philadelphia-based consulting firm, the city implemented a number of long-term financial strategies, including but not limited to expense cuts; lowering pension earnings assumptions and increasing the portion of earned income taxes earmarked for pension payments.
The city also expanded the city’s Local Economic Revitalization Tax Assistance program, which provides 10-year property tax breaks for residential/commercial development citywide to encourage investment; created a new stormwater management fee to provide funding for sewer system improvements; and took a roughly $97 million water lease prepayment from Erie Water works, setting aside more than $80 million of that money to pay down long-term debt.
PFM endorsed LERTA expansion, the stormwater fee and the Erie Water Works deal.
Lamis said that kind of long-range planning is a key reason why the city ended 2024 with a $2 million surplus and has been able to avoid property tax increases for the last six years.
However, Schember’s administration projects budget deficits of up to $13.3 million by 2029 without intervention, primarily due to costs related to employee salaries, health care and pensions that increase each year.
“Given that the city’s current five-year financial management plan has expired, the city is planning to apply to STMP to undertake a second plan,” Lamis said.
How does home rule factor in?
The consultant would also look at how a potential move to what’s known as a home rule form of government could impact city finances, Lamis said.
City Council in April authorized the creation of a ballot question that would ask city voters in November whether they want to launch a nine-member commission to study the possibility of moving to a home rule charter.
That form of government would allow the city to create its own constitution with greater flexibility and independence regarding issues such as city operations, taxation and executive/legislative structure.
Erie currently adheres to the state’s Third Class City Code, with an optional charter, in terms of how its government operates. According to the Pennsylvania Department of Community and Economic Development, “the basic authority to act in municipal affairs is transferred from state law, as set forth by the General Assembly, to a local charter, adopted and amended by the voters.”
Home rule municipalities also have significant latitude to craft their own governmental rules in various areas, according to DCED, except where specifically limited by state law.
Contact Kevin Flowers at [email protected]. Follow him on X at @ETNflowers.
link
More Stories
Oracle Recognized as a Leader in the 2025 Gartner Magic Quadrant for Financial Planning Software
‘Not your father’s insurance industry’
Town Manager Releases Recommended Fiscal Year 2027 Budget and Financial Plan