Allentown Budget and Finance Committee Meeting

On March 25, 2026, the Allentown Budget and Finance Committee convened to receive financial reports for December 2025 (final) and February 2026, and to review recommendations for improving the city's budget process. The meeting featured presentations from Director Patel and a joint presentation by Councilpersons Pungo and Bender, who summarized findings from a multi-phase budget process review mandated by a January 2026 council resolution.

Financial Reports (December 2025 Final & February 2026)

• December 2025 Year-End: Director Patel reported that general fund revenues net of NIS (Neighborhood Improvement Zone) payments totaled $152.2 million against a budget of $147.8 million. The 2025 NIS certification amount was $4,355,504.04, comprising earned income tax, local services tax, business privilege tax, business license fee, and realty transfer tax. An escrow of $1,775,480.51 from Barkheimer was sent to the Pennsylvania Department of Revenue, and the city made a supplemental payment of $2,580,023.53 on March 2, 2026.
• General fund expenditures reached 93% of the adjusted budget of $154.7 million, reflecting 4% savings compared to the prior year. Personnel costs accounted for 72% of expenditures ($109.7 million). Public safety premium pay closed at just over $3 million for police/fire and just over $1 million for EMS.
• Other funds: Risk fund closed in line with expectations; Solid waste fund revenues and expenditures both at $23.9 million; Stormwater fund revenues stronger by 2% at $6.2 million, expenditures $6.1 million; Golf fund revenues $2.7 million, expenditures $2.5 million (19% savings); Rental unit fund revenues stronger by 19% (noting billing occurs in last quarter); Building code fund (new in 2025) revenues $4.2 million, 158% higher than the $2.7 million budget, expenditures $2.5 million.
• General fund cash position on December 31, 2025 was $39.8 million, with $35 million in term investments (PLGIT) and $2.1 million in PLGIT Prime, yielding 3.91% APY. Remaining $2.6 million at TD Bank yielding 3%.
• February 2026 Report: General fund revenues net of estimated NIS liability were $19.6 million (13% of projected), expenditures $20.1 million (13% of budget). NIS liability is now shown as a negative amount under each tax type. The housing fund recorded $147,000 from realty transfer tax. Police/fire premium pay was $300,000, EMS $105,000. General fund cash position at end of February was $40.1 million, with $30 million in term investments and $9.8 million at TD Bank.
• Controller expressed appreciation for the clarity on NIS liability reporting, noting it will improve transparency for the public and future budget calculations.

Budget Process Review

• Background: Councilpersons Pungo and Bender, with support from staff, presented the final findings of a resolution passed January 21, 2026, which directed a review of the city's budget process. The review comprised three phases: (1) analysis of the current budget development and adoption timeline, (2) comparison to other municipalities, and (3) identification of procedural gaps when a budget is not adopted by December 31.
• Key Findings from Surveys and Meetings:
  • 70% of respondents cited timing as a challenge; 70% desired earlier alignment on budget priorities before budgets are developed.
  • 60% indicated inefficiencies in real-time questioning and last-minute clarifications; 60% supported a more structured public discussion.
  • 80% noted frequent last-minute revisions and lack of structure; 65% expressed uncertainty about what happens if no budget is passed.
  • 70% of administrative respondents said earlier budget guidance from the administration would improve the process; 65% felt the current department budget development approach needs improvement.
• Recommendations Presented:
  1. Charter Amendment Proposals:
     • Move the budget adoption date from December 31 to the first Wednesday in December to allow more time for negotiation.
     • Re-ask voters to reinstate a default budget provision (without allowing a tax increase without council approval), providing a closure mechanism if no budget is passed.
  2. Operational and Rule Changes:
     • Set an amendment deadline: all council amendments must be submitted by the second regular council meeting in November, and amendments must be revenue-neutral or include identified savings.
     • Standardize the council question process by requiring advance submission of questions.
     • Explore a shared budget QA tool for collaborative tracking of questions and answers.
     • Establish a process for council to communicate priorities to the administration early (May/June) so departments can incorporate them into budget development.
     • Develop a comprehensive budget document outlining the process, legal requirements, and frequently asked questions, to be reviewed annually.
     • Conduct an annual dedicated review of the city's five-year fiscal plan, preferably in the first or second quarter.
     • Review and potentially revise the budget book format for clarity and efficiency.
• Next Steps: The committee will review these options with full council, conduct legal analysis, and pursue further dialogue with the administration. Depending on the chosen option, implementation may require a charter amendment ordinance (going to voters), a council resolution (changing council rules), or an update to standard operating procedures.

Key Outcomes

• No binding votes were taken; the committee presented recommendations for council consideration.
• Controller acknowledged the thoroughness of the process but raised a concern about the feasibility of a default budget that includes a tax increase, noting that the default provision would need to address how to strike the tax increase while maintaining spending levels.
• Council members expressed appreciation for the work done by Councilpersons Pungo and Bender, and Director Patel thanked the committee for listening to administration feedback.
• The meeting adjourned with no further business.