At a progress report Wednesday, the leader of Altoona's Act 47 recovery team complimented City Council's "extraordinary" leadership, adding that council and staff have been "great to work with."
But after John Espenshade left for home and the meeting broke up, some of those same officials batted around worries about the timing and results of the effort Espenshade is leading for his consulting firm, Stevens & Lee.
As the weeks go by with S&L still unsigned to a formal contract with the state, it seems more and more likely that council will need to craft a budget without an approved distress recovery plan.
Espenshade has dismissed such concerns, but he told council Wednesday that S&L will turn over the plan 90 days after signing that contract, upon the deadline set by the Act.
Given that the signing may not occur until the end of this month, and given the approximately 45 days needed to adopt the plan after receiving it from the consultant, approval seems unlikely until New Year's or later, according to Mayor Bill Schirf and other officials.
That wouldn't be a problem, except that the plan presumably will recommend revenue enhancements that would need to be accounted for in the 2013 budget.
And state law requires the city to pass that budget - with revenues and expenditures balanced - by the end of the year.
The revenue enhancements could include increases in earned income or property taxes - both currently capped by state law.
But it wasn't clear to officials that the city could pass such enhancements after the end of this year - especially if the budget doesn't include them.
State law prohibits passing a budget that includes such cap-breaking enhancements without an approved recovery plan to justify them, said City Manager Joe Weakland.
One possible solution suggested by at least one official: A fanciful budget that took account of the additional revenue provided by the enhancements without explicitly ascribing that revenue to those cap-breaking enhancements.
Council could follow that with a post-New Year's passage of those enhancements, at its leisure.
Act 47 would seem to permit the city to pass those increases after New Year's - or at any time:
Under the heading "Right to petition court for tax increases," the law speaks of the power to petition county court to raise earned income and/or property taxes. "The one-year increase shall run from the date specified in the petition ... or if no such date is specified, from the beginning of the current fiscal year."
That all may be moot, as Act 47 provides other revenue enhancement possibilities, including state loans of zero interest, pointed out Councilman Mike Haire.
The city could save about $2 million next year if it replaced its $50 million capital debt, which it's paying off at about 3 percent interest, with a no-interest loan, he said.
Weakland, however, has little confidence in two avenues for revenue enhancement the consultants have talked about: intergovernmental cooperation and economic development.
"It's a proven fact intermunicipal cooperation will not work," he said, reflecting the intractable opposition of many officials and residents of outlying municipalities to some types of alliances with the city.
And economic development is only effective insofar as it can increase employment by residents, who then pay more earned income tax, he said.
