Lansford’s leaders got a snapshot of the borough’s financial situation and some early recommendations to consider moving forward, including hiring a manager or sharing services.

Ben Kafferlin, managing partner of Kafferlin Strategies, the consulting firm undertaking the state-grant funded Strategic Management Planning Program for the borough, spoke to borough council Wednesday night.

But first council heard from Jonas Crass, a local government specialist for the state Department of Community and Economic Development, who explained the STMP program, which is five-year strategic and financial planning process to help the borough more forward, he said.

“It’s really a great way for council to start being proactive to get a plan together for the next five years,” Crass said, explaining that Kafferlin will be laying the groundwork in this initial phase and offering recommendations.

“What then follows will be up to five years of grant funding from the state, up to $200,000 a year every year for these projects for the next five years, and the borough did apply for financial hardship, which means that the state is covering 90% of this grant with the borough covering 10%,” he said.

Kafferlin explained that the STMP program is designed to refocus communities headed toward financial distress and set them toward “operational excellence.”

The firm, through this eight-to-nine-month process, will be looking at Lansford’s finances, its policies and procedures, technology and staffing needs, redundancies and capital project needs, he said.

“We really look over everything pretty holistically. Then we will come back with a series of recommendations,” Kafferlin said. “It’s nice to have an outsider come in and meet with everyone, collate all of those ideas into one comprehensive plan and kind of give back to you.

“Nothing that we say has to be implemented,” he said. “But it’s making recommendations that are actionable for the council. So, ultimately, the power is still in your hands.”

Demographics

Kafferlin went over the borough’s basic demographics, noting that the community has a fairly high population density, leading to a need for good code enforcement, and with an average home value of $55,000, which is one-fifth of the state average and one-quarter of the county’s average.

“A little more concerning is that your have a low median income of only $44,000 per household, and about a quarter of your population is in the poverty — not just at 150% poverty, but actual poverty,” Kafferlin said.

Also, about one quarter of the properties in town are vacant, which is double the state average; and the home occupancy split 50-50 between renters and owner occupied, he said.

In addition, only a few hundred jobs are located in the borough, meaning there is low potential for an earned income tax, Kafferlin said. The borough also has the highest property tax millage in the county, he said.

There are very few industrial properties in the borough, and some of those, such as the Dock Street properties, are publicly owned and not on the tax rolls, Kafferlin said.

Creating a redevelopment authority and shifting ownership of Dock Street properties, specifically the former Silberline complex, to that authority or a county redevelopment would be advisable, he said.

Financials

The borough has multiple bank accounts or funds with about $3.3 million to $4 million cash on hand.

“Your budget to actuals have generally been pretty good with the exception of the last year of COVID, 2021-22, which we’re just going to throw out because most communities got really hijacked by market forces they weren’t expecting,” Kafferlin said.

The borough also brought in more revenue last year than budgeted, like $1 million over on revenues, while expenditures were modest, he said.

Lansford’s cash on hand increased from about $2 million to $4 million over the last six years, which isn’t a bad thing, Kafferlin said, but the borough needs to manage those funds.

“So, my big caution here is yes, you have a healthy fund balance, but actually, you also have an equally disturbing number of capital needs,” he said. “You have huge liabilities, like Dock Street, like this building, like a lack of working garage, and so forth.”

The borough should designate those additional funds toward these capital projects to avoid spending it or making bad fiscal decisions, Kafferlin said.

Councils over the years have done a good job of keeping revenues on par with inflation and expenses in reason, he said. About half the borough’s budget goes toward police and that’s normal, while the contribution toward fire protection was low at $17,000, Kafferlin said.

The borough, however, has done nothing toward maintaining buildings, and is about to get “whacked with some significant roads and/or sewer transmittal expenses,” he said.

Recommendations

Lansford should hire or empower a professional manager to act as a hinge between council and staff and provide clear lines of leadership, Kafferlin said.

Council could begin working on that recommendation now, he said, and the manager could be shared with another municipality or part-time contracted manager that is still clearly empowered.

Council also needs to adopt clear policies and procedures to set agendas, interact with staff and how decisions are made and communicated, Kafferlin said.

He reminded council that they act as a body, not as individuals, and shouldn’t have one person managing employees, he said.

“Ultimately, you act as a body,” Kafferlin said. “You individually have 0% authority. Together, you have 100% authority. So, the decisions that you’re making should be made in public.”

Council should also consider a Home Rule or optional form of government for more flexibility in management structure, he said.

Once the borough has Kafferlin’s final recommendations, which could number in the hundreds, council should adopt a strategic action plan and use to drive budget and give council and staff clear guidance, he said.

Council should clarify its organizational chart, as the current structure leads to confusion, conflict, inconsistent direction to staff and liability exposure, Kafferlin said.

He again recommended forming a borough or regional redevelopment authority or partnering with an existing one; and also, developing a capital improvement plan or considering an Energy Savings Performance Contact with an ESCO firm. Kafferlin noted that his firm could assist with putting the borough in touch with an ESCO firm or several.

Kafferlin also recommend updating accounting and financial controls, especially in light of the loss of a treasurer and the current secretary working toward transitioning to that role.

Next month, Kafferlin will return to review department specific findings, such as administrative and police, with council on Oct. 14, and offer budget help at the Nov. 11 meeting.

The final presentation will be on Dec. 9 with the full list of recommendations and the top recommendations prioritized with the associated costs, Kafferlin said.

“What we’re going to produce for you is a something like a 300-page document,” he said, “Which lists all the recommendations on a timeline over the next five years. so that you can start acting on them immediately.”