Lansford Borough is in such dire financial straits that its council on Thursday considered asking the state for help in filing for bankruptcy.
After much discussion, council decided against the bankruptcy move, initiated by Councilman Tommy Vadyak, at least for now. It did, however, adopt a 2011 budget that carries a 3.06 mill property tax increase, froze additional purchases (except for emergencies), voted to pay the $275,333 in bills it owes "as money becomes available," and borrowed money from its sewer transmission account – already $97,993 in the red – to pay wages.
Vadyak said a $50,000 demolition grant that had been folded into the general fund further deepens the true financial hole.
"I don't know where we're going to get the money from," he said. "Personally, I feel we should file bankruptcy and bring in the state. Let the state run the town."
Later, his motion to do that failed for lack of support.
The new budget, even with the tax increase, still falls short by $2,288.
"Our budget isn't balanced," said council Vice-President Mary Kruczek. "We did the best we can with what we could."
The spending plan anticipates $1,575,873 in revenue and $1,578,161 in expenses. The 3.06 mill tax increase brings the property tax rate to 32.47 mills, up from this year's 29.41 mills. That means the owner of a property assessed at $25,000 will pay $811.75 in real estate tax next year. That's $76.50 more than this year.
The millage breaks down to: 26.28 mills for the General Fund; 1 mill for Debt; 0.61 mill for Parks and Recreation; 1.17 mills for Fire Protection; 2.78 mills for Lighting; 0.13 mills for Library purposes; and 0.50 mill for Pensions.
Each mill is anticipated to generate $33,376 in revenue. That's $681 less than this year.
Council voted 5-1 to adopt the spending plan, with Vadyak opposed and Councilman Andrew Snyder absent.
Council members blame an eroding tax base for the reduced revenue. There is a buffer, though.
Kruczek said the borough has money in CD's that is not reflected in the budget.
The borough will be undergoing an audit in January, and that also should help pinpoint the problem areas.
Council members shared their thoughts on the crisis and the budget.
The crisis was "not something that happened overnight, and we can't fix it in a day," Kruczek said.
Councilwoman Rose Mary Cannon advised council to hold off giving any money to "other entities" until it resolves the borough's fiscal crisis. The "other entities" may include the Panther Valley Public Library, which stands to receive $4,338.
Cannon also proposed the freeze on additional purchases, a move that council approved on a 4-2 vote, with Kruczek and Danielle Smith opposed.
Kruczek advised council to "double-check" all purchase orders.
Councilman Adam Webber defended the budget, saying the spending plan was "streamlined" and that it would "help dig us out of this mess that we're in right now."
The mess is pretty thick: Among the $275,333 in bills looming over the borough are a $73,635 bill to Trollinger Consulting group for the pension fund, due today; $56,151 to First Niagara Bank for a tax anticipation loan, also due today; $29,344 to Tamaqua Transfer & Recycling for trash collection, due Dec. 9; and $11,505 to PPL for bills due on dates ranging from Dec. 1 through Dec. 29.
Secretary-treasurer Renee Slakoper said she has been negotiating with creditors, and was confident the borough would be able to meet its most pressing financial obligations. Council, which spent months examining its spending and revenue in detail as it painstakingly crafted the 2011 budget, will continue to study the flow of money through the borough as it tries to get a handle to how to stanch the red ink hemorrhage.