Budget planning session nets frustration in S. Hill
Summit Hill held its first budget workshop meeting last night and if there's one thing that looks certain, there's going to be a tax hike.
The council isn't sure how much the taxes will increase.
There was a brief informal mention of possible layoffs, maybe even in the police department, but other council members indicated they wouldn't favor such action.
The combination of high insurance rates and debt payments, and less than anticipated income for real estate tax, earned income tax, and garbage collection fees left the council members leaving the meeting frustrated and without resolution regarding the financial health for the forthcoming year.
Without a tax increase, tentative budget figures indicated a $58,000 deficit for 2011. That was before council members noted that an $8,000 item was overlooked in the computation sheet, meaning the deficit would be $64,000. It was also before councilman Mike Kokinda pointed out that revenues anticipated during 2010 were way short of expectations. Kokinda said figures indicate that income will again be less than projected for 2011 if the same figures are used.
Even a 1.5 mill tax hike would net a deficit in 2011 using the current listed budget figures.
Last year there was a 1.5 mill tax increase, with the new building project blamed for part of the hike.
So bleak are financial figures that one councilman suggested the borough not have Christmas lights this year. It was agreeed to have lights in Ludlow Park, but possibly not turn them on until the day before the Christmas on the Hill celebration occurs.
Street lighting and Christmas lights exceed the 2010 budgeted amount by a few thousand dollars.
There will likely be no donations - a $150 line item - in 2011.
The council opened bids last month for a cleaning service for the borough hall, police station, and community center, but it is now likely this work will continue to be done by the borough work force. "We're not going to raise taxes to clean the borough hall," said councilman Mike Alabovitz.
Borough treasurer Kira Michalik expressed concerns about this, stating that cleaning of the borough hall is done once a month and the police station hasn't been cleaned. The police department occupied their office two years ago.
The council agreed to have Michalik take another look at the borough's expense accounts and revenue charts and present them with updated information.
The regular monthly meeting of the council will be held at 7 p.m. Monday, Nov. 8.
Beginning on Nov. 15, the council agreed to hold budget workshops every Monday night until a spending formula can be obtained.
It was noted that in a two-year period, health insurance rates increased from $72,000 to $124,766. Council president Joe Weber said the council isn't looking to cut insurance benefits, but will have to explore other options to bring costs down.
The council will be paying $35,000 in principal and interest on its building loan, and an additional $158,000 for principal and interest on a bond it took out as an interim measure until it receives $1.25 million promised by the state for the building project. The council agreed it doesn't know when it will receive those funds.
A letter to the editor in the TIMES NEWS by State Representative Keith McCall on Sept. 18 stated that a problem with obtaining the funds is that one of the contractors didn't pay required prevailing wages.
McCall wrote in that letter that he continues "to work with the Governor's office to try to secure the release of the funds for the borough."
The income was especially disturbing to Kokinda.
He said real estate taxes has been projected to bring in $597,069 in 2010, but the year-to-date collections so far total $546,741.
Michalik said she gets the budget figures from records of the borough tax collector. She noted that 4 percent of the decrease ($18,000) was because of successful tax appeals.
Earned Income Tax was projected to be $230,000, but only $178,615 was collected during the year. There is $230,000 projected for 2011, based on figures given by Berkheimer Associates, the EIT collector for the borough.
Kokinda disputed the projected figures and asked how a budget can be created with such wide variables in projected income versus actual income.
The 2010 garbage collection income was expected to be $313,320 in 2010, but only $243,398 was collected. The 2011 games is projected at $303,870.
Michalik said the nearly $70,000 shortfall is because of three factors: Delinquents, exonerations, and a 10 percent discount given to people who pay their bills in full at the beginning of the year.
The exonerations and discounts began in 2010. So far there have been 59 exonerations, or about four percent of the residential listings in the borough.
Weber said the exonerations shouldn't impact the budget because "it's a wash," meaning that this much less is paid to the trash hauling firm.
"This ordinance is the dumbest thing we ever did," commented Michalik on the garbage collection ordinance.
Alabovitz said, "I thought we were going to do a once-a-year exemption" for trash collection. It was noted that monthly exemptions were okayed because this is the first year for the ordinance, which specifies property owners don't have to pay a trash collection fee if properties are vacant for six months or more.
Michalik said delinquents are hurting because they get taken to magistrates and then repay just five or $10 a month for years.
"It's not fair to punish everyone for delinquents," interjected councilman John O'Gurek.