Mar 19, 2003 By Josh Krysak 4 min read

PERRYOPOLIS – The borough is about $45,000 in debt and must tighten its belt to avoid future financial problems, an accountant who audited the borough’s books for 2002 told the council Tuesday. However, Jamie Dinsmore, a representative from McLure and Wolf public accountants, told the council that while the borough was in debt at the end of 2002 and that the deficit has grown because of a costly winter, the borough is not in dire financial straits.

“You had a deficit in the general fund at the end of December of about $21,000,” Dinsmore said. “In addition to that deficit, you also had unpaid bills.”

According to Dinsmore, in 2002 the borough’s total revenue was about $379,000, and expenditures totaled about $414,000.

“You need some belt-tightening and either raise more revenue or reduce expenditures,” he said.

After Councilman Ronald Lombard, at last week’s regular meeting, called for a budgetary review meeting, only about 15 people showed up Tuesday to discuss budgetary concerns with the council and to hear a report on the recently completed audit of the 2002 budget.

Lombard, the borough treasurer, said last week he had heard of misunderstandings about how a budget actually works and confusion about why the council is paring budgetary items.

He said that some of the problems are due to the inclement winter weather and the struggling economy, as well as less revenue from sources like the Mary Fuller Frazier Estate.

“Having to buy more salt and the weather, those things are really out of our control,” Lombard said. “It is really a crap-shoot every year.”

Lombard noted that due to the number of man-hours and the amount of supplies exhausted to clean the streets of snow, the borough is about $6,000 over its snow-removal budget.

When Lombard asked for an assessment of the borough’s financial situation on a scale of one to 10, with 10 being the best case, Dinsmore said the borough ranks at a six or seven.

Dinsmore told the council that while he found no inaccuracies in the 2002 budget, he did see areas the borough must address to help avoid future budgetary problems.

“You need to make sure and totally segregate the liquid fuels budget and the general budget,” Dinsmore said.

Lombard agreed: “It confused the budget having the liquid fuels in there. In a lot of municipalities, just for simplicity, they use liquid fuel funds for big expenditures.”

Lombard noted that liquid fuels funds, received from the state, are separate from the general fund in the 2003 budget.

In addition, Dinsmore advised the council to use actual expenditures from the previous year, instead of past budget figures, when preparing spending plans for upcoming years, to help gain a better understanding of the money needed to operate the borough.

Councilman Paul Black said that some of the budget problems are due to rising costs in health insurance and the addition of a borough employee.

And, he noted that the borough should receive some federal reimbursement for snowstorm-related costs, because Fayette County was declared in a state of emergency after this year’s blizzard. He also said that in the 2003 budget, the council made major cuts that hopefully will curtail any further slide into debt.

“In the 2003 budget, issues were addressed and drastic cuts were made. We didn’t want to do that, but we thought it was necessary. I think that the taxpayers understand the fact that if the economy is bad on the federal level, then it is going to trickle down to the local level. This is a ‘Catch-22’ for us,” Black said.

He added that the borough cannot budget for 3 feet of snow or $2 per gallon of gasoline.

According to Lombard, the 2003 budget was pared by about $135,000 due to all the lost revenue.

Councilman Bob Zundel said that the council will address motions that had been tabled from the last meeting at the next regular meeting, after the board has time to look more closely at the budget figures.