Oct 1, 2009 5 min read

Uniontown Mayor Ed Fike said at least 25 city employees would have to be laid off this year to offset a budget deficit of at least $220,700. The city can’t impose another property tax increase to cover the deficit, so expenses have to be reduced until spring, when revenue from taxes becomes available and some of the laid off workers would be recalled, Fike said in a meeting with the Herald-Standard editorial board on Wednesday.

Net income so far this year is $1,032,273, but the city repaid $233,000 of the $650,000 tax anticipation loan borrowed by the previous administration and $445,000 remains outstanding, Fike said, adding that the total amount due has increased because of interest on the loan.

Payroll through the end of the year will cost $575,000 and utility bills for the remainder of the year also will have to be paid, he said.

Subtracting those payments, excluding utilities, from the net income leaves the city with a $220,727 deficit, Fike said.

The layoffs would include the seven firemen who the firefighters’ union and city agreed to lay off in March, he said.

There are no plans to abolish the fire department, but wages and benefits for three firemen were not allocated in the budget and the department is $108,000 over budget, Fike said.

Eventually, he said, the city will see more tax revenue from the 30 rent-to-own homes recently built in the East End, Lafayette and Gallatin Avenue neighborhoods, new jobs created by the Uniontown Hospital expansion and the 100 jobs expected from the SeniorLIFE-Uniontown project on Fayette Street.

For now, the city has to pay its expenses with the income it has, Fike said.

This year’s budget contained a 4.5-mill property increase to balance a $1.3 million deficit. The tax rate is 13.235 mills.

In addition, City Council laid off 41 employees in 2008 and this year, but some of those workers have been recalled.

Council also laid off the entire 10-man sanitation department in July 2008. Fike said the department was losing $600,000 a year, Fike said.

An outside contractor, Veolia Environmental Services of German Township, was retained for garbage collection and the company pays the city an $8,000 franchise fee every month.

Veolia offered to consider hiring the city’s sanitation workers, but only one applied and was hired, Fike said.

The contract between the city and the sanitation workers’ union expires at the end of this year and the union is trying to force the city to pay workers the wages they would have received if they had worked until the contract expired.

When an employee is laid off, the city pays 75 percent of his or her wages through unemployment compensation, so four people have to be laid off in order to save one employee’s wages, Fike said.

Because of the franchise fee, “we’re still ahead” even if the city has to pay the remainder of the sanitation workers’ wages, Fike said.

An arbitrator ruled in May that the city violated the contract by failing to meet and discuss the layoffs before the workers were laid off. Fike said he met with the sanitation workers before the layoff, but the arbitrator said that did not satisfy the “meet and discuss” provision in the contract.

In early 2008, sanitation workers regularly called off work citing illnesses and took personal days after Fike told them the city would not continue paying them overtime wages for working on Saturdays.

Fike said expenses had to be cut and taxes had to be raised to balance this year’s budget, but his goal is to eventually reduce the tax rate.

In 2007, the year before Fike took office, the tax rate was 8.735 mills. He said about 6 mills were used to run the police department, about 4 mills went to the fire department and 2 or 3 mills went to the street department. Fike offered no explanation of how the city managed to stay afloat back then, with expenses exceeding revenue.

“You can’t spend more than you make. That was the whole problem when I went to City Hall,” Fike said.

Employee health-care benefits, which employees contribute to, costs the city $800,000 a year, Fike said.

In workers’ compensation cases, the state pays injured workers two-thirds of their salaries and the city is required to pay the remaining third, Fike said.

The parking garage on Penn Street is another drain on the budget’s general fund, the mayor said.

It is not generating enough revenue to cover the construction debt, which is $11,000 a month, or $132,000 a year. Fike said.

In 2007, the year it opened, the garage brought in $32,000. It brought in $75,000 in 2008, Fike’s first year as mayor.

He said he doesn’t know why the garage did so poorly in 2007, but the box that holds the money in the machine where people pay before they leave has to be removed and opened in City Hall.

“If money is missing, it happened in City Hall,” Fike said.

The annual payment on the South Street garage is $370,000 and that amount is so high because the garage was refinanced to finance construction of the Public Safety Building, he said.

The state Auditor General’s office and the state police Bureau of Criminal Investigation are investigating the city’s finances to try to determine what created financial crisis that led to the layoffs and tax increase, Fike said.