Connellsville City Council begins budget process
CONNELLSVILLE — After reviewing 2013 revenue line items Wednesday night at the first of four City Council budget meetings, City Councilwoman Marilyn Weaver said council is going to have to consider spending cuts and a millage rate increase for the 2014 spending plan.
“You’re going to have to do two things — cut spending in each department by roughly 10 percent and increase the millage, I’d say 1 ½ percent,” she said.
City Treasurer Judy Keller reported that $1.11 million in current year real estate is available for collection; however, only $893,385 has been collected so far, which translates into an 80 percent collection rate.
“You can see, real estate revenue is not coming in,” Keller said. “Things are behind. We are not doing as well as we have in the past. People are struggling.”
She reported that the amount available for collection is derived by taking the total value of all taxable property in the city as determined by the county assessment office and multiplying that by 6.66 mills.
In 2012, the city experienced an 87 percent collection rate and, the year before, an 89 percent collection rate.
She estimates an additional $39,195 can be collected between now and Dec. 31, but that would leave the city at an 83 percent collection rate.
The city budgeted to collect $959,516 in real estate taxes in the 2013 budget.
“You can’t go with what you hope to get,” Weaver said. “It has to make somewhere around 87 percent, and even maybe this year that is a little high, but it would be better than what we have been estimating. I think every department is going to have to re-look at their budgets and cut back, somehow, some way.”
In addition to the city being behind on the real estate tax collections, Keller noted that the city is also behind on earned income tax collections. The city estimated to collect $550,000 by the end of the year, but to date, has only collected $347,247.
Keller mentioned the city still needs to pay back a $675,000 tax-anticipation loan by the end of the year.
“I don’t think you’re going to get $550,000 in earned income taxes,” she said. “The loan needs paid off. There’s not much money in the bank.”
At this time, Keller reported there is $454,530 in the city’s general fund account.
“The council needs to present and adopt a balanced budget, but there’s a bigger problem facing the city right now, and it’s the lack of cash on hand to pay the bills and pay back that loan,” she said.
City Councilman Brad Geyer, director of public finance, asked Keller if the city could send a reminder to those who have not yet paid. She said it’s a possibility, but it’s likely the same people who have not paid in past years.
Weaver mentioned unemployment or rolling layoffs as a possible solution to the city’s financial woes.
Geyer said council will address expenditures and review department wish list items at the next budget meeting which is set for 5 p.m. on Nov. 6.
Also Wednesday, representatives from ABM of Canonsburg, a facility-management company, presented council with a possible solution to renovating some of the city’s facilities.
Richard Phelps, an ABM representative, said the company looks at how the city’s facilities are operating and what could be done more efficiently.
The first step, he said, is for an ABM representative to visit the city and examine its facilities to see if improvements in current facilities, such as furnaces, lighting and windows, would result in a savings for the city over time.
“What’s consuming energy in your facility? How do you replace those inefficient assets? There’s no cost to you to determine if you have an opportunity,” Phelps said. “There’s no cost until you decide to implement that vision.”
He said the savings would have to be guaranteed to the city, and the savings in each individual year has to be greater than or equal to, whatever the city’s payment is each year.
Geyer asked for the city clerk to set up a time for an ABM representative to visit the city.
“I don’t think there is any harm in that,” he said. “The upside is too high to not do so.”