Council passes tax-hike budget
It’s over but it’s not.
City Council passed a half-mill real estate tax increase and approved Mayor Derek Slaughter’s $29 million 2021 budget Thursday, but with an eye toward reopening the budget in January to see if further reductions to the size of tax millage increase can take place.
Council and the administration set the tax rate at 16.22 mills, but upon getting information from Norman Lubin, city solicitor, learned it had to before Feb. 15 to reopen, discuss options and adopt the reopened budget.
If nothing is done, the half-mill is $50 more per tax bill for households assessed at $100,000.
To reach a quarter-mill would require finding $217,000 more in reductions or a combination of revenue or cut in staff, Council President Randall J. Allison said.
Reaching a zero-tax-increase budget would mean reducing the budget further by $434,000, he said.
As it stands, households assessed in the aforementioned tax bracket would pay $1,622 in city tax a year. A mill has been adjusted by the finance office to be $872,540. The previous discussed one mill equivalent was $860,000.
The votes for approving the budget were by Allison, Liz Miele, Vincent Pulizzi, Adam Yoder, Bonnie Katz, David Banks and Jon Mackey.
The council meets Jan. 7, Jan. 14, Jan. 21 and Feb. 4 before the deadline to have a final adopted budget that was reopened, Lubin said.
Nicholas Grimes, city tax collector/treasurer, said his role in the budget will be to certify with the Lycoming County tax office the tax rate and he has to do that at the latest by mid-February.
Grimes said he preferred to do that by the week before the February deadline, as the bills are produced to be mailed out around that time of the year.
Council reduced the size of the tax hike through a variety of transfers, cuts and income analysis.
Allison said it was important for council to reach an end-game estimate, such as whether the target is 0.25 mills, or .33 mills or no tax increase.
“Otherwise we’ll have a hard time identifying what we need to get there,” Allison said.
The mayor and administration indicated they were on the same page with the reductions because of the extraordinary circumstances of the COVID-19 pandemic and the negative financial impacts of it, including high unemployment and less revenue from business privilege and mercantile taxes due to business closings and slowdowns
Councilwoman Liz Miele said that while she would prefer to have no tax increase, her 12 years of council experience has taught her to be wary of cutting too much, due to unforeseen expenses and the risk of the city not having any money to transfer to cover those expenses.
Through transfers and amendments, council agreed to the use of residual natural gas impact fees and a police department complement of 47 officers to reach the $434,000 in savings. The transfers and amendments kept $860,000 in the City Hall account, $10,000 more than what previously was in it, said Councilman Adam Yoder.
The reductions in overtime and compensation time of $35,000 were thought to be able to be used toward keeping two seasoned police officers on the county Narcotics Enforcement Unit.
Once larger deductions were done, council trimmed further on federal payroll, health insurance and trash removal. The final balance in the city fund reserve account was $156,000, according to Joseph Pawlak, interim city finance director.
By the time the meeting ended, council had removed more than 1 million in various line items.
Slaughter made an argument against outsourcing of departments. His suggestion was to hire a part-time grant writer to ease the pressure on chiefs of police and fire who wrote several grants over the years.
He reiterated the need to have patience as he worked with state Department of Transportation and Federal Transit Administration on proposed improved “systems” to help the city. He declined at this time to reveal those plans saying he was prohibited due to the negotiations.
Councilwoman Bonnie Katz said grant writing can be done by Skip Memmi, the newly hired director of community and economic development department.
Katz said the city also needed to reengage with its lobbyists as so many infrastructure projects lie in the balance including Grafius Run flood mitigation and levee recertification.
In a surprise announcement at the end of the meeting before council voted, Adam Winder, acting general manager of city public works department, said he was willing to remove $55,000 from an equipment line item and would further outline potential savings in the department to help reduce the tax increase that then passed.
In other action, council approved a demolition and lot consolidation request of Lycoming College.
The college owned these buildings in the 300 block of West Fourth Street and wanted to create eight parcels and combine them into one parcel for future land development purposes, said Gary Knarr, city zoning officer.