To avoid a tax increase in 2013, the City of Pottsville will have to cut more than $375,000 out of its proposed spending plan, City Administrator Thomas A. Palamar said Monday.
"What we have to do is create a budget that's indicative of what the city's revenue is, which I think is a very good thing. It's a healthy thing for the city and for our budget and for us moving forward into the future," Palamar said.
But city officials only have three days to do it. The council is planning to adopt its tentative budget at a special meeting at City Hall at 4 p.m. Thursday.
"For Thursday's meeting, it has to be balanced," said Mayor John D.W. Reiley.
Palamar wasn't sure what line items would be cut.
"We really don't know at this point. It would be really irresponsible to say anything at this point without really carefully reviewing everything. But there will be significant cuts that we'll be taking out of a lot of departmental budgets," he said.
Inflation has the city by the proverbial throat. Anticipated expenses in 2013 will include a 7 percent increase in health care, a 21 percent increase in insurances and a 22.7 increase in pension contributions, Palamar said.
"When you have a 22 percent increase in your pension contributions, there's no way on God's green earth that we're going to match that with 22 percent increases in our revenue. There's just no way," Palamar said.
The 2012 budget was $8,058,299. According to the Schuylkill County website, the millage rate was 18.47 mills, or $18.47 for every $1,000 of assessed property value.
The city put a 2.5-mill increase in its 2011 budget. Prior to 2011, the city's last tax increase was a 1-mill increase for the 2009 budget, City Clerk Julie D. Rescorla said previously.
All members of the city council were present for the budget workshop Monday, held at the second floor conference room at City Hall. While the meeting was short, only 20 minutes, the group decided what approach to take to tackling the city's financial plan.
The city is anticipating $8,060,888 in revenue in 2013. But on Monday, it was looking at a list of expenses totalling $8,435,961, which is $375,073 more than the city can afford, Rescorla said.
"What we really need to know, and the big question is: Are we going to deal with this budget to reduce this number to balance it with the projected revenue, or are we looking at an increase in revenue?" Palamar asked.
"We're looking at a decrease," Councilman Michael P. Halcovage said.
"So no tax increase," Palamar said.
Halcovage responded by shaking his head no.
"Our strategy then, obviously, is going to be a combination of budget cuts and service cuts. Many years ago we cut through the fat and the muscle. Now we're down to the bone. There will be some staffing issues we'll have to address and some service issues we're going to address as well," Palamar said.
The mayor complimented Palamar and Rescorla on the work they were doing, and wished them luck on the task at hand.
"It's a difficult process. We take it very seriously. I commend Julie a great deal because in the day-to-day, when the push comes to shove and the bills have to be paid, it happens in the city clerk's office. And its meticulous. And the reason we take this so seriously is because we want to make sure that in her office when it comes to those bills being paid that we have the revenue to do so," Palamar said.
Tax revenue in 2012 was up $65,449 from 2011, Palamar said.
"It says a lot about our community, in trying economic times, that our tax revenue is increasing every year," Palamar said.
While that's positive, the city is still getting used to the county's new tax system, Palamar said.
"We're trying to be relatively conservative with that data," Palamar said.
In July, the Schuylkill County Tax Collection Committee officially dropped the Central Tax Bureau of Pennsylvania, "Centax," as its local services tax collector. Centax was failing to process tax bills in a timely manner. Since then, the committee hired Berkheimer Associates, Bangor, Northampton County, for the job.
"Projecting into next year, we're dealing with a little bit of unchartered territory. When you're looking at a new tax collector, from Centax to Berkheimer, that's going to be a little different for us," Palamar said.
Salaries
The city officials also offered a rundown of which employees would be getting pay raises in 2013, and which ones would not.
- In 2012, the city's 13 non-union administrative employees received a 1.5 percent pay increase. In 2013, they won't be getting a pay raise, according to Palamar.
Those positions and the salaries are: chief of police, $81,845.77; city administrator, $78,916.69; city clerk, $70,356.25; code enforcement officer, $42,206.80; superintendent of streets, $55,518.58; fire chief, $51,458.58; tax assessor, $38,253.80; deputy city clerk, $35,794.76; health officer/animal control officer, $33,641.26; deputy tax collector, $32,788.98; deputy code enforcement officer, $28,143.87; city administrator's secretary, $26,321.81; and the mayor's secretary, $40,139.73.
In 2012, those employees were slated to receive 3 percent pay increases, but they agreed to have their increases cut to 1.5 percent.
- The city's 21 non-uniformed employees, who are represented by a union, the American Federation of State, County and Municipal Employees, received a 3 percent increase in 2012. Those employees will be getting another 3 percent increase in 2013, according to Rescorla.
- The city's full-time police officers, who are represented by the Fraternal Order of Police, received a 3.75 percent increase in 2011, but didn't get a pay raise in 2012, according to Halcovage.
"We went through arbitration and there was no increase for 2012. But there will be a 2 percent increase in 2013. That was determined in an arbitration award," Halcovage said.
The city has 24 full-time police officers, Palamar said.
Fire companies
The city hasn't given its fire companies an increase in contributions since 2008, but Palamar said Monday the city is hoping to give them a 5 percent increase in 2013.
"Obviously after the first reading, it could still be adjusted," Palamar said.
"But that's not a really significant number at all," Halcovage said.
The city's seven fire companies each received a $22,230 allotment in 2010, 2011 and 2012, Kurt Shelhamer, Yorkville Hose Company captain, said at the city's Nov. 21 budget workshop session.
Shelhamer and city Fire Chief Todd March both encouraged council to consider a 5 percent increase for 2013. It would total $6,020, or $860 per company, Palamar said.
Shelhamer wasn't at Monday's workshop, but March was. He said he hopes the city can offer the increase, but isn't sure the city will be able to.
The city has about 150 volunteers at its seven fire companies: American Hose Company No. 2, Good Intent Fire Company No. 1, Humane Fire Company No. 1, Good Will Fire Company No. 4, Phoenix Fire Company No. 2, West End Fire Company No. 7 and Yorkville Hose & Fire Company No. 1.