ASHLAND - Property owners will see a 1-mill increase in real estate taxes in 2013 after the borough council formally approved the operating budget at Wednesday's regular meeting with a 5-2 vote.
However, there was a break for sewage system users as a proposed $7 per quarter increase was tabled.
Real estate taxes will increase from 20.80 to 21.80 mills. The 1-mill increase is dedicated to the capital reserve account, with the funds to go toward a combination of a line of credit and a new loan for finishing the new borough police station at the lower level of the municipal building.
The 2013 budget includes $994,385.85 in general account revenue and $993,151 in expenditures.
Before the budget went to a vote, Councilman Patrick Cooney asked why there is a need for a 1-mill increase after there have been cost reductions in borough operations during 2012, especially in benefits. These include the elimination of Thomas Towers as code enforcement officer and combining the code officer and health officer positions under Barbara Lyden, reducing Susan Jones to part-time status as parking meter officer, cutting a full-time office clerk and having no borough manager in November and December.
"I don't understand why a 1-mill increase is needed," Cooney said, noting 1 mill brings in about $24,000 in tax revenue.
Council President Frederick Spieles said the 1 mill will go into the capital reserve account, which has a balance of about $8,000. Since the borough will be paying about $3,800 a month in the new year for the loan to complete the police station, the current balance would only last two months.
Borough Treasurer Patty Moyer attended the meeting and explained that with the new loan combined with the line of credit, which the borough has been paying for at least six years, the borough will now be able to pay off both by October 2014 at about $7,100 per month.
"We did not want to go up a mill," Spieles said. "Patty and I went through the budget and she got it as close as she could."
By dedicating the 1 mill to the capital reserve fund, the revenues cannot be used for anything else but for the police station loan, Moyer said.
Councilman Daniel Weikel motioned to adopt the budget, seconded by Councilman Danny Johnson. Voting to approve were Spieles, Weikel, Johnson, Ann Marie Groody and Ray Walacavage. Voting against were Cooney and Patti Wesner.
Borough council also approved the tax ordinance to set the tax rates in 2013. Groody made the motion, with Walacavage providing the second. The vote was 5-2 with a similar roll call as the budget vote.
The real estate tax rate of 21.80 mills for 2013 is dedicated to the following accounts:
- General fund - 16.60 mills
- Street light - 2 mills
- Recreation - 0.70 mills
- Fire equipment - 0.50 mills
- Capital reserve - 2 mills
Spieles said the sewer rate increase will be reviewed.
"We're going to table any increase until a future meeting," Spieles said. "We're going to take a look at our finances to see if we need to increase the fee."
In other business, borough council:
- Approved securing a tax anticipation loan of $100,000, which will provide operating funds for the first three months of 2013 until March, when tax collection revenue starts coming in.
- Approved the second payment of $85,206.83 to Heim Construction Co. for work completed at this point in the final phase of the Streetscape project. Spieles said company officials informed him that the project completion is still scheduled for the end of December.
- Approved a five-year contract with M&B Environmental Inc. to operate the water filtration plant.