Gap would be closed with tax hike, spending cuts, trust fund withdrawal
By Kathleen Brady Shea, Managing Editor, The Times
Coatesville Finance Director John Marcarelli (left) presented an overview of the proposed 2013 budget as the city’s codes director, Damalier Molina, listened.
Coatesville City Council got its first look at the 2013 proposed budget Monday night, a draft that elicited a less-than-enthusiastic reception from four of the five members present.
For most of the two-hour-plus meeting, City Manager Kirby Hudson and Finance Director John Marcarelli provided an overview of the $8.6 million proposal, which represents a 1.8 percent increase in spending.
The proposal includes a tax increase of 5.5 mills that would also eliminate the annual $295 solid-waste fee. As a result, the average 2012 residential real-estate tax bill of $569.30 would rise to $901.87; however, it would be partially offset by the elimination of the solid-waste fee, bringing the net increase to $37.57 for the average resident, Marcarelli said.
Marcarelli said by folding the solid-waste fee into the real-estate tax, the city would likely improve the collection rate and receive income earlier in the year.
Hudson said the attempt to balance the budget underscored “how messed up last year’s budget” was, citing numbers that were “inflated or misrepresented.” He said the depressed economy, which has resulted in lower property values and assessments, has contributed to reduced income.
“Revenues were overstated; expenditures were understated,” Marcarelli said, describing a pattern that goes back years.
Hudson said he and Marcarelli contemplated three options to close a deficit of $1.4 million: raising taxes, using the trust fund alone, or combining the two. He said they opted to propose a modest tax hike, impose some cuts, and recommend a trust-fund withdrawal of $675,000. “The bottom line: We may still end up having a shortfall,” said Hudson.
The proposed trust-fund withdrawal represents a change in the city’s budgeting. Typically, the fund is tapped after revenues come up short, not when a gap is anticipated. The fund, which started at $39 million after the city sold its water and sewer company in 2000, is down to about $9 million.
“We need to wean ourselves off of using it,” said Marcarelli. “It can’t happen overnight.”
The proposal eliminates seven positions, Hudson said. They include the assistant city manager and the redevelopment director. The five full-time police officers who opted for early retirement will not be replaced, he said. A codes worker will be added, and a part-time grant-writing post would be created, Hudson said. He acknowledged that a candidate existed, and although he did not identify him, Hudson’s description of the person’s background matched Allen T. Smith, the city’s former Weed and Seed coordinator who most recently applied for the assistant city-manager position.
Councilwoman C. Arvilla Hunt suggested the position should be full time, perhaps combined with the assistant manager’s job, but Hudson said it did not make sense to pay someone when grants were not available. He said he cut the assistant’s position to send a message about the importance of belt-tightening: “If I’m willing to do it, everyone else is going to have to roll up their sleeves,” he said.
To reduce personnel costs further, Hudson said he met with leadership from each of the city’s three unions and requested a freeze of the 2.5- to 3.5-percent contracted salary increases for 2013. Hudson said that although the union leaders were receptive to avoiding layoffs, a majority of each union would have to vote on accepting the freeze.
“Our biggest problem is the reserve trust fund because we have a fallback,” said Councilman Ed Simpson.
Council President David C. Collins agreed, suggesting the city should distribute it to the poor and start from scratch. He said that residents should not be shouldering the burden of the city’s habit of living beyond its means. “We need to make some deep and serious cuts,” Collins said.
Councilman Jarrell Brazzle concurred that more trimming is needed, but he said he was pleased that Hudson and Marcarelli are attempting to interject realism into the process. “The last city managers have presented us with b.s. on paper,” he said.
Simpson said he expected some opposition to combining the solid-waste fee into the real-estate tax since businesses would still have to continue contracting with private disposal companies and would likely view the change as being charged for services they don’t receive. Marcarelli said everyone pays for a totality of services, many of which, such as police and fire protection, are not used.
Acting Fire Chief Jim Lentz suggested the city consider the disproportionate drain on services that some businesses generate and increase some fees and fines. “It’s absolutely justified,” he said. “Don’t let anyone in the community tell you otherwise.”
Codes Director Damalier Molina said many communities charge more than double the city’s $40 rental-license fee. In response to a question from Simpson, Hudson said absentee landlords own more than 50 percent of the city’s rental units. In addition, the city, which constitutes three percent of the county’s population, contains more than 53 percent of its Section 8 housing.
Molina said discussion has begun to change the structure of rental fees and inspections, which were supposed to be conducted once every two years. “We didn’t have the staff to do it in two years,” he said.
Monday night’s advertised meeting would have offered the public its first glimpse of the 2013 budget proposal; however, no residents attended. Councilmen Joseph Hamrick and Jeff LoPrinzi were also absent. Two additional opportunities to gain insight will occur this Thursday and next Thursday, Nov. 15, when work sessions are scheduled.
Hudson said department heads would be present to offer specifics. The first session will include administration, fire, finance, codes, and human resources, and the second will detail police, public works, capital reserves, solid waste and liquid fuel.
Everyone that walks down Coatesville’s streets is taking a chance that he or she will be mugged. Every store and restaurant owner in Coatesville wonders if today is the day for the armed robbery. That is Coatesville’s problem and Hudson’s proposal will most likely make it worse.
The $168,000 missing from the 2008 budget is allegedly cash payments for trash bills. Rolling the trash collection into real estate taxes will stop those cash payments at the window.
Grant writers are a dime a dozen. You can contract with an outside firm, for a fee, and get great service.
The Economic Development Partners Initiative, for example, has grant writers on their staff. Grant writing has become a niche industry and grant writers can be hired, by contract, for multiple areas of municipal functions.
Keeping one grant writer on the City’s payroll, even if it is on a part time basis, can’t be justified in a tight economy. The City can reach out to the Econ Dev Partners (they already have a relationship with the City) and hire them – or post an ad on the City’s web site – on an as-needed basis.