Jeannette expects no tax increase
The city of Jeannette expects to end this year and next with a balanced budget.
Council Tuesday approved a preliminary budget of $5.1 million that will keep the tax rate at 32.61 mills. Mayor Robert Carter and councilmen Bill Bedont, Dr. Mark Levander and James Benson all voted for the proposal. Councilman Mark Clark was absent.
“We're going to be completely balanced,” said Bedont who oversees the city's finances.
There is one black cloud on the horizon that could scuttle Bedont's best-laid plans.
The city is appealing an award to businessman Frank Trigona, who is seeking $650,000 in damages stemming from a 2005 decision by council to withhold occupancy permits for rental property because he owed the city back taxes. Trigona's attorney is seeking $153,000 in legal fees. A judge ruled the city had no legal authority to withhold the permits and Jeannette's insurance carrier refused to cover any damages.
Jeannette is appealing the award arguing that Trigona is owed $76,500. Both parties are awaiting a ruling by Westmoreland County Judge Richard McCormick Jr. after presenting testimony in the case this fall.
Bedont said the budget does not contain any funding for either amount.
“I can't predict it, so I can't put a number in,” he said. “There's always the appeals process. We're in a sinking ship. How long can we keep bailing out water?
Levander said without a decision by McCormick, there's no way to calculate the impact an adverse decision could have on the city and whether any drastic measures would have to be taken to keep the city solvent.
“Is it going to impact at $60,000 or $600,000?” Levander asked.
“When that comes across, we'll figure it out how to handle that at that point in time,” added Carter. “It's not a good situation no matter how we look at it.”
“We're going to cross that bridge when we come to it,” Bedont said.
Also hanging over the city are contracts with its police, firefighters and city workers. Bedont said contract offers have been made to each union that includes a wage freeze for all city employees in 2013.
The city expects to pay off a $350,000 tax-anticipation loan by Dec. 31 and has been negotiating with First Niagara Bank for another loan to get the city through the first several months of 2013, said Bedont, who has provided the bank with “tons of information.”
“We're loan worthy,” he said.
Police, fire, sanitation and the street departments remain the biggest expense for the city.
The budget for the police force will be $1.1 million next year.
The fire department, which includes three full-time fire and on-call firefighters, expects to spend more than $257,000. It will cost the city more than $605,000 to collect the garbage and another $318,000 to maintain streets.
Pension costs remain a major source of spending.
Next year the city will have to contribute more than $671,000 toward pensions for the city's police, firefighters and street and sanitation workers. For the past several years, Bedont said, Jeannette has been contributing 25 percent less than it should have in order to meet the annual payments known as a Minimum Municipal Obligation.
“This throws a kink into my five-year plan,” he said.
“We can't keep taking 25 percent discounts. We should be paying $200,000 a year.”
Richard Gazarik is a staff writer for Trib Total Media. He can be reached at 724-830-6292 or at email@example.com.