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Arnold forecasts layoffs

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About the tax increase

Here's how taxes would change on a house with an assessed value of $14,000:

Current tax rate: 34.75 mills

Proposed tax rate: 43.50 mills

Current tax bill: $486.50

Proposed tax bill: $609

Tax increase: $122.50

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Wednesday, Dec. 12, 2012, 12:51 a.m.

Barring a miracle between now and January, Arnold officials said they likely will need to lay off employees next year.

Councilman David Horvat, who oversees city finances, said the city could not find a bank willing to give Arnold a $1 million unsecured loan.

That means the city is facing a $430,000 deficit to start 2013 — not including the $750,000 tax-anticipation loan from 2012 it still must repay.

Horvat said much of the $430,000 deficit should be recovered early next year when revenue from the last quarter of this year's sewage and garbage fees comes in.

Mayor Larry Milito said Controller Kevin Palladino is working with First Commonwealth Bank to negotiate repayment of the loan, which is due by the end of this year.

“I lay in bed at night trying to think of where the money can come from, what rock we can find it under,” Milito said. “It saddens me to do the things we're probably going to have to do come Jan. 1, and that's lay people off.”

Arnold employs about 20 people, including 10 police officers and seven public works employees.

Milito could not yet say how many people would need to be laid of or for how long.

He previously said layoffs likely would affect more than one department, including the police, even though the city is contractually obligated to employ at least 10 officers.

A few residents asked council to find a way to avoid reducing police.

“I strongly urge you not to cut the police force,” said Keith Bertetto of Drey Street. “That's a major concern of mine.”

A 13-year resident of the city, Bertetto said he often defends Arnold to outsiders who think crime is rampant.

“It's not that bad here,” he said. But if there are fewer police officers, he said, “It's going to get bad.”

“That's the last thing we want to do,” Milito said. “But unfortunately, that's the biggest part of our budget.”

Council has proposed a $4.5 million budget for 2013, which includes about $875,000 for the police department.

The budget also includes a property tax increase of 25 percent, from 34.75 mills to 43.50 mills.

Officials said that will take Arnold to the maximum tax levy allowed by law; increasing it further would require court approval.

Milito indicated officials still hope to avoid layoffs, but their options are limited.

Council plans to solicit bids for garbage collection in January, which they hope will save money over the current system of having public works employees collect trash.

But resident Joseph DiMaria of Ridge Avenue questioned whether a switch would benefit residents. He worried a contractor would set bag and weight limits and charge residents “hidden” fees.

Milito said the city can specify the collection terms when it seeks contractors.

Another cost-saving consideration is consolidating police departments with New Kensington and other neighboring communities, but officials said that's not something that could happen quickly.

Dante Moretti of Freeport Road asked whether changing Arnold from a Third Class city to a township or borough could save money.

Solicitor John Pallone said it would require a detailed analysis to determine if any savings, such as no longer requiring a full-time police department, would balance out any costs or lost revenue.

Again, Pallone said, that's not a short-term solution.

“I have faith,” Milito said. “But we're not looking good for January.”

Council won't finalize its budget until a special meeting on Dec. 31.

Liz Hayes is a staff writer for Trib Total Media. She can be reached at 724-226-4680 or

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