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Jeannette considers selling assets, will revise 2013 budget

Wednesday, Jan. 30, 2013, 9:00 p.m.
 

Council will revise its 2013 budget at its next meeting on Feb. 13 at 6 p.m. in city hall.

The city has not made any payment toward the 2012 police pension fund — the total payment would be $414,000 but a discounted payment of $350,000 could be made. Each month the city does not pay the fund, known as the MMO, interest is incurred, increasing the total owed.

The city has been in Pre-Act 47's Early Intervention Program for years and one of the “triggers” known for pushing a city into full Act 47 status as a distressed municipality is failure to pay the MMO. As a result, the city must prove it's able to pay last year's payment at some point this year before the 2013 payment of $546,000 is due in December.

Part of that work requires city council finance chairman Bill Bedont to prepare a new 2013 budget accounting for last year's MMO payment while maintaining a balanced budget that will meet all of this year's financial obligations. One of those obligations is the more than $235,000 now owed to businessman Frank Trigona and his lawyer following a judgment handed down by Judge Richard McCormick Jr. last week.

Making the situation more complicated, Bedont said, is that the final figures from 2012 are still somewhat up in the air because of ongoing discrepancies related to the collection of Earned Income Taxes and how those funds were deposited by Centax and Berkheimer. As a result, Bedont believes the final 2012 figures determined by the treasurer's office are not correct.

If Bedont is correct, the city's deficit at the end of 2012 is $250,000 — if he is not correct, the deficit is higher by at least $100,000. Bedont's figures show the city came in $138,719 under budget, not counting the MMO bill.

Bedont and other council members have said the deficit needs to be addressed in the 2013 budget, but that doesn't necessarily mean drastic cuts to spending. Bedont said he is looking to increase revenues.

Last week, Bedont said one avenue council is pursuing is the sale of city-owned property. Bedont said an example of something that could be sold is a fire truck the city has that isn't used as often as other fire equipment.

“We're looking for things that we don't use as much as we should,” said councilman Mark Clark. “We have a fire truck, we could look at some equipment that is not being used. We may have some issues on what we can sell.”

Bedont said council is working to figure out how much money can be raised by selling assets and how much spending cuts can be made before considering layoffs.

“It's going to mean making difficult decisions,” said Bedont. “I'm trying to build a five-year plan, but it's difficult right now because there are so many unknowns.”

If council is able to solve the immediate budget issues it faces and can keep the city from entering full Act 47 status, city government will have to figure out how to manage its finances moving into next year.

Bedont acknowledged that in all likelihood, selling assets to fix the budget is a one-time only solution and council must decide what to do moving forward.

“Council will continue to consider major changes in 2013 as it did in 2012, when we made significant decisions,” Bedont said. “We have not cut services yet because we thought we were in better shape than we were at the beginning of last year.

“Maybe this year we'll take a closer look at Delta's recommendations,” Bedont said.

Delta Development Group presented a series of recommendations in July 2011 as part of the city's Early Intervention Program, meant to keep Jeannette from being declared financially distressed and forced into a state recovery program under Act 47.

Delta suggested the city trim the fire department from three full-timers to one, to trim the police department from 11 full-timers to eight, to outsource garbage collection and to increase various fees across the board, among other recommendations.

Kristie Linden is an editor for Trib Total Media. She can be reached at klinden@tribweb.com or 724-838-5154.

 

 
 


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