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McKeesport must tap reserve fund to pay bills

| Thursday, Nov. 7, 2013, 4:51 a.m.

McKeesport council voted on Wednesday to allow Mayor Michael Cherepko to tap into his reserve fund to make payroll and pay bills.

Cherepko said the city's overall deficit by the end of the year may reach $2 million, but bills and employees need to be paid now.

Council's approval came because of a heated exchange between Cherepko and council president Darryl Segina.

Cherepko asked for the motion several times at the meeting, explaining that without access to the approximately $900,000 in reserve, the city would not be able to pay its regular obligations.

“We're going to treat it as if it's not there and use it in an emergency,” Cherepko said. “I don't want to come to the end of the month — and we don't have a council meeting until December — and not be able to make payroll ... Your $900,000 is going to be gone at the end of the year anyway.”

Council voted 6-1 in favor of Cherepko using the reserve, with Segina casting the dissenting vote.

Segina said he did not feel comfortable voting on the request without specific figures, noting payroll problems and the reserve fund were not discussed at Tuesday night's workshop.

“We have no details on what our problem is and how much money we're in the hole,” Segina said. “I think this is the fourth time since I've been here that we've tapped this reserve, and $900,000 is nothing to sneeze at. We don't know how much debt we're going to have after this, so I'd prefer to vote on this sometime in December after we have a meeting in caucus that we can actually see the figures without voting blindly on $900,000.”

Cherepko was not at the workshop meeting.

“You have the budget,” Cherepko told Segina. “We're not going to spend any money that has not already been approved in the budget. The bottom line is basic fundamental mathematics that I believe my fifth-graders would understand. When your revenues do not quite meet your expenditures then you need to go to the reserve.”

Segina said he would have liked to receive a phone call or something in writing from the mayor about financial concerns prior to the council meeting.

“There's no plans that you've given us with what you want to do with this,” Segina said. “Now you're saying $900,000 like it's almost nothing.”

The two went back and forth about who brought up city debt at previous meetings and what conversations did and did not take place.

“This is half of our problem,” Cherepko said of the possible $2 million deficit at the end of the year. “I'll probably come to you with something in December in addition to this. I've been saying this all year.”

“It's in the minutes,” city Solicitor J. Jason Elash said in defense of Cherepko.

“Why are you talking?” Segina asked Elash. “You're a solicitor. If I want an opinion I'll tell you. You're out of order.”

“If you ask me I will definitely respond, just like if the mayor asked me, I will respond,” Elash said.

Among the other debt discussed is a $700,000 increase in minimum municipal obligation to McKeesport's pensions, and a $300,000 stimulus revenue cut.

“If we don't come off as an administration and pull a rabbit out of the hat next year, this city is broke,” Cherepko said.

“You better have a lot of rabbits in the backyard because you're going to need them,” replied Segina.

The mayor said he will have more financial details regarding the use of the reserve fund and next year's budget figures in December.

Michael DiVittorio is a staff writer for Trib Total Media. .