Connellsville ponders borrowing $225,000 to make payroll, pay bills
Connellsville City Council could decide to borrow $225,000 from Scottdale Bank to keep the city operating through the end of this year while it continues to slash expenses from its 2013 tentative spending plan.
“If we decide to borrow $225,000, that should give us enough money so we can make payroll and pay our bills for the next two months,” Councilman Brad Geyer said. “The payroll for the next two months is estimated at $270,000.”
At a budget work session Tuesday night, council members also continued to slash expenditures from its 2013 budget in an effort to present a balanced spending plan at next Wednesday's city council meeting.
If council fails to make the necessary cuts to balance the 2013 budget, council members could take action to approve a 1-mill real estate tax hike. The city's current millage is set at 6.66 mills where it has remained for more than 20 years.
Geyer said one mill generates $166,000 for the city. Since the tax collection rate is only about 85 percent, he estimated that a one-mill tax hike would actually generate about $142,000 for the city.
“I can tell you right now that I'm not going to vote for a tax increase,” Mayor Charles Mathews said.
“We will have the first reading of the budget next week, but it's highly unlikely that we're going to vote to increase taxes,” Geyer said.
Geyer presented proposed 2013 budget figures to council. The figures included $3,424,594.50 in revenues and $3,409,799.72 in expenditures.
“The figures are about $15,000 apart at this time,” Geyer said. “The law requires us to adopt a balanced budget. We're going to have to reduce revenues or increase expenditures to balance the budget.”
Councilman Marilyn Weaver suggested that the extra $15,000 could be set aside to pay back the $225,000 loan that the city could decide to take from Scottdale Bank to make it through the end of this year.
Council members claim they do not have enough money to pay the city's bills for the next two months because projected revenue has not been coming into the city because of a change in tax collection agencies.
Although the Central Tax Bureau in Youngwood originally collected the city's earned income and mercantile taxes, Geyer said Fayette County recently entered into a contract with Southwest Regional Tax Bureau of Scottdale to collect the taxes.
“We really don't know why our earned income and mercantile taxes aren't coming into the city on time,” Geyer said. “There seems to be a delay because of the changeover in the tax collection agency. We're hoping that the money will eventually come into the city and our financial situation will improve.”
“The tax has to be somewhere,” Matthews added. “Southwest Regional Tax Bureau has an office that is full of boxes with checks in them. As soon as we get the tax money that people paid to the city, I'm sure everything will be fine.”
Cindy Ekas is a freelance writer.