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Layoffs, tax hike loom in Arnold

| Wednesday, Nov. 14, 2012, 1:02 a.m.

Arnold residents are facing a 25 percent real estate tax increase next year.

And if the city can't get a $1 million loan, city employees, including police officers and public works employees, will be laid off, officials said. A pay freeze for city hall employees will take effect.

Council on Tuesday night approved a preliminary budget that calls for a property tax hike of 8.75 mills. That would increase the real estate tax rate from 34.75 mills to 43.50 mills.

Officials say the tax hike will occur despite council's slicing more than half a million dollars in expenses, compared with this year's budget.

“The last thing we want to do is cut anybody's job,” Mayor Larry Milito said. “I have a pit in my stomach that I'll have to send somebody home. We need our people to pray we get this loan.”

Officials are working to secure a loan through the investment banking firm of Boenning & Scattergood.

Bond counsel Dinsmore & Shohi LLP is working to assist with securing the loan. A representative of the firm is experienced in getting loan money for financially troubled municipalities.

The new spending plan of $4.48 million is a reduction from this year's $5.06 million budget.

Even with cost-cutting procedures, Councilman David Horvat said health care costs for city employees will increase about 7.5 percent and labor costs will increase about 3.5 percent.

So far this year, three public works employees have retired and were not replaced. Council also delayed buying new police cars. Instead, the city bought two used police cars this year.

City to seek trash hauler

In a departure from long-standing policy, Arnold is preparing to seek bids for trash collection starting next year.

Public works employees now collect trash from residences.

If trash collection is contracted to an outside hauler, the public works employees will be freed to do more traditional duties such as street and stormwater system maintenance, officials said.

Council also might look at renting the sewer pipes that lay underneath the city. Officials didn't elaborate on what that means.

Arnold expects to end this year with a $500,000 shortfall and next year's red ink is expected to total $600,000.

How the crisis developed

Officials said the financial crisis came about largely because previous councils chipped away at a capital reserve fund that had $392,000 in it 2007 in order to balance the last several budgets.

Another hit to city finances occurred in 2010 when an arbitrator ruled Arnold owed the New Kensington Sanitary Authority $261,000 after holding back a certain percentage of sewage money over a period of years.

A number of citizens commended the job done by city police officers and pleaded with officials to try to avoid layoffs.

The final budget adoption is set for Dec. 31 at 5 p.m.

In other business

Officials said on Tuesday night that $300,00 in federal Community Development Block Grant money is on its way to the city.

The money is not part of the regular city budget. It will be used to pave Drey Street next spring and to demolish at least eight dilapidated residences.

Structures due for the wrecking ball are at 1714-1716 Riverside Drive, 1428 Third Ave., 1413 Third Ave., 1428 Fourth Ave., 1728 Fourth Ave., 308 Murray Ave., 819-821 Drey St. and 1914 12 Constitution Blvd.

Three more abandoned properties could be added at a later date.

George Guido is a freelance writer for Trib Total Media.

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