Connellsville council to hold the line on taxes
Connellsville City Council Wednesday night adopted a tentative $3.68 million budget for 2013 and voted to hold the line on real estate taxes at 6.66 mills.
Mayor Charles Matthews and the four council members unanimously voted to approve the spending plan. A final budget is expected to be adopted at the next city council meeting set for 7 p.m. Dec. 12.
Councilman Brad Geyer said the city decided to wait to see if it can recoup about $225,000 in missing tax revenue before it decides to raise taxes.
Geyer explained that the city has not received tax money because Centax (Central Tax Bureau) went out of business and the Southwest Regional Tax Bureau in Scottdale took over the collection process. Mercantile, business privilege and local services taxes are still owed to the city.
“We've had much debate about the collection of (Act) 511 taxes and the shortfalls we currently have,” Geyer said. “We've faced many problems because the previous tax collection agency went out of business.”
Instead of raising taxes to cover the $225,000 shortfall, Geyer said, council decided to take a “more prudent avenue.”
“We decided that we should try to recoup the money before we raise the tax rate,” Geyer said. “If the tax agency collects the money, it could be placed back into our accounts, which means a tax increase would not be necessary. We would have raised taxes for no reason.”
Councilwoman Marilyn Weaver said she disagreed because she supported a one-mill tax increase.
“I guess this is one way to look at it,” Weaver said. “But I wanted to raise taxes one mill to make sure the city has enough money to operate.”
If the city would have raised taxes by one mill, Weaver said, a taxpayer whose home is valued at $48,000 would have paid an additional $48 in real estate taxes for the year.
“One mill would have brought an additional $168,000 into the city,” Weaver said. “I know that's not a lot of money, but the city would not have had to borrow as much money for its tax anticipation loan.”
Although the city originally planned to borrow $450,000, Geyer said an additional $225,000 is needed to keep the city financially solvent for the first few months of the new year until the outstanding tax money is returned to the city. The city's tax anticipation loan will be an estimated $675,000.
“We have the cash to make it through the end of the year,” Geyer said. “We haven't determined where we will borrow the tax anticipation money yet.”
Council authorized solicitor Tim Witt to review the bond of Centax and take appropriate action, including but not limited to litigation, in connection with Centax's failure to properly collect taxes.
Geyer explained that the Allegheny County Court recently appointed an attorney to go through the accounts of Centax and to review confidential information.
The city also appointed Berkheimer as its tax hearing officer for all city taxes collected.
“Berkheimer will be working to collect delinquent per capita taxes owed to the city,” Geyer said. “We have less than $10,000 in delinquent per capita taxes that we're trying to collect.”
In other action, council authorized the Connellsville Redevelopment Authority to acquire the directional signs for the Amtrak Station at no cost to the city. The signs will be installed by the city's street department.
During public comment, Johanna Harden asked council members why public action wasn't taken when the city decided to allow Fayette EMS to use a golf cart owned by the city.
“I have no objection to the city allowing Fayette EMS to use the golf cart, but this decision should have been brought out at a public forum,” Harden said.
Cindy Ekas is a freelance writer.