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Latrobe council warned: Raise revenue somehow

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Tuesday, Dec. 11, 2012, 12:01 a.m.
 

Latrobe Council Monday approved a $5.03 million budget that holds the line on real estate taxes for the third consecutive year, but not before receiving a warning that the city must take steps to increase revenue or face financial problems in a about a decade.

“This is a lean budget. There is not a lot of fat,” City Manager Alexander Graziani told city council. Any additional reductions in the budget would result in a cut “to the marrow,” he added.

The budget that council approved for 2013 is balanced with a real estate tax levy of 21.5 mills, which is expected to generate $1.37 million, or 27 percent of all revenue. The city dedicates 0.2 mill to the Adams Memorial Library, which is about $13,300, and provides an additional $20,000 contribution.

The 2013 budget is only $39,965 higher than the 2012 budget and Graziani stated in his budget report that it is “a struggle to keep expenditures equal to revenue.”

The city anticipates balancing the budget with a transfer of about $98,000 from a $550,000 surplus Latrobe expects to have on Jan. 1, Graziani said. The transfer into the general fund is necessary because of a projected revenue shortfall of $103,250, Graziani said. The manager said, however, that he made the revenue projections lean. For 2012, the city should receive about $125,000 more in revenue than was anticipated in the budget.

The budget council approved is slightly higher than the $4,997,040 draft budget it received from Graziani last week.

Latrobe should be concerned that it is heading down a path of fiscal insolvency faced by other cities — such as Reading, Johnstown and Pittsburgh — if changes are not made within the decade.

“If we keep the fees and the taxes the same, we will be in Act 47,” the law permitting the state to enact a recovery plan for financially distressed communities. It needs to make structural changes and should look to increasing revenue from both government and non-government entities, he said.

The city needs to increase the profits it generates from the operation of its waste transfer station.

The sanitation department contributes 34 percent of the city's budgetary revenue.

Latrobe should create a structure for nonprofit businesses, such as Excela Health, to make payments in lieu of taxes.

Such an initiative likely would have to be done in conjunction with other municipalities where Excela Health has hospitals, such as Greensburg and Mt. Pleasant, and in North Huntingdon, where it has an outpatient center.

“I would strongly pursue that,” Graziani said.

The city should update its fee structure for the planning services it provides, Graziani said.

The city's financial picture was better than projected because it approved a one-year contract with its current refuse hauler, Allied Waste Services of Scottdale, for $678,581.

Residential customers currently pay $40 per quarter and the charge is not expected to increase.

The hauler will handle commercial waste, as well as recyclables.

Joe Napsha is a staff writer for Trib Total Media. He can be reached at 724-836-5252 or jnapsha@tribweb.com.

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