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Penn Hills

Penn Hills preliminary budgets shows $1.4 million shortfall

Dillon Carr
| Thursday, Nov. 8, 2018, 11:18 a.m.
Penn Hills Municipal Complex
Penn Hills Municipal Complex

Penn Hills’ manager gave several suggestions in his 2019 draft budget — including a property tax increase — to fill a $1.4 million deficit.

In his budget message, which is available for public inspection at the municipality’s administrative building at 102 Duff Road, Penn Hills Manager Scott Andrejchak said the deficit is due, in part, to higher waste service fees. The $10.4 million contract with Scottdale-based Republic Services, which is up for vote at the Nov. 19 council meeting, reflects a 43-percent increase from the municipality’s previous three-year contract with the same company.

The current deal expires Dec. 31. Penn Hills will have paid $7.3 million over three years through the deal, according to the 2018 budget.

To cover the increase in its unavoidable waste services increase, Andrejchak proposed a 1-mill increase to generate $1.4 million annually.

Another option, Andrejchak said, is to eliminate $1.4 million additional costs in the budget.

“If council wants to explore it, I could develop a series of plans which would cut services, but this is really not practical,” Andrejchak said.

When the budget process began, the municipality faced a nearly $2.1 million shortfall, he wrote in his message.

To help close the gap, Andrejchak eliminated three vacant public works positions, which saved around $232,000. He also removed new vehicle purchases and other capital purchases for police and internal technology equipment.

Another option is raising the municipality’s Earned Income Tax rate. Andrejchak did not say how much the EIT would need to increase in order to close the shortfall. The current EIT rate is 1.75 percent, with 0.5 percent designated for the Penn Hills School District.

The final option Andrejchak proposed is billing residents for waste services. He estimated the monthly cost for a resident in 2019 would be $16.25, or $195 annually. In 2020, that would increase to $17.07, or $205 – and in 2021, the rate would again increase to $17.93, or $215.

Andrejchak said the option depends on vendors agreeing to bill the service.

Councilman John Petrucci said he is against a property tax increase and favors the option to bill residents for waste services because, he said, it’s fair across the board.

“Why should a resident that owns vacant property pay more taxes when they do not have rubbish collected? Or why should a home on one side of Penn Hills be assessed higher than one on the other side of Penn Hills … for the same rubbish service?” Petrucci said in an email.

Other council members could not be reached for comment.

Mayor Sara Kuhn declined to comment on specifics of the draft budget before she hears from residents at public meetings.

“The public has the opportunity to review the budget a month in advance to the public meetings,” Kuhn said. “This allows time to research the budget and prepare any and all questions, additions or deletions they may have, and they can present those concerns at the budget meetings.”

Penn Hills Council will hold three public hearings before approving a final budget by the end of the year. As of Nov. 7, the meeting dates were not made public.

A physical copy of the draft budget can be inspected at 102 Duff Road from 8 a.m. to 4:30 p.m. Monday through Friday.

Dillon Carr is a Tribune-Review staff writer. You can contact Dillon at 412-871-2325, dcarr@tribweb.com or via Twitter @dillonswriting.

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