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Recession hits struggling towns like Monessen, Uniontown harder

| Saturday, April 28, 2012, 6:05 a.m.

In his first year as Uniontown's mayor, Ed Fike drove a garbage truck, personally tore down dilapidated houses and returned his paycheck to the city, which is smothered in debt.

It's what he calls his "hands-on, no nonsense, git-'r-done" approach to leadership, adopted out of necessity last year when he learned during his first week in office that Uniontown owed more than $1 million in tax anticipation loan payments and bills from the previous administration.

The city then raised taxes, laid off nearly half its work force, halted road and maintenance projects and slashed spending so drastically that no one buys even a roll of paper towels without approval, clerk Kim Marshall said.

Elected officials throughout Western Pennsylvania say the recession is taking a toll on municipalities struggling with declining populations, stagnant tax revenues, escalating employee insurance costs and aging infrastructures. As a result, they are scrutinizing budgets and searching for economical ways to serve people battered by job losses and personal financial hardships.

It shows.

In Uniontown's city hall, leaves, dirt and scraps of paper litter the hallways. A cloudy haze coats glass in doors and windows. Caked with mud, a broken playground turtle seat rests on its side in Fike's reception area, where the carpet hasn't been swept in weeks.

"We call in people to do things on an as-needed basis," Fike said. "What we're trying to do is get the city back on its feet."

The stories are repeated throughout Allegheny, Westmoreland, Fayette, Beaver, Washington and Butler counties. Places that thrived 40 years ago during the heyday of the steel and coal industries have lost jobs, people and money in the years since, census records show.

North Versailles disbanded its police force. Munhall cut funds in half for its annual community day fireworks and froze nonunion salaries. McKeesport put off maintenance and laid off workers. Monessen raised taxes, borrowed money and announced plans to downsize and move city business into a health center annex.

Cutting to the bone

Many leaders say providing even basic services is a luxury. Road maintenance has been cut, supplies are ordered only when necessary and infrastructure improvement projects are nonexistent.

"We're changing the way we do things," Monessen Mayor Anthony Petaccia said. "Any way we can find a way to cut money, we cut it."

Petaccia said the once-bustling Mon Valley mill town revamped purchasing procedures to require the administrator's approval for expenses over $50. Employees wash and perform maintenance on city-owned vehicles. Hiring ground to a halt.

Monessen's tax rate went up by 2.5 mills, and Petaccia said the city asked a judge to approve a 5-mill hike because 1 mill generates only $59,000. Struggling taxpayers say they are grateful the request fell short.

The 2000 census, the most recent year for which Monessen's numbers are available, showed its median household income was $26,686 and indicated nearly 16 percent of residents lived in poverty.

Higher taxes would have pounded Monica Kramer, who nearly lost her Donner Avenue home to foreclosure when her balloon mortgage doubled last year. Things are tight, said Kramer, a Head Start worker who shares the home with her husband, Bob, a minister, and their sons Izaak, Solomon and Joshua.

"I think the community has come together, though, because people are sharing what they have and helping each other deal with the economic hardships," said Kramer, a gospel singer for Songbird Ministries who sells CDs of her Christian songs for $5.

Twenty miles away, McKeesport Mayor James Brewster said the sagging economy created a "real challenge." The city, which lost hundreds of mill and manufacturing jobs with the demise of the steel industry, was in "serious condition" long before the recession started, he said.

Employee health care insurance costs have been "spiraling out of control," he said, adding that about 65 percent of the expenses in the city's $20 million budget are staff-related. Costs for fuel and supplies went up and revenue went down as residents hit by job losses struggled to pay their taxes, Brewster said.

"We finally got boxed into a corner," he said.

Widespread distress

Experts say Monessen, Uniontown and McKeesport are not unique.

Chris Briem, regional economist for the Center for Social and Urban Research at the University of Pittsburgh, said many of the region's municipalities have been in a crisis for a long while. Although the recession exacerbates the problem, it is not the cause, he said.

"This is one of the most fragmented local government regions in the nation," Briem said, explaining the area's classic mill towns were built to support an economy that went away. "A lot of small municipalities have no leeway, no big budget to shift resources, so they are in real fiscal distress."

That, he said, poses big problems for small towns.

Many have unionized work forces, paid police and fire departments and few prospects for economic development. As jobs disappear, people leave, draining tax rolls.

Census records show that from 1970-2007, Uniontown's population dipped from 18,282 to 11,730 and Monessen's went from 15,218 to 8,075. In 1970, McKeesport had 37,977 residents, a number that plummeted to just over 22,200 by 2007.

Business shrinks

In McKeesport, where census records indicate 25 percent of families live in poverty, businessman Stephen Pergantis sees the signs of distress when he looks at his balance sheet or at the empty streets and shuttered storefronts outside his Coney Island convenience store on Fifth Avenue across from city hall.

At one point, the shop, which sells cigarettes, snacks and groceries, had six employees and a deli sandwich counter, he said. Now, the sandwich business is long gone and he works alone, with occasional help from his father or brother.

Although he jokes that McKeesport is listed in records books as the only place where a McDonald's fast food restaurant has failed, he's not laughing.

"Business is the lowest it's ever been. It got so bad that they took the lottery machine out," Pergantis said. "As of right now, I can pay my bills and taxes, but that's it."

Nevertheless, Pergantis said he sees a bright future for McKeesport, possibly borne on the national economic stimulus plan, a proposal to make the city a hub for a magnetic levitation rail system or the businesses that could crop up around Allegheny County's planned public safety and court complex.

In the mayor's office, Brewster sees it, too. When the economy turns around, McKeesport has potential, he insists.

Petaccia believes Monessen and its homeowners could get some much-needed cash and free natural gas by selling mineral rights to a company that wants to tap into underground Marcellus Shale reserves.

In Uniontown, where the median income is slightly more than $19,000 and 22 percent of families live in poverty, Fike hopes several projects will create jobs and stimulate growth. Renovations at The Uniontown Hospital, a new day-care center for the elderly in a former grocery store and expansion of the Mon Valley Expressway toll road should help, he said.

Until then, he'll do what he can to keep the city running.

"My promise was that I wanted to leave our city better than I found it," said Fike, a mail delivery service and tavern owner who says being mayor was his childhood dream.

"Our new slogan is that we're going to try to give our residents more for less. We can't let negativity override us."

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