Jeannette OKs borrowing $3.5M for street paving, flood control
Jeannette council voted this week to borrow $3.5 million in bonds — $2 million of which will be directed to projects such as street paving and Brush Creek flood control.
“The extra money for infrastructure, we definitely need,” Mayor Richard Jacobelli said.
The remaining $1.5 million is a bond issued in 1998 that the city refinanced, which Manager Michael Nestico said will save about $88,000 in interest payments. Keeping that amount in the city's coffers is worth it, Jacobelli said.
“We brought the interest down enough that the refinancing is actually going to save the city money while still giving the city $2 million,” Nestico said.
The city's annual payment on the bonds will increase to $250,000 from $208,700 in 2016, according to a preliminary version of Jeannette's 2017 budget that council approved Monday. Payments will be made over 16 years.
The 1998 bond had a lifespan of 26 years.
Approximately $4 million in proceeds from the 2015 sale of the sewage authority to the Municipal Authority of Westmoreland County sitting in a reserve account indicates that the city is financially secure, Nestico said. That helped officials obtain the bonds and a low interest rate, he said.
Next year's preliminary $5.7 million budget includes a 1-mill tax increase that was approved by a narrow majority of city voters as a way to fund Jeannette Public Library. The library will receive $67,000 in property tax revenue — a jump from the $15,000 it had been getting in recent years.
The draft spending plan uses about $200,000 out of the city's reserve account, but Nestico said that will be eliminated when council passes a final budget next month.
“I cannot allow that to occur, and I want to align the budget ... without tapping into reserve funds,” he said. “It is the city's intention to have a final budget (that does) not include any reserve funds.”
He expects to make cuts during the next few weeks.
The current millage rate is 32.62 mills, the third highest in the county. The owner of a property assessed at $15,000 would pay $15 more annually under the increased tax for the library.
The preliminary plan includes hiring a fourth full-time firefighter, pay increases for union employees and covering increased healthcare costs.
Garbage collection rates could increase, Nestico said. A $20,000 deficit is projected in the department under the draft plan.
“If that remains the same, then we may have to increase rates to offset that,” he said.
Council could approve a final budget Dec. 14.
Renatta Signorini is a Tribune-Review staff writer. Reach her at 724-837-5374 or rsignorini@tribweb.com.
