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Connellsville posts $174K deficit | TribLIVE.com
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Connellsville posts $174K deficit

Tribune-Review
| Saturday, November 22, 2014 1:21 a.m

Connellsville City Council will introduce its 2015 budget during a special meeting at 5 p.m. Monday. Council will also discuss the city’s financial issues during the meeting.

“We are having this public meeting, which will also air on Armstrong Cable, to lay everything on the table for the public to see,” said Connellsville Mayor Greg Lincoln. “To allow the public to make any comments or suggestions they may have about the 2015 budget.”

During the city’s third budget meeting held last week, council found itself with a $174,000 deficit in the 2015 budget. There were several options on the table to save money, including a new insurance provider for the city’s union workers and eliminating the city’s one-man paid fire department. Residents voted in the November election to eliminate the one-man department on a referendum vote. New Haven Hose Company volunteers would handle fire calls in the city.

The new insurance contract could have saved the city about $80,000. The elimination of the last paid firefighter with salary, benefits, insurance and operations cost of the East Side Fire Station could save $100,000 annually.

Lincoln said the representatives from the three unions met with the city’s insurance provider recently to get details regarding the insurance contract.

“After attending the meeting, the three unions have decided to reject the new insurance plan,” Lincoln said. “We are currently looking into other savings in regards to insurance.” The unions represent police, street and fire departments.

Brad Geyer, the city’s director of finance, said the current insurance plan will remain the same price as in 2014. There is no planned premium increase.

The issue with the firefighter will go to arbitration, but a date concerning that matter has not been scheduled, thus taking the $100,000 from the budget would not be an option at this point.

With a deficit still looming over the budget, Geyer said talk of a tax increase will be part of the discussion on Monday.

“There are some items yet that we can trim,” Geyer said, but without a change in insurance or guidance of the fire arbitration, there’s not a lot to be trimmed.

“If we cannot find any more cuts to eliminate the deficit, taxes would have to be raised to cover the difference,” Lincoln said.

Lincoln said a 1-mill increase would bring in $167,000 on a 100-percent collection rate. The city has an average collection rate of 89 percent.

The millage rate is the rate of property tax per $1,000 of assessed value on a home. Homeowners pay $7.50 for every $1,000 in the assessed value of their homes in 2014 with the millage rate set at 7.5 mills, which was raised from 6.66 mills for 2014.

The city will look at taking out a tax-anticipation note. The city has taken out the loan in the past to cover the months before real estate taxes come into the city coffers.

The city has taken out the loans for several years, always making payment back to the bank before year’s end.

However, in 2012, the city found itself unable to make payment on the principal of $450,000. That forced council to take out a tax-anticipation loan of $675,000 for 2013 and again in 2014.

Geyer said the city plans to reduce the tax-anticipation note, and it made nearly $40,000 in principal payments in 2014.

“We are currently determining the amount we need and supplying the information requested to the local banks,” Geyer said.

Lincoln said the amount could be about $625,000.

“But it could increase if our accounts and finance director (Geyer) feels we would not have enough money to pay the city’s bills in January and February 2015,” Lincoln said.

Geyer said council is budgeting $80,000 this year toward reducing the tax-anticipation note in 2015.

“I feel this is a responsible approach by reducing the yearly principal,” Geyer said.

Another issue with the 2015 budget is the request from New Haven Hose for $40,000 in lieu of receiving Community Development Block Grant money. In the past few years, the city has allocated the department $24,000 annually.

Other municipalities have dedicated a certain percentage of the millage rate to fund fire departments.

“I totally support dedicating a millage for New Haven Hose that would equal $24,000,” Lincoln said. “This would eliminate New Haven Hose from worrying about losing their funding every time there are municipal elections. It’s fair and the right thing to do.”

Geyer said while there is very little difference between the way the city currently contributes to the fire department and setting a percentage from the millage rate, it’s an open- discussion item.

“The goal is to set up a consistent allocation for New Haven Hose,” Geyer said.

Along with discussion of the budget, Lincoln said he would like to discuss the Connellsville Recreation Board purchasing playground equipment. The board received a matching grant for $10,000 from the Fayette County Cultural Trust.

Mark Hofmann is a staff writer for Trib Total Media. He can be reached at 724-626-3539 or mhofmann@tribweb.com.

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