Council overrides veto
2018 tax increase approved; mayor makes case again for cutting spending
Borough council closed out 2017 with one final hour of discussion, and a nearunanimous vote. Council voted seven to two on Sunday morning to override Mayor Andy Szekely’s veto of a proposed tax increase, the final step toward finalizing the borough’s 2018 budget.
“I apologize for bringing everyone out here on New Years’ Eve morning, but I think what I’ve done is highlighted what we can do better, moving into the future,” Szekely said.
Last week borough council passed a 2018 budget with total expenditures of roughly $47.2 million and a proposed real estate tax increase of one mill, roughly 25 percent above the previous rate of 4.5 mills and an increase of roughly $120 for the average borough household over their current roughly $660 average borough bill. The budget and accompanying tax ordinance both passed unanimously, but Szekely said at that time he would refuse to sign off on the tax ordinance, and said he thought the borough could find additional cuts, could project revenues from building projects slated to finish this year, and had extra money in reserves that could be used to cover the gap — all views he reiterated Sunday during a special council meeting called specifically to override his veto.
“From my point of view, from the residents’ point of view, dollars and cents add up, especially
for someone on a fixed income,” he said.
In a prepared statement, Szekely listed his reasons for vetoing the increase, citing spending on the borough municipal building that was constructed in 2013-15, changes to the construction on the Madison Parking Lot by developer Equus Capital Partners, and a previous tax increase in 2011 and tax and utility increases in 21015.
“What are our obligations to these residents? After all, a $600 increase in taxes, electric, and sewer rates in the last seven years is a lot for someone on a fixed income,” he said.
Council then sparred for roughly an hour on the proposed budget and increase, and the bigger picture topic of spending in general over the past decade. Councilmen Jack Hansen and Rich DiGregorio cast the only votes against overriding Szekely’s veto, and said recent tax increases at the school district, county and state level have added up for many.
“With all of this, putting a tax increase onto the people is going to hurt them a lot, and some people are going to be driven right on out of Lansdale, who’ve lived here all of their lives,” Hansen said.
“My concern is for the people who are unemployed, under-employed, the elderly who are on fixed incomes. We don’t want to drive these people out of the borough. We want to help them, we want to take care of them, and I think there are other ways we could’ve done it,” he said. “We showed it a year ago; a little shaving from each department, and we balanced the budget without a tax increase. That could’ve happened again this year, but it didn’t.”
Council member Mary Fuller addressed a topic that residents have frequently conflated with the tax increase on social media since budget talks began: that the planned borough skate park project was somehow a cause of the increase.
“This tax increase has absolutely zero to do with the new skate park that’s coming in at Fourth Street,” Fuller said.
“If borough money is used, it will come from the capital budget. That money has been on the books for a couple of years, and most of the money, if not all, will come from a grant and a match,” she said, likely using funds from Equus for the Madison Lot project.
“You really need to be careful about planning on income that’s not there. I’ve been up here eight years now, and when I first sat here, Andale Green was supposed to be finished by the time I was here. Eight years later, it’s still not complete. It’s not that the project isn’t going to get done, but you have to be careful to count that revenue.”
Councilman Leon Angelichio voted for the override, but said he hoped it would spur a larger discussion about ways the borough could cut costs and raise revenues — and said solutions like selling off parks or the borough’s Electric department may not be as effective as they first sound.
“The electric department infuses a large portion of cash into our budget,” he said, referring to a roughly $5 million transfer each year, including in the proposed 2018 budget, from electric revenues to cover other expenses.
“Say you sell it. That’s $30 million, $40 million. Then calculate the $5 million they put into the budget every year, and you have a very short-term solution to a very long term problem,” he said.
Residents may sound off online, Angelichio said, but he encouraged them to attend meetings and ask questions in person — and said the lack of candidates running against current council members was either a good sign, or an ominous one.
“That tells you one of two things: either you’re doing a phenomenal job, and people don’t want you replaced, which if you look at social media, that’s not true. Or, the job is difficult, and other people don’t want to sit up here and do
it,” he said.
Councilman Jason Van Dame, who is chairman of the administration and finance committee that has held budget talks for the past several months, said he heard few calls for cuts until Szekely’s veto, and the future revenues could be included, but asked if they should.
“Could we anticipate future income from developments? I don’t think it’s a good business decision. In my business, my expenses are much more closely tied to my projects, so if a project doesn’t happen, my expenses don’t occur,” he said.
“However, in our business, here in government, those expenses are there, whether a development finishes or not. We have no guarantee that Andale Green is going to complete 140 more units, or Equus is going to complete their project (in 2018) — none of them are guaranteed, so to build a budget based on that is, in my opinion, not a good decision.”
Council member Carrie Hawkins Charlton pressed Szekely for specifics on where he would cut and why he didn’t speak up earlier, and reiterated her claim from last week that she thought the mayor was doing so for attention before his term expires — a charge that drew a heated response from Hansen.
“I feel this was showboating. If you had questions from the beginning, you should have come to staff,” she said.
“It’s frustrating when people say the mayor is showboating, when he’s trying to do the best he can for these people in this borough. He has shown, the whole time he is mayor, that he works very, very hard for the people in this borough,” Hansen replied.
“It may be his last day as mayor, but he’s doing the job he was elected to do,” he said.
Councilman Steve Malagari said his public works committee will spend 2018 looking for more cost savings
through tactics like consolidated purchasing of certain chemicals and materials, perhaps with other borough departments, and will look into ways to get more bidders on contracts like for snow plowing that currently draw few, if any, bidders.
“It’s a constant thing I think about, and there’s always ways we can improve. This is why we’re here. We have to improve all the time, and make it better than we were before,” he said.
Council President Denton Burnell reiterated his comments from earlier this month, saying the tax increases in 2011, 2015 and 2018 were at least partly meant to make up for increased spending, but no tax increases, over the prior decade.
“In the years from 2002 to 2004, we took on new debt totalling $7.67 million, and added to our annual debt service expenses. Does anyone care to guess how much we raised taxes to pay for that debt? Absolutely nothing,” he said.
“We took on new debt, and we did nothing to deal with it. So what we did was, we kicked the can down the road. Here we are, down the road,” he said.
Burnell quoted former Manager Lee Mangan, whose tenure included that decade of increased spending with no tax increases, and said Mangan warned in late 2008 as he prepared the 2009 budget that the bill would come due eventually.
“‘What you are saying is you don’t have the political will in your community to meet your basic obligations. Every time you get close to raising the taxes, you don’t raise them,’” Burnell said, quoting Mangan.
“I, for one, will not be dragged back into the practice of robbing Peter to pay Paul, and calling that a ‘truly balanced budget.’ Sure, you balance it for one year, but what about the year after that?” Burnell said.
Lansdale’s borough council will hold their reorganization meeting at 7 p.m. on Jan. 2, and their next business meeting at 7 p.m. on Jan. 17, both at the borough municipal building, 1 Vine St. For more information visit www.Lansdale.org or follow @LansdalePA on Twitter.
“We took on new debt, and we did nothing to deal with it. So what we did was, we kicked the can down the road. Here we are, down the road.” — Council President Denton Burnell