Borough considers 4.9% tax hike

SOUDERTON >> It looks like property taxes could be increasing by 4.9 percent for the borough’s 2019 budget.

The proposed budget will be officially presented in November with a final vote coming in December, but the consensus at Souderton Borough Council’s Oct. 22 budget work session appeared to be to increase the property tax rate from the current 5.51 mills to 5.78 mills.

That would put the borough property tax bill for a home assessed at $150,000 at $867. Each mill equals $1 of tax per $1,000 of assessed property value.

The 0.27-mill increase includes 0.20 additional mills for the general fund, which would be set at 5.2 mills; 0.03 mills more for the library tax, which would go to 0.33 mills; and 0.04 mills more for the fire protection tax, taking it to 0.25 mills. The $40.50 increase on a home assessed at $150,000 equates to $30 for the general fund, $4.50 for the library and $6 for the fire protection tax, council President Brian Goshow said.

The fire protection tax increase is for the fire company workers’ compensation and to give a little more of a contribution to the volunteer fire company, Borough Manager Mike Coll said.

Franconia, Salford and Lower Salford already have a 0.33-mill

library tax rate for the Indian Valley Public Library, while Telford and Souderton’s rate has been below that, Goshow said.

“The library is requesting that we increase to that amount so that we’re on par with what everybody else is,” Goshow said.

The $3.6 million general fund budget includes hiring a full-time police officer mid-year to replace a retired officer. Other proposed police costs include $20,000 for dash cameras — the department currently does not have any — and $12,000 for new mobile radios to be installed in patrol vehicles.

“Right now, the officers are relying on portables,” Coll said.

Capital reserve expenses include $82,500 for a new public works utility truck, $35,000 for swimming pool capital projects and $65,500 for park construction projects, including storm drainage improvements and a storage shed.

Highway aid fund expenses include $50,000 for repairs and painting on the Summit Street bridge.

“That is showing signs of rust,” Coll said. “There’s actually some plates underneath

that are starting to rust to a point where I think we really need to address some of those issues.”

The bridge is inspected by the state on a regular basis, he said.

“Structurally, it’s still fine,” Coll said.

The work planned for next year would include patching and sandblasting, he said.

That could cost more than the $50,000 shown in the draft version of the budget, he said, so he will check with the borough’s engineer to try to get better numbers.

The draft version of the budget distributed by Coll at the meeting would have hiked taxes by 3.4 percent, but Goshow said that only covers borough operations without putting money into reserves, a practice that has been going on ever since the 2008 recession.

“This is a zero balance budget. You’re not growing any money for the future, which is problematic,” Goshow said.

The borough is paying its bills and has taken on projects and made improvements but should also be building reserves, he said.

In order to try to avoid tax hikes, the borough cut spending to a bare bones minimum in 2008, he said.

Now the choice is to either cut more or increase taxes, he said.

“I don’t want to push them up any more than anybody else does,” Goshow said of taxes, “but at the end of the day, tell me in this budget where you can find more money, where you can spend less.”

The cuts have already been made, he said.

“The reason it’s so difficult to find a place to spend less money is because we did that in 2008. We chopped and chopped and chopped away, and the next year we cut even a little bit more away,” Goshow said.

With the economy having improved, it’s time to build up some reserves, council members said.

“The economy’s not going to hold that much longer. There’s going to be a recession at some point,” council member Matt Mscichowski said.

“You don’t want to get to the point where now you have a capital expenditure that you need money for and now you’re doing it in a recession,” council member Jeff Gross said.

“If the economy does start to slide a little bit at some point in time, you have no reserve to even absorb that,” Goshow said. “I won’t go so far as to say that it’s irresponsible, but it’s close to it.”

Following the discussion, the consensus was for the 5.78 mill rate and money being put into reserves.