Council unable to trim tax hike

Budget knot remains tied at 18% tax increase

POTTSTOWN » Borough council was not much closer to making a decision Wednesday night than it was last month about a proposed $54.7 million budget for 2018 that would raise taxes by more than 18 percent.

The budget and resulting tax rate were on the agenda for discussion and council has already advertised the budget and tax rate with those figures, meaning the numbers can only be adjusted down, not up.

But making changes to cut costs turned out to be not as easy as you might think.

Council Vice President Sheryl Miller engaged in a bizarre rhetorical exchange with Borough Manager Mark Flanders, Borough Solicitor Charles D. Garner and Council President Dan Weand when she tried to make specific suggestions for personnel cuts.

Miller recommended eliminating the proposed new position of assistant public works director, one of two assistants for the human relations director, reduction of the grants adminis-

trator and an person each in codes and finance by reducing window hours during which people can pay bills and submit permit applications.

First, Garner told her that Pottstown borough manager ordinance cedes all but a few personnel decisions to the borough manager, so council cannot make those decisions.

“You can only say what services you want to reduce and then its up to the borough manager to decided how to affect that,” Garner said.

Visibly frustrated, Miller gamely tried to get around this roadblock but was met by the same repeated response from Weand and Flanders — “What services do you want to cut?”

Flanders pointed out that in some cases, lower spending would also mean lower revenues.

“Codes is mostly revenueneutral,” he said. “The fees cover the costs of the service, so if you eliminate a person, you also eliminate the revenue.”

Both Councilmen Dennis Arms and Joseph Kirkland argued that if personnel is reduced “others will have to fill in and pick up the slack. That’s what happens at every other work place,” said Arms.

If personnel is cut, “others will have to fill in and pick up the slack. That’s what happens at every other work place.” Dennis Arms, Fourth Ward Councilman

Kirkland also said that although “I hate throwing committees at problems,” that perhaps a special committee could be formed in 2018 to look for ways to reduce the budget.” He did not explain how that committee’s responsibilities would differ from those of the finance committee, which meets all year long.

Finally, Miller found the right magic combination of words to convince Weand to instruct Flanders to bring to Monday’s meeting how much the changes she suggested would lower the tax hike.

Miller said she thinks council should shoot for a goal of a tax hike of no more than 8 percent.

Wednesday night, Weand addressed another idea for lowering taxes — reducing the police force — suggested Tuesday in a paid advertisement by Thomas Hylton published in The Mercury.

Weand said the crime rate is down, adding “it seems people like and want to keep our police department. We’ve hit the lowhanging fruit. The only way to reduce the tax increase is to take police off street, reduce window attendants, we’re that close.”

An 18.39 percent tax hike would increase the borough’s millage by 1.902 mills, equaling an annual increase of $161.67 for a property assessed at $85,000, which represents about 80 percent of the properties in town.

Early Invervention

A more long-term approach to addressing the borough’s budget woes was suggested by Jamar Kelly, who from the Governor’s Office of Local Government Services, an arm of the Department of Community and Economic Development.

That is the government agency which, in 2007, approached the borough about something called the Early Intervention Program — essentially a grant that pays for an outside consultant to do an in-depth analysis of borough government, its finances and its operations.

Kelly said perhaps it is time for Pottstown to avail itself of those services again, and for a reduced price of only a 20 percent local match instead of 50 percent.

Getting started on the program would cost $18,000 — money flanders said could be paid because when he retires at the end of the month, the borough will be saving the cost of his salary.

Perennial Problems

The 141-page report that resulted from the analysis, released in 2009 included 122 recommendations that, if not followed, would lead to property taxes going up 75 percent; water rates increasing by 25 percent; sewer rates jumping 19 percent in five years, and all that with no employee raises or capital investment.

The recommendations in the report, some of which the borough followed, would close the projected budget deficit by nearly $2 million — from $4.8 million down to $2.9 million.

As evidence of the streamlining the borough has accomplished in recent years, it’s worth noting the projected budget gap is only $1.1 million.

In 2009, council raised taxes by 10 percent and laid off 13 employees.

Flanders told council last month that cutting 13 police officers would close the deficit, or 30 or so of the nonuniformed workers.

The 2009 report, by Cincinnati-based Management Partners, warned that annual pay raises of just 3 percent, would add another $2 million to the general fund’s budget deficit.

Nevertheless, that’s exactly what council did in 2014 with the police union, providing cumulative raises of 7.5 percent over two years; and again in 2017 with a three-year pact providing cumulative raises of 10 percent over that period.

According to Hylton’s column on Tuesday, 16 of the borough’s 46 police officers made more than $100,000 in 2016.

Council similarly provided 3 percent raises to Pottstown’s AFSCME union workers in 2014, and 1.5 percent raises again in 2016.

Even back in 2009, the reported noted that — as council has said loudly and repeatedly this year — because the borough obtains 44 percent of its general fund revenue from property taxes, the decline of the assessed value makes the borough’s current operation unsustainable, the consultants wrote.

The loss of Pottstown Hospital — the borough’s largest taxpayer — from the rolls starting in January was a particularly deep wound, costing the borough $209,436 a year in property tax revenue and accounting for 71 percent of this year’s tax revenue losses. But they are not alone. According to the Montgomery County Board of Assessment Appeals, Pottstown ranks second in the county for the number of assessment appeals in the last year — 261 — just behind Lower Merion at 294.

Charles A. Rick, an attorney with offices on North Charlotte Street in a building that itself saw a $324,300 assessment reduction this year, filed about 82 of those appeals for clients, according to county officials.

Council seemed inclined to take action Monday to start the process for applying to the Early Intervention Program