Boro Holds Line On Taxes In 2010 Proposed Budget
McConnellsburg Borough Council approved a tentative 2010 budget last Wednesday evening that calls for no tax increases for borough residents. On a Mike Chilcote/Lee Rager motion, council voted unanimously to accept a proposed budget that calls for taxes of five mills on real estate in the borough, occupation taxes at 20 mills and a $5 per capita tax. Borough taxpayers also pay a onehalf percent real estate transfer tax and a one-half percent wage tax.
In 2008, council voted to cut real estate taxes for 2009 from seven mills to five mills based on its decision to disband the borough police department effective December 31, 2008.That vote made good on a promise that council had made earlier to return a portion of the tax dollars saved by abolishing the police force to its citizens. One mill of taxes in the borough yields about $25,000 to the borough’s coffers.
Borough Council members began their budget discussion by unanimously saying they would not raise any taxes in 2010. From there, they began a discussion on how to balance their budget with less money and an upcoming bill of $177,000 that must be paid into the borough police pension fund by December 31, 2010. The one-time “catchup” contribution stems from the borough’s end-of-contract settlement with the former borough police officers. The settlement required that the officers’ pension benefits be amended, retroactive to January 1, 2009, to provide for a spousal and dependent survivor’s benefit of 50 percent of the monthly pension benefit the officer was receiving at the time of the officer’s death, including any cost-of-living adjustment required by legislative enactments that are applicable. Also with regard to the officer’s pension, the plan is required to be amended to allow for full superannuation benefits (60 percent of final average compensation) upon the completion of 25 years of police service to the borough and the attainment of age 51 instead of age 55.
The borough’s proposed 2010 budget calls for expenditures of $453,148 to be offset by revenues of approximately $526,094. Expenditures are projected to be higher than estimated 2009 expenditures ($352,079) by about 29 percent due largely to the required pension contribution. The proposed 2010 overall projected budget reflects an overall “tightening of the belt” by council members during tough economic times. On passing the budget, borough secretary Jack Fields expressed the council members’ concerns, saying “it will be a rough year for us, but it could be worse.” Council will be using at least $100,000 of its investments to balance the 2010 budget.
EXPENDITURES General Government
The proposed budget projects spending of $128,475 in the General Government category, a six percent increase over projected 2009 expenditures in that category. The increase is due largely to legal expenses incurred in 2009, but not yet billed. Council instructed Fields to request the invoices for 2009 and to pay them in 2009 so that council could amend that section of the budget before final passage in December. Council, in an effort to decrease expenditures, voted to discontinue its $800 contribution to the Chamber of Commerce in 2010. Council members make the annual contribution to the chamber for the erection of the borough’s Christmas lights. However, according to council members the lights are erected at no cost to the chamber, so the donation will be discontinued in 2010. The 2010 budget calls for continuing donations to the library and to the Parks and Recreation Commission of $1,000 and $2,000, respectively.
In the Total Police Protection category, the proposed budget sets spending at $201,054, an increase of approximately $61,467 or 44 percent from expected 2009 expenditures of $139,587. The increase is due to the one-time police pension fund contribution. The contributions are calculated by an actuary.
Fire, Water & Contributions
The budget proposed sets expenses in this category at $17,544, just slightly more than anticipated spending of $16,835 in 2009. Only a slight increase is expected in trash collection for bulky item day and a slight increase in fire hydrant rental.
A marked increase in expected street construction and street repairs in 2010 is the main reason for an increase in this line item this year. Although council expects to spend about $15,000 in street repairs next year, actual street construction is set for about $20,000 in 2010. Only $3,676 was spent on street construction in 2009. Also in 2009, the borough spent $10,764 on street repairs and $15,000 is budgeted for 2010.
Snow removal for 2010 is budgeted at $10,000, which is more than actual expenditures of only $3,149 during a relatively mild 2009 winter. Overall, council projects spending of $105,274 in the highways portion of the budget, a significant increase over expected expenditures of $74,929 in that category for 2009.
On the revenue side of the budget, council expects to collect $139,064 in real estate, occupation and per-capita taxes and $136,200 from miscellaneous sources, including wage taxes, TV cable commission, parking meters and fines. Total receipts of $526,094 expected for 2010 are down significantly from 2009 anticipated receipts of $602,909. The nearly 13 percent decrease reflects continuing economic woes, with the largest decreases in real estate taxes, a slight decrease in meters and fines, interest on investments and real estate transfer taxes.
The borough expects to end 2010 with a balance of $72,946, down from this year’s expected ending balance of $250,830.
The proposed budget will be open for inspection for 30 days, and council must adopt a final 2010 budget at its December meeting. Following the 30-day review period, council may make changes to the budget but may not increase taxes set at last Wednesday’s meeting.