Sharon budget plan includes tax increase

The increase raises a homeowner’s property tax by 10 percent.

STAFF REPORT

SHARON, Pa. — City council will vote tonight on a preliminary 2009 budget that includes a 4-mill tax increase.

If council passes the budget, it will go to a second reading that will likely be set sometime in December, said Sharon Mayor Bob Lucas. There will also be two public hearings on it — one at 4:30 p.m. Nov. 26 and the other at 4:30 p.m. Dec. 8.

The budget would increase a homeowner’s property tax by 10 percent.

Lucas said in a letter to council dated Oct. 30 that there are three reasons for a $380,000 shortfall in the budget. The tax increase would generate just enough to eliminate the shortfall.

First, the Sharon Sanitary Authority will be taking over the operations of the city sewer system, he said. That will result in a $300,000 decrease in city revenues for administering the system, and a loss of $100,000 in expenses, which will result in a net loss of $200,000.

Lucas said that the city is having the previously inactive authority take over the system at the request of the county. The county agreed to become partners with the city in obtaining bonds for the new sewer plant that is expected to be operational by this spring. The city asked the county to partner with it so it could get the county’s triple-A bond rating, Lucas said.

Lucas said the county’s rating saved $10 million on the plant project.

Lucas said the city will still be paying some expenses that the city’s $300,000 sewer fund paid. It paid a third of his salary and a third of two other administrators’ salaries, a third of the solicitor’s salary and a third of council members’ salaries.

“I’m still here. The administrators are still here,” he said.

Lucas also pointed out that 30 percent of the city’s assessed value is nontaxable. “But everybody pays sewer bills.”

He also said that the city is losing five wastewater collection workers to the authority, but those employees performed other duties that included mowing, maintenance for streets and vacant properties and, in the winter, plowing. He said that loss poses “additional challenges,” though he said he isn’t planning to replace the employees.

“I’m proposing a 4-mill tax increase just for the revenue end,” he said.

Another reason for the millage increase was the state’s $56,000 reduction in aid to the municipal pension, he said. The third reason, he said, is that the city’s pension contribution for employees that aren’t police or firefighters has increased by $124,000. The increase came after the Pennsylvania Municipal Retirement System changed the formula for how much contributions would be.

Lucas has made some cuts, including reducing the workweek for some clerks and a maintenance man to 35 hours.

He proposed reducing the fire department staff by one firefighter.

He also proposes eliminating the code-zoning officer, whose duties will be absorbed by the Community Development department.

He has proposed putting $46,000 of federal money the city uses for extra police patrols in a higher-crime area into regular police wages instead, saving $46,000 in tax money. He said that would eliminate paying for one police officer without eliminating an officer.

He has proposed not increasing a contribution to the Shenango Valley Library from last year’s $102,716.

He has also proposed restoring the city’s portion of per capita tax senior citizens pay. The city had been waiving its portion, or $10 of the $30 tax, he said.

The mayor’s letter and the proposed budget are available on the city’s Web site, www.cityofsharon.net. Tonight’s meeting begins at 6:30.