Tube City Almanac

December 05, 2012

City Budget Holds Line on Spending, Taxes

Category: News || By Jason Togyer

(EDITOR'S NOTE: This story was corrected on Jan. 4, 2013. City council on Jan. 2, 2013, adopted a new budget with corrected figures for police department salaries.)

. . .

Citing a sensitivity to residents on fixed incomes, the city's 2013 budget holds the line on property, wage and other taxes and fees.

But balancing the nearly $18 million spending plan relies heavily on a new $1 million fee in lieu of taxes to be paid by the city's sewerage authority.

City council is scheduled to vote tonight on the proposed budget. Some positions are being eliminated through retirements, but no layoffs are planned, Mayor Michael Cherepko told the Almanac on Tuesday.

"For the most part, we have gone through and trimmed what we could trim," he said. "We did have some retirements, and we have the possibility of a few more."

. . .

On the revenue side, the biggest change in the proposed 2013 budget (PDF link) is the elimination of more than $1 million in annual debt payments to the city by McKeesport's Municipal Authority. In 2011, the sewerage authority, which also serves several neighboring communities, pre-paid $24 million in debt it owed to the city.

In lieu of those debt payments, the city has levied a "host fee" on the sewerage authority amounting to $1 million per year. City officials said the host fee is designed to reimburse McKeesport taxpayers for services provided to the authority, as well for property tax revenues lost due to expansion of the sewer system to accommodate connections to neighboring municipalities and the expansion of the sewage treatment plant in the lower 10th Ward.

As a non-profit agency, the sewerage authority is exempt from local property taxes. The authority has agreed to pay the fee, although under a new state law, it could be challenged in court by ratepayers.

McKeesport has also continued to aggressively collect past debts and fees, Cherepko said. Beginning this year, wage taxes have no longer been collected by individual municipalities and are instead remitted directly by employers to a regional tax claim bureau.

City employees who once processed wage tax collections are instead going after delinquent accounts, Cherepko said. "I think we did a very good job this year collecting our delinquencies, and we intend to do more," he said.

. . .

On the expense side, the amount of money paid into the municipal pension fund will increase in 2013 by more than $636,000, according to figures supplied by the city. Health insurance costs for employees also have increased to the point where they now represent one of the biggest expenses in the city budget, Cherepko said.

The proposed budget includes no raises for city administrators, and pay increases ranging from roughly $1,200 annually for unionized clerical and public-works employees and around $2,000 for firefighters and most rank-and-file police officers. Part-time firefighters and police officers will see increases of 51 cents per hour.

(EDITOR'S NOTE: This story was corrected on Jan. 4, 2013. City council on Jan. 2, 2013, adopted a new budget with corrected figures for police department salaries.)

The city is trying to start 2013 without any past due bills from 2012 or prior years, he said. Cherepko and city Administrator Matt Gergely have said that thousands of dollars in delinquent bills from previous administrations were found when they took office in January.

"For the first time in years, maybe in decades, for all I know, we are not going to carry over any bills," Cherepko said.

To pay off those bills, the mayor is asking for council to authorize the release of $550,000 from the so-called "mayor's reserve fund," which includes money from the sewerage authority's debt pre-payment.

Council meets at 7 p.m. in the public safety building (old municipal building) at 201 Lysle Blvd.

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