The first draft of the $47.8 million 2021 borough budget was unveiled last night and calls for a 3.5 percent tax hike, which would raise the annual tax bill by $28.12 for a home assessed at $85,000.
Borough Manager Justin Keller and Finance Director Ann Maletsky said a mix of positive and negative several factors are affecting the budget, including Pottstown's perennial problem -- a loss of assessed property value, this year about $4 million.
Also problematic is a deficit of about $500,000 in the trash fund, brought about, Keller said, by the COVID-19 pandemic. With more people out of work, working from home and learning from home, more trash is going into the receptacle in the kitchen instead of the one in the office or the factory floor.
Keller said a surplus in the fund can cover the deficit for now, but coming on top of a $300,000 deficit covered from reserves in the previous year's budget, "that's something we're going to want to keep an eye on," said Keller.
That particular "unfunded liability" now tops $30 million and requires the borough to set aside $250,000 every year just to try to sock away enough money to pay for those expenses when they come online, Keller said.
The budget proposes a 4 percent wage increase for management staff to keep pace with the 4 percent wage hike police and non-uniformed union workers will see in 2021.
There are some bright spots to the budget however, said Keller.
Also up in the beginning of the year, more than 6 percent, were earned income taxes, meaning people in the borough were earning more money.
However by August, when the lay-offs and furloughs from the pandemic begin to kick in, there was a precipitous 4 percent drop-off in revenues.
To be conservative, the budget draft estimates earned income taxes at 6 percent lower.
"We built this budget under the assumption that the effects of COVID will be with us at least halfway into 2021," Keller said.
Keller said the police are also increasing their training budget targeting diversity training and training in how to de-escalate situations.
And the borough has successfully lowered its health insurance costs, reducing it by more than $1 million in just the last two years, Keller said.
Overall, the budget draft projects a deficit of about $475,000 and calls for using $293,384 in savings from this year to close part of the gap.
The remaining $236,788 gap would be filled by a .33 mill tax hike, according to the draft.
The budget also continues the practice of maintaining a five-year capital projects budget, and Keller said he wants one begun for the Parks and Recreation Department as well.
A capital fund for the fire department is also being constructed to help pay for new fire trucks, one of which will be purchased in 2021 and funded largely through a grant.
All four private fire companies each use four different insurance health and worker compensation policies for their paid driver/firefighters.
Keller said its likely savings can be achieved if all four companies agree to put all their drivers on the same health and worker's compensation plans.
That savings, he said, can be returned to the fire companies in the form of an increased borough contribution. "The ball's in their court," he said.
Staff and council's finance committee will continue to work on the budget through December and Keller said there are still two crucial pieces of the puzzle missing; the final assessed property figures and a final number for health insurance.
"I've been through a number of these and this is a really, really good start," said Borough Council President Dan Weand, who also heads up council's finance committee.
King Street Bridge Closing
|The King Street bridge over Manatawny Creek.|
It will close on Oct. 13 and remain closed through April 15 of 2022.The bridge carries about 9,000 vehicles per day over the Manatawny Creek. The new bridge will have bike lanes and eight-foot sidewalks instead of the current four-foot sidewalks.