Budget Questions and First Firefighter of the Year

Photo by Evan Brandt

Pottstown Fire Chief Michael Lessar congratulates Michael Sedlock of t he North End Fire Company who is retiring after 48 years of volunteer service and was named the first-ever Pottstown Firefighter of the Year.

The Firefighter of the Year Award

Wednesday night was a very long meeting, with a very long agenda and lots of information which, at midnight, my head is a little too thick to convey coherently.

Instead, I will offer some highlights, the most important of which is related to the budget and its 18 percent tax hike.

No decisions were made about the budget and in a weird kind of kabuki budget theater, Vice President Sheryl Miller outlined some specific cuts, only to be told that council can only suggest areas to cut and its up to the borough manager to make it happen.

So despite Miller suggesting several specific administrative cuts, such as not hiring an assistant public works director, getting rid of one of two human resources director assistants and cutting down on open window hours, Borough Manager Mark Flanders and Council President Dan Weand kept asking her "what services to you want to cut?"

It was frustrating to watch and, likely, more frustrating to live through.

Also important is the return of the folks from Department of Community and Economic Development's Governor's Center for Local Government Services were back.

Their Early Intervention Program, started back in 2007 and completed in 2009, is what created a report with 122 suggestions on ways Pottstown could economize. They would like to do the same thing again, which council seemed amendable to, but which would not be soon enough to affect the proposed 2018 budget.

Also significant is a plan for the construction of the new station in Memorial Park for the Colebrookdale Railroad, which will require a land swap to happen.

Nathaniel Guest, who runs the railroad, said so far most of the nearly $2 million in economic impact is in Boyertown, because there is a station there, and he wants some of that benefit to come to Pottstown, "my home town."

Anyway, lots of other things in the works, such as a proposal to establish a group home at 306 N. Charlotte St., which is on the northeast corner of the intersection with Lincoln Avenue, but for now, you will have to be satisfied with the Tweets from the meeting ...

Borough Starts Climbing a $27 Million Mountain

The borough is getting started on setting aside money each year to cover a whopping $27 million obligation to pay for medical and other benefit costs for current and future police retirees.

Wednesday night, council was briefed on the proposal to set aside $250,000 per year for what the council agenda labeled opaquely as "OPEB," which, according to Borough Manager Mark Flanders, stands for "other post employment benefits."

The official vote will occur at Monday night's council meeting, which begins at 7 p.m. and is the meeting at which the public is allowed to comment.

Mark Flanders says it will not take 108 years to fund the
$27 million 

police retirement health cost liability.

These potential costs are not retirement payments, but rather for medical benefits for retirees, both current and future.

Getting a handle on the total potential cost of obligation itself is no easy task, said Flanders.

"This is a moving target that fluctuates; based on actual retirements (as opposed to people leaving before retirement) and mortality rates," he wrote in an e-mail replying to a Mercury query.

According to Finance Director Janice Lee, the amount of an individual retiree's medical costs "varies according to what contract the employee retired under" as well as what medical benefits are actually sought.

For example, a retiree who needs treatments for cancer will cost more than one who requires less expensive medical services.

"It's not the same for all," Lee wrote in an e-mail response to The Mercury.

Even the $27 million liability is an estimate at best, based on actuarial estimates for the variables mentioned.

As a result, the administration demurred to give an estimate for how long the borough will need to set the $250,000 aside annually before the liability is considered funded.

Pottstown Borough Hall

However, Flanders agreed that an estimate of 108 years -- which is the time it would take when $250,000 is divided evenly into $27 million -- is "certainly not" accurate.

Nevertheless, the obligation is nothing to sneeze at when one considers that it is just under half the size of the $40 million 2013 budget.

Funding this obligation, or "liability," depending on what terminology you use, "was part of the EIP recommendations," said Borough Council President Stephen Toroney.

He was referring to the state-funded consultant report in 2008 that outlined measures the borough needed to take to remain financially solvent.

The 141-page report was written by an Ohio consulting firm named Management Partners funded partly through the state's Early Intervention Program for municipalities in financial trouble.

It contained the startling prediction that unless Pottstown radically changed the way its borough and authority government is run, that borough property taxes would jump by 75 percent; water rates by 25 percent and sewer rates by 19 percent in the next five years.

The report was cited as the reason for the lay-off of 13 employees in late 2008 and the 10 percent

property tax hike which accompanied it.

The report highlighted a number of looming problems, not the least of which has been the steady drop in Pottstown’s total assessed property values.

The report contained 122 recommendations designed to save $370,000 a year.

Not all of the recommendations were undertaken, but many were and, as a result, there no tax hike for the current budget year.

However, one recommendation which council and the administration had yet to address was this outstanding obligation.

At the same meeting, council reviewed the action necessary to fund this obligation, members also reviewed the obligations with which they have kept pace -- the borough's two pension funds.

The minimum obligation needed this year to fund the police pension plan is $865,432 and the minimum needed this year to fund the pensions for non-uniformed employees is $186,497, according to Borough Solicitor Charles D. Garner Jr.

However, not all of that money comes from borough coffers as the state also kicks in part of that cost.