Policy criticized Council changing electric fund transfer limits for future budgeting flexibility

By on November 14, 2012

By: GARY P. KLINGER Review Correspondent, Staff Writer

Ephrata Borough Council voted unanimously to increase the percentage which can be transferred from the electric fund to the general fund at Monday night’s voting session of council.

The move changes the maximum percentage from 7.75 percent to no more than 10 percent, giving the borough the flexibility it needs to address budget issues as they arise. As such the actual amount transferred in 2012 was $1.414M.

Borough Manager Robert Thompson pointed out that the amount for 2013 has not yet been determined, however he said he expects that range will be between 7.75 and 10 percent. In actual dollars, that would translate to $1.379 to $1.78M.

Thompson also clarified a point erroneously reported by this reporter in last week’s story.

"$2.8 million is the minimum Electric Fund balance target per the policy that states 10 percent of appropriations plus $1 million," said Thompson.

Council discussed the possibility of adjusting its electric financial management policies at last Monday night’s working session. There was further discussion of the matter this past Monday night. The difference was that last week’s article in The Ephrata Review spurred at least one local resident to attend and comment on the proposed change.

Robert Wasneuski, by his own admission, is a very proud Ephrata resident for the past 29 years. But Wasneuski has concerns about the transfer of funds from the electric fund to the general fund.

"The borough is operating a monopoly and they should not," said Wasneuski. "They also do not belong in the energy investment and speculative purchasing and retail (electric) business. We deserve the same rights and same PUC protection as all other PA taxpayers. It is just that simple."

Wasneuski pointed to Middletown borough which was likewise in the business of purchasing and reselling electric power to its residents. That municipality made headlines this past summer when it filed for Chapter 47 bankruptcy protection.

In addressing council, Wasneuski simply asked that council table the matter until it could be more closely studied.

"I ask council…I beg of council to table the vote on your plate tonight to change the current electric fund revenue distribution," said a passionate and animated Wasneuski. "Take it back to session, lay it on the floor and rethink it."

As previously reported, Thompson explained that "the value to residents of a community that is a public power supply supplier is that the net proceeds from the electric utility operation can be reinvested back into the community."

By selling electric to its residents, the borough can then use the profits locally to make sure it holds enough funds in reserve to help the borough get back up and running in the event a major catastrophe hits the greater Ephrata area, cutting power and services. This concept was fresh on council members minds last week, meeting just days after the borough missed the direct impact of Hurricane Sandy.

Ephrata Borough has also stated those profits from the electric business have also helped to fund things the Ephrata community might not have otherwise. Most recently, those funds meant that the Ephrata Community Pool could be thoroughly renovated without increasing the borough’s debt load. Those funds have also been able to help bridge budget shortages caused by the ever uncertain economic times of the past several years.

Council President Dale Hertzog responded by inviting Wasneuski to attend various committee meetings which deal with not only borough funding but the operation of the electric enterprise. He said that the input and feedback from citizens is always welcome and that especially in committee, there is more time to carefully consider the research of residents such as Wasneuski.

Chairman of the Budget and Finance Committee Vic Richard commented on the policy change.

"This has been at 7.75 percent for a while," said Richard. "It was 10 percent but was reduced. However, because we have seen a bit of a reduction in electric sales, this move allows us to keep pace and the ability to change things."

Richard pointed out that this is a 10 percent maximum and not an ordained amount for the 2013 budget period.

Council member George DiIlio agreed.

"This simply gives us the flexibility we need," said DiIlio. "Just because the policy is set at 10 percent does not mean we will use 10 percent."

With the exception of Anthony Kilkuskie who was absent at Monday night’s meeting, the measure passed unanimously.

For additional information Ephrata Borough, visit ephrataboro.org. Gary P. Klinger welcomes your questions, comments, questions and suggestions via e-mail at klingerglobal@gmail.com. More COUNCIL, page A18

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