Tax hike will be voted on Monday

By on December 7, 2011

By: GARY P. KLINGER Review Correspondent, Staff Writer



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Review Real estate taxes for Ephrata Borough residents will be a bit higher in 2012 if the budget proposed by council is approved at next week’s voting session.

Budget and Finance Committee Chair Russell Shirker delivered the news at Monday night’s council working session in front of only a few residents in attendance.

"I don’t like it," said Shirker. I really don’t but it is not an easy situation for any of us sitting up here."

The proposed 2012 fiscal budget would raise property taxes by .19 mills to 2.07. With this increase, those with property valued at $150,000 would see their tax bills increase by $28.50.

Currently, Ephrata Borough enjoys the third lowest municipal real estate tax rate in the county. There is some speculation that once all the dust settles with this year’s round of municipal budgeting, the borough may find itself with the lowest tax rate in the county.

Yet, despite the tax increase, the budget will not technically be in balance — meaning that expected revenues will fall short of projected expenditures. However, the size of the tax increase was kept in check and any budget shortfall overcome by tapping various reserve funds. The borough’s chief financial officer, Gail Bare explained that the sanitation fund had more of a balance than needed, therefore the borough decided to hold the line on refuse and recycling rates. The borough also chose to use up some of the excess reserves in the self-insurance fund, and the capital reserve funds had been accruing for use on the pool renovation project already underway. Even with these actions, the borough reserve funds will remain at or above what is considered standard levels.

Mayor Ralph Mowen explained why this was critical.

"I’m sure you all saw in the news where the county had their bond rating reduced due to taking reserves below what the standard is," explained Mowen. "We are not in that type of situation by a long shot. Ephrata Borough enjoys a AAA rating."

Council president A. Anthony Kilkuskie added that with the county tapping into reserve funds rather than increasing taxes, it had the effect of making their borrowing power less than had they raised taxes. This would translate into higher interest rates and thus ultimately a higher cost burden to the tax payers in the long run. He noted that though painful, a modest tax increase was a sensible way to assure the borough remain on solid financial ground well into the future.

"This budget has gone through each committee for review and any recommendations," added Kilkuskie. "This was not just thrown on us at the last minute. There were numerous recommendations and requests made at the committee level leading us ultimately to this proposed budget."

Councilman Bob Good commended the staff on the exemplary job done on guiding the budget process, stating that the administration had worked very hard to hold the cost to have an affordable community.

"We struggled with some really tough questions like ‘will there be a recovery and if so, when and how strong?" commented Good, who cited recent reports on the changing demographics of Lancaster County. "The poverty level of communities in Lancaster County and children in public high schools has gone up in every district, including ours, according to a report in the Lancaster newspapers. A tax increase is not popular for anyone but we start asking what can we do? Maybe the answer for this year is nothing. But I can’t help but wonder about a few things: how long will this community be able to sustain what it has?

"Nobody wants to give up services but nobody wants to pay any more for it either," Good added.

Council went on to discuss the fact that the borough’s revenue stream remains somewhat flat. It expects the changes to the way the Earned Income Tax will be collected and applied to the borough, will affect cashflow in 2012 and possibly beyond. With the economic downturn continuing, real estate transfer taxes are down as are property values. In addition, there is growing concern about the number of tax-exempt properties located within the borough, with some debating whether the borough could at least ask some to consider making a contribution in lieu of taxes. One other possibility considered was asking those non-profits to pay for certain borough services such as street lights and snow removal.

Good also raised the spector of funding the borough’s unions.

"We struggle every year in negotiation to try and maintain a labor force that is getting more expensive to use every year," said Good. "And whether they argue for pay raises every year or argue over their minimum contribution in benefits, the threat is always there to strike or drag us off to arbitration; so as you look at business next year, and years following, a good hard look must be made in all areas where we are losing revenue or demanding payment. Are we going the easy route by telling the residents we will just increase your taxes?"

Council member Susan Rowe reminded council that tax exempt properties are approved by the county and not by the borough. She challenged the incoming council to find ways of continuing to find ways of increasing the revenue stream while at the same time cutting costs as much as possible without painful cuts in key and vital programs. She added that legislation is being considered at the state level whereby local governments could begin to charge non-profits for things such as lights, snow removal and emergency services.

Council expects to vote on the final budget at next Monday’s voting session at 7 p.m. in council chambers of borough hall.

In other news, council will vote next Monday on a $3,400 change order for the pool renovation project. According to borough manager Bob Thompson, wording of the original agreement with Wade and Associates was ambiguous and could be taken a number of different ways. The council’s original intention was to retain the roof over the skate park located behind the pool’s bath house. Originally there would have been a $3,400 credit to demolish and remove the roof. The change order would clarify that the roof is to be retained and repaired.

Council was also updated on the process of securing a vendor for the pool snack bar. In all, 12 vendors were approached but only one response came back. Steve and Karen Brown from Lily’s on Main have expressed interest in operating the snack bar. There has been some discussion over whether or not pool patrons would still be able to bring any food in from outside or whether the only food permitted would be that purchased at the snackbar.

Community Services Committee Chair Tom Reinhold conceded a strict prohibition of outside food would not play well with pool patrons.

"My concern is that it’s still a community pool and most parents don’t have an extra $20 or $30 to burn every day on food," said Reinhold, who indicated the Browns may be willing to lay off that request as well as offer less expensive offerings. At this point, Reinhold said he thought it would still be OK to bring a bag of snacks along to the pool.

For more information on Ephrata Borough, visit Gary P. Klinger welcomes your feedback, questions and comments via email at More BOROUGH, page A6

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