Taxing decisions ahead for council

By on November 22, 2016

Some taxing times are ahead for members of Ephrata Borough Council as they consider the proposed municipal budget for 2017.

In a presentation by Christine H. Moore, director of finance and administration, it was explained that expected expenditures of $11,605,477 exceed the projected revenue of $11,506,124 by $99,353. She projected a number of different budget scenarios over the next two fiscal years, explaining what impact a potential tax increase might have.

In order to bring the budget into balance and keep the general fund balance healthy, Moore laid out three possible tax increase scenarios. In the first, a $100,000 tax increase would balance the budget in 2017 but still lead to a projected $140,000 shortfall for 2018. By bumping that up to $120,000, the budget would balance in 2017 yet still lead to shortfall in 2018, although if projections hold, that amount would be reduced over the first proposal. The third scenario would increase taxes by $140,000 and put the borough on track for a healthy fund balance both years.

“My main concern is the general fund,” said Moore. “We need to find those funds somewhere.”

A healthy fund balance of between 25 and 50 percent of the borough’s annual operating expenses is critical to the borough’s credit rating and ability to borrow money. Part of the healthy fund balance is due to its electrical business, which Moore said has been profitable and taken into account developing the proposed budget.

While the impact on the budget may be significant, even if council adopts the proposed $140,000 increase, the impact on the average homeowner will be rather insignificant. For someone owning a property valued at $100,000, the increase would amount to $21 per year. Moore added that the median property value of owner-occupied homes in the borough is currently $158,083.

Currently the borough’s tax rate is set at 2.07 mills. The proposed tax increase would raise that to 2.28 mills.

Mayor Ralph Mowen stated that residents enjoy the lowest tax rate of any borough in Lancaster County.

According to Moore, among all local boroughs, Ephrata’s tax rate is currently the lowest, a standing which is expected to remain intact even if an increase is enacted.

“The last time council enacted a tax increase was in 2011 at .039,” said Moore. “That was very minimal and only brought in about $20,000.”

Moore explained to council that increases in health care costs accounted for most of the budget shortfall. Currently, labor and personnel costs account for about 71 percent of the budget.

“The one thing that really did impact us was the increase in healthcare costs,” said Moore. “That increase was $250,000. That we are only $100,000 short shows that the managers did a really good job at keeping costs low and expenses to a minimum and keeping things in line.”

From here, the budget will be carefully deliberated by each of the council’s committees. The budget will be advertised and available for public review for a period of 30 days. Council must adopt a final budget by the end of the year. A preliminary budget will be adopted at the working session on Monday, Dec. 5 and a final budget is expected to be approved at the Dec. 12 voting session.

Hocking preliminary plan approved

The only two items on Monday’s night’s Consent Agenda both pertained to the proposed Hocking Apartments project, planned for the east side of town near Tom Avenue and Julieann Court.

Initially council was being asked to approve a waiver/ modification of submission of the preliminary plan for the project. It was also asked to approve that preliminary plan as the project’s final land development plan.

Council member Tim Barr requested that both measures be removed so that there might be further discussion of the matter prior to the vote. Barr explained he was concerned that council should not go against the recommendation of the planning commission. He pointed out that the concerns raised on storm water issues and the height of a necessary retaining wall were significant enough to call on the Hocking organization to address these prior to being granted borough approval.

“I have concerns that we are being awfully eager and generous in granting this waiver,” Barr said. “The planning commission raised concerns and there are still questions about the retaining wall. It appears to be over 30’ tall but I’m concerned that we do not have a specific height on this.”

According to plans submitted by the property owner, the retaining wall would be approximately 12 feet tall.

Previously Barr has expressed concerns with the number of apartment rental units being built in the borough. Instead, he has strongly urged developers to construct homes which could increase home ownership within the borough.

“If this could have been row homes instead of two ten-unit apartment buildings it would provide that pride of ownership and encourage those homeowners to invest in Ephrata, giving them that pride of being a part of the community,” he said. “It’s not that renters don’t feel that connection but renters tend to be more transient.”

Mayor Mowen weighed in, stating he was also concerned about the waivers.

“I read over the comments from the planning commission meeting and there were 18 issues,” said Mowen. “Issues which are not minimal should be addressed and resolved before we approve the final plan. Ms. (Nancy) Harris (the borough’s zoning officer) feels that granting the waiver would not be in the best interest of the borough. She felt there should be follow-through to resolve these issues.”

Council member Vic Richard was more favorably disposed to granting the waiver, stating that the proposed development was very nice and that the Hocking organization has always handled such projects well in the past.

“Not everyone has the opportunity to buy a house,” said Richard. “I don’t feel personally we get to pick and choose what people are trying to put in. I look at how the Hocking organization has handled this development over the past few decades and it’s a class development.”

Richard went on to say that while some of the comments from the planning commission were minimal, he was confident that all issues would be addressed in an appropriate manner.

When it came time to vote, Barr requested a roll-call vote on the matter. The motion to grant the waiver was defeated by a vote of 5-2. Chairperson of the Development Activities Committee, Linda Martin joined Richard as the only “yes” votes in favor of the motion.

Asked how this process compared to the path for similar projects, Thompson indicated it was quite similar.

“What I do know is that the majority of the members of the Development Activities Committee recommended approving the waiver request however they were not unanimous,” noted Thompson. “That is why the committee made the recommendation to approve the waiver and the plan as a final plan.”

Prior to the vote, Council President Sue Rowe weighed in.

“My only comment is that this is a classic example of why the development activities committee meets after the planning commission issues its report,” said Rowe.”

As a result of the vote, the preliminary plan will need to proceed back through both the county and local planning commission and resolve the questions planning had raised. Once those questions have been resolved, the project will be presented again as a final land development plan.

Council’s decision is a setback however the project will move forward.

“We look forward to finalizing the development my Dad started in the 1980’s and hope to continue to work with Ephrata Borough to accomplish that goal,” said property owner Julie Hocking.

Proper use ofExploratorium explained

At last week’s council working session, Thompson addressed concerns regarding the use of the Ephrata Public Library’s Exploratorium building by the Democratic National Committee during the election season.

He explained that while the borough owns the actual library, the Exploratorium is not a public building since it is owned solely by the library. In addition, he noted that library officials had assured him no public funds are used to operate and maintain the Exploratorium.

Some local residents were concerned that the library was presenting a political bias on property owned by the borough.

Joy Ashley, director of development at the library weighed in, saying that the Exploratorium is not a municipal building and that tax dollars do not go into any kind of Exploratorium budget.

“To refuse the Democratic party reservation opportunity would actually be presenting a bias, which we are not allowed to do,” she said.

Ashley pointed to the Library Bill of Rights, adopted in 1939 by the American Library Association, which does not allow a public library to be selective about who may reserve a room. Item 6 in the Bill of Rights, states:

“Libraries which make exhibit spaces and meeting rooms available to the public they serve should make such facilities available on an equitable basis, regardless of the beliefs or affiliations of individuals or groups requesting their use.”

Hampton Inn sale yields check

The recent sale of the Hampton Inn to Willow Valley Associates has yielded a check to Ephrata Borough in the amount of $328,450.

At last week’s working session, council members had to determine how that money should be used and to which account it should be allocated. After some deliberation, members decided the funds should be allocated to the Economic Development Restricted Account.

Thompson explained the background on the matter.

“When the Mountain Springs site was developed the Borough extended a $320,000 line of credit to the Ephrata Economic Development Corporation,” said Thompson. “In 2015 the borough and the EEDC executed a reimbursement agreement whereby the terms and conditions to repay the borough principal and interest totaling a maximum of $400,000. In December of 2015 the EEDC paid the Borough $71,550. Since the recent sale of the hotel the EEDC paid to the borough the remaining $328,450.”

The rationale behind the decision to allocate those funds to the Economic Development Reserve Fund was to continue with the original vision to invest in longer-term economic development within the borough.

Mayor Mowen encouraged members to make the allocation, pointing out that this had been council’s intent when the funds were invested to build the Hampton. Inn.

For additional information on Ephrata Borough, visit ephrataboro.org.

Gary P. Klinger is a correspondent for The Ephrata Review and welcomes questions and comments via email at klingerglobal@gmail.com.

 

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