Re-worked numbers point to no tax hike

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November 18, 2009

By Mary Spicer The Meadville Tribune Wed Nov 18, 2009, 11:59 PM EST

Meadville City Council is on the road to a no-tax-hike spending plan for 2010 a significant drop from earlier plans.

During Wednesday’s budget session, council members informally, unofficially and unanimously agreed that no municipal property tax increase is lurking on the sidelines for city residents.

Exact details remain to be worked out. However, Mayor Richard Friedberg unofficially laid out a plan that will eliminate a $306,000 shortfall in the $9.2 million proposed budget, which represents a 1.3-percent increase in expenditures over 2009.

As part of the 2009 budget process:

n The city transferred $140,000 from the city’s rate stabilization account to offset a projected shortfall. That money was never spent. Established after the city sold its sewer system to Meadville Area Sewer Authority, the fund maintains a balance of approximately $1.9 million that is occasionally used to offset budgetary shortfalls with the understanding that funds “borrowed” will be replaced as soon as possible. Instead of repaying the fund in 2010, however, the city will include the previously borrowed dollars in the 2010 budget, reducing the shortfall to $166,000.

n A change in the way the city is allowed to amortize its pension plans will result in a savings of approximately $50,000, according to Friedberg, reducing the shortfall to $116,000.

n Projected interest earnings were calculated at what Friedberg termed “a very conservative” 1 percent. Still staying conservative, Friedberg estimated that the city will earn an additional $30,000 to $40,000. Splitting the difference, that leaves the city with a shortfall of approximately $80,000, which will be transferred in from the rate stabilization fund.

Rate increase averted

Just a week ago, a proposed 1.37-mill property tax increase included in the preliminary budget released on Nov. 4 remained intact — which would have meant an increase of almost $35 per year for the owner of an “average” city residence. The 1.37-mill increase included keeping $110,000 of the $140,000 “borrowed” from the rate stabilization fund in 2009 in the 2010 budget.

With a 1.37-mill increase, city residents would be paying 22.29 mills in city property taxes, an increase of 1.37 mills over the current 20.92 mills.

One mill equals $1 for every $1,000 of a property’s assessed value. A 1.37-mill increase would come out to an additional $34.25 for the owner of a residence with the city’s median assessed value of $25,000, upping the 2010 city property tax bill from $523 to $557.25. Compared to 2008, when the owner of that “average” residence paid $485.50 in city property taxes, the proposed increase would mean an extra $71.75.

Discussions will continue through Nov. 25, when the second public hearing on the city’s annual budget will begin at 5:45 p.m. in Meadville’s City Building. The regularly-scheduled monthly meeting is scheduled to begin at 6 p.m., followed by a special budget session. The first and second readings of the budget are scheduled for 4 p.m. on Dec. 2 and final adoption is expected Dec. 16 during a study session also beginning at 4 p.m.

Mary Spicer can be reached at 724-6370 or by e-mail at mspicer@meadvilletribune.com.

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Re-worked numbers point to no tax hike

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