Easton 2014 Budget Passed Unanimously

By Christina Georgiou

The 2014 City of Easton budget was passed unanimously Wednesday evening, with no comment or discussion from city council.

The new budget holds property taxes at their current rate or 24.95 mills, but residents will pay more in Earned Income Tax (EIT) next year. A 0.2 percent increase in the EIT was passed by council members on November 13, raising the rate to 1.95 percent for residents. The EIT rate paid by those who work in Easton but do not reside in the city will remain at the current 1.75 percent rate.

A $110,000 shortfall in the budget will be rectified in January, city administrators said last month, suggesting that the money will likely be made up by not filling a currently vacant position on city staff and/or delaying hiring for a new position that is in the budget.

City administrators had previously attempted to fill the gap by proposing a $25 increase per unit in the annual residential licensing fee, but the move failed to get city council members' approval.

The 2014 budget calls for a general fund of about $32.27 million, an increase of approximately $700,000 over 2013.

City EIT Rate Hike Passes, Rental License Fee Increase Fails

By Christina Georgiou

A 0.2 percent increase in Easton Earned Income Tax (EIT) was passed unanimously by city council members Wednesday evening, raising the rate to 1.95 percent for residents. The EIT rate paid by those who work in Easton but do not reside in the city will remain at the current 1.75 percent rate.

A last-minute attempt to fill a $110,000 hole in the city's 2014 budget proposal by increasing the city's residential licensing fee by $25 per unit annually failed to get city council members' approval.

The shortfall cropped up after the council rejected a provision during a budget hearing Tuesday night that would have raised rates in the city's South Third Street parking garage from $2 to $3 per hour during summer months.

City Administrator Glenn Steckman suggested at Wednesday's meeting the hole could be filled by raising the residential licensing fee to $80 per rental unit, up from the current $55 rate.

The 2014 budget proposal calls for a $5 increase in the fee to $60, which the council said it agreed with, but members balked at the sharper rate increase.

"I just think it needs a lot more thought," said Mayor Sal Panto, who attended the meeting by phone. Panto is in Seattle, WA at the National League of Cities' annual conference.

Steckman said the increase would support more vigorous code enforcement and rental unit inspections.

"Although I support (that), and I want to support it, I think it will take months to implement it," Panto said. "So I have some reservations about putting this in place in 24 hours, but I do support the intent."

The city plans to hire one additional code enforcement officer next year to help with rental unit inspections. The budget proposal calls for the new position to be filled in April, but city officials said Tuesday evening that might be pushed back until June to help cover the shortfall after the parking rate increase failed to gain traction.

Easton Council member El Warner said the new proposed rate increase was too steep.

"We're talking about making this cost $80, a $25 increase," she said. "I'm just not ready to do this on 24 hours notice."

Steckman said raising the fee more than the budget originally called for would help the city recoup costs associated with city rental unit inspections and code enforcement, noting that Councilman Roger Ruggles had said he wished the fee was reflective of the expenses to the city to do so.

"What this gives to me is a vision for the future of where this may go. But...it may not be this, and this may not be where we go," Ruggles said.

"I think it may be what we all want to do, but not at this time," Vice-mayor Ken Brown said.

Panto suggested that "baby steps" towards a higher fee might be taken along with better enforcement through coordinating city departments to make sure rental units comply with health and safety ordinances.

Technology upgrades, which the city is working on implementing soon, would allow police to better communicate with the codes and health departments after situations such as drug raids, he suggested.

Steckman seemed frustrated the suggestion was rejected.

"I've done this in other communities," he said, adding that such rate hikes are "aimed at increasing rental property values."

The city administrator then suggested that city council could opt to leave the $110,000 shortfall in the proposed $32 million budget for now, and approve it as it stands at the next regular city council meeting. The administration would then further work on ways to eliminate it in the first quarter of 2014, in January.

He also suggested city council might reconsider the parking deck rate hike, saying that traffic in the municipal garage is mostly monthly pass holders during the week, and city visitors on weekends.

Panto said he favors finding other ways to cover the shortfall in January.

"I'm not on board with the increase Monday to Friday," he said.

The mayor suggested the bulk of the $110,000 could be made up through the elimination of a "long empty" city position through attrition.

"I'm not talking about a person, I'm talking about a position," he added.

City Finance Director Chris Heagele said he'll be working immediately to identify other places the shortfall might be made up, noting that eliminating the vacant position is a good place to start. With salary and benefits being the majority of the amount, he said it may be possible for him to identify other small cuts to cover the rest of the amount.

City EIT Increase Likely, But Parking Rate Hike Off the Table for 2014

By Christina Georgiou
 

Easton city council members rejected raising municipal
parking deck rates from $2 to $3 per hour during the peak
summer season in 2014 during a budget hearing
Tuesday evening. As a result, both curbside metered parking
and municipal garage fees are expected to remain the
same next year.

Easton's Earned Income Tax seems likely to be raised by two-tenths of a percent, to a total of 1.95 percent, for residents in 2014, but city council members roundly rejected the idea of raising parking fees in the municipal parking garage to $3 per hour during summer months at a budget hearing on Tuesday evening.

Those who work but do not live in Easton will continue to pay 1.75 percent as implemented by the council at the beginning of this year, city officials said.

The increase in city parking deck fees would have brought an estimated extra $160,000 to Easton's coffers next year, but council members said the hike isn't justifiable and would hit residents as well as visitors to the city's attractions.

City administrator Glenn Steckman said the increase is necessary to control traffic in the parking deck during peak times. The deck was recently been filled to capacity during the Easton Garlic Fest and last weekend during Bacon Fest II. As a result, it was shut down until spaces opened

Steckman also suggested some of the extra revenue from the increased rate might go towards paying for the construction of more parking in the future.

"I do understand the supply and demand issue...but I do have an issue with rates going up and down," said Councilman Jeff Warren. "I really believe there needs to be some consistency."

Councilwoman El Warner, who has opposed parking rate hikes in the past, said, "I'm actually not in favor of doing this at all."

Mayor Sal Panto, attending the meeting via phone due to his attendance at a national mayor's conference in Seattle, WA this week, said it would be good to have the revenue, but not at the expense of city residents.

"I think it's great to get $3 per hour from visitors and tourists from out of town, but we need to figure out a way that residents (can pay less)," he said. "I think we need to make it fair for our residents."

He added that he agreed Easton will need more parking in the future, but said, "I don't think the people going Downtown (in the summer) on a Thursday night should pay for a garage we might build next year."

Warren agreed, saying, "We don't want to--I don't want to say 'gouge'--but we don't want to stick it to them."

Easton Councilwoman Sandra Vulcano suggested that trolley service be offered during large city events to ferry visitors from lots and parking spaces further from the center of the city to solve overflow issues. The cost of the service might be borne by charging riders $1 each, and the shuttle could travel in a loop to make it convenient for all, she added.

After council members made it clear they wouldn't vote in favor of the parking garage seasonal rate increase, Steckman said adjustments would have to be made to make up for the $25,000.

"I can count as well as anyone," he said, referring to the majority of council that voiced objections. "We'll come back with a revised budget for you tomorrow."

Steckman said the necessary cuts might come from delaying the hiring of a new building codes enforcement officer to handle landlord licensing and rental inspections from April to June and axing the purchase of a paving melting pot for the public works department.

City administrators also recommended an increase in the city's residential rental license of $5 per year from $55 to $60, which would bring in an estimated extra $25,000 per year, and raising the real estate transfer tax from $125 to $140.

City finance director Chris Heagele, along with Steckman, recommended council vote to increase the city EIT by 0.2 percent at its regular meeting tonight, which is the amount the budget proposal is based on. Without it, the city faces a shortfall in excess of $1 million and severe cuts to services and city programs would be necessary, they warned.

"All the assumptions in here assume a 0.20 (percent) EIT and the rental license fee increase. Roughly every tenth of a percent is $400,000," Heagle said. "If we don't enact that ordinance, we would either need to raise revenue substantially or take an axe to the budget."

Panto reiterated that he recommends raising the EIT rate.

"It's either raise it by two-tenths of a percent or raise it more, because at this late date, we can't screw with the budget," the mayor said.

The council introduced three ordinances at its last meeting, knowing only one would be voted on, to give them latitude in the decision--an increase of one-tenth of a percent, one at two-tenths, and a third at three-tenths.

In the event the council decides against any increase, they could reject all three measures, and the EIT rate would remain unchanged.

However, that council will vote in favor of two-tenths of a percent increase as recommended by city administrators seems to be the most likely scenario at this point.

"I've never had a problem with (1.95 percent)," Warren said.

Updated to correct the amount of the current rental licensing annual fee.  It is $55, not $50 as the article originally stated.

Easton City Council Reviews Coming Year's Expenses

By Christina Georgiou

A pie chart illustrating Easton's 2014 proposed expense
uses.
Click on the image for a full size view.

Easton City Council members examined the expense side of the 2014 proposed city budget equation during a budget discussion--the second such session so far--Monday evening.

If the 2014 budget proposal is passed without changes, the Earned Income Tax (EIT) rate for residents will need to be raised by 2/10ths of a percent to help cover a shortfall of more than $1 million, bringing the total rate to 1.95 percent EIT, with 0.5 percent going to the school district. The EIT rate for those who work but do not live within city limits, first imposed this year, will remain unaffected by the possible change.

Three ordinances were introduced at last Wednesday's regular city council meeting to cover three possible EIT rate hike scenarios, 1.35, 1.45, and 1.55 percent, though only one will ultimately be passed by the council sometime next month, if council does not cut some expense items to avoid the increase. If council decides to cut expenses, none of the three will be passed, elected officials said.

Despite the projected shortfall, however, some line items in the city's 2014 budget proposal seem destined for increases. Next year's city budget calls for a general fund of about $32.27 million, an increase of approximately $700,000 from 2013.

The city plans to buy 50 more parking meters that take credit cards next year, along with "some other devices" for the city's parking system, said City Administrator Glenn Steckman, which will increase the line item for parking meter expenses to $137,654 next year from $76,960 budgeted for this year, an increase of $60,694.
Un-reimbursed overtime for the Easton Police Department is also expected to rise by $15,000 next year to $40,000 from a projected $25,000 this year. The increase is due to a increasing number of city events, officials said. Other overtime department members put in, such as for providing security for high-profile Lafayette College events, is reimbursed by the organization for which it is incurred, they added.

In the city's IT department, nearly $93,000 more will be spent in 2014 than was allotted for this year, with the bulk of the cost being new equipment and software related to upgrading the city computer system and installing an electronic payment system so people can pay bills and fines online.

Mayor Sal Panto said the upgrades are necessary, despite the associated costs, and expressed frustration the switchover has taken years, saying the changes are long overdue.

"Let's stop talking two to three years," he said of the total tech upgrade plan," Panto said. "Lets start talking one to two (years). I've been here six years, and we've been saying two to three years that whole time."

Some city technology costs are likely to decrease next year too, with the installation of a new phone system, said the city's IT director Frank Caruso, who estimated the annual savings will be about $21,000.

Easton currently uses Verizon as their phone provider, and this year's city phone bills will cost a total of about $86,000. City officials said the company has been "totally unresponsive" to inquiries about billing charges, which in a number of instances appear to be inflated and contain calls to "questionable" numbers, such as ones that seem to be disconnected or connect to perpetual busy signals.

"We're hoping to go over to a VoIP (Voice over Internet Protocol) system. We're almost there," Caruso said. "We're going to make the switch and move away from Verizon."

In the city's public works department, road repairs and maintenance is estimated to cost $110,000 for black top and other construction materials next year, up from $52,000 in the current year's budget.

Public Works Director David Hopkins attributed the steep rise to the number of city streets that will require maintenance, and state laws that require the city to add handicapped-accessible ramps at all crosswalks where road repaving is performed.

In the past, the city has relied on Community Development Block Grant (CDBG) funding to shoulder some road maintenance costs, but Easton should largely discontinue the practice, Hopkins said.

2014 projected revenue sources
Click on any image for a full-size view

"We need to wean ourselves off CDBG funding because only 40 percent of the city is eligible," he said.

An additional $23,000 will be spent on the city's trees next year too, bringing the total projected cost to maintain the urban forest program to $40,000 for the year.

Some of the city forester's resources will be used to assist homeowners who have trees that lie in or near public property, but most will go towards city-owned trees, Hopkins said.

"(The city owns) at least 3,500 trees, not including parks," he said.

A threat to the city's ash trees from the emerald ash borer, expected to be in the area within two years at most, means the city needs to be ready and proactive, Hopkins said. Saving the trees is not only prohibitively expensive, the remedy is far from being a sure thing and probably won't save the trees in the end anyway, he added.

"We're probably looking at the removal of the 90 or so ash trees we have along the streets," Hopkins said.

City council members asked few questions during the session, and it's unclear which, if any, members might favor budget cuts over an EIT rate hike.

A third 2014 budget session is set for Tuesday, November 12 at 6 p.m. in city council chambers. Discussion is expected to included planning and economic development expenses, salary-related issues, and city operational costs.

The current budget proposal includes a 3 percent salary increase for all city employees, including non-union employees and the mayor.

"I think there's about an hour to an hour and a half left on the budget to cover," Steckman told council members.

Easton City Council Mulls 2014 Budget, Considers EIT Hike

By Christina Georgiou

A pie chart illustrates sources of revenue and their proportions
for the 2014 City of Easton budget.
Click on the image for a full size view.

Easton city council members scrutinized the revenue side of the proposed 2014 city budget at its Tuesday night finance committee meeting, looking at various line items and discussing whether the estimates were accurate.

The council will introduce three ordinances at its regular meeting this evening, each with a different rate of Earned Income Tax (EIT) residents may pay to the municipality next year--1.35, 1.45, and 1.55 percent, though only one will ultimately be passed by the council sometime next month, Easton Mayor Sal Panto said. Currently, both residents and those that work but do not live in the city pay the same rate.

If the highest rate is passed, city residents will pay a total of 1.95 percent EIT, with 0.5 percent going to the school district. Commuters will continue to pay the same rate as this year under Panto's proposal.

Introducing all three possible rates will allow for flexibility while the 2014 budget undergoes adjustments while still allowing for the amount of time the ordinances need to be aired publicly before passage, the mayor said.

The city faces a shortfall in excess of $1 million, and raising the EIT, along with some city service fees is the best way to make up the difference, Panto has said. Other cost-saving  options include closing one or both of the city's pools, or shuttering one of the city fire department substations, the mayor has suggested, though he's said he's reluctant to do either.

As Chris Heagele, the city's finance director, presented estimated revenue line items Tuesday evening, some council members questioned whether some of the estimates were too conservative and wondered whether if city's Home Rule Charter requirement that the annual proposed budget be presented by October 1 hinders having the most accurate estimates to work with.

Councilman Roger Ruggles said he thinks a number of the revenue estimates were too low, and that actual funds taken in by the city by the end of the year would be higher. He particularly questioned whether EIT revenue from non-city residents, admissions taxes, and parking revenue wouldn't be more next year than is currently projected.

Heagele admitted that non-resident EIT revenue is likely to rise as more workers and their employers become aware of the tax, implemented earlier this year, and that admission tax revenue is also likely to increase with the increase in numbers of visitors to the newly expanded Crayola Experience.

"We feel we're going to get an even higher rate of collection next year," he said.

Some city parking revenue numbers were "trending low" due to the three months Crayola was closed for renovations, which affects the estimated parking revenue for 2014, Heagele said, but erring on the side of caution is safer than assuming the city will have more money next year.

Panto said he too favors a conservative approach to estimating what the city will likely take in next year.

Councilman Jeff Warren also supported being cautious about revenue estimates.

"I'm with the mayor that the conservative figures on this (is the way to go) because we don't have the numbers," he said.

Actual revenue figures from this year used to prepare the 2014 budget proposal was only available through August, due to the requirement it must be presented by October 1.

City Administrator Glenn Steckman said changes to the proposal are likely as the process progress, however.

"This is a living, breathing document. It's going to change," he said. "This is our best estimate at any time."

Warren suggested that the requirement for the budget to be presented so early needs to change so more accurate revenue estimates can be generated.

"I believe we need to potentially revisit these dates (for the budget)," he said, noting that while the Home Rule Charter probably intended the early date to allow more time for public input, the requirement seems to be hampering the process.

A pie chart illustrating Easton's 2014 proposed expense
uses.
Click on the image for a full size view.

"It's hindering the ability for us to really see things," Warren said. "It's something we need to look at down the road."

Another budget discussion, this time looking at the expense side of the equation, is scheduled to take place in city council chambers this coming Monday, October 28, at 6 p.m. All the city department directors are expected to present their respective portions of the proposed budget at that time.

If necessary, an additional budget hearing will take place on Tuesday, November 12.


The 2014 budget proposal calls for a general fund of about $32.27 million, an increase of approximately $700,000 over 2013.

The city's Home Rule Charter requires the city council to pass a balanced budget by December 1.

Updated at 10:42 p.m. to correct the possible new EIT rates and the EIT rate paid to the school district.

Easton Mayor Proposes Raising Earned Income Tax to Close $800K Budget Gap

By Christina Georgiou

Easton Mayor Sal Panto presented the
proposed 2014 city budget at at special
city council meeting Tuesday evening.

Raising the Earned Income Tax rate from the current 1.75 percent to 1.95 percent for city residents is the best way to close a $800,000 projected funds gap in Easton's 2014 budget, Easton Mayor Sal Panto said during a presentation to city council of the 2014 proposed budget on Tuesday evening.

Next year's city budget calls for a general fund of about $32.27 million, an increase of approximately $700,000 over 2013.

"The administration recommends we fill that gap with an increase of two-tenths of a percent in Earned Income Tax," Panto said.

"With this budget, senior citizens won't pay an increase, and in fact, if they recycle--and they're our best recyclers--they'll pay less," he added.

Under the proposal, only residents would see the increase--those paying the "commuter tax" would still pay 1.75 percent.

The shortfall, which was whittled down from nearly $2 million, is largely due to increased healthcare and city pension costs, Panto said.

The mayor credited Public Works Director David Hopkins for the city's upcoming new trash hauling contracts. By breaking the service down into its three basic components, the city will save about $1 million annually for the next seven years over current costs.

The city will now get paid for some recycled materials, and some of the cost savings that will generate will be passed onto city residents, city officials have said. Residents that recycle can sign up to be eligible for a rebate equal to one month's garbage service, or $33, under the program to be implemented in 2014.

But savings on trash hauling costs aren't enough to entirely off-set other rising costs.

2014 proposed revenue sources
Click on any image for a full-size view

2014 proposed city expenditures

Easton, covers health care benefits for employees through self-insurance, paid out an estimated $3.7 million this year due to increased medical claims, far more than in previous years. Panto attributed the spike to a number of serious illnesses among city workers and their families over previous years, but said its unclear whether the costs and claims will continue to rise.

The cost of employees salaries and benefits is a major chunk of the city's annual budget. The 2014 budget calls for both union and non-union employees to see a 2.5 percent raise.

For union employees, the raise is part of their contracts. Panto said giving non-union employees a similiar bump in pay is important to retaining skilled people.

"We need to stay competitive," he said. "We don't want to lose good people."


Another major, but non-negotiable expense for 2014 is pensions, the cost of which has risen $7 million over the last six years, and is set to rise another $3 million next year. The sharp increases are due to the state pulling funding from the municipal pension funding program, leaving local municipalities to foot the bill, Panto has said.

Cutting costs and economizing to balance the budget may mean some hard choices, especially if city council doesn't approve the administration's recommended EIT hike, Panto said.

Some non-essential services' fees are not covering the costs associated with providing them, he said, noting that the city's pools lost $100,000 this year. He suggested the entry fee for non-residents be doubled to help offset the cost.

He also suggested the city might save money by closing one of the fire department's sub-stations.

"Do we maintain three firehouses in a four-square-mile area?" Panto asked, adding, "I don't want to be the one to close pools or firehouses, but the fire department costs $6 million per year."

The city should also seek to recover revenue it's entitled to but isn't receiving, the mayor said, and a major part of that is delinquent fees and taxes. He said the city will be cracking down on "bad" landlords especially to recover funds owed.

"This decision was not made this week. It was made two months ago," Panto said, noting the triple-fatal fire earlier this week is only more impetus for the city to enforce building codes and make sure inspections are up to date.

He added that delinquent accounts for rental properties are hurting Easton's bottom line and neighborhoods, singling out two for scrutiny.

"Domenic DeSai is not a good landlord. Domenic Albanese is not a good landlord. We don't need them here, but if they're going to be here, they need to follow the rules," Panto said.

"Not all landlords are bad, but the majority of derelict accounts are by bad landlords," he said. "We need to get into these homes, and make sure they're safe."

The 2014 proposed budget calls for hiring an additional code enforcement officer to help keep inspections up-to-date and to deal with blight issues.

Money is also proposed to be spent to upgrade the city's billing and tracking systems and help collect fees owed, Panto said.

City council members, who received their copies of the city budget proposal at the conclusion of the mayor's presentation, didn't comment on the suggestions.

A budget review hearing is set for Tuesday, Oct. 22 at the city council committee meeting, and the council is also set to discuss the 2014 budget on Tuesday, Nov. 12, said City Clerk Thomas Hess.

The city's Home Rule charter requires the new budget proposal be advertised and made public for two weeks before city council discusses it.