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 Commuter Tax Public Hearing Set for Monday

By Christina Georgiou

A hearing concerning the proposed "commuter tax", which would require those who work but do not live in the City of Easton to pay Earned Income Tax (EIT) is scheduled for Monday, July 16 at 6 p.m. at city hall to take public input on the matter.

The 0.75 percent tax, which seems likely to be approved by council members, is earmarked to help the city pay an estimated $1.7 million shortfall in its pension plan for city workers. If passed, the move is expected to raise $1.35 million.

Additionally, Easton municipal employees would pay 1.75 percent EIT if they do not live within the city limits. The rate is the same as what city residents currently pay.

The proposal has received a number of criticisms from various employers and workers that the EIT would be unfair, with the latest to complain the EIT would be unfair being Northampton County Council, who passed a resolution 8-0 expressing disapproval of the idea Thursday evening.

The matter is expected to come up for vote at the next Easton city council meeting on Wednesday, July 25, and if passed, will be implemented beginning on January 1, 2013.

Update: The date for this meeting has been corrected. It is Monday, July 16 at 6 p.m. (Apologies, it must have been the heat. )

Easton “Commuter Tax” Formally Introduced

By Christina Georgiou

A proposal to impose Earned Income Tax on those who work but do not live in the City of Easton was officially introduced at the regular city council meeting Wednesday evening.

The 0.75 percent tax, if approved by council members, is earmarked to help the city pay a shortfall in its pension plan for city workers and will be implemented beginning in 2013 if council members approve the measure, slated to be voted on in four weeks, after the city properly advertises the potential change in law as legally required.

City resident currently pay 1.75 percent EIT.

It seems extremely likely the bill will be passed based on past comments from city council members and Mayor Sal Panto, who said the city will fall short by $1.7 million if it does not raise the EIT. The tax will raise the majority of the needed amount, he said.

“The number is about $1.35 (million), of which we have a $1.7 (million) need,” Panto said.

The measure is allowed by state law for cities that fall into the “distressed” category. Easton is considered to be “moderately distressed” and the law allows for it to raise the EIT to pay for it's pension shortfall.

The money raised by the tax increase can only be used for that purpose, city officials said, and if the city's finances improve the tax may be lowered or dropped altogether, though Easton is under no obligation to do so.

Councilman Roger Ruggles questioned how the city will enforce collections.

Easton City Finance Director Chris Heagele said collection costs, estimated at $20,000, will be taken from the city's general fund.

“It's really just an accounting issue,” Heagele said. “The law ia unclear, and some (municipalities) do it one way, and others do it another way...It would only matter if we collect more than we projected. Which would be terrific, but if that were the case, we wouldn't be distressed.”

If the law is passed, commuters will begin paying Earned Income Tax (EIT) to the city beginning next year, starting on January 1.

The money will be withheld by employers, who will take the highest amount the employee is likely to owe between the City of Easton and their home municipality's taxing rate, with a maximum possible rate of 1.75 percent. So if a worker's community of residence has an EIT rate of say, 1.4 percent, 1.75 percent will be withheld, but Easton will only get 0.3 percent, or the difference.

City of Easton workers will also pay 1.75 percent EIT if the law is passed.