Layoffs, Loan Option Discussed at Budget Meeting

The mood was less uncharacteristically somber at a Hellertown Borough Council budget meeting Nov. 3, as council members discussed various options for closing a more than half-million dollar hole in the borough's 2012 proposed budget.

Following a lengthy executive session, during which personnel matters were discussed behind closed doors, council members weighed the pros and cons of five different options for balancing the budget.

"Our revenue has been flat for three years," Borough Manager Cathy Kichline explained.

"Some of these options are a Band-Aid for 2012," she conceded, but later added that "the Borough of Hellertown cannot keep relying on real estate taxes (in the future)."

One of the options under consideration would increase taxes on borough households by 1.5 mills, which councilman Tom Rieger said would amount to "about an eight percent tax increase," or about $75 per year.

Rieger said that although last year he was "adamantly opposed" to the one mill tax increase that Borough Council ultimately approved, this year the realities of the borough's financial situation seem starker.

"We created the problem," he said. "We created the hole."

The idea of approving a tax increase met with opposition from several council members, however.

Councilwoman Gail Nolf said that although to some residents $75 "is nothing, to some people that's a week's worth of groceries."

"I'm trying to figure out why costs keep going up when people are losing their jobs," she said.

Council President Phil Weber agreed that approving a tax increase would be difficult to do when "the people don't have enough money as it is."

"I'll tell you, there's a lot of people in town that can't handle a $75 tax increase," he said.

The option for balancing the budget that a majority of council members said appeared most favorable to them would involve a combination of layoffs and an issuance of new debt, but no tax increase.

The so-called "Option Three" budget option, Rieger said, would put the loan money toward "one-time capital expenses" such as replacing a bridge and other "bricks-and-mortar" projects.

Right now, "(loan) rates are extremely low," Kichline explained to council.

"So we'd be using debt the way it should be used," added Nolf.

Option Three would also result in the layoff of one police officer and a transfer of $212,000 from the borough's general fund balance, for a $5,000 budget surplus.

The layoff of one or possibly two officers would be a result of the borough not receiving a Northampton County Gaming Revenue and Economic Redevelopment Authority grant that last year funded the salary and benefits of two new officers, Weber said.

Last month, however, for other expenses related to impact from the Sands casino in Bethlehem.

Weber also said it appears likely that three summertime Public Works Department employees will not be returning to their jobs next year, although he added, "we are looking at other options."

Council is set to continue discussion of the 2012 proposed borough budget at its regular meeting Monday at 7pm at .

The final budget must be adopted by Dec. 31, however a preliminary final budget must be available for public inspection for 10 working days prior to final adoption, Kichline said.