Published Friday, November 22, 2002
layoffs, tax hike
Herald Staff Writer
The city of Sharon is facing a bleak financial year in 2003. The proposed budget calls for layoffs in the police, fire and street departments and increases in property taxes and sewer fees.
"What it amounts to is the bottom fell out," Mayor David O. Ryan said of the city's financial situation. "We just can't keep going like the city was going. I'm not ready to be a distressed city."
The $8 million proposed budget was officially presented Thursday, although Ryan said all council members received a copy Tuesday.
"This is the most brutal budget I've seen in 24 years on council," Councilman Raymond Fabian said.
The budget calls for a 5.5- mill property tax increase that would generate $530,686 for the city. That would bring total millage to 42.5. A mill of taxes generates $96,500 for the city.
A mill is $1 for every $1,000 of a property's assessed 1970 market value. A mill costs the average taxpayer $12.67, so a 5.5-mill increase would mean about $71 more, according to City Finance Director Michael Gasparich.
Council President Fred Hoffman said he was told by Michael DeForest, director of the county revenue department, that the increase would cost the average taxpayer closer to $100.
Increasing costs for salaries, health care, insurance and other expenses and a reduction in state funding and property taxes have left the city in a precarious position.
The budget proposes eliminating two policemen, two firefighters and two street department workers, which would save the city $198,483, or just over 2 mills of taxes, Ryan said.
"These are temporary as far as I'm concerned," Ryan said of the layoffs. "I intend some day, some way, to bring them back." He added that the layoffs are a necessity and something he hates to have to do.
Hoffman said he would support the tax increase, but not with the layoffs. He said he has concerns about laying off public safety employees.
Fabian said he, too, is troubled by the layoffs. "We have really butchered the fire department," he said, recalling years ago when the department was staffed at 29. Now there are 18 firefighters.
The layoffs in the police department don't seem to be as devastating as in the fire department, Fabian said. Despite that, he said he didn't agree with layoffs in the police department either.
Councilman Lou Rotunno made a motion to reopen talks to merge Sharon's police department with Southwest Mercer County Regional's, but the motion was voted down 3 to 2. Rotunno and Hoffman voted yes and Fabian, George Gulla and Chris Outrakis voted no.
Rotunno said he thinks the city can operate with no layoffs and only a 2.5-mill tax increase. He said the financial condition of the city happened over time and doesn't need to be fixed in one fell swoop.
"I don't know how this budget can be done," Mrs. Outrakis said. "We sat back for years and that's why we're in this position ... We all went along with it. Nobody said anything. Do you think that I like to sit up here and say we're gonna lay off people?"
"I sure as hell don't want to see anybody laid off," Gulla said. He said he wants everyone to find ways to make the budget work without laying people off.
"This was just the year where everything hit," Gasparich said. He said the only way the city made it through 2002 was because of a bond refinancing in August.
City officials realized in August that Sharon was $865,000 in debt because of unpaid bills from 2001, a $239,000 end-of-year deficit and additional health insurance costs that were not anticipated.
Ryan said the other options to the proposed layoffs and tax increase are:
» To do nothing -- which would cause the city to go into default in June or July.
» To raise taxes 10.2 mills to cover the deficit and increased expenses.
» To furlough 20 employees instead of six to cover the deficit.
"How much of a tax increase can the citizens stand?" Ryan asked.
Ryan said he was advised by Gasparich and other city officials to lay off people in September, but he wanted to wait until he had end-of-the-year projections.
Sewer fees would also increase. The average resident will see a $4.42 increase in his bi-monthly bill, Gasparich said. He said $140,000 of the additional money raised will go to pay salaries, health care and debt service for the sewer fund and $85,000 will go toward paying back the $1 million the sewer fund owes the general fund.
Hoffman said the city is negotiating a new garbage contract through Mercer County Regional Council of Governments, and residents can also expect to see an increase in their refuse and recycling bills.
Gasparich and Ryan stressed that the city's financial condition didn't happen overnight, and Ryan -- who is just completing his first year as mayor -- said he's not happy this is the first budget he has to present to council.
Gasparich said if the city had gradually raised taxes over the years, Sharon would be financially sound and the millage would actually be lower than the proposed millage for 2003.
From 1987 to 1997, taxes increased only 2.5 mills. The proposed 2002 budget called for a 5--mill tax increase, but council approved only 3.5 mills.
You can e-mail Herald Staff Writer Kristen Garrett at kgarrett@sharonherald.com