The Herald, Sharon, Pa.

Local News

November 21, 2013

2014 Sharon city budget balances, but the year after won't be pretty

Taxes, layoffs or service cuts avoided – for now

SHARON — City Manager Scott Andrejchak isn’t asking for tax increases, layoffs or service cuts next year, but he told council that Sharon’s ability to balance its budgets without them can’t extend past 2014.

Council on Wednesday held a hearing on the proposed $7.8 million budget and gave it a first reading. The tentative plan is only about $65,000 higher than last year.

In his introductory letter to council, Andrejchak said he was able to balance the budget because of “an unexpected reduction in the health care premium” the city pays to Highmark for the Community Blue health plan that includes the hospital of Sharon Regional Health System in its network but not UPMC.

Without those savings, the city “would be looking at $250,000-plus in cuts or tax increases, he said.

There are no wage increases for police or management and non-union employees. The budget includes contractual increases of 2.5 percent for firefighters and a $1,000 payment for members of the AFSCME union.

The city last year received the last installment of about $280,000 from the sale of the sewage treatment plant and lines to Sharon Sanitary Authority. The city had balanced recent budgets using those annual payments as operating revenue although some members of council had favored setting that money aside in a capital reserve to buy equipment and vehicles and to cover contingencies.

Real-estate tax collections are flat and the city faces higher debt service payments, building maintenance costs and street department costs, Andrejchak said.

After three years of balanced budgets without cuts or tax increases, the city could run into trouble in 2015, he said.

“Balancing budgets in 2015 and beyond will require tradeoffs between what residents pay in taxes, what levels of service we can realistically provide and what residents expect from the city,” Andrejchak said. “Just as importantly, the city must begin to fund road improvements and repairs. Deferred maintenance is no longer an option.”

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