The Herald, Sharon, Pa.

Local News

December 5, 2012

Capital projects to get revenue boost

HERMITAGE — With better-than-expected tax revenues, a one-time spike in state pension aid and lower operating costs in several departments, the city of Hermitage is ending the year with more money in the bank than usual.

The proposed 2013 general fund budget – introduced a week ago – projects to carry over $1,647,988, up from $867,686 this year and $356,587 in 2011.

“What it allowed us to do was to shift more money over to our capital programs,” said City Manager Gary P. Hinkson. “We will be doing a significant amount of infrastructure work in 2013, and buy some equipment.”

In the 2013 general fund budget, 18.5 percent – about $2.1 million – will be transferred to the capital budget.

With that money, Community Development Block Grant funds, grants and the proceeds of borrowed money through a bond issue, the city will be investing significant dollars in street paving and sealcoating, storm water drainage improvements and recreation projects in 2013 and 2014, he said.

The proposed $11,376,998 budget is up 2 percent over this year’s $11,157,833 budget. The spending plan proposes no increase in city taxes and fees, other than the third and final annual hike in sewer user fees – from $42 a month to $47.50 – to pay for the expansion of the water pollution control plant.

Tax revenues were strong this year, especially in earned income tax and the realty transfer tax, although officials remain conservative in their estimates for 2013.

Hinkson said the realty transfer tax can fluctuate widely from year to year, and officials are not sure if the better-than-expected EIT revenues are from more people working or better, more timely collections due to the transition from local tax collection to a countywide collection system.

However, those advances, along with new development, have officials optimistic.

“We’re encouraged that the economy has stabilized and shown signs of improvement,” said Assistant City Manager Gary M. Gulla.

Last year, the city raised the Local Services Tax on people who work in the city – the old Occupational Privilege Tax – to $47 from $5, and the money raised by the tax, about $400,000, will be going to the Neighborhood Investment Program.

Having completed work in the NIP area bordered by East State Street, North Buhl Farm Drive, Highland Road and the Sharon border, officials will now focus on the area north of Highland, west of Buhl Farm Drive with Buhl Farm park and Sharon to the north and west.

Under the program, the city paves streets, improves storm water drainage, replaces signs, reviews street lighting and looks at other issues in a specific area.

There likely will be no NIP projects undertaken by the city in 2013 – although money will be spent on engineering – as Aqua will replace water lines and Hermitage Municipal Authority will replace and repair sanitary sewer lines.

“Much like the last one, it makes sense to have them get in there, do their work, and follow them,” Hinkson said, adding work likely will take two to four years.

The part of the NIP funded by CDBG funds will be looking at the Patagonia area north of Orangeville Road.

Storm water improvements – estimated to cost about $1 million – planned for 2013 include projects on Butterfly Lane, Ridgewood Drive and Llodio Drive and restoring the Indian Run stream between Sunset Drive and Easton Road.

The city will continue sealing recreational trails and expects to begin the development of the Stull Farm on Sample Road for recreation.

Capital purchases will include a new telephone system for the city building, a truck and snow plow for the street department and fingerprinting and video arraignment equipment for the police department. Money also will be set aside for the fire department for a future purchase.

A retirement incentive this year resulted in a handful of city workers retiring and allowed for a restructuring of duties for some employees.

Neil Hosick, hired to oversee storm water projects, is taking on new duties as facilities coordinator to oversee all city-owned property, including buildings and grounds, trails, parks and storm water detention basins.

Sherry Iversen, the former earned income tax collector, has been named finance supervisor and her duties include the solid waste recycling program, city-owned vehicle management, monitoring municipal assessments, collecting old delinquent wage taxes, monitoring wage tax receipts and keeping the tax rolls current.

The city will be hiring a new lab technician for the water pollution control plant due to increased water testing requirements – the city will have to test seven days a week instead of five – and will share Ian Garfoli with Hermitage Municipal Authority.

Garfoli was hired by the city in 2005 as special projects director to design and oversee construction projects and was laid off in 2009 when the recession hit city finances. HMA picked him up shortly after his furlough to oversee the water pollution control plant construction, but as that project winds down, he will spend 60 percent of his time working for the authority and 40 percent with the city overseeing projects.

Even when the lab tech is hired, the city staffing level will be less than last year and at the same level as 15 years ago.

“We’ve grown, we’re spending more money on infrastructure than we did 15 years ago, but we’ve restructured the organization in a way that gives us the best bang for our buck,” Hinkson said.

Commissioners also introduced these budgets last week: capital reserve fund, $564,000; construction fund, $2,267,161; sanitary sewer utility fund, $6,997,738; highway aid fund, $410,820; LindenPointe facilities fund, $85,484; vested sick leave, $239,359; Pennsylvania Emergency Management loan, $39,443; and capital improvement fund, $265,548.

Commissioners are expected to approve a budget Dec. 28.

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