The Herald, Sharon, Pa.

April 7, 2013

OUR VIEW: Farrell talks on Act 47 must center on realities


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---- — Farrell was the first city in Pennsylvania to file as a financially “distressed  community” under the state Act 47. If city officials are wise, it would be the last to get out of it.

On Tuesday, Farrell City Council will meet with city manager Michael Ceci and Dr. Michael Weir, the state-appointed Act 47 recovery coordinator, to discuss revisions to the fiscal recovery plan. The session is set for 6:30 p.m.

It should be an interesting meeting. We wonder if Farrell is really ready to get out of Act 47 — unless there is consolidation with other local communities. There are certain tax benefits that come with being distressed that are necessary if the city is to survive.

The main tax benefit is with the personal income tax. Everyone who works in Farrell can be taxed at the city’s high rate and Farrell is permitted to keep the extra tax above what the worker’s home community charges.

That is a pretty substantial chunk of change that the city probably can’t afford to lose. And in a way, people who work in the city are receiving benefits of road repair and emergency services if they need them.

According to a recent Herald story, council members and Mayor Olive McKeithan will need to consider some tough questions posed by Ceci.

Two of the frightening questions Ceci will ask concern increases in the city’s income tax and property tax rates.

Raising taxes is pretty much a kiss of death for any elected official in a community where a high level of poverty exists.

Still, some other serious decisions are looming on the horizon. One concerns services for the fire department, street department, code enforcement, the library, recreation, administration and police.

One of the pluses of Act 47, for example, was that it provided flexibility in dealing with firefighters’ and street workers’ unions.

Today several city employees are dual fightfighters and street workers, graciously accepting the increased tasks to benefit the troubled city.

One major problem that can’t be ignored is the skyrocketing cost of police protection. When Farrell joined other communities in the Southwest Mercer County Regional Police Department, there was a savings. Not anymore.

The cost of being part of the merger is off the charts. Most of the fault lies with the commission that was appointed to oversee its operation, yet for some reason, continues far too often to buckle to demands of the department.

It is only fiscally responsible for the city leaders to look into ways to save money for police, whether it would be to secure protection from Sharon or Hermitage, or like some other communities, turn to state police. However the latter is not advisable, because the state police presence would probably only be there in emergency situations.

Council should consider every kind of merger or consolidation of other programs as well if it will save money and should discuss it with leaders from surrounding municipalities.

According to Ceci’s plan that council and mayor will consider: No staffing increases, minimal wage hikes and limited departmental spending, plus gradual wage and property tax hikes, better tax collection and gradual decreases in the nonresident wage tax. Ceci predicts that this would allow the city to get out of Act 47 in 2018.

That probably may never reach fruition. In fact, part of it concerning tax increases will create a nightmare for more higher-taxed residents and perhaps some businesses or industries that may elect to leave the city. Nobody would relocate to the city to pay higher property taxes.

 There is one big question that every elected official needs to consider and tell the truth:

“Do you think Farrell is a economically viable city or can become one, meaning it can rely upon a consistently increasing tax base to meet the costs of providing services to its residents?”

Everyone in Farrell and surrounding communities will be watching the decisions about the Act 47 plan.

But to us, Farrell getting out of Act 47 altogether is a dangerous option filled with uncertainty.