Aug 18, 2017 4 min read

Donora council met Thursday in a special session to discuss the budget shortfall the borough is facing and ways to address the problem, which could include layoffs.

Borough administrator John Bedner said the borough faces an estimated $100,000 deficit this year because of shortfalls in projected building permit fees and a lack of savings expected from LED street lighting.

Council member Karen Polkabla said none of the departments has spent more than what the council expected them to spend.

“It’s not that we are spending too much money. It’s that we are not going to be getting enough money coming in,” Polkabla said.

Bedner recommends council members vote to borrow the money needed for this year from the sewer fund. He said they will have to set a schedule to repay the loan, with interest, to the fund.

Bedner and Polkabla said it also is likely the borough will have to trim its workforce.

“From now until the end of the year, we are going to have to look at cutting back some people where we can,” Polkabla said, even though that’s not something borough officials want to do.

Bedner said the borough was expecting expansion in the industrial park, but since it didn’t happen, the $40,000 expected from building permits there fell through. He said the borough has roughly $58,000 tied up with LED lights that were installed to help save on energy costs. Officials were told the lights would save the borough 33 percent on street-lighting costs.

“We assumed at that time the LED lights were put in that we would recognize a savings from that. We don’t,” Bedner said.

He said it costs about $11,000 per month for the streetlights. Bedner suggested council look into the possibility of turning half of them off. He said if that is not a viable option, council could consider adopting a streetlight tax. Bedner estimates by turning half of the lights off, the borough could save as much as $5,000 a month.

Bedner said the Association of Boroughs has a free energy program called APPI that will evaluate the borough’s West Penn Power service for free and help determine if the borough can get cheaper rates. He said this evaluation would not include the streetlights.

Polkabla said council will set up a meeting with West Penn Power to see what the options are regarding lighting before making any decisions.

Bedner said the borough should be receiving $8,000 from a fire insurance escrow fund. He added the borough’s insurance carrier, CSD, could be asked to conduct a review of the borough’s policies, which are due to be renewed in November. The borough, Bedner said, might be able to cut costs by purchasing policies that do not go above legally required levels.

He said he also has plans to ask the team that did the borough audit for a meeting to discuss whether there are any areas where the borough can save money.

Tax collector Susan Vitalbo said council cannot raise the real estate taxes again this year because of the reassessment, but Polkabla suggested they should look into going to court for approval of an increase above the permitted 5 percent.

Bedner said council could raise taxes next year by another 5 percent, which would bring in an additional $24,000. It also could raise the occupational tax from $3 to $10, which he said would bring in about $14,000. An increase in the per capita tax could generate another $9,000, he said.

“We’re going to need to do this regardless, because we are going to need to come up with a schedule to pay back the loan,” Bedner said.

Bedner said the borough also owns many vacant properties that can be advertised for sale. Vitalbo said she will advertise them in her office, and Polkabla suggested placing the list on Facebook to spread the word.

Bedner said the borough also can take advantage of the state’s free early intervention program, under which third parties would come in and evaluate areas such as the street department and police department and advise council on what should be done.

“We need to do some things to curb spending now before the end of the year,” Bedner said.

He said one option might be to adjust the heating and cooling in the borough building. Bedner said although it might produce only minor savings, every bit helps.