WILKES-BARRE — The 2018 budget proposed by Mayor Tony George forgoes a property tax hike, but relies on a wage freeze for most of the city’s 273 employees and significant increases in parking and garbage fees to balance the $49.2 million spending plan.
The draft budget presented Thursday swaps the city-issued garbage bags for a more expensive sticker program and doubles the hourly parking rate at meters to $2 to raise nearly $900,000 in additional revenues. And except for the police who have an annual 3 percent raise in their contract that runs through the end of 2019, employee wages will not change.
George said contract negotiations are going well with unions representing City Hall and Department of Public Works employees. The city is still awaiting an arbitration decision with firefighters. But the mayor maintained he’s not ruling out layoffs to avoid hitting property owners with a tax increase for a second straight year.
“Nothing’s off the table,” George said. “Like I said, if there’s a 3 percent raise, we’ll have to make that up somewhere because I’m not going to raise taxes.”
The draft plan that will go to city council for review and approval is a 4.5 percent increase over this year’s $47.1 million balanced budget that included a 19.7-mill property tax hike.
A mil is a $1 tax on every $1,000 of assessed property value. The city’s millage rate is 141.33 mills. The city is the only municipality in Luzerne County that uses its own assessments. All the others use the county assessments.
The city is on track to end the year with nearly $700,000 cash on hand, largely due to guidance from the PFM Group, the Philadelphia-based financial adviser that’s assisting with short- and long-term planning. A PFM-engineered bond deal to restructure the debt service improved cash flow and kept the city from declaring distressed status with the state.
The bond deal estimated to cost $71 million over the long term also provides $4.4 million for reconstruction of portions of the Solomon Creek wall and covers the city’s more than $1 million in unbudgeted costs for cleanup after the March blizzard.
“That was factored in on the refinancing,” the mayor said.
George noted he followed the advice of PFM to hike the garbage and parking fees. “Unlike a property tax increase, these proposals are user based and were strongly recommended by PFM,” he said.
Under the proposed budget, residents would pay $2.50 per sticker, 25 percent more than the per-bag cost of $2. Parkers would be hit harder with a 100 percent increase to $2 an hour.
“Actually, the meters are there so people can go in, get something real quick, half hour or an hour and leave,” George said.
The hike aims to discourage people from feeding the meters and taking spots from shoppers downtown. It’s meant to encourage people to use the parking garages that cost between $1.50 to $3 an hour, the mayor said.
“This way, there’ll be more in-and-out traffic. It will be better for downtown businesses,” George said.
City council chairwoman Beth Gilbert attended the mayor’s budget address and said she would reserve judgment on the meter hike.
“I do want to talk to some business owners and see what their take on it is,” she said.
Gilbert, however, had reservations about the garbage fee hike.
“Speaking as a homeowner, the stickers are going to cost a lot more money for me. I think this is definitely going to increase the burden on homeowners,” she said.
The higher cost could lead to illegal dumping, Gilbert added.
The garbage sticker fee is budgeted to raise an additional $400,000 and boost the revenue-line item to $1.6 million from $1.2 million. Likewise, the meter hike is budgeted to bring in an additional $475,000, increasing revenues to $1 million from $525,000.
The sale of city-owned property is budgeted to bring in an additional $910,000. The revenue-line item increases to $1.1 million from $200,000 this year.
The mayor said the city anticipates closing on the sale of the former First National Bank on Public Square to developer George Albert to accommodate the growth of the high-tech firms downtown.
“Hopefully, next year it sells,” the mayor said.
The city is still waiting to hear from Berkshire Hathaway Guard Insurance about its interest in the former Hotel Sterling property for a new headquarters. The downtown site on the corner of West Market and North River streets has been “getting some interest” from others, the mayor noted.
Combined, the garbage and parking fees and property sale make up approximately $1.8 million of the $2.1 million in additional revenues budgeted next year.
Pension payments and a more than 6 percent increase in health care costs helped push expenses higher. Debt service increases slightly to $5.3 million from $5.2 million.
The city’s contributions to police and fire pensions will be lower next year. But the non-uniformed pension cost will skyrocket to $1.8 million from $0. The city received a credit this year that has to be repaid, the mayor explained.