Hazleton council comes up with 'package deal' to get money to pay workers
Updated On: Dec 06 2013 05:08:28 AM CST
Hazleton city council hastily put together what one official called "a package deal" Thursday night, putting in place a new fee affecting all property owners while moving to slice real estate taxes.
The dual council actions, both approved on 3-2 votes Thursday night, came during a sometimes raucous, often contentious meeting before a group of about 65 people -- at least one of who wore a holstered handgun.
Before the vote on the stormwater collection fee, several people told council they were unhappy with the prospect of having to pay the new levy and even more upset that Mayor Joe Yannuzzi was absent from the meeting.
One woman accused Yannuzzi of "scare tactics" for saying in the media that without the money from the fee, the city wouldn't be able to pay its workers for the final three weeks of the year and predicting that layoffs could extend "well into the new year."
City council built in the $500,000 in revenue it expected from the storm water fee when it approved the 2013 budget, but it never set the actual fee.
Officials are hopeful that the new fee ordinance will allow the city to borrow the money it needs to meet its payroll.
Steve Hahn, Hazleton's acting city administrator, told WFMZ.com after Thursday night's meeting, that he will begin approaching area banks on Friday to negotiate a loan called a "tax anticipation note."
He said he had no idea how long it might take to finalize the loan, but noted that one bank he approached earlier this week rejected lending the city any money.
"Contrary to what people believe, banks are not inclined to loan the city money," he pointed out
Hahn said he expects the city will be offered "60 to 70 percent" -- $300,000 to $350,000 -- of the half-million dollars in anticipated revenue from the storm water fee.
Sample maps included in Thursday night's agenda showed property owners in some residential zones paying anywhere from $8.80 to $17.55 for very small lots to $45 to $125 for lots that are a quarter-acre to six-tenths of an acre.
The maps showing zones with large lots used for businesses, strip malls and hospitals show fees of $45 to $3,750 and $210 to $4,700 and smaller lots with fees of $20 to $150.
After the storm water fee was approved, council president James Perry surprised some of his colleagues with a plan to cut property taxes in 2014 by .45 of mill.
He said this could be done by using $450,000 laying dormant in a sewer transmission fee fund to reduce the city's debt service. That would mean the average homeowner would pay $45 less in real estate taxes next year.
The fee is still being collected, Perry said, even though the city turned over its sewer system to the Greater Hazleton Joint Sewer Authority in 2009.
Council members Jean Mope and Jack Mundie, who voted against the new storm water fee, were angered at not being briefed beforehand by Perry about the $450,000.
"It seems our sewer fund has been a cash cow," Mope said, adding, "The problem is, we never know where we really are [financially]."
She wondered why the money could not have been used as collateral for a bank loan to pay city employees, and said council "is rushing into" Perry's proposal without scrutinizing it.
However, Perry's idea to drop the debt service millage was approved with the support of member Kevin Schadder and council vice president Keith Bast, who said it was part of "a package deal."
Robert Moore, of the accounting firm Dennis R. Moore & Associates, will make sure council can use the money to reduce its debt service.
Hazleton's proposed 2014 budget now stands at $8.52 million, with an overall property tax rate of 4.06 mills -- 3.12 mills for general revenue purposes, .85 of a mill for debt service and .09 of a mill for recreation.
Council has scheduled a vote on the budget for Dec. 19.
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