Pottstown looks to northern city's success

POTTSTOWN — The City of Easton's experience with a state program designed to make long-range financial plans offers a good example for what Pottstown might expect by participating, according to Borough Council Vice President Greg Berry.
Berry is among those on council who believe a vote Monday should engage the Department of Community and Economic Development to help select a financial consultant to come into Borough Hall to perform an in-depth analysis of the borough's finances and operation and help to provide a long-term financial plan.Last winter, the borough applied for and received a $30,000 grant from DCED to participate in the Early Intervention Program, but it has so far failed to follow up on the grant, which also requires a matching $30,000 commitment from the borough.Wednesday night, Berry shared a copy of the draft report Easton received in an attempt to illustrate to council members what sort of information Pottstown would obtain by participating."Our situation is not far off from theirs," Berry said.A copy of the report provided to The Mercury revealed there are many similarities between the economic challenges faced by Pottstown and Easton.Looking at Easton's financial condition in 2006, the report observed that "Easton has faced many of the same cost pressures as other older cities in the Commonwealth, with expenditures growing faster than revenues, from a fairly stable population and employment base."Further, according to the report, "growth in Easton trails that in other parts of Northampton County, despite its strategic location within a bi-state region of strong growth," much the way economic growth in Pottstown, strategically placed at the hub of a tri-county region, trails other parts of Montgomery County, one of the state's wealthiest counties.Much like Pottstown, "Easton's property tax rate is already the highest among Northampton County municipalities and its combined local, school district and county rate is second highest. Further reliance on the property tax as a source of new revenue may be limited," the report's executive summary warned.Easton, like Pottstown, is also "home to a large non-profit educational institution and much of Easton's 4.3 square-mile area is not subject to property taxes."In addition to The Hill School being off Pottstown's tax rolls, the borough is also home to many churches and county-funded social service agencies that do not pay property taxes.Also like Pottstown, "labor costs (especially benefits) have grown at a level above the rate of inflation" in Easton, the report observed.And, also like Pottstown, "the city has already undertaken many traditional responses to fiscal pressure," which include increased fees and increased property taxes."The city's real estate millage now exceeds those levied by neighboring municipalities by a considerable margin," the report said of Easton. "Continuing to raise property tax rates may place the city at a competitive disadvantage relative to its suburban jurisdictions."The plan offered by the consultants hired by the Early Intervention Program sought to find and provide ways for Easton to meet its increases expenditures with revenues other than constantly increasing property taxes.The city had already beaten the consultants to some of the punch, implementing new revenue streams in 2006 that included a "mechanical devices tax" and a police towing contract as well as eliminating 12 positions, increased employee co-pays for medical expenses and off-loading its weights and measures function to the county, the report noted.A four-stage plan was recommended to help Easton close its projected budget gap in the coming years.It included a change to the city charter allowing it to raise the city's share of earned income and deed transfer taxes.The second stage called for negotiating "payment in lieu of taxes" from local colleges and non-profit organizations; raising the per capita tax, implementing a parking lot tax, adding corporate sponsorship and advertising programs and increased fees for services.In the third stage, the city was advised to restructure ownership of the water system, eliminate pension and health insurance contributions for council members, establish performance benchmarks and service efficiency standards, introduce a yard waste recycling program to reduce landfill tipping fees, implement a capital management program and even implement a fire alarm registration fee.The final stage called for a one- or two-year wage freeze for all city employees, a 20 percent reduction of overtime expenses and reduce health care premiums through expenditure caps and wellness programs that would reduce the need for medical care."The final approach would balance the city's series of deficits without the need for a property tax increase at all," the report predicted."The recommendations laid out in this multi-year plan are designed to help the City of Easton become more efficient, more accountable and more effective — fundamental conditions for the city's financial sustainability and growth," the report concluded.Berry, who heads up Pottstown Borough Council's finance committee, has strongly endorsed participation in this program."We are unfortunately always catching up on prior year's issues, but now is a good time to move forward with long-term planning," Berry said Wednesday. "If not, we could be in a pretty bad situation."

Pottstown Mercury - 08/10/08 - http://www.zwire.com/site/news.cfm?newsid=19902519&BRD=1674&PAG=461&dept_id=18041&rfi=6