SHENANDOAH — The borough council tentatively adopted at Tuesday’s special meeting its 2016 operational budget that includes a 2-mill increase in real estate taxes.
The tentative budget was accepted in a 4-2 vote, with council President Donald E. Segal, Vice President Leo Pietkiewicz and council members Paul J. Holland and Rosanne Mychak voting in favor. Voting against were councilmen Jeffrey Zubowicz and Ronald C. Mickalowski. Councilman Robert Kulpowicz did not attend.
If the budget is formally approved as is later this month, the real estate tax will increase from 25 to 27 mills. The overall assessed valuation of property in the borough is $33,100,925. Each mill should bring in $33,100 in tax revenue, though the collection rate is about 80 percent.
The median property value in Shenandoah is $7,720. The average increase in taxes per home will be $15.44.
Segal explained parts of the budget before a vote was taken. The $3,242,780 budget ($3,120,220 in 2015) includes the following revenues:
• General fund — $1,973,890 ($1,915,885 in 2015)
• Sewer revenue fund — $1,101,600 ($1,046,750 in 2015)
• Liquid fuels — $167,290 ($157,585 in 2015)
“In this budget into the general fund, we are discussing a two-mill tax increase, which will give us a $51,000 increase, provides a mill dedicated to a demolition fund, projects a future cash balance, provides funding for a new police vehicle, and meets obligations of uniform and non-uniform bargaining agreements,” Segal said.
Segal continued with the synopsis of the budget, speaking of the sewer revenue fund rate increase that will help with continued capital improvements at the treatment plant, provide funding for a new sewer department vehicle and meets obligations of collective bargaining agreements.
He also said that there is an increase in state liquid fuels funding for 2016, and money is budgeted for the purchase of a new street department vehicle.
Pietkiewicz motioned for the tentative adoption, with Mychak providing the second. Before the vote, Michalowski asked if there is a rollover/surplus expected in this year’s operations, with Segal replying $35,500.
“I’m definitely opposed to this tax increase,” Michalowski said.
In a separate vote of 4-2, the borough council increased sewer rates for next year by $3 per month, $9 per quarter, for the financially struggling Shenandoah Sewer Authority. In 2015, sewer customers saw an increase of $6 per month, $18 per quarter.
After the meeting, Segal said, “The money is tight. Very tight. It took some time, but it looks like we’ll end the year (2016) with a $25,000 cash reserve.”
Segal said the tentative budget will be forwarded to the state Department of Community and Economic Development and the Pennsylvania Economy League for their review. Shenandoah is involved in the state’s Early Intervention Program in reviewing the borough’s operations and work toward stabilizing the financial picture, with the annual budget being a very important aspect.
Segal said that the 1-mill increase dedicated to the demolition fund will help establish an emergency account to deal with blight issues that need to be addressed quickly. The 1 mill will raise about $26,000 at the 80 percent tax collection rate.