Approximately 20 West Kittanning residents attended last week?s Borough Council meeting amidst advertisements that Council would vote to increase taxes and borrow a $450,000 line of credit to finance the new borough building. After many residents disputed, both were approved 4-1.
by Jonathan Weaver
West Kittanning Borough?s new borough building will be financed not only by a tax increase, but also by a bank loan.
Last week, Borough Council members voted 4-1 to borrow a $450,000 line of credit from F&M Bank to help finance the new building, which is to be built in place of the current building (the former West Kittanning Elementary School) on Arthur Street.
Council Member Ed Morris voted against the motion.
?I think it?s too much money and we don?t need a tax increase,? Morris said.
Auditor Bob Venesky began an hour-long public comment period by asking Council if they knew the loan total payback. He said he did some research of his own.
?I got the amortization chart on the Internet, and according to my figures, the loan taken out for a full-term, it will be a payback of $641,000 ? the first 12 months, interest only would be $1,368.75,? Venesky said.
More than 220 payments of more than $2,500 would be made following such.
Council President Cliff Neal responded to many of the resident questions concerning the building plans and reiterated its worthiness. He also announced Council may not have to borrow the full amount.
Council President Cliff Neal said the financial figures were presented before the proposal was advertised and asked if Venesky calculated in insurance or heating and cooling savings ? which he did not.
But, Venesky said the savings would not be enough not to warrant another tax increase in three years. He said expenditures during the past three years have rose by a total of more than $150,000.
Solicitor Chase McClister and other council members said the total credit amount might not need to be realized.
?Council may not need to draw down that much,? McClister said. ?What the State requires us to approve is a worst-case scenario, so they had to borrow the total amount.?
Jim Sobiski of Southern Avenue also brought up several controversial payments for street department goods, which he felt might be unnecessary.
?(Council members) are spending money like crazy ? nobody?s watching these bills!,? Sobiski said.
Neal said each bill will be reviewed before they are paid by Secretary Carly Cowan.
In addition to the loan, Council voted 4-1 ? with Morris again opposing ? to enact a 1.25-mill tax increase. The increase brings taxes to 8.25 mills, or an extra $50-75 per year.
The loan was contingent on at least a one mill tax increase. Finance Committee Member and Councilperson Nancy Capone said the taxes were further raised so the General Fund was not completely depleted at the end of the calendar year.
As was said last month and prior, Neal reiterated his defense for the tax increase, comparing the millage rate to Kittanning Borough (27.5 mills) and Ford City (16.5 mills) and said the new one-story building will be able to be used by many civic organizations and residents.
?I think the residents of West Kittanning will see this as a jewel, a bright spot in West Kittanning,? Neal said.
Venesky said he has spoken with senior citizens who utilize the current borough building and would rather have kept paying seven mills in taxes .
Diane Schrecengost asked if the new building was paid in segments rather than at once if taxes would remain the same.
Councilman Ken Trudgen ? who made the primary motions for the tax increase and line of credit ? responded.
?As far as breaking it down in two stages, I don?t know the difference in doing it now or doing it later. I?m not a big fan of putting off tomorrow what we can do today,? Trudgen said.
According to projections, it will require an estimated $60,000 to tear down the existing building ? including the removal of asbestos ? and the new building will cost $280,000
Jeanne Englert said Council was not willing to raise taxes last year when residents voted for full-time police protection, to which Neal responded.
?We have a police department ? we didn?t need a police department. We need a new borough building,? Neal said.
In other news, Council members approved advertisement of the proposed 2013 budget. With the tax increase, revenues and expenses are to balance out at $330,125.
Nearly $270,000 of revenue is thought to be gained by real estate and earned income taxes, while salaries and street lighting make up the greatest expense.
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