SUGARCREEK, Pa. (EYT) — Heading into Wednesday’s Sugarcreek Borough council meeting, some questions appear to remain over the borough’s budget.
Rocky Grove Fire Chief Jeremy Simcheck is unhappy with the budget believing that despite a one mill tax increase that will generate an additional $165,241.00 for the borough, that money will not be used for the police department and fire departments as he believes was promised.
“As many of you know, borough council was looking to cut the police department by about $90,000.00 under the premise that the fire departments were receiving an additional $30,000.00,” Simcheck wrote in a Facebook post on December 15.
“Many of our outstanding citizens came to numerous council meetings to express their support of the (police department) and (fire departments). In fact, your outspoken support led to council raising taxes by one mill ($165,241). Everyone thought this would go to support the public safety in the borough.”
“Unfortunately, that is not the case. They are using almost $65,000.00 to pad the existing budget. [This also includes a $6,044 decrease in the (police department) budget.] The remaining is going back into the ‘Rainy Day Fund.’”
A thorough investigation of the budget by EYT Media revealed that the revised proposed Sugarcreek Borough budget has earmarked $420,466.00 for the police department which is a little over $6,000.00 less than last year’s estimated budget of $426,510.00 but still more than the original 2017 budget proposal.
Part of the reason the budget is around $6,000.00 less than last year is because of the amount of money the borough needs to contribute to the pension retirement pay.
In 2016, the pension retirement pay was earmarked to receive $40,915.00 In 2017, the same pension retirement pay is earmarked for $30,391.00 or over $10,000.00 less than this year meaning the remainder of the police budget is up $4,480.00. The vast majority of the increase comes in the form of health/hospitalization insurance which was budgeted for $37,900.00 in 2016 ($2,600.00 in a Health Insurance Exchange and $35,300.00 in Health/Hospitalization Insurance) but is estimated to be $40,600.00 (all in Health/Hospitalization Insurance) in 2017, a difference of $5,300.00 — monies are saved in other places like full costs.
According to borough manager Joe Sporer, any health care numbers in the 2017 budget are just estimates.
“Our insurance provider has told us to expect an increase anywhere from 10 percent to 40 percent,” Sporer said. “I budgeted on the conservative side at a 15 percent increase across the board not just in the police department. It could fall below that at 12 or 13 percent, or it could be above that at 17, 18, or 20 percent. We won’t know until March or April. That is when the insurance rates are set.”
Meanwhile, the 2017 budget lists $51,780.00 for the fire department with $28,780.00 of that coming from the Commonwealth. That is the same as last year with $23,000.00 coming out of the borough to pay, by law, for workmen’s compensation ($17,000.00) and insurance on the fire vehicles ($6,000.00).
However, in another section in the budget called “Community Development, Contributions to non-government,” there is a 150 percent increase last year from $20,000.00 to $50,000.00.
According to Sporer, this is money going directly to the borough’s two fire departments, Rocky Grove and Reno. The $30,000.00 increase was in the original budget proposal that cut money from the police department and didn’t increase after the millage rate was raised one percent to restore the police budget.
Simcheck’s contention is that both the police department and fire departments should be seeing more money from the tax increase
“As a borough resident and taxpayer, I am outraged and hope many of you are, too,” Simcheck’s December 15 Facebook post said. “We were told there was an $87,000.00 ‘hole’ in the police budget. This was a lie. We were threatened with being a ‘financially distressed municipality’ even though we have over $700,000.00 in a reserve account. This was a scare tactic. Now, every resident who came out in support is being ‘slapped in the face’ with a tax increase that can be used to pad salaries, pay additional vacation time and pay for other unnecessary items. The rest goes into a savings account, rather than help our struggling fire departments.”
According to the 2016 budget available online, Sugarcreek Borough was running a nearly $60,000.00 deficit in that budget ($59,657.00) while the proposed 2017 budget would give the borough a $40,980.00 surplus if insurance cost increases hold at 15 percent or less.
Sporer said he was directed by council not to run a budget deficit this year and thus the reason cuts were made in the budget, including from the police department, in the original budget that was presented. At the same time, while those cuts were being made, council also instructed Sporer to give the fire departments an additional $30,000.00.
The new budget, with the tax increase, allowed the borough to put the money back into the police department and possibly recoup some of the $59,657.00 that had to be paid out of the general fund from last year, although that total is only an estimate.
“As of October 31, we were running about 6 percent over budget for the year,” Sporer said. “Now that can change between then and the end of the year. We will know once the year is over.”
If Sugarcreek Borough continued to deficit spend like in 2016, the borough would be able to go another four or five years before in ran out of money, Sporer said.
Five years of running a deficit of $60,000.00 would cost the borough an additional $300,000.00.
“It’s good policy to have a balanced budget,” Sporer said.
Budget figures show an increase in salaries of around 2.5 percent or around $20,000.00 from the general fund, which is required by contracts according to Sporer and an increase in health insurance costs of around $33,000.00.
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