Home | About | Support | Follow us on Facebook

Budgeting for Bullies

Photo by Karolina Grabowska on Pexels.com

It’s budget time in Lower Saucon Township so let me fill you in on what’s been going on down at the old virtual Town Hall.

As I understand it, here’s how the schedule works. There’s a budget workshop meeting, which was held on Wednesday, October 28. That’s followed by the presentation of the 2021 Proposed Budget at a regular Council meeting which was held on Wednesday, November 4. The approved Proposed Budget is then open for public comment for 20 days. The Council approved publishing notice of the public comment period at its November 4 meeting. The approved Proposed Budget is now up on the Township website. I’m not quite sure when that 20 day period started or where that notification gets published. When I find out, I’ll let you know. Then, sometime after the comment period, the Council votes on the final budget for 2021. According to Ms. Huhn, it’s likely this would be at the December 16 Council meeting.

Why would you care about this timeline? Well, I’m thinking there may be some residents who want to make some comments about some of the particulars in this budget.

Budget Details and the Cliff Notes Version

On Friday, November 13, 2020, the Morning Call published a detailed article on the Lower Saucon budget written by Christina Tatu. If you can’t access the article because of the Call’s paywall, here are the highlights:

  • The general fund budget is $8.53 million. The total budget is $11.3 million.
  • The proposed budget reduces real estate taxes from 6.39 mills to 5.14 mills, representing a 1 mill reduction in real estate taxes and a .25 mill reduction in the fire tax
  • The township has about $12 million in cash reserves
  • The township Council added an addendum to the budget that makes funding of the township’s two fire companies dependent on their successful completion of a merger by arbitrarily prescribed dates in 2021

Let’s take a look at some of the items in more detail.

Real Estate Tax Reduction

Obviously for most Township residents, the reduction in the real estate tax is the good news of the day. And frankly, any township that’s holding almost a year and half worth of revenue in reserve is not collecting taxes; it’s hoarding money. So returning some of it to Township residents seems a laudable thing to do.

Here’s some of the history. Because of the imminent closure of the landfill (in about 3 years), Council undertook an aggressive plan to pay down township debt so that when the landfill revenue disappeared, residents would not take as big a hit tax-wise to cover the loss. They finished paying off that debt in 2020, leaving the Township debt-free, an enviable position.

In the meantime, the landfill applied for an expansion, called the Northern Realignment, that will increase the landfill’s usable life by about 5 more years. Landfill revenue currently amounts to about $2 million per year, so its loss would represent about a 23% reduction in revenue. If the expansion is approved, that potential loss gets postponed for an additional five years. The combination of the aggressive debt-repayment action and the extension of the landfill life resulted in that significant cash reserve. Council’s plan to return some of that overage to residents seems to be prudent, and fair, policy.

There are two items in relationship to it, however, that I would like to bring to your attention.

First, the extension of the life of the landfill does not FIX the problem of its eventual closing. It only kicks the can down the road. The reduction in the real estate tax millage is only prudent if Council undertakes a concomitant commitment to township revenue development focused on creating new revenue within the next 5-7 years that will replace the landfill loss. There has been some discussion on various development possibilities in the Township but I get no sense of urgency about any of them. The 378 Corridor has been one possibility, but right now, many of those properties sit vacant, representing lost revenue. While I understand that the Covid-19 crisis has put dramatic strains on many of the types of businesses that populated that stretch, Council cannot become complacent about addressing opportunities along that Corridor. Planning now for the inevitable end of the Covid crisis would be an appropriate use of Council’s time rather than waiting until it’s a scramble to get projects up and running in time to meet the new deadline of the landfill closing.

Second, implementing a tax decrease is a very helpful tool for politicians running for re-election. But if the decrease now only means a significant increase later, then we’re just playing bait and switch. Mr. Banonis has already tried to put a political spin on the decrease. The Call quotes him as saying the tax decrease was “necessary to provide relief to our residents suffering from the continued effects of Gov. Wolf’s COVID shutdown.” This is a bit precious, to say the least. In presenting the budget, Township Finance Director Cathy Gorman made the point that one of the reasons that Lower Saucon will be ending the year in such a good financial position is that the Earned Income Tax receipts are, in fact, 11% higher than those received in 2019. I’m certain most other townships would like to be in such an enviable position and, while many of us have been adversely affected by the COVID crisis and will certainly be relieved to have the reduced tax burden, it doesn’t appear that the COVID crisis has taken a huge financial toll on residents’ incomes. In addition, many residents, especially those of us in older age groups and those with dangerous co-morbidities, are quite grateful to Governor Wolf for his ongoing responsible and effective leadership during the crisis that focused on preserving the health of the community.

The bottom line – the tax decrease, while prudent and appropriate at the moment, comes with possible challenges in the future. Keep that in mind and perhaps keep the pressure on Council to keep looking for new revenue opportunities.

Fire Tax Decrease

The other good news is the fire tax decrease of .25 mills. The fire companies have said that they are comfortable with that decrease and with the reserve cushion that has already been built up. Since this is a relatively new tax, it’s not surprising that it has taken a few years to figure out what the proper level of taxation is to guarantee funding.

The Budget as Cudgel

Which brings us to the whole issue of funding for the fire companies and the addendum that was added to the 2021 budget to predicate the funding levels on whether the two companies can achieve a merger by the Council’s pre-determined timelines.

Here’s some history as I understand it. The township at one time had 4 fire companies: Leithsville, Se-Wy-Co, Southeastern and Steel City. Leithsville and Se-Wy-Co merged to create Lower Saucon Fire Rescue (LSFR). LSFR then absorbed Southeastern and maintained the name Lower Saucon Fire Rescue. The final merger is between Steel City and LSFR. All of this has taken place over the span of several years.

Also, at some point, based on some financial skullduggery that occurred at a fire company that is not part of the Township, the Township imposed a set of requirements on how the fire companies needed to report their finances in order to qualify for Township funding. At the beginning of this year, there was some attempt by Council members to tie some additional strings to the funding for 2020. I was puzzled at the time at the level of acrimony between the Council and the fire companies’ representatives. Mrs. deLeon and Mrs. Stauffer raised objections to what they perceived as an attempt to change the rules for the release of funding at the 11th hour and no changes were made.

Since then, several Council members have apparently become even more frustrated about the length of time that the last merger is taking. Mrs. Yerger, Mr. Banonis and Mr. Carocci have all expressed annoyance and irritation with the slow pace of the consolidation. At the October 7 Council dumpster fire that passed as a meeting, Mr. Carocci presented three motions during the reports period of the agenda (which means the motions were not on the publicly available agenda) requiring that the fire companies meet arbitrary deadlines to complete the merger or else face the reduction or possible elimination of funding during the 2021 budget year. Over the objections of Mrs. deLeon and Mrs. Stauffer, the motions passed.

The Approved Draft Budget includes those requirements. If you look at the section, Fire and Emergency Services, on page 21 of the budget explanation on the Township website, you’ll see a clever little asterisk next to the title. This takes you to end of the budget report and the restrictions that were passed at that October 6 council meeting. I’ll reproduce them here so you don’t have to go looking.

Motion for the Township staff to prepare a proposed 2021 budget that will allocate $150,000 to Lower Saucon Fire & Rescue and $50,000 to Steel City Fire Company to assist in the funding of their operations which payments will placed on the June __, 2021 agenda for approval. If the April 1st deadline is met, then payment may be authorized at the next regularly scheduled Council meeting. These amounts maintain the 2020 Township funding levels. However, none of the allocated funds in the 2021 budget will be payable unless the following condition is met:

Lower Saucon Fire & Rescue and Steel City Fire completely merge their operations and become one legally merged fire company to the satisfaction of Township Council and under Pennsylvania and Federal Law by April 1, 2021.

If by April 2, 2021, Lower Saucon Fire & Rescue and Steel City Fire have failed to completely merge their operations and become one legally merged fire company to the satisfaction of Township Council and under Pennsylvania and Federal Law the allocated funds will be reduced by 50% at that time. Meaning – Lower Saucon Fire & Rescue would only be eligible for $75,000 and Steel City Fire $25,000 in Township funding in fiscal 2021.

If by May 1, 2021, Lower Saucon Fire & Rescue and Steel City Fire still have not completely merged their operations and become one legally merged fire company to the satisfaction of Township Council and under Pennsylvania and Federal Law the remain allocated funds in will be reduced by an additional 50% at that time. Meaning as of May 1, 2021 – Lower Saucon Fire & Rescue would only be eligible for $37,500 and Steel City Fire $12,500 in Township funding in fiscal 2021.

If by June 1, 2021, Lower Saucon Fire & Rescue and Steel City Fire have failed to completely merge their operations and become on legally merged fire company to the satisfaction of Township Council and under Pennsylvania and Federal Law. Lower Saucon Fire & Rescue and Steel City will not be eligible for any of the aforementioned Township funds during fiscal year 2021.

Scott Krycia, President of LSFR, presented a very cogent and direct comment to this portion of the budget at the budget workshop meeting on October 28. In it, he highlighted the difficulties that the COVID crisis has presented in accomplishing a merger that involves multiple levels of both county and state approval to be completed. He also pointed out that all of the fire companies’ personnel are volunteers, who are attempting to accomplish all of this in their spare time as they and their families also deal with that COVID crisis that Mr. Banonis likes to use to justify all sorts of things and as they continue to fight fires and provide rescue services. His quite reasonable plea was that Council reconsider the deadlines and work out ones that are mutually acceptable to the fire companies and the Council. His plea fell on deaf ears. It was on the basis of this particular issue that Mrs. deLeon voted against approving the budget at the November 4 meeting. Mrs. Stauffer was absent.

Mr. Krycia didn’t bring up this other point but I will. I’m always suspicious of weasel wording like “to the satisfaction of Township Council.” What exactly does that mean? Could the merger be in accordance with “Pennsylvania and Federal Law” and still not “satisfy” Township Council? That’s pretty vague wording that could cover a multitude of sins. So far this year, it would seem that Township Council is never satisfied with anything that the fire companies propose.

I’ll also point out that Mr. Krycia was required to explain his rather complicated position in the pathetically laughable three minutes of public comment time that he was allotted, a subject I’ll take up in a future blog.

Ms. Tatu, in her Call article, reports that Mr. Krycia believes that if the LSFR loses funding, the fire company might have to take measures that would mean longer response times. Frankly, if I were LSFR and Steel City and I were treated with such disrespect to the point that Council wouldn’t even have a civil discussion about the real barriers to meeting arbitrary deadlines imposed by the Council, I’d just shut the fire companies down. I’d also point out that I’m not aware that any of the three Council members who supported these actions have any direct experience in managing a fire company merger whereas the leadership of LSFR has been through this process at least twice in recent years. Whose experience would you depend on?

It all seems to be a gigantic power struggle that certainly doesn’t end up benefiting the Township, especially in a time when volunteer fire companies are having more and more difficulty finding volunteers. It’s a tough job, time consuming and physically demanding, and volunteer fire personnel are tremendously dedicated. If the end result is that Lower Saucon has to transition to a paid fire department, you can kiss that 1 mill tax reduction good-bye.

Make Your Voice Heard

What can you do about all this? Speak up. Send comments to the Township Council. Here are their email addresses.

  • Mrs. Yerger – syerger@lowersaucontownship.org
  • Mr. Banonis – jbanonis@lowersaucontownship.org
  • Mrs. deLeon – pdeleon@lowersaucontownship.org
  • Mr. Carocci – tcarocci@lowersaucontownship.org
  • Mrs. Stauffer – k.stauffer@lowersaucontownship.org

Or give the township office a call at 610-865-3291 and ask them where comments can be registered.

This is especially important if you are NOT part of either of the fire companies or related to their members. I’m sure the fire companies can mount their own defense, but if you find these budget restrictions imprudent and counter-productive, let council members know that it’s not just a fire company thing. This impacts all of us.

Next Township Council Meeting – Wednesday, November 18, 7 PM

Next Township Elections – Primary: Tuesday, May 18, 2021. General: Tuesday, November 2, 2021

Thank you for reading Saucon Shenanigans!  While this will remain free to readers as a public service, if you find what I write valuable and would like to support this work, you can make a contribution by clicking the "support" button below.  Any support will be greatly appreciated.