December 18, 2006, Special Council Meeting

Summary of Action Taken

Minutes

The special meeting of Clarion Borough Council was held on December 18, 2006, in the Clarion Borough Offices.

President Wilshire called the meeting to order at 8:00 a.m.

Councilmembers present included Mr. Zerfoss, Mr. Herman, Ms. Leonard, Ms. Vavrek, Ms. Moore, Mr. German, and President Wilshire. Ms. Freenock, Mr. Stutzman, Mr. Ragon, Chief Hall, and Mayor Stroup were also present.

Citizen Comments: There were none.

Administration: After recommendation by Susquehanna Group, President Wilshire stated Council was presented with Resolution #2006-240, a Resolution that all wage taxes withheld on behalf of individuals working within the Borough, regardless of residence, be remitted to the Borough tax collector on a quarterly basis and asked for a motion.

On a motion by Ms. Moore with a second by Ms. Vavrek to approve Resolution #2006-240 that all wage taxes withheld on behalf of individuals working within the Borough, regardless of residence, be remitted to the Borough tax collector on a quarterly basis.

President Wilshire stated the Borough has an elected real estate tax collector and inquired legally if there’s any problem adopting this Resolution.

Ms. Freenock commented the Borough’s allowed to do this.

The motion carried with a vote of seven yea.

On a motion by Mr. Herman with a second by Ms. Vavrek to adopt the 2007 Budget and Tax Ordinance #2006-742.

President Wilshire asked for any discussion.

Mr. Zerfoss questioned again if the Borough has a letter on file from DCED that the Borough owes them money.

Ms. Freenock stated no. The financial review that was done by the Comptroller’s Office was not complete, and they are recommending to DCED that a full blown audit of CDBG be completed. The Borough’s waiting for a decision from the grant manager and the supervisor of the CDBG Program as to how they’re going to proceed. Ms. Freenock anticipates the Borough will have to pay some funds back.

Mr. Zerfoss doesn’t object to the 1½ mill tax increase that will pay normal operations of the Borough to take care of the obligation of the employees’ contracts. However, the remaining 3½ mill increase that the auditing group, financial consultants, and Solicitor feel the Borough will have to pay back is not right. Mr. Zerfoss stressed the Borough doesn’t have anything stating the money will need to be paid back.

Mr. German pointed out part of the mill increase is for Parks and Recreation, which Mr. Zerfoss opposed last year. Mr. German feels it’s more than just paying back money. The EMS Tax was grossly over estimated 2 years ago and it plays a role in this. That was a budget Mr. Zerfoss voted for 2 years ago.

Mr. Zerfoss commented normal operation is acceptable. At the Work Session, Mr. Zerfoss stated another full-time police officer is necessary for safety reasons for both the citizens of the Borough as well as the current officers. This is good money, because people can see what the Borough’s doing. Mr. Herman mentioned at the Council Meeting that hopefully next year taxes could be reduced by 3½ mills. Mr. Zerfoss doesn’t think Council’s too sure on what is happening with the EMS Tax nor will he/she know next year. Mr. Zerfoss stated Council won’t have to worry about dropping that amount if it’s not approved now.

Ms. Moore inquired how Mr. Zerfoss proposes to pay back the money when it’s requested.

Mr. Zerfoss stated the Borough will take care of it in March/April when the tax money comes in.

Ms. Moore pointed out Clarion Borough doesn’t have any rollover to cover expenses from January to that time.

If DCED wants their money, Mr. Zerfoss reported the Borough won’t have the money to pay back.

Ms. Moore and Ms. Vavrek agreed that’s the whole point.

Mr. Zerfoss suggested DCED can put a lien against the Borough of Clarion. Once Clarion Borough decides to sell, they’ll get their money. Voting to raise taxes on hearsay of what the Borough may have to pay back is not sound government either.

Mr. German asked Ms. Freenock for her opinion.

Not being finished, Mr. Zerfoss stressed the bottom line is raising taxes on something that hasn’t taken place is wrong.

President Wilshire interprets the Borough has expenses going into next year. Because the EMS Tax didn’t come in, there were transfers made that amount to roughly $100,000 that have to be repaid. In good faith, President Wilshire stressed they have to be repaid. At the last meeting, discussion took place that there is a possibility of repayment of fines regarding some of the CDBG money over a period of years, and it’s not clear on how much that could be at this point. Hopefully, the Borough can negotiate, because President Wilshire perceives the State was lacking in reviewing the grants over a period of time. However, the $100,000 or roughly 3 mills needs to be paid. There’s still a possibility of something else out there.

Mr. German recalls Mr. Zerfoss voted 2 years ago to approve a budget that originally was looking at a 3-mill increase and then the EMS Tax came along and Council decreased millage by 1 mill. This was done because Council anticipated the EMS Tax was going to bring in x-amount of dollars, which didn’t happen. Two years later, Mr. German stated the Borough’s repaying some of that money that did not come in.

Ms. Freenock thinks Council looked at 3 proposed 2007 budgets; the worse case scenario carried a 10 mill increase, which included everything that the Susquehanna Group, Solicitor French, and she felt would need to be repaid. However, some of the CDBG money was deducted, and the transfers that are going to be repaid with this 3½ mills are for the pension fund, 2005 CDBG money, and to repay the deficit, which the Borough has been operating at for the past several years as Councilman German indicated. Real money was spent and must be repaid so the books balance. Councilwoman Moore pointed out there was no rollover, which is true. That’s the reason the Borough had to take a Tax Anticipation Note last year and the reason why it’s being done again in 2007. Ms. Freenock stated revenues will not come in until the spring when taxes start to come in. If the 3½ mills are removed, Ms. Freenock reported the budget doesn’t contemplate repaying anything. The pension money needs to be paid back. There will be fines, penalties, and interest.

Mr. Zerfoss verified the 3½ mills pays back monies owed to the pension and CDBG.

Ms. Freenock commented it doesn’t include all of the CDBG.

Since the EMS Tax didn’t come in, President Wilshire informed everyone transfers were made in order to pay the bills from sources that probably shouldn’t have been touched. That’s the money being repaid at this time with that 3½ mills. Hearing no further discussion, President Wilshire asked for a roll call vote.

The motion carried after the following roll call vote: Mr. Zerfoss, no; Mr. Herman, yes; Ms. Leonard, no; Ms. Vavrek, yes; Ms. Moore, yes; Mr. German, yes; and President Wilshire, yes.

For informational purposes, Ms. Moore stated the Borough always had a rollover to get from January through March when she was on Council through the 80’s. When Ms. Moore got back on Council, that was no longer the case. Ms. Moore doesn’t know what happened between that time and now, but no one planned for a rollover. Ms. Moore thinks Council really needs to strive to do that to keep the Borough on level thinking.

On a motion by Ms. Vavrek with a second by Ms. Leonard, re-appointing Richard Hulings to a 3-year term on the Zoning Hearing Board to expire at the end of 2009 and Ron Perry to a 4-year term on the Planning Commission to expire at the end of 2010, was carried with a vote of seven yea.

President Wilshire announced the Borough needs replacements for a 3-year term on the Police Pension Committee, a 3-year term on the General Employees’ Pension Committee, and a 4-year term on the Planning Commission. In addition to asking the media to note these vacancies, if any Councilmembers have any suggestions, he/she should contact the Borough Office.

Ms. LaVan backed up to the Resolution approving the 2007 Budget.

President Wilshire stated that was combined with adoption of the 2007 Budget and Tax Ordinance.

Downtown Committee: There were none.

Public Works: Mr. Zerfoss reminded everyone Christmas trees can be disposed at the Public Works Building in the designated location.

Public Safety: Mr. Herman stated the Committee, Mayor, and Chief have worked quite awhile in reference to replacing one of the police vehicles. Council was given a specification sheet on the vehicle. The Committee also wants a 3-year, 100,000 mile warranty, which will save money in the long run. Mr. Herman commented the Committee wants to open this for bids with these specifications or substitutions that are equal to what’s listed. Also, the Borough would have the right to reject any or all bids.

On a motion by Mr. Herman with a second by Ms. Moore to advertise to accept bids for a 2007 Ford Crown Victoria police car.

President Wilshire asked how Council got this bid.

Mr. Herman commented this is a Piggyback bid. There was a very strong interest to bid this vehicle locally. It appears people felt they could be more than competitive than what Councilmembers have in front of him/her.

The motion carried with a vote of seven yea.

Mr. Herman isn’t sure how quick the Borough can receive bids but doesn’t want to wait until February’s Council Meeting. Therefore, if bids are received the week after the January Council Meeting, then the Committee may request a Special Council Meeting to award it. The officers need this vehicle.

Housing and Zoning: Ms. Vavrek had nothing to report.

Recreation: Ms. Leonard had nothing to report.

Mayor’s Report: Mayor Stroup thanked Mr. Herman for working with the Chief on getting the car bid done. Also, Mayor Stroup mentioned it’s good to go back to the more traditional black and white vehicle.

Manager’s Report: Ms. Freenock had nothing to report.

Old Business: There was none.

New Business: There was none.

Correspondence: There was none.

On a motion by Mr. Herman with a second by Ms. Vavrek, the Special Council Meeting was adjourned at 8:26 a.m.

______________________________

Nancy K. Freenock

Borough Secretary