December 5, 2006, Council Meeting

Summary of Action Taken

Citizen Comments: None

Administration: Monthly Reports; Discuss Proposed

2007 Budget; Approve to Advertise

2007 Budget; Tax Ordinance Rates

Read, Followed by Approval to

Advertise Ordinance; Table of

Organization; EMS and Wage Taxes

Discussed; Authorize Repayment of

2006 TAN; Adopt Resolution to

Approved 2007 TAN; Set CDBG

Public Hearing; Permission to

Advertise 2007 Council Meeting and

Work Session Dates; Terms of

Various Boards and Commissions to

Expire

Downtown Committee: Christmas Activities Discussed

Public Works: Monthly Report; Traffic Signal at

Eighth Avenue and Wood Street

Discussed; Permission to Bid

Clean-Up Day Services

Public Safety: None

Housing and Zoning: None

Recreation: Meeting with Little League Repre-

sentatives in Re Park

Mayor’s Report: None

Manager’s Report: None

Old Business: None

New Business: Discussed Revenue Received

Whenever CAA Sold

Correspondence: None

Minutes

The regularly scheduled meeting of Clarion Borough Council was held on December 5, 2006, in the Assembly Room of the Clarion Free Library.

President Wilshire called the meeting to order at 7:00 p.m.

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

President Wilshire asked everyone to stand and recite the Pledge of Allegiance.

The minutes of the October 30, 2006, Work Session, were approved on a motion by Mr. Herman with a second by Ms. Moore. The motion carried with a vote of seven yea.

The minutes of the November 7, 2006, Council Meeting, were approved on a motion by Mr. Herman with a second by Ms. Vavrek. The motion carried with a vote of six yea, with Ms. Leonard abstaining due to being absent from that meeting.

Citizen Comments: There were none.

Administration: President Wilshire presented the appropriations for the month of December.

On a motion by Mr. German with a second by Ms. Leonard, approving the appropriations for the month of December, was carried with a vote of six yea with Mr. Zerfoss voting nay because he will not support the $255 payment to Attorney Strong.

President Wilshire also presented the Treasurer’s Report of Fund Totals, Budget Analysis, and Overtime Comparison Report for information purposes.

President Wilshire stated the next action to advertise the Proposed 2007 Budget and Tax Ordinance will be handled separately and asked for a motion to advertise the Budget.

On a motion by Ms. Vavrek with a second by Ms. Moore to give permission to advertise the Proposed 2007 Budget.

President Wilshire asked for any comments or discussion.

Mr. German inquired on the budget itself.

President Wilshire commented yes. Council will be voting to advertise it tonight and then a Special Council Meeting will be held to adopt it, which will probably be December 18th.

Reading the newspapers, Mr. German wants to make it crystal clear that any of the situations that Council is dealing with, as the President stated may have been created with inappropriate transfers within the budget involving grants and the such, was prior to Ms. Freenock taking over.

President Wilshire agreed and thinks that was recorded at the meeting.

Mr. German verified Council’s looking at a 5-mill increase. Out of that, Mr. German asked what percentage or figure can be attributed to the inappropriate transfers within the budget of grant funds.

Ms. Freenock reported 3.5 mills.

Mr. German stated 1.5 mills can be attributed to the cost of doing daily functions inside the Borough.

Mr. Freenock commented yes. It’s the increased cost of doing business.

Mr. German wanted to make sure that is clear, too.

Just to be clearer, President Wilshire reported Council is also dealing with that year when the revenue was projected at a certain level for the Emergency Municipal Services Tax, which didn’t come in. That’s part of the reason for the tax increase as well.

Mr. Herman stated Council originally discussed 3 separate budgets; one of which was a 1.2 mill increase that now is 1.5 and would have covered 2007’s budget and inquired if it would be fair to say that 3.5 mills would be covering bills that would be paid on a one-time basis.

Ms. Freenock agreed.

As stewards of the people’s money, Mr. Herman thinks one of the things Council has to seriously address is, although that 3.5 is going to go pay this one-time, next year in September or October when the budget is being developed, and considering that there may not be any additional things found or emergency expenditures/catastrophes of some sort, the responsible thing Council should do with this 3.5 mills would be to reduce it backwards in the 2008 Budget. Sometimes people have a hard time reducing taxes. If things are back in line for 2008 and the 3.5 isn’t necessary, then it should be reduced. If the sale of the sewer authority goes through, Council should invest the near $2 million wisely so what’s earned in interest potentially could be used to trod off some of it, too. Mr. Herman feels bad the taxpayers are looking at this large increase and stressed it’s up to Council to look at other avenues and ways to try to keep the millage down. That’s the responsibility of Council and definitely must be done.

Mr. Zerfoss asked that if 3.5 mills are to pay bills that were discovered during the audit.

Ms. Freenock stated yes; the 2005 audit.

Mr. Zerfoss questioned if the Borough has a certified letter from the department putting the Borough on notice that it has to be paid.

Ms. Freenock reported the Borough has the management letter from the accounting firm that completed the audit.

Mr. Zerfoss verified the accounting firm isn’t the final group to say what the Borough has to pay.

Solicitor French thinks it’s anticipated that the Borough will have to pay it back. That’s the way these funds work. You cannot misspend the money. The money has to be spent in accordance with the grant.

Mr. Zerfoss wonders if the Borough has a letter from the correct government, whoever they are, telling the Borough they want their money.

At this time, Solicitor French doesn’t think Council has a letter from DCED telling the Borough what exactly needs to be paid back and understands DCED has not even computed what potential penalty may be for this situation. What has been included in the budget is the amount of money that was transferred inappropriately. There may be more funds that have to be appropriated to pay penalty or interest. Solicitor French thinks there are two groups that are essentially indicating the money has to be repaid; the first group is the auditor for last year and the second is the financial consultant Council hired through the grant received. Solicitor French supposes the technical answer to Mr. Zerfoss’ question is no. There is no letter from a governmental agency; however, it is strongly anticipated the Borough will receive one.

Mr. Zerfoss comes back to last year when he wanted to do things using money from the sale of the sewer authority. Other colleagues on Council asked how money can be spent or used when the Borough doesn’t have it yet. Mr. Zerfoss pointed out the Borough’s going up to 3.5 mills without a certified letter telling the Borough it has to be paid.

President Wilshire has a little bit of a different take than Ms. Freenock on the budget situation. Council has a 1.5 mill increase for operational expenses and then some of that remaining money is to replace transfers that were made to balance the budget.

Ms. Freenock agreed.

Mr. Herman commented 3.5 mills, or $100,000, is set aside separately from the operation of the 1.5 mill increase. That’s what Mr. German was pointing out.

President Wilshire commented the Borough’s catching up and next year the budget can be reviewed.

Mr. Herman thinks people are usually reluctant to make a statement that Council would look strongly at possibly reducing taxes as long as everything’s going okay. Next year when budget preparations begin, Mr. Herman urged if things are fine and the extra money is not needed, it should be reduced in some fair fashion.

Mr. German thinks Councilmembers look at a budget for that year. Every budget is different. This is Mr. German’s third budget. Mistakes have been made, prior to, that’s gotten the Borough to this point. Two years ago, Mr. German stated the EMS Tax was grossly overestimated but yet Council decided to go that route and decrease the millage by 1 mill. Mr. German questioned where Council would be today if that wasn’t the case. The next year Council decided to only increase Street Lighting when it was clearly indicated Parks and Recreation was under-funded for years. When Mr. German first got on Council, Mr. Zerfoss stated it gets harder and harder every year not to raise taxes. That was 3 years ago. Mr. German reported it’s still the same today. Sometimes Council has to do what’s right at the time. Mr. German stressed make no mistake there’s been missteps along the way to get to the point where the Borough is at today.

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

President Wilshire reported a motion to approve the Tax Ordinance for advertising is the other component. The Ordinance states the tax rates as follows: for general purposes 19.15 mills; for street lighting purposes 1.3 mills; for fire equipment purposes .44 mills; for library purposes 1.3 mills; and for recreation purposes 1.61 mills. Also, the EMS Tax rate is $52; earned income tax is ½ of 1%; mechanical tax $60/unit; and realty transfer tax is ½ of 1%.

Ms. Leonard pointed out under Section 1, the third line down, the fiscal year 200 needs to be corrected to be 2007.

On a motion by Ms. Vavrek with a second by Ms. Moore to approve the Tax Ordinance for advertising, with the correction to be made. The motion carried after the following roll call vote: Mr. Zerfoss, no; Mr. Herman, yes; Ms. Leonard, yes; Ms. Vavrek, yes; Ms. Moore, yes; Mr. German, yes; and President Wilshire, yes.

For clarification, Mr. German asked if it’s a 20-day period that Council has to advertise.

Solicitor French commented the budget will be on display for the public to review for 10 days and then the budget and Tax Ordinance will be adopted at the December 18th Special Council Meeting.

President Wilshire believes there is a quorum for the December 18, 2006, Special Council Meeting at 8 a.m.

President Wilshire stated the table of organization is included for everyone’s review, which Council needs to approve at a later date. Council can handle this on December 18th as well.

Mr. German asked for clarification.

President Wilshire noted the table of organization outlines the salaries that are in the budget, but Council actually has to approve them.

Solicitor French agreed the money is in the budget, but Council actually has to establish the salary level for each position. It’s similar to what is done with the contractual employees when Council approves the contracts. Wages must be set for non-union people, too.

President Wilshire asked Ms. Freenock to discuss the EMS Tax and Wage Tax Resolution #2006-240.

Ms. Freenock thinks Council is aware of what needs to be done with respect to collecting the EMS Tax for 2007. Earlier this year, Council interviewed Central Tax Bureau of Pennsylvania. Ms. Freenock recommends Council renew that process. Cent Tax would charge the Borough a straight fee in terms of 1.7% of collection, which is slightly higher than what’s currently being paid. Cent Tax describes Clarion Borough as the hole in the doughnut. They represent all the municipalities that surround Clarion Borough and quite a few in western Pennsylvania. Ms. Freenock suggests Council entertain a motion to engage Cent Tax to provide tax collection services for the EMS and wage tax and believes by doing so the delinquency rate will drop. Cent Tax has the appropriate software. If there’s a taxpayer who is delinquent, the current tax collector does not discover that for 2 years due to the tax rolls being 2 years in arrears. Cent Tax enters a social security number and their system shows what money is due to Clarion Borough, which will be automatically transferred. Council won’t have to wait for the current tax collector to write to the tax collector for whatever municipality that is holding the money and prove the money belongs to Clarion Borough.

For clarification, President Wilshire asked Ms. Freenock to discuss the current EMS Tax Ordinance that is in effect and what and how employers will be collecting next year.

Ms. Freenock informed everyone that anyone currently employed in the Borough or actually employed in 2007 will be charged a $52 EMS Tax; $5 for the School District and $47 for the Borough. There is no income threshold. It is supposed to be collected the first quarter in which the individual is employed in the Borough.

President Wilshire stated Council was under the impression before that there was a $12,000 threshold and verified it’s too late to amend the Ordinance to include it.

Ms. Freenock stated that’s correct.

Mr. Herman asked if Council will act on a new tax collector at the December 18th meeting.

Ms. Freenock agreed.

President Wilshire asked if DCED has to approve that before Council acts.

Ms. Freenock commented no.

President Wilshire reported Council needs to authorize repayment of the 2006 Tax Anticipation Note, TAN, plus all accrued interest. Interest has been paid monthly throughout the term of the note. The repayment amount would be $110,150, which is the outstanding indebtedness at December 31st including 15 days of interest. Later on, Susquehanna Group, the financial consultants, recommends Council to approve a resolution for a 2007 TAN.

Ms. Freenock noted it has to be repaid by the end of the year.

On a motion by Mr. Herman with a second by Ms. Moore to authorize repayment of the 2006 Tax Anticipation Note. The motion carried with a vote of seven yea.

On a motion by Mr. Herman with a second by Ms. Vavrek to adopt Resolution #2006-239 to approve the 2007 Tax Anticipation Note.

Mr. German inquired if this is only the second time Council has ever done this in Borough history.

President Wilshire doesn’t know all the history but it’s a rare occurrence.

Ms. Freenock stated the resolution accepts the proposal of S & T Bank. The interest rate would be 4.21% with quarterly payments. There’s a $100 documentation fee.

The motion carried with a vote of seven yea.

President Wilshire announced a Public Hearing has been scheduled for the CDBG Grant for December 21, 2006 at 10 a.m. at the Clarion Borough Offices. The purpose is to consider public input for 2007 projects.

On a motion by Mr. German with a second by Ms. Leonard, approving to advertise the dates of the Council Meetings (January 2, February 6, March 6, April 3, May 1, June 5, July 10, August 7, September 4, October 2, November 6, and December 4) at 7:00 p.m. in the Assembly Room of the Clarion Free Library for the year 2007 and the dates of the Work Sessions (January 29, February 26, March 26, April 23, May 21, June 25, July 30, August 27, September 24, October 29, November 28, and December 17) at 5:00 p.m. in the Clarion Borough Office for the year of 2007, was carried with a vote of seven yea.

President Wilshire announced there is a list of the terms on various boards and commissions that will expire at the end of the year. The Borough Office will contact each individual to see if he/she is interested in serving another term. This can be handled at the December 18th Council Meeting.

Downtown Committee: Ms. Moore thinks the Christmas activities are going well. There was a glitch with light-up night but it was resolved.

President Wilshire questioned why the stores didn’t stay open the night of the Christmas parade and feels the merchants would want to be open for people to shop.

Ms. Moore found out the day of the parade the stores wouldn’t be open and doesn’t disagree with what President Wilshire’s saying. There was a party at the Masonic Lodge.

Mr. German noted there were two Santa Clauses at the parade.

Public Works: Mr. Zerfoss commented the Public Works Report is in the packet for everyone’s review.

Mr. German asked if the timing of the new traffic signal at Eighth Avenue and Wood Street is the same as before.

Mr. Stutzman reported no. It’s a little longer on Greenville Avenue than on Wood Street. It’s not a big difference; but it’s noticeable. Once again, Mr. Stutzman hasn’t been notified on whether the right equipment is in there yet to coordinate that with Main Street, so it may change.

Mr. German inquired if there has been any feedback.

Mr. Stutzman commented everybody likes the pedestrian crossing. Until everything’s correct, the light won’t belong to the Borough, which is good.

Mr. Zerfoss stated the Committee would like permission to seek bids for Clean-Up Day for 2007, which will be May 19, 2007. This year when bids went out, it was late. The Borough only received one bid. One company asked the Borough to bid earlier for next year. Hopefully, by doing that, the Borough can get a better price.

On a motion by Mr. Zerfoss with a second by Mr. German to give permission to seek bids for Clean-Up Day to be May 19, 2007.

Mr. German questioned if the Borough’s ever considered bidding this for more than 1 year; for instance, 3-years or 5 years. If the Borough could get locked in for a price for a couple years, the Borough may be able to save some money.

Mr. Zerfoss stated that’s never been done.

Ms. Freenock can bid it both ways.

Mr. Stutzman doubts the companies will bid it for more than 1 year because of fuel prices.

Mr. Ragon added the date is unknown.

Mr. Herman commented the school calendar is set 3-5 years in advance so the information would be available on line.

Mr. Zerfoss added the Borough could seek bids for 1 and 3 years.

The motion carried with a vote of seven yea.

Public Safety: Mr. Herman had nothing to report.

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

Recreation: Ms. Leonard reported Mr. Herman, Ms. Freenock, and Mayor Stroup met with Mr. Scott Miller and Mr. Rich Lane, the new president and vice president, respectively, from the Little League Association to open up discussions about sharing expenses at Paul A. Weaver Community Park. It was a very positive meeting and more meetings will be held in the future.

Mr. Zerfoss hopes that the representatives of Monroe Township, who are present this evening, will be involved in a future meeting.

Mayor’s Report: Mayor Stroup had nothing to report.

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

Old Business: There was none.

New Business: Mr. German feels Council needs to seriously consider what to do with the funds that will eventually be received when the sale of Clarion Area Authority actually occurs. There needs to be a plan on where to put the money; not for long term but the instant it happens. Council needs to be ready. Mr. German realizes this sale was to have happened 3 years ago but questioned if the Borough has a plan in place.

President Wilshire stated no. Council has never been sure about when it would happen. There are conflicting reports now that it may not happen until January or February.

When it happens, Mr. German commented the Borough is going to have a flex of money that cannot be put in one bank. Council needs to determine what to do and look ahead.

President Wilshire imagines you could put the money in one bank but doesn’t feel you’d want to.

Ms. Freenock stated you can’t place it all in one bank and be insured.

Mr. German asked if any other Councilmembers have an opinion on this and doesn’t want to get caught off guard.

Mr. Zerfoss has plans and would be glad to explain them sometime.

Mr. German isn’t talking about long-term plans.

President Wilshire reported it’s going to be a long discussion and the Susquehanna Group will be included for advice on how to handle it too. Council is going to have to determine what the long-term ramifications are as well. President Wilshire feels there will be 7 different view points.

If this occurred December 31st, Mr. German asked what would Council do and stressed that’s a real serious question that needs to be answered and in place.

Correspondence: There was none.

On a motion by Mr. Herman with a second by Mr. Zerfoss, the Council Meeting was adjourned at 7:40 p.m.

______________________________

Nancy K. Freenock

Borough Secretary