February 27, 2006, Work Session

Summary of Action Taken

Minutes

The Work Session of the Clarion Borough Council was held on February 27, 2006, at the Clarion Borough Offices.

President Wilshire called the meeting to order at 5:00 p.m.

Councilmembers present included Mr. Zerfoss, Ms. Leonard, Mr. German, and President Wilshire.  Ms. Moore arrived at 5:08 p.m. and Mr. Herman arrived at 5:10 p.m.  Ms. Vavrek was absent.  Ms. Freenock and Mr. Ragon were also present.  Chief Hall arrived at 5:02 p.m.  Mr. Stutzman was absent.

Citizen Comments:  Mr. Rodney Sherman, Clarion News, stated the visibility at Liberty Street and Fifth Avenue is much better since Council has changed the parking at that location.  It is much easier for motorists to pull out of Liberty Street.  Mr. Sherman appreciates Council’s action on his request.

President Wilshire believes that is on a 60-day trial period, and then the Public Safety Committee will re-evaluate it.

Administration:  President Wilshire reported the Borough received several special event requests, which are all standard annual requests.  Action is necessary at Tuesday’s Council Meeting.

President Wilshire commented there is a resolution in the packet authorizing and directing the Borough Manager to pay regular recurring bills in a timely manner to avoid late fees.  These bills would be paid prior to Council officially authorizing payment.

Ms. Freenock informed Council these bills would include telephone, electric, or other utility bills the Borough receives each month.  Due to paying once a month, several bills are received late and assessed a fee.  Attorney bills would not be paid without Council’s approval.

Mr. Zerfoss thinks this is a good business procedure.

President Wilshire stated the next resolution is about the tax collector and asked Ms. Freenock to explain.

Ms. Freenock commented Berkheimer Tax Administrator is the Borough’s tax collector for delinquent per capita and earned income taxes.  Berkheimer’s can charge a collection fee onto the delinquent tax payer; but in order to do so, Clarion Borough must adopt a resolution permitting Berkheimer to do that.  Ms. Freenock reported Berkheimer is not holding any Borough money.  However, Berkheimer cannot mail any current delinquent notices without receiving this resolution.  In the past, Berkheimer collected this fee.  However, a change in legislature requires the municipality to adopt a resolution allowing the tax collector to attach any fees.  The fee schedule will be included in the packet for everyone’s review.

President Wilshire inquired how much the fees are in general.

Depending on the type of notice, Ms. Freenock commented the fees range from $9.50 to $39.50. 

President Wilshire asked Ms. Freenock to discuss the next resolution in reference to participating in the PACC Contract.

Ms. Freenock informed everyone this relates to the purchase of the Public Works Truck.  In an earlier discussion today, Mr. Herman suggested the resolution be amended to specify the purchase of the truck and not the broad authorization as it is shown in the packet.  Ms. Freenock thinks that’s a good idea.

Mr. Zerfoss doesn’t remember adopting a resolution in the past to participate.

Ms. LaVan stated Mr. Stutzman was informed the resolution was required in order to get the truck through PACC but will check tomorrow to make sure it’s necessary.

President Wilshire reported the next item is to seek bids for the 2005 audit.

Since it’s a professional service, Ms. Freenock doesn’t believe it needs to be bid.  Ms. Freenock contacted several auditors to see if they could complete the 2005 audit.  However, no one could do it by the March 31st deadline.  DCED stated there’s no penalty for not having it in by that date.  Ms. Freenock sent a letter to the Prothonatary’s Office and has not had a response from them. Since the Borough will not meet that deadline, Ms. Freenock feels it would be a courtesy to send a letter to these auditors asking if he/she would be able to handle Clarion Borough’s audit now. 

Mr. German inquired if this is late this year.

Ms. Freenock informed everyone an auditor should be secured by December 31st and added Mary Brooks used to complete the audit but could not since she was the tax collector in 2005.

President Wilshire reported Council tentatively discussed the resignation of Orville Lerch and the appointment of Bill Miller to the Clarion Area Authority Board, but both will need to be officially approved at Tuesday’s meeting.

President Wilshire commented Council needs to discuss possible CDBG projects. This is an annual entitlement grant program the Borough receives.  Ms. Freenock suggests using some money towards the fire hall, which is owned by the Borough and leased to the Fire Department.

Mr. German recalls this was discussed last year. The roof and bricks need attention.  The Borough owns that building and really needs to look at it.

Mr. Zerfoss stated the last time the Borough worked on the fire hall was when it was remodeled or rebuilt.

President Wilshire remembers there were problems on the old portion, which probably still remain.

Mr. Zerfoss agreed with Mr. German that it’s a Borough building, and the Borough needs to take care of it.

Ms. Freenock reported other possibilities are building an access road into the lower portion of Paul A. Weaver Community Park and determining if any repairs are necessary at the Library.  If Councilmembers have any other ideas, they can be explored.  Mayor Stroup mentioned other funding available for the fire hall, which Ms. Freenock is looking into.  If that money is awarded, that project would be removed from CDBG.

President Wilshire announced five letters of interest were received on the Solicitor’s position and commented an Executive Session will be held at the end of the Work Session to discuss personnel.

President Wilshire asked Ms. Freenock to discuss the EMS Tax.

Ms. Freenock believes there was some confusion when the EMS Tax was originally enacted.  According to Act 511, if a municipality decides to enact the EMS Tax, then the OPT Tax must be rescinded, which was done.  Ms. Freenock thinks it was Council’s belief that the ordinance adopted set a low income threshold at $12,000, meaning anyone earning less than that did not pay any part of the EMS Tax.  This is not the case.  No threshold was mentioned.  There are some misconceptions such as the following: one, anyone earning less than $12,000 pays $10 ($5-Borough, $5-School District); and two, anyone earning less than $12,000 pays $5 (only to the School District).  The way the ordinance is written requires everybody to pay $52 ($47-Borough; $5-School District).  Ms. Freenock stressed the ordinance did not set a $12,000 threshold.  Since the OPT was rescinded, the Borough cannot require people to pay $5.  Right now, there is no way to verify whether everyone that should be paying it has been paying it.  One way to remedy that problem is to pass an ordinance whereby every employer in the Borough would pay the earned income tax to the Borough’s tax collector who would then send it to the appropriate municipality.  Ms. Freenock stated it’s done that way in a number of jurisdictions, and Council has the authority to do that.  Council needs to address what to do about 2005. 

President Wilshire stated the intent, as it was presented to Council and voted on, was to include the exemption for people earning less than $12,000.

Ms. Freenock informed Council the Borough sent a letter suggesting employers deduct it $1 per week, or $2 per pay.  The ordinance requires the tax to be paid by the end of the first quarter, or appropriate quarter, in which the individual worked.  This could be done by deducting $13 from the first four pays for any employee.  If it crosses quarters, the Borough would receive part of the tax in one quarter and the remainder in the following quarter.

Mr. German asked Ms. Freenock for her recommendation.

Due to the information that the Borough supplied, Ms. Freenock commented there is no way to recoup taxes for anyone who earned less than $12,000 and did not pay.  Ms. Freenock believes the individuals should receive a refund.  Going forward, the Borough can make this tax clearer.  If Council wants the $12,000 threshold, the ordinance will be amended and that will be included.  According to the law, whatever is listed on the DCED website is what the employer must withhold.  The website indicates the Borough receives $47 and the School District receives $5 and does not mention a threshold.

President Wilshire doesn’t think the website is a legal document.

Ms. Freenock stated DCED thinks it is.  DCED takes the information from the annual reports that the Borough provides to them and lists it on the website.  If it’s not listed on the website, DCED’s interpretation is the employer is not required to withhold it.  Ms. Freenock contacted Central Tax Bureau, a tax collection agency.  Central Tax Bureau, a privately owned company in existence since 1927, collects taxes for every district around the area with the exception of Clarion Borough and Clarion School District, which they refer to as the hole in the donut.  Central Tax Bureau indicated they would like to give a presentation to Council.  Ms. Freenock reported their fees seem cheaper than what Clarion Borough’s currently paying.  Clarion Borough taxes would be sent to Central Tax Bureau in Franklin, who would then deposit the money into a clearing account once a week, and then the Borough would receive a check for what was remitted.  Right now, Clarion Borough receives tax money on a monthly or quarterly basis.  Unless the Borough and School District both use Central Tax Bureau, there will be no way to compare who has and hasn’t paid.

President Wilshire asked Ms. Freenock to arrange a joint presentation for the School District and Borough.

Since Clarion is the hole in the doughnut, Mr. German asked how far of an area is being discussed.

Ms. Freenock reported Central Tax covers Butler, down to Clearfield, and up north.

Mr. Herman voiced concern many times before and again to there being no way for Clarion Borough to know who should be paying the tax and if he/she is.  There could be people that are not paying and should be, but Clarion Borough would never know.  It could be the case where an employer decides not to pay it.

Ms. Freenock reported the current tax collector doesn’t have the software to run the two programs which would match up who should and shouldn’t be paying.  Central Tax does.  Right now, the Borough’s on an honor roll system.  Ms. Freenock informed everyone Central Tax Bureau sends all of the employers a questionnaire wanting to know exactly how many employees are employed and what he/she made, which is input into their computer.  The Borough’s collector has not done that.

Mr. Herman inquired if the Borough has the right to know who should and shouldn’t pay, because the answer Council’s been given in the past is the Borough’s not entitled to it.

Ms. Moore feels the Borough doesn’t need individual names but a survey on who does and doesn’t pay would be helpful and could be done easily.

Mr. Herman understands.  That would make it easier to project an estimate for the budget.  The Borough doesn’t have anything right now.  That creates a major problem with trying to figure out the budget.  It’s a guess.

Ms. Freenock reported another issue is the per capita tax.  It was stated the per capita tax was eliminated, but was not done by resolution or ordinance.  Technically speaking, the per capita is still in effect.  Ms. Freenock commented it was not collected for 2005 and has a call into Mary Brooks to find out how she knew not to collect it.  This may have been confused with the OPT.  The per capita has nothing to do with OPT.  Per capita goes to the residents of the Borough.  The EMS Tax is on employees of this Borough.  Ms. Freenock announced the per capita brings in about $6,500 a year.  The County is still collecting per capita.

Mr. Herman thinks the Borough’s intent was not to eliminate the per capita tax.

Ms. Freenock commented Council eliminated both the $5 OPT and $5 per capita tax.

Mr. Herman doesn’t remember doing away with the $5 OPT Tax.  Mr. Herman understood the Borough was still receiving $5 for the Borough and School District from people earning less then $12,000.

Ms. Freenock stressed the Borough cannot collect the OPT Tax.  It was rescinded.

Mr. Zerfoss added the per capita tax was eliminated, because it was a nuisance tax.

Mr. Freenock commented that’s fine, but there is no paper trail indicating that.

 Before moving on, Mr. German asked what Council is going to do.

Ms. Freenock asked if anyone is interested in lowering the income threshold from $12,000 to something less.

President Wilshire inquired if that can be done in the middle of the year.

Ms. Freenock informed Council has the following options: stand by what the Borough sent out as far as 2005 and give people entitled to refunds, refunds; going forward for the year 2006, Council could enforce the ordinance as written, which means everyone would pay the $47; or contact DCED explaining the documents were created but with a misunderstanding.

Mr. German feels giving refunds is the right thing to do.

Ms. Moore doesn’t think Council has any other choice.

Ms. Freenock reported the bottom line is the employer, not the employee, is responsible.  Every employer in the Borough received a letter with incorrect information.

President Wilshire asked if individuals would have to present his/her W-2 form in order to receive a refund.

Ms. Freenock stated Ms. Beary would have to determine what is necessary.  So far, there are only 8 requests.  If Council chooses to go this route, it should be published and a filing date must be set.  Ms. Beary would issue the refunds.  The refunds would be deducted from whatever money the Borough would be receiving that particular quarter.

President Wilshire stated this will need voted on next week.

Ms. Freenock questioned if Council wants to collect the EMS Tax at $13 for the first four pays of the year.

Mr. Zerfoss thinks the Borough should.  Some employers deduct the entire EMS Tax in the first quarter but wait to send it until later. 

Ms. Leonard reported it needs to be collected in a timely fashion without causing a hardship to the employee, which $13 each pay shouldn’t be.

President Wilshire asked Ms. Freenock to see if the Borough can re-open the Act 511 Taxes but thought those taxes were approved at budget time.

Ms. Freenock agreed but noted it’s always been Council’s intention to have a threshold of $12,000.  The change would be on how it is collected.

Downtown Committee:  Ms. Moore will have something to report at the Council Meeting.

Public Works:  Mr. Zerfoss noted it’s still snowing.

Public Safety:  Mr. Herman had nothing to report.

President Wilshire informed Mr. Herman that Mr. Sherman thanked Council for the changes with the parking at Liberty Street and Fifth Avenue.

Mr. Herman believes it has improved.

Mr. Sherman relayed it is much appreciated.

Housing and Zoning:  President Wilshire, in the absence of Ms. Vavrek, reported there is a Public Hearing in reference to the amendments to the Zoning Ordinance to be held March 2, 2006, at 6:00 p.m. in the Assembly Room at the Clarion Free Library.

Recreation:  Ms. Leonard stated Councilmembers received a draft copy of a letter to be sent to surrounding municipalities in reference to a donation towards Paul A. Weaver Community Park.  Mr. Herman’s main concern was not to include Monroe Township at this time, because Clarion Borough may have a broader appeal to them.  Mr. Zerfoss’ concern was the amount wasn’t enough for some but too much for others.  Ms. Leonard commented the intent is to send another letter out in the fall when the municipalities are preparing their 2007 budget with the hope the township or borough will set a permanent donation.  Since a donation is being sought, Ms. Freenock informed Ms. Leonard Council must give permission to send it.  Therefore, Ms. Leonard asked if Council wants to proceed with this letter; if so, if Monroe Township should be included now or later; if a follow-up letter should be sent in the fall asking the municipality to approve an annual donation in their budget.  Ms. Leonard will not be able to be at the Council Meeting, but Mr. Herman and Mr. Zerfoss will be there to present the letter.

Ms. Freenock reported the electric bills at the Park last year totaled $4,900.  Public Works wages are unknown.  Council may want to include this kind of information in the letter in the fall.

Mr. Herman stated Council has discussed requesting money from other municipalities many times before and everyone agrees it needs to be done.

Mr. Zerfoss reported the fee may not be enough for some municipalities but too much for others for the following reason; one municipality could have 12-14 children participating in the Little League Program whereas another could have 90.

President Wilshire commented Mr. German provided some figures to Council at the end of the year in terms of the number of participants.

Mr. Zerfoss feels registration for this season was held and updated figures may be available.

Mr. German reported it may not be updated yet.  However, the chart indicated the percentages didn’t fluctuate that much over the 3-4 year period.

Mr. German suggested the letter should indicate a follow-up letter will be sent in the fall asking the municipalities to set a permanent donation in their budget.  Mr. German thinks a contract with each municipality should be in place. 

Ms. Leonard commented that can be added.  Clarion Township is the only municipality where Ms. LaVan sends an invoice each year.  A contract is a good idea.  Ms. Leonard asked if Monroe Township should be included this time.

Council agreed Monroe Township should be included.

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

Manager’s Report:  Ms. Freenock received a notice from Adelphia in reference to digital customers and changes on the pay per view function. In demand is being discontinued. 

President Wilshire asked if Adelphia mentioned anything about switching to Comcast.

Mr. Freenock stated no.

Old Business:  There was none.

New Business:  There was none.

Correspondence:  There was none.

President Wilshire called for an Executive Session to discuss personnel concerning proposals for the new solicitor, leaving at 5:50 p.m., with no action anticipated.

President Wilshire called the meeting back to order at 6:36 p.m. and stated the Executive Session was to discuss personnel concerning proposals for the new solicitor and noted no action was taken.

On a motion by Mr. German with a second by Mr. Herman, the Work Session was adjourned at 6:36 p.m.

                     ______________________________

                     Nancy K. Freenock

                     Borough Secretary