New Castle News

November 20, 2012

City council postpones recovery plan

Nancy Lowry
New Castle News

NEW CASTLE — New Castle City Council will try again Friday morning to adopt a financial recovery plan.

Meeting in special session Monday night, members proposed language changes in the amended Act 47 recovery plan currently before council.

Saying he is not comfortable with language requiring tax increased in 2014 and 2015, Councilman Ed Yerage Jr. asked that the plan be amended to state that “in lieu of tax increases” in those two years, council and the administration be given the opportunity to seek “reoccurring sustainable revenue” to take the place of tax increases.

Act 47 coordinators Gordon Mann and James Roberts, who attended the session by phone, agreed to the change.

Council will meet at 8 a.m. Friday to vote on the resolution and the plan. Several council members will be out of town for Thanksgiving and will attend and vote by phone.

At Monday night’s meeting, frustration was expressed at delays in moving the plan forward.

As an agreement was reached on language, Roberts stressed the importance of adopting the plan “in totality and with good faith.

“I know that several of you are not comfortable with reorganizing the community and economic development, but that is the only way to move ahead,” he said. “More jobs and more tax revenue is needed. I hope we can proceed together in good faith and implement the entire plan and get New Castle on stronger footing.”

Council members discussed options including another garbage bag fee increase, which Roberts rejected.

He explained revenue generated by the bags can be used only to sustain the service, not added to the general fund.

Councilman Bill Panella said he opposes the 17 percent tax increase council is being asked to make.

“The increase is 8.5 percent but it is over two years,” he said. “That’s 17 percent.”

Councilman Tom Smith said he does not favor more delays.

“You’ve given the city and council another year in free fall. We could find ourselves back here 364 days from now,” he said,. “How has that helped to move the city forward?”

In the meantime, he noted, the city will be negotiating labor contracts with police and fire departments.

Yerage’s request, that council and the administration be given more time to find recurring and sustainable revenue, may not succeed and council could be in the same position next year — on the brink of a tax increase and no further along toward getting out of Act 47.

“But we’ll have a year to find a solution,” he said.

After the new language is included in the plan, council must vote on the proposed three-year plan which amends the original five-year document that expires at the end of the year.

The original plan drafted by the Act 47 team in August called for a one-mill tax increase for 2013 and a one-mill hike in 20015. One mill of tax generates about $400,000. Both increases are earmarked to help pay employee pension fund obligations. The amended plan delays the tax increase to 2014.