Verona officials raise real estate taxes, cut street paving to make up for accounting error
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Verona property owners will pay more in real estate taxes as council approved an estimated 24% tax hike as part of this year’s budget.
Council approved raising the millage rate from 7.8 mills to 9.7 mills, which is a 1.9-mill hike.
It means a tax increase of just under $96 a year for those with the median assessed property value of $50,400.
Projected revenues are listed at about $1.76 million and expenses at about $1.63 million. That’s a surplus of about $130,000.
Income included about $981,000 in real estate, $335,000 in local enabling taxes, $151,000 in state shared revenue, $125,600 in intergovernmental revenue, $57,000 in business licenses and permits and $18,000 in fines and forfeits.
Spending includes about $580,000 for police, $275,000 for public works, $190,000 for administration, $160,000 for capital expenditures, $90,000 for legal services, $60,000 for engineering, $54,000 for fire protection, $40,000 for finance including accounting and auditing, $44,600 for parks and playgrounds, $31,000 for code enforcement and $23,500 for tax collection.
There is no money allocated for road paving in the budget, which was unanimously passed Dec. 14.
“We looked at all different kind of scenarios,” said Nancy Carpenter, who was council president at the time of budget adoption. “This is what we could do without leaving ourselves vulnerable. I think given everything that we were dealing with, this is a pretty solid budget for this year.”
Accounting error blamed
Council also agreed to defer a $55,000 payment to the sewer fund for a year as it continues to rectify an accounting error, which officials said was one of the major reasons for an estimated $370,000 budget shortfall.
Council pulled money from its sewer fund the past several years and spent it for general purposes, which is against borough code.
Dave Matlin, who was council vice president at the time of budget adoption, said sewer fund monies were acquired from the Oakmont Water Authority and were to be set aside for sewer repairs and maintenance.
Instead, Verona borrowed from itself about $550,000.
Matlin said the error was not discovered until earlier this year when Verona changed bookkeeping services.
There is no deadline to pay the money back — or means to cover a major sewage problem should one occur.
Covid didn’t affect budget
Budget documents indicate there was no significant loss of revenue or increased expenses due to covid.
“I don’t believe we were negatively impacted by the pandemic, so that wasn’t what our challenge was,” Carpenter said.
A challenge was to find things to cut in order to minimize a tax hike.
What was cut
Council not only cut out paving, but the hiring of another police officer, a Seven Springs trip for council to mingle and learn from other municipal leaders and public works overtime by not watering flower baskets.
“It’s a very lean budget in terms of spending, and we had to make a lot of compromises,” Matlin said. “We tried to listen to each other on council and also listen to the public, while balancing the need to continue providing a basic level of essential public services. That includes things such as police, public works and support for the volunteer fire department. It became clear that we wouldn’t avoid a tax increase without cutting into those essential borough operations and services, which none of us wanted to do.”
Borough Secretary Christina DeRunk was hired in August and had to quickly familiarize herself with community operations, as well as get to work with elected leaders on the pending budget.
She led a discussion in November, with the assistance of consultant Susan G. Hockenberry, in which she outlined what was the borough’s dire financial straits.
“I think in the last year the borough has done a tremendous job in improving transparency, communication and implementing internal controls,” she said. “They’re still some progress to be made, but I’m optimistic for 2022 that the borough will continue on a good trajectory.”
Council members commended DeRunk’s efforts, particularly with the budget
Council reorganized earlier this month and named Matlin council president. Carpenter is no longer on council.
The budget is available for review at the borough office, 736 E. Railroad Ave.