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Middletown budget includes tax hike; 0.5 mill increase would be first since 2008

By Dan Miller, danmiller@pressandjournal.com
Posted 11/6/17

By 4-3 vote Middletown Borough Council during its Nov. 6 meeting approved for advertisement a proposed general fund budget for 2018 that includes the borough’s first property tax increase since …

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Middletown budget includes tax hike; 0.5 mill increase would be first since 2008

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By a 4-3 vote, Middletown Borough Council approved for advertisement a proposed general fund budget for 2018 that includes the borough’s first property tax increase since 2008.

A 0.5 mill hike would increase by half a percent the tax bill on assessed property in the borough. For example, it would increase by $50 the tax bill for someone with property in the borough assessed at $100,000, or by $100 on property assessed at $200,000.

Voting to advertise the proposed 2018 general fund budget was Council President Damon Suglia, Vice President Dawn Knull, Ben Kapenstein and Ian Reddinger. Voting no were councilors Anne Einhorn, Diana McGlone and Robert Reid.

The vote was Monday, Nov. 6. The council’s regular Tuesday meeting was moved to Monday because of the election.

Under a plan proposed by Kapenstein, council would use the $124,000 in additional revenue brought in by the tax increase to close a deficit in the proposed 2018 general fund budget of just less than $271,000.

Surplus electric revenue would be used to close the rest of the deficit, under Kapenstein’s plan.

The proposed 2018 general fund budget totals just over $6.1 million, compared to spending in the current year budget of $5.8 million. 

The 2018 proposed budget can be found on the borough website, www.middletownborough.com, because council has now approved the spending plan for advertisement. Final budget adoption is set for Dec. 5.

The budget would add two new officers to the Middletown police department; one full-time and one part-time. The budget also includes funding to promote one officer to sergeant in 2018.

The budget also provides funds for new equipment for the police department, including three new vehicles and 16 new laptop computers.

The price of these equipment purchases is being offset by the anticipated sale of the McNair House property for $90,000. Less commission being paid to a real estate firm, the borough expects to have $83,000 from the sale to help cover the police equipment purchases.

The police department increases account for the biggest spending increases in the budget overall, borough Manager Ken Klinepeter said in an email to the Press & Journal the morning after council’s action on Nov. 7.

Besides the increases for manpower and equipment, Klinepeter noted “significant increases” in the police budget for officer training, renting vehicles for undercover work, cash to pay informants, and higher information technology costs to cover maintaining computers, servers, and video/data management.

The budget is also setting aside funds to cover the anticipated settlement of a new collective bargaining agreement between the borough and the police association, Klinepeter said. 

Middletown officers have not received a raise since July 2014. The last contract between the borough and the association expired at the end of December 2012. The July 2014 pay increase was called for in an arbitration award.

Klinepeter did not have a firm figure, but estimated that at least $250,000 will be needed to cover the costs if a settlement is reached in 2018, including retroactive pay increases to the police officers who are part of the bargaining unit.

Police spending is to increase from $2.5 million in 2017 to nearly $2.7 million in 2018, and makes up the biggest chunk of the public safety budget.

Public safety — which also includes the fire department, codes, emergency, and planning and zoning — at 52 percent makes up over half the spending in the entire general fund budget, followed by public works at 35 percent.

Council is increasing its 2018 allocation to the fire department by $40,580 over 2017, Klinepeter noted.

The proposed 2018 budget also contains a large increase in money budgeted to run the borough-owned municipal swimming pool next year — from $24,500 in 2017 to $111,650 in 2018.

This anticipates a proposed restructuring of the Olmsted Regional Recreation Board expected to go into effect in 2018. The restructuring calls for the borough to bear all costs related to the swimming pool from now on, whereas under the existing arrangement the borough has received funds to help cover the pool from the three other entities that make up the regional recreation board — Lower Swatara Township, Royalton, and Middletown Area School District.

The proposed 2018 budget also adds a new full-time position being split between the codes and electric departments, a new part-time position for public works, and promotion of an existing public works employee.

In addition, Klinepeter said that the 2018 budget includes $70,000 to cover a compliance and technical services officer, with the cost to be split between administration and code enforcement.

McGlone in a prepared statement said the tax increase is not necessary “when significant economic growth projects are on the horizon for next year, as the Woodland Hills (housing) development is due to break ground and will provide millions in electric revenue and additional properties will be on the tax rolls.”

“We have $6 million cash combined between the electric and general funds that are unrestricted, even after the $1.3 million electric fund transfer outlined in this year’s budget,” McGlone said. “We have a surplus of electric revenue this year alone of over $420,000, all of which can be used to cover any deficit.”

She contended the town “cannot sustain” the tax increase when 15.8 percent of Middletown residents live in poverty, and $40,789 is the median household income. 

The tax increase will also make it harder for the town to increase its rate of owner-occupied housing of 48 percent, compared to 52 percent of borough residents living in rental housing, McGlone said.

Suglia said that most of the tax increase is going to support the borough having its own police department, which is what residents have said they want.

“We heard the people speak at an earlier meeting that they don’t want (police) regionalization, they want to keep our own police force. Well this is what we need to do in order to help protect our own police force, is by putting a small millage raise on the taxes,” Suglia told the Press & Journal after the vote.


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