For the third year in a row, the city's budget is largely balanced on the high expectation its administrators have that they will be able to sell property related to the city's redevelopment plan, according to a discussion of the 2009 financial plan at a recent City Council meeting.For 2007 and 2008, City Council agreed to balance the budget on the hopes City Manager Harry Walker would sell more than $1 million in city-owned property. The sales never happened. And for a third year, Walker is asking council to have faith in his redevelopment plan.
On Monday, only three members of the public joined more than 20 city employees at the council meeting, at which officials tentatively adopted the proposed budget by a split vote.
Walker said the budget proposal reflects the "values" of the city's administration and that council must decide what values it wants to support. Walker specifically asked if council's values support following through with the city's redevelopment plan, spending $100,000 on street surveillance cameras for the police department, and funding city publications to "tell your story to the world about what's good about Coatesville."
"It's a values judgment," Walker said. "Every item we have in here is essentially the administration's judgment that we should have it in here and it's something we need. We hope that this is something (council) will see also as a stepping stone for growth in the city."
Under the revised proposal, the 2009 budget is estimated at just over $10.1 million. Walker, at previous budget meetings, projected the city would take in slightly over $1 million from the sale of assets and the city may need a loan to cover the gap until the assets are sold.
The administration expects to take in more than $2.6 million from property taxes - about the same as what came in during 2008 - and transfer $1 million in interest from the reserve trust fund. The city is also estimating taking in more than $600,000 in permit fees in 2009, which is down from the earlier estimate of more than $900,000. In the first eight months of 2008, the city collected roughly $230,000 in permit fees.
Additionally, Walker initially projected the city's earned income tax revenue would increase from $2.4 million in 2008 to more than $3.2 million in 2009. In early November, Walker said the city had already collected more than $2.4 million this year in earned income taxes.
Walker also previously proposed a $10 increase in solid waste fees, but for now that has been removed from the table.
Revised budget numbers were not made available to the public Monday. City officials, looking at their own budget materials, stressed the budget was still a work in progress.
According to a report issued by the Fairmount Capital Advisors in October, the city will be nearly $14 million in debt by 2013 unless the city completes all of its many pending redevelopment projects and attracts enough new residents and businesses to increase the city's tax base.
Over the past three years, developers have talked about building housing and retail stores in the city, but nothing has become a reality. Chetty Builders - a large component of the city's redevelopment plan - moved its sales trailer out of the city earlier this year, saying that instead of condominiums it would now plan to build apartments.
Councilman Ed Simpson said Monday that Walker's budget was unsound and his redevelopment hopes are unrealistic.
Simpson brought up the previous administration, which spent millions to bring a golf course to the city. The golf course never happened, he said. Likewise, during Walker's two-plus years with the city he has promised to bring a redevelopment plan to life, but only one project has been completed during his tenure - a health center for low-income county residents.
"Where are the results?" Simpson said. "I understand we got big ideas, but we got empty pockets."
Simpson also said he does not want to "nickel and dime" the city's trust fund, which holds roughly $20 million, to get the proposed capital projects off the ground.
City Councilman Kareem Johnson said he understands the money the city would invest in redevelopment would pay off in the long run; however, the city doesn't have money right now to invest.
"We still need to come up with matching funds and still come up with operating costs," Johnson said.
At the session, Walker also asked the council members to approve a capital budget that includes renovation costs for the city's out-of-use train station and construction of two train station parking lots. The renovations and parking lots, Walker said, will motivate SEPTA and Amtrak to stop their trains here.
Walker said using the trust fund to invest in the city's redevelopment is an option if the city wants to survive financially. He said the investments in the train station and other areas will improve the city's quality of life and send an encouraging message to developers.
"It's when you're running a deficit. You have to decide whether or not you want to invest in yourself," Walker said. "I'll give you two options: You can invest in yourself and turn things around or bleed to death."
Walker also tried to assure council that developers - Pulver, Chetty and Iacobucci - are still interested in building in Coatesville.
Monday night's votes fell in favor of Walker. Council agreed in a 5-2 vote that the city should apply for an $800,000 county grant to cover the Dulles Drive road extension project related to a proposed senior living facility project. The city would have to match 15 percent, unless money Iacobucci Homes, the site developer, has already invested would qualify as the match. Another option would be for the city to apply for other grants to cover the matching costs.
Walker said if the city does not have the money to cover the matching costs, the city could decline the grant. Simpson said the city should not make a habit of applying for grants and then declining them. Simpson and Councilman Martin Eggleston voted against the application.
The second vote was for the city to apply for a $700,000 county grant to construct two parking lots at the city's train station. Matching costs for the city would be $150,000. Again, city officials said the city could apply for other grants to cover matching costs. Council approved the motion with a 6-1 vote. Simpson voted against the motion.
Finally, council approved the administration's proposed budget with a 4-3 vote. Simpson, Eggleston and Johnson voted against the preliminary budget.
Council is expected to vote on a final budget Dec. 8.