SHAMOKIN - The city had a general fund balance of $281,000 at the end of June, a considerable turnaround from concerns earlier this year that it would be broke by summer.
With the books well in the black, officials have no intention of filing for bankruptcy or cutting personnel. Mayor George Rozinskie and city clerk Steve Bartos reported this week that measures have been taken to reduce wasteful spending, increase revenue and decrease costs.
"City officials want the citizens of Shamokin to know that they are continuing to work together to improve the financial well being of the city," Rozinskie said in a press release issued by the city. "We have taken proactive steps to improve our financial status."
Bartos has said before he believes the city's financial crisis is exaggerated, and he's spent much of his time in the first 10 weeks as the new city clerk addressing budget issues.
"We have to tighten our belts financially, but no personnel cuts are being considered," he said Friday. "I've been able to give Treasurer Brenda Scandle more accurate numbers connected to our expenditures, which has enabled Brenda to more
accurately calculate cash flows. I believe we will have a financial surplus until at least November."
Scandle and former city clerk Dave Kinder reported earlier in the year that the city was in imminent danger of bankruptcy and would be out of money to make payroll by June.
But Bartos said the previous cash flow report was only a "snapshot" of incoming revenues and outgoing expenditures.
"It is difficult to determine from month to month exact revenues and expenses due to various uncontrollable factors such as collection of taxes and cost of services," Bartos said. "Currently, the city is not in any danger of bankruptcy or not being able to pay projected expenses."
Scandle agreed the city's financial status has improved with the implementation of cost-saving and revenue-generating measures. But the treasurer pointed out that cash flow changes every month, making it hard to predict if the city will be in the black at the end of the year.
"There's a chance we won't have a deficit, but it's hard to project," Scandle said Friday. "Everyone in city government is working together to improve the city's finances."
'Stronger team approach'
Rozinskie said personnel changes, most notably Bartos, and other factors have led to the city improving its financial condition.
"Reorganization of City Hall along with a stronger team approach with the treasurer's office have led to the identification of a number of cost-saving measures and new revenue sources that previously had been overlooked," Rozinskie said.
Bartos said the mayor's decision to no longer accept health benefits from the city and the recent retirement of street department worker Roy Rapp will save the city approximately $35,000 in salary and benefits. He noted the mayor has health insurance coverage through Medicare and from his service in the U.S. Navy.
He said a side-by-side analysis of the 2010 and 2011 cash flows performed by Scandle verify that expenditures for 2011 have decreased, leaving the six-figure end-of-June fund balance.
Other savings
Bartos said council's recent decision to increase the television cable franchise fee from Service Electric from 4 to 5 percent will generate between $25,000 and $30,000 more revenue per year for the city.
He also expects the city to save approximately $20,000 in street lighting through the agreement with an energy pool, which offers municipalities better energy rates. Bartos said the city currently pays approximately $150,000 per year for street lights, but that would fall to approximately $130,000 by getting electricity at 6.923 cents per kilowatt hour versus the current 8.98.
Council is considering hiring Concord Public Financial Advisers Inc., of Reading and Lancaster, to repackage and refinance its annual debt service that totals $236,400. On Monday night, Daryl S. Peck, principal of Concord Public Financial Advisers Inc., gave a 25-minute presentation to council involving the city's four existing bank loans. Peck's free presentation involved providing locked-in current favorable low interest rates below the current fixed rates. The initial fixed rates on three of the loans expire Dec. 1, while the other fixed rate expires in 2013.
Peck said locking in the rates will protect the city from the possibility of higher interest rates in the future and provide more certainty in developing and monitoring budgets.
He also said restructuring the existing debt will provide budgetary relief during the current fiscal year.
Bartos said, "We are also shopping around our insurance package that covers buildings, street department and police vehicles, fire apparatus and workers' compensation and currently costs approximately $150,000 per year."
Bartos noted the present insurance contract, with Myers and Lynch Insurance Inc., Shamokin, expires July 31.
"We are making the insurance issue a priority because we believe a potential savings can be made in that area," Bartos said.
Bartos said Rozinskie and council members also hope to fill as many city-owned properties as possible to generate revenue. Those include two vacant properties at Mill Road Square in the 500 block of North Franklin Street and the basement area in the American Legion Building below the Shamokin-Coal Township Public Library that formerly housed the local senior action center.
PEL projection
When asked about a projection made in August 2008 by the Pennsylvania Economy League (PEL) that the city's deficit would grow to $5.7 million by the end of 2012 if actions weren't taken to reverse its out-of-balance spending and revenue, Bartos replied, "That's certainly not going to be the case. That was only a projection that will turn out not to be true."
Bartos said he has reviewed the voluminous report issued by PEL after the city applied for its early intervention program in January 2008 because it was concerned about a growing deficit that had reached $2.7 million by the end of 2007.
PEL cited the city's shrinking tax base as contributing to the problem.
"There were some good recommendations made by PEL to the city to improve its financial problems, but some of those recommendations were never implemented," Bartos said. "But I'm in the process of implementing them now."
In December, the city was again granted court approval to raise property taxes 5 mills above the maximum allowed for a third class city. The increase, which was among PEL's recommendations, is expected to generate an additional $135,000 this year.
Bartos said his two main goals as city clerk are to establish more fiscal responsibility to prevent bankruptcy and identify new revenue sources for the future.