The large tax increase Mount Holly Springs Borough Council approved in 2016 will likely carry over into 2018 and beyond as a permanent part of the municipal budget.
The council Monday voted to advertise a proposed $900,500 budget for 2018 that holds the line on the general fund real estate tax at 2.34 mills. A final vote on the fiscal plan is scheduled for Monday, Dec. 11.
A year ago, the council approved a 21 percent tax hike from the old rate of 1.925 mills to the current rate of 2.34 mills. The increase was the result of a decision the council made in September 2016 to apply for a PennVEST grant to replace the storm water system on Hill Street.
To be eligible for a 100 percent grant, the borough needed a “clean plan” for the $1.64 million project before a grant application was filed last February. That required the borough to pay $116,000 in upfront engineering fees so that the firm of Herbert, Rowland & Grubic Inc. could do a field survey, preliminary design and permit work.
The borough learned in late October that it will receive the $1.64 million grant for the full cost of the project including the reimbursement of the upfront engineering fees, council vice-president Leroy F. Shildt said Monday.
Last year, local resident Joseph Gelsinger asked Council President James J. Collins II whether the 21 percent tax increase would remain in effect in subsequent years after the revenue for the engineering fees are paid out. At the time, Collins could not say whether the tax increase would carry over long-term as a permanent part of the budget.
Following the meeting Monday, Borough Manager Tom Day said there are no plans to reduce the 2.34-mill real estate tax even though the borough will be reimbursed the upfront fees once the grant has been fully processed and implemented.
“It would probably not be in the best interests of council to lower that percentage and then turn around and have to raise the millage back again to balance our budget,” Day said. He said the cost of borough government is going up year-to-year just like everything else.
The council Monday briefly discussed a proposal to increase the fire tax from the current 0.216 mills to 0.250 mills next year. Instead, the council decided to allocate $4,000 from the general fund to the local fire company.
Citizen’s Fire Company No. 1 had put in a request to the borough to increase the fire tax to meet their 2018 budget projections, Day said. He said that while in past years Citizens asked for $25,000 from the borough, the company was asking for $28,000 next fiscal year.
Prior to enacting a fire tax, the borough used to issue a $25,000 check every year to the fire company, Day said. But because of delinquent taxes, the fire company now receives slightly less than the $25,000 it had been guaranteed under the old funding avenue.
“I don’t think we should have a tax increase,” Mayor P. Scott Boise said.
Day said it is possible the fire tax issue may come up again in discussion in 2018 over the 2019 municipal budget.
Under the current budget proposal, the fire tax will remain at 0.216 mills and the street light tax will stay at 0.239 mills.
It could be spring before bids are received and work approved for the Hill Street project, said Shildt, an outgoing council member who has volunteered to be a liaison between the borough and the contractors.
Last year, Shildt said a videotape survey of the system reinforced the need to move forward and replace the storm sewer lines.
The video camera recorded multiple cracks along sections of pipe, and there was a two-foot square section of pipe that was totally missing. The camera could not determine how far down the gap went.
When the contractor tried to videotape the line from the other side of the gap, the camera was blocked by stones that had infiltrated the line. There was also a 200-foot section of pipe that could not be videotaped.
Once implemented, the Hill Street project would not only replace the system but include the establishment of a rain garden to help filter impurities from the storm water drainage, Shildt said.
The Hill Street grant is the main reason the borough is projecting a $62,900 year-to-year savings in general fund expenditures from $963,400 in 2017 to $900,500 proposed for 2018, Day said.