West Chester Weekly News Roundup

With so much going on around town, catch up on what you may have missed.

It’s been a busy week in the Borough. Let’s catch up.

It’s Friday, September 11. A jaw-dropping Borough Finance committee meeting leads to a number of surprising revelations, but no real answers to the budget problems. Plus, restaurants get ready for expanded indoor occupancy just in time for fall and West Chester Area School District navigates the best way to teach a sensitive subject remotely. Let’s take a moment, before we begin.

“32.3% increase in a pandemic and a potential financial crisis, I am having trouble supporting this.”

Nick Allen, Councilman Ward 2
Foreshadowing.

Now, where do I begin? On Wednesday the Borough Finance Committee held its monthly meeting and one-time therapy session. Before discussion of the current financial crisis began, Council and staff had a few things they needed to get off their chests.

  1. All 600 parking meters in the Borough will be obsolete by the end of year and will need to be retrofitted or replaced if we would like to continue collecting parking revenues next year. Unexpected expense – or should it have been expected? $629,000.   
  2. The Borough was denied a loan by Key Bank because of its current financial situation. The loan was to help cover the cost of the new parking meters. See above.
  3. (Spoiler alert) Sewer rates are most likely increasing in October. (More on this in October.)
  4. And just for fun, the Park & Rec Department didn’t properly invoice $65,000, or two years worth of amusement ticket expenses, and now that money will be hitting the 2020 budget.

We’ll come back to all this in a minute, but first the budget. As we know the Borough is facing a significant budget crisis, how significant is much less clear after last night’s presentation. 

What we know(ish): 

  • The goal of the Borough is to keep the same level of services for Borough residents
  • The last time taxes were raised was 2011. (This does not include the Earned Income Tax increase that occurred last year, as was pointed out on the meeting chat.)
  • We are currently facing a $1.7 million or $2.2 million (both numbers were used), so let’s just say, a large deficit next year.
  • The final budget will not be approved until December but the Borough Manager needs a balanced budget to advertise in the local paper 60 days prior to the public budget hearing which will occur mid-December. This means Borough Council will have to at least take a stab at balancing the budget at next week’s Council meeting.   

What’s not as clear: 

In Borough projections real estate revenues were projected down despite, several areas of new construction in the Borough – also, the fountain at 44 West is operational.

Exactly how bad is this crisis we are facing. According to the presentation, the Borough is facing a rather dire economic future – deficits of upwards of 11 million by 2025 if nothing is done. However, in reviewing some of the specifics of the numbers (Special thanks to Borough Councilman Nick Allen who painstakingly went through the numbers) there were several line items it was decided needed further clarification. Such as:

  • While the Borough Council is almost certainly raising sewer rates in October, this added revenue was not included in the projections. 
  • Parking revenues, excess of which have previously been added to the general fund, are not included in the projection calculations. Leaving a rather dramatic drop off in revenue projections from $4.5 million in 2021 to $1.6 million in 2022. 
  • The budget also allows for a 10 percent year-over-year salary and benefit increase for staff and notes police salaries, benefits, pension and other post-employment benefits have increased by $900K, which seems like a lot. 

I did not catch all the concerns because the meeting ran a little long and I had to take a break to put the kids to bed, but the general take away is: the numbers may have been a little overly conservative. Making aggressive estimates on expenses, conservative assumptions on revenues. 

“I think it’s best to be conservative,” said Finance Director Barbara Lionti. Councilman Allen felt the projections took the economic shortfalls being caused by the coronavirus and made them permanent. 

“Seems to me we are up against COVID-19 more than we are facing a structural budget issue,” he said.  

What is going to be done about it.  While Councilman Allen made it clear he was against raising taxes during a pandemic, Councilman Bernie Flynn, indicated his support for the increase. He pointed out multiple times during the meeting it was, “less than a dollar a day to keep our services the same.” 

The rest of Borough Council mostly kept their thoughts to themselves. The focus this week was on the numbers, and there are still many questions on exactly how the Borough Management team settled on the figures they did – especially as they related to projections. Leaving several, including Mayor Dianne Herrin to suggest an independent audit may be needed. 

Next week the topic moves to the full Council. The hard facts likely remain, either taxes will have to be raised or Borough services will be cut, neither of which were seriously discussed during the meeting. 

If you are tuning in next week, expect more details on the numbers, and hopefully, a discussion about what to do about the Borough budget.

Mark your calendars: Meetings are scheduled for Sept. 15 at 7 p.m., worksession, and Sept 16 at 7 p.m., voting session. Webex info on the Borough website.  

All 600 parking meter in the Borough need to be replaced by the end of the year.

Free parking for all. Now, on to one of those bombs I dropped earlier. Apparently, the company behind the Borough parking meters will no longer be supporting the software at the end of the year making them essentially worthless and thus leaving the Borough with two choices:

  • Retrofit all 600 at a cost of $500/each
  • Upgrade to kiosks at a cost of $6000 a piece for a grand total of $629,000

While considering all that is above it may be tempting to take the cheaper option. However, there are benefits to biting the bullet and investing now in the upgrade. First the retrofit would only be temporary, an upgrade would be needed eventually. Second, a test of the kiosk system was done last year at West Chester University and the kiosks were found to pay for themselves in eight months. Given the current parking environment, it would likely take the full fleet significantly longer, estimates of up to two years were given at the meeting, before money was recouped but, still a pretty nice payback. 

The question then becomes how to pay for it. There are again, two options: get a bank loan; or borrow the money from our reserves. Using our reserves, means no interest and if the kiosks pay off as they are expected, it could be a pretty safe gamble. The bank loan, if you can get one, adds interest but maintains the reserve fund and lessens the risk should the payback not go as planned. 

Things you should know that will factor into the decision:

  • Cash reserves are already pretty significantly down. According to the report given by Councilman Flynn, reserves for the Borough should be around $15 million. They are currently at $8 million.
  • Interest rates could vary from 1.89 percent to 3 or more, significantly altering the cost of the payback. 
  • The Borough was denied its first loan application by Key Bank due to its current economic situation. There are still three applications pending but the sickly balance sheet could mean a higher interest rate.   

Look for this matter to be discussed at next week’s Borough Council planning session, in the meantime Borough Manager Mike Perrone and team are going to continue to follow up on loan applications. 

Gay Street closure has helped expand outdoor dining in the Borough.

Can we have some positive news, please?  While West Chester bars and restaurants continue to lobby for more outdoor space, next week Borough Council will vote on a request from Jake’s and Riggtown Oven to expand seating in front of their establishments, Pennsylvania is almost ready to increase indoor dining levels. This week governor Wolf announced the state would up indoor occupancy to 50 percent beginning on September 21. Currently occupancy levels are at 25 percent where they have been since things didn’t go so well the first time the first time they were increased to 50 percent earlier this summer. To hopefully keep that from happening again, restaurants must first show they are complying with public health guidelines before expanding. They must also stop serving alcohol at 10 p.m.  

“At a time when many children are already feeling stressed and anxious, there were concerns that this topic may cause further anxiety for our youngest students.”

James Scanlon, Superintendent WCASD

This may be difficult for our younger learners. This week the West Chester Area School District had to decide how to teach about the tragedies of 9/11 during a pandemic when students are remote.  While lessons will continue as planned for older students, elementary classroom lessons have been paused this year. The district cited concerns over that the Zoom limits a teachers ability to monitor a child’s reactions. Instead the district shared resources with parents if they wished to discuss the topic at home.  

It’s that time of year again.

The warnings. It’s time to get your vote plan together. If you haven’t already been contacted by every political agency in the county and followed relentlessly on social media, then please, let me do the honors. If you are planning to vote by mail, you’ll need to submit your request through Chester County. You should request your ballot as far in advance of the election as possible, like today. The County must receive your request for a mail in ballot by Tuesday, October 27, 2020. Deadline to register to vote is Oct. 19.  Election is November 3.  

Don’t forget to leash your dogs. The Police and Park Department would like to remind you it’s against Borough of West Chester ordinance 78-1-H to let pets off their leashes at the parks. Also, against that ordinance not to clean up after them.   

Accolades. Baby high fives to West Chester University which just snuck onto the Money Magazine list of 175 top value colleges at number #174. This year the magazine looked at 739 contenders for things like family borrowing and income potential. Not a bad distinction in general, but hard to celebrate financial value in a year where most classes are virtual.

Also a “he’s a jolly good fellow” to James McErlane, Senior Partner of Lamb McErlane PC who received the Jeanne Molitor La Rouche Leadership Award. This prestigious award was named for the founder of Surrey Services and celebrates an individual who, through leadership and community service, exemplifies the Surrey philosophy of “Neighbor Helping Neighbor.” 

Goodbye. To discounted amusement park tickets through the Park & Rec department. After several years delivering minimal revenue the program was ended this year. Unfortunately due to problems with invoicing, not collection of payments, according to Borough Manager Mike Perrone, the Borough will still be writing a $65,000 check to the Pennsylvania Recreation and Park Society

Hello. To a new invoicing process for Borough staff. After now $500,000+ in funds has been mis-invoiced (here and above), the Borough has implemented some new processes. According to Borough Council president Michael Galey, these processes will be discussed at next week’s Council worksession. 

To pet grooming. Coming this fall a new pet grooming service from our friends at Champions Premier barbers and Champions School of Barbering. Like to spend your days surrounded by furry friends? They are now hiring groomers and bathers.  

To a new career path. Levante Brewing is looking for a Brewery Packaging Technician. Have no idea what that means, but who wouldn’t want to work with those guys? 

“At a time when many in our community are experiencing financial uncertainty, it’s important for children to understand the basic and advanced financial concepts their families and their friends’ families are facing.” 

Daniel J. Machon, Jr., President and CEO of Benchmark Federal Credit Union.

Pay it forward. West Chester-headquartered Benchmark Federal Credit Union wants to help kids make smart personal finance decisions so it’s adapted its award-winning, accredited financial literacy program for remote learning. The financial literacy program, which covers such topics as bill paying and balancing a budget, is free for kids age 8 to young adult. Teachers can access the complete curriculum of materials for free here, or parents and students can access resources directly from Benchmark Federal Credit Union here.

Spotted last weekend: Masks for sale, $5.

The freakin’ weekend. What are you up to this weekend? I will be spending additional time with the kiddos as Chris learns to make beer, part of a much delayed Christmas present, and planning for our first family camping trip which is scheduled for next weekend. If anyone has any insightful tips they’d like to share, I’d love to hear them. 

Plus, the West Chester University Office of Sustainability is hosting a viewing of The Story of Plastic with panel discussion tonight. Register here

Zumba classes in Marshall Square Park! Tomorrow at 9 a.m.

And pumpkin bread is a-baking

Stay safe. Stay healthy and I’ll see you next week. 

New to the blog? Follow along for the lastest from West Chester.

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