Union Township ponders tax increase after debt balloons

Township supervisors here may raise taxes to balance the books, as a $44,428.58 payment to the Citizen’s Hook and Ladder Fire Company to resolve a contentious lawsuit has swollen the municipality’s debt.

The township is now in the red more than $100,000, according to financial figures, and the township supervisors will hold a public hearing next week to take residents’ input on a possible tax increase and next year’s budget.

The debt stood at some $61,000 before the payments this past month toward other loans and to the Milesburg fire company, which sued the township in 2010 to recover money not paid as part of an agreement with other municipalities. A judge ruled the agreement was valid and sided with the fire company last year. This spring, a state appeals court upheld the judge’s ruling.

The debt picture looks like this: the township will pay $770 a month for the next five years to pay off a loan taken out to cover the fire company’s back pay. According to the township’s treasurer report, two $770.72 payments were made in August toward that loan.

In addition, the township pays around $750 a month toward a loan for its materials shed. That loan had a balance of $31,391 through August.

There were also two $354.53 payments made toward paying down the loan for the township building. Another $427.22 went toward paying off a tractor, and the balance of that loan is a little more than $8,000.

“I don’t think we can make it with what we’re taking in right now,” Supervisor Warren Kibe said at Wednesday’s Board of Supervisors meeting. “I don’t see any way out other than to increase it.”

The payment to the fire company was sent by certified mail Aug. 30 and received Sept. 5, township secretary Rochelle Dubbs said Wednesday at the meeting.

The Board of Supervisors will convene a work session at 7 p.m. Monday to discuss the 2014 budget. The public is invited to attend.

On Wednesday, the supervisors almost moved to raise taxes, but solicitor Terry Williams advised them that the residents in the audience should know the amount and use of the money. Williams suggested the supervisors hold a public session to take input on drawing up the next budget.

The supervisors didn’t discuss budget numbers or an approximate rate increase to balance revenues with expenditures. But a newsletter the township circulated last month predicts that the average household could see a $30 increase.

The next budget will have to take into account the loan to pay the money owed to the fire company. The township financed $43,000 over five years at a 2.87 percent interest rate, and the difference of about $1,400 was paid from the general fund, Dubbs said.

In addition, Williams told the supervisors they will have to pay a higher retainer fee for his legal services next year, because he’s been used more over the past year because of the lawsuit.

The cost of the lawsuit has galvanized some in this township of about 1,200 people.

One resident, Alan Hall, waged a successful write-in campaign in May’s primary election, knocking the board chairman, Ryland Brower, off the ballot in November. Hall would take office, barring a successful counter-write-in campaign by Brower next month.

And since the result of the lawsuit was announced in April, the supervisors meetings now attract a crowd, ranging from a dozen people Wednesday to more than 40 in May. Residents have accused the supervisors of spending frivolously despite the lawsuit repayment hanging over the township, and they’ve come with plenty of questions.

For instance, resident Tammy Hanscom, in the crowd Wednesday, asked the solicitor if he was consulted before the supervisors voted in 2009 to not make the full payments to the fire company that were in the agreement. Williams said he didn’t think he was asked to give advice at the time.

The residents don’t hold back, either: Bonnie Fisher on Wednesday suggested that those supervisors who voted not to pay the money should be the ones to repay the debt.