Borough Council’s finance committee began talks Monday about next year’s budget before its regularly scheduled meeting.
October, borough Manager Ralph Stewart said, is the sweet spot for budget discussions to begin.
“We try to do it this time of year, so that we have nine months of data, which gives us more accurate numbers about how we’re doing this year and how we can project those numbers for 2016,” he said. “We have our numbers through September, and we’ll do projections through the end of the year to see where we’re tight and where we have a surplus, too.”
Budget discussions will come back to a nagging issue smaller communities like Bellefonte face — expenses continuously increasing without many options to up revenue.
Bellefonte budget talks are in the preliminary stages, but at least one number is certain, a 12 percent increase in health care costs. The jump equates to about $85,000.
“That’s going to be one of the largest obstacles, and the rising costs of health care is a big obstacle for every employer,” Stewart added. “Municipalities are no different than the private sector in that regard. That’s always the biggest challenge, some costs increase much greater than inflation. If all costs went up 2 percent each year, we’d be fine. When it’s something like 12 percent, you know that money has to come from somewhere.”
Increases in costs have put the borough in a bind over the past few years, enough so that some staff positions have been eliminated, like the role of superintendent, and refuse employees being cut from six to four.
“We’ve tried to trim down personnel where possible or reorganize in a way that we can operate our services,” Stewart said. “We don’t cut services. We try to manage and be innovative in ways to provide our services.”
Another challenge ahead is the general fund.
“For most funds, we’ll get through them and probably be able to stay the course,” Bellefonte Assistant Manager Don Holderman said. “The general fund will be the most challenging.”
Stewart agreed, saying general taxes for real estate and earned income are the primary sources of revenue for the general fund. The tax base for providing services for things like the police department, however, has nearly grown to its full potential.
The borough’s waterfront revitalization project, which broke ground this spring, could provide more revenue for the general fund.
“We’re doing that project for a number of reasons, one of them being to help the tax base,” Stewart said. “What was there brought in virtually nothing. One goal, as you know, is to bring in an entity or developer to help.”
While Stewart called 2015 “the year of projects,” he said more projects will be on the way next year.
“We’ll discuss different possibilities,” Stewart said. “We’ll have a list of possible street and paving projects and curbing project. A PennDOT application for grants is coming up. We’ll also discuss some areas for stormwater improvements.”