city news conference

Lancaster Mayor Danene Sorace talks to the media inside city council chambers Monday, Sept. 14, 2020.

There is no tax hike proposed in the draft of the 2021 Lancaster city budget that Mayor Danene Sorace unveiled Tuesday night. Instead, as it did this year, the city will rely on money from its reserves to make up a projected $4.9 million deficit in the $64.5 million spending plan.

“We cannot justify increasing the economic burden on a community already overburdened before the impact of COVID,” Sorace told City Council in presenting the proposed budget.

In a news briefing prior to the meeting, Sorace pointed out that the city already has, by far, the highest property tax rate in the county. She said the state needs to give the city more options for raising the revenue needed to balance its budget.

“It’s an impossible situation. On the one hand, we can raise taxes and keep the basic level of services going and basically make Lancaster a place that is unaffordable to live and not a place that is attractive for any kind of investment,” Sorace said. “Option two is that we can not raise taxes and reduce services, which also has the result of making Lancaster a place that is not inviting to the kind of vitality you want. Pick your poison. Those are the options we are given.”

Relying on reserves

The city relying on reserves to balance its budget is not new. The city has done that in nine of the past 10 years. In most of those years, though, it managed to avoid actually using those reserves by delaying filling staff vacancies and finding operating efficiencies, Sorace said. In 2020, though, reduced revenues and a reduction in state pension aid resulted in the need to expend more than $2.3 million of the $15.4 million in reserves it held entering the year.

“We built up a reserve over the years because we knew somewhere along the way there would be a downturn in the economy or something would happen where we would need those reserve dollars,” said Patrick Hopkins, the city’s director of administrative services during the briefing. “Here we are.”

The city cannot continue to rely on those reserves forever, though. Five-year budget projections show the city expending all of its remaining reserves by 2023 if taxes don’t rise and no new revenue sources are made available.

“We need some kind of relief that provides a menu of options for municipalities, for cities, to raise revenues to pay the cost of services that are vital to our city residents,” Hopkins said.

Sorace did not specify what sort of relief the city is seeking. The city has hired a lobbyist to advocate for changes, and Sorace said she, and other city staff, continue to meet with the city’s elected representatives to push for reforms.

Other measures

“We’re going to continue to do everything we can to control expenses. But at the end of the day it’s about how many police officers you want on your streets, how many firefighters do you want to have to be able to respond to a fire, how many people do you want out plowing the snow,” Sorace said. “These are basic core services. I am focused on maintaining that.”

In the interim, the city will continue to seek cost savings anywhere it can, including delaying filling vacant positions and finding operational efficiencies. A study of the city’s fee schedule is planned with a goal of adjusting fees to be sure they are sufficient to cover the costs of the services being provided. The city will also look to reduce its debt service expenses by refinancing a series of bonds that were issued in 2011. Hopkins said the city’s leadership team has been challenged with finding new revenues or reduced expenses that can cut the projected 2021 deficit by at least half.

While taxes will not go up in 2021, residents will see some other higher costs. Stormwater fees will increase by $3 per 1,000 square feet of impervious surface, going from $59 to $62. Trash bills will also go up, rising $32 per year under the terms of the city’s new hauler contract, which went into effect in October. The city also plans to file with the state Public Utility Commission for a water rate increase for customers outside of the city.

The full proposed budget is available on the city’s website. Council’s Finance Committee will hold hearings on the budget on Dec. 5 in a session scheduled to run from 10 a.m. to 3 p.m. Final approval is expected at council’s Dec. 22 meeting.

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